HomeMy WebLinkAboutRDA Packet 2000/06/06
ellY OF
CHUlA VISTA
TUnDAY, JUNE 6, 2000
4.00 P.M.
(1_IDIATILY 'OLLOWlNG THI CITY COUNCIL MiniNG)
COUNCIL CHAMBE"
PUBLIC SIBVlCU BUILDING
JOINT MEETING OF THE REDEVELOPMENT AGENCY
CITY COUNCIL OF THE CITY OF CHULA VISTA
CALL TO ORDER
ROLL CALL
Agency/Council Members Dovis, Moot, Podillo, Solos, and Choir/Mayor Horton
CONSENT ITEMS (Items 1 and 4)
The staff recommendations regarding the following item(s) listed under the Consent Calendar will be
enacted by the Agency/City Council by one motion without discussion unless an Agency/Council
member, a member of the public or City stoff requests that the item be pulled for discussion. If you wish
to speak on one of these items, please fill out a "Request to Speak Form" available in the lobby and
submit it to the Secretary of the Redevelopment Agency or the City Clerk prior to the meeting. Items
pulled from the Consent Calendar will be discussed after Action Items. Items pulled by the public will be
the first items of business.
1.
APPROVAL
OF MINUTES:
2.
AGENCY
RESOLUTION
3.
AGENCY
RESOLUTION
September 21, October 5, October 12, October 19, November 9, November
16, and November 30, 1999
ADOPTING NEGATIVE DECLARATION 15-00-13, APPROVING
COASTAL DEVELOPMENT PERMIT DRC-0038, AND APPROVING AN
OWNER PARTICIPATION AGREEMENT WITH JACK-IN-THE-BOX
INCORPORATED FOR THE DEVELOPMENT OF A GAS STATION WITH
CONVENIENCE STORE AND DRIVE-THRU RESTAURANT WITHIN THE
BAYFRONT REDEVELOPMENT PROJECT AREA-Jack-in.the-Box
Incorporated is proposing to construct a gas station and convenience store
and drive.thru restaurant at the northeast corner of Bay Blvd. and J Street
within the boundaries of the Bayfront Redevelopment Project Area. The
proposed land use is allowed under the General Plan and Bayfront Specific
Plan.
STAFF RECOMMENDATION: Agency odopt the resolution.
APPROVING AN OWNER PARTICIPATION AGREEMENT WITH THE
ORTIZ CORPORATION FOR THE DEVELOPMENT OF A GARAGE/
WAREHOUSE AT 788 ENERGY WAY WITHIN THE OTAY VALLEY ROAD
REDEVELOPMENT PROJECT AREA-The Ortiz Corporation is proposing to
construct 0 3,533 sq. It, garage/warehouse at their existing construction yard
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AGENDA
4.
AGENCY
RESOLUTION
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JUNE 6, 2000
located at 788 Energy Way within the boundaries of the Otay Valley Road
Redevelopment Project Area. The building will be used for minor repair and
maintenance of vehicles. and storage. The proposed land use is allowed
under the Generol Plan, Otay Valley Road Redevelopment Plan, and Zoning
Ordinance.
STAFF RECOMMENDATION: Agency adopt the resolution,
ADOPTING NEGATIVE DECLARATION 15-00-12 AND APPROVING
OWNER PARTICIPATION AGREEMENT WITH THE MAIN SQUARE
CORPORATION FOR THE DEVELOPMENT OF AN INDUSTRIAL
BUILDING LOCATED AT THE SOUTHEAST CORNER OF MAIN STREET
AND FOURTH AVENUE WITHIN THE SOUTHWEST REDEVELOPMENT
PROJECT AREA-The Main Square Corporation is proposing to construct a
22,640 sq. ft. industrial building at the southeast corner of Main Street and
Fourth Avenue within the boundaries of the Southwest Redevelopment Project
Area. The building will be used for the establishment of automobile repair
shops.
STAFF RECOMMENDATION: Agency adopt the resolution.
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the Redevelopment Agency on any subject
matter within the Agency's jurisdiction that is not an item on this agenda. (State law, however, generally
prohibits the Redevelopment Agency from taking action on any issues not included on the posted
agenda.) If you wish to address the Agency on such a subject, please complete the "Request to Speak
Under Oral Communications Form" available in the lobby and submit it to the Secretary to the
Redevelopment Agency or City Clerk prior to the meeting. Those who wish to speak, please give your
name and address for record purposes and follow up action.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
The following items have been advertised and/or posted as public hearings as required by law. If you
wish to speak to any item, please fill out the "Request to Speak Form" available in the lobby and submit
it to the Redevelopment Agency or the City Clerk prior to the meeting.
5.
PUBLIC
HEARING:
TO CONSIDER ADOPTION OF A DISPOSITION AND DEVELOPMENT
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND GATEWAY
CHULA VISTA LLC FOR THE PURPOSE OF DEVELOPING A 304,000
SQUARE FOOT MIXED OFFICE AND RETAIL DEVELOPMENT AND 1,014
SPACE PARKING STRUCTURE, ENTITLED THE GATEWAY CHULA VISTA
PROJECT, ON A 16 PARCEL SITE AT THE NORTHWEST CORNER OF THIRD
AVENUE AND "H" STREETS IN DOWNTOWN CHULA VISTA WITHIN THE
TOWN CENTRE I REDEVELOPMENT PROJECT AREA-The corner of Third
Avenue and "H" Street represents a unique redevelopment opportunity that links
the Third Avenue downtown shopping district with the South County Government
Center and the Chula Vista Shopping Center. In order to activate this important
location and strengthen the emerging Chula Vista office ond retail market, Agency
staff have been negotiating with the development team for the Gateway Chula
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AGENDA
.3.
JUNE 6, 2000
Vista Project since June 16, 1998, with the adaption by the Agency Board of a
Semi-Exclusive Negotiating Agreement (SENA) with the Chrismatt Corporation.
The SENA was extended for six months in June of 1999, with Gateway Chula Visto
LLC as the new development entity, during which the final terms of the business
deal were negotiated. During the past several months, the specifics of the
Disposition and Development Agreement (DDA) have been negotiated, including
all aspects of the sale of Agency land and other terms and conditions of the
development proposal. [Community Development Director] [Continued from the
meeting of May 23, 2000]
AGENCY (A)
RESOLUTION
COUNCIL
RESOLUTION
(B)
(C)
(D)
APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT
AND RELATED AGREEMENTS BETWEEN THE AGENCY AND
GATEWAY CHULA VISTA, LLC FOR THE DEVELOPMENT OF A
MIXED-USED COMMERCIAL/OFFICE PROJECT AT THE
NORTHWEST CORNER OF THIRD AND H STREET;
MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH;
AUTHORIZING EXECUTION OF SAID AGREEMENT; AND
APPROVING FUNDING OF THE PROJECT WITH VARIOUS
AGENCY SOURCES AND CDBG FUNDS
STAFF RECOMMENDATION: Hold the required public hearing, consider all
testimony presented and adopt the resolutions of the City Council and Agency
Board approving project funding sources, making all required findings, approving
the Disposition and Development Agreement (DDA), and all implementing
agreements with Gateway Chula Vista LLC, and authorizing the Chairman to
execute same.
OTHER BUSINESS
6. DIRECTOR'S REPORT(S)
7. CHAIR'S REPORT(S)
8. AGENCY COMMENTS
ADIOURNMENT
The meeting will adjourn to an adjourned meeting of the Redevelopment Agency on June 13,2000 at 6:00
p.m., immediately following the City Council meeting, in the City Council Chambers,
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MINUTES OF A REGULAR MEETING OF THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
September 21,1999
6:00 p.m,
A Regular Meeting of the Redevelopment Agency of the City ofChula Vista was called to order at
6:51 p.m. in the Council Chambers located in the Public Services Building, 276 Fourth Avenue,
Chula Vista, California.
1. ROLL CALL:
PRESENT: Agency Members Davis, Moot, Padilla, Salas, and Chair Horton.
ABSENT: None,
CONSENT CALENDAR
2. RESOLUTION NO. AR-1643, APPROVING AMENDMENT TO TOWN CENTRE I
LAND USE POLICY
In 1977, the Agency adopted a land use policy for the Town Centre I Redevelopment Project
Area. That policy, which is currently in use, includes general land use guidelines, a list of
allowed uses, and a list of uses not allowed in Town Centre 1. At the request of the
Downtown Business Association, staff reviewed the current policy and proposes several
amendments so that the Agency will be more responsive to current land use trends.
Staffrecommendation: The Agency adopt the resolution.
ACTION:
Following Agency discussion, Agency Member Davis offered Resolution No. AR-
1643, heading read, text waived, approving amendment to Town Centre I Land Use
Policy, as further amended to include tatoo parlors as a use that is not allowed. The
motion carried 5-0.
Councilmember Davis also asked that entertainment uses such as live music be considered in
conjunction with ABC permits where appropriate within the district.
ORAL COMMUNICATIONS
There were none.
OTHER BUSINESS
3. DIRECTOR'S REPORTS
There were none.
OTHER BUSINESS (Continued)
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OTHER BUSINESS (Continued)
4. CHAIR'S REPORTS
There were none.
5. AGENCY MEMBER COMMENTS
There were none.
ADJOURNMENT:
At 7:04 p.rn., Chair Horton adjourned the meeting to a Regular Meeting to be held October 5, 1999,
at 4:00 p.rn., immediately following the City Council meeting.
Respectfully submitted,
~lLl ~~...-
Susan Bigelow, CMC/ AAE, City Clerk
Page 2 - RDA Minutes
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09/21/99
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MINUTES OF AN ADJOURNED MEETING OF THE CITY COUNCIL AND
A REGULAR MEETING OF THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
October 5,1999
4:00 P.M.
An Adjourned Meeting ofthe City Council and a Regular Meeting of the Redevelopment Agency
of the City ofChula Vista were called to order by ChairlMayor Horton at 4:48 p.m. in the Council
Chambers located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California.
1. ROLL CALL:
PRESENT: Agency/Councilmembers Davis, Moot, Padilla, and Mayor Horton.
ABSENT: Deputy Mayor/Chair Salas.
CONSENT CALENDAR
(Items 2 through 4)
2. APPROVAL OF MINUTES of June 29, 1999 (Adjourned meeting of the Redevelopment
Agency, City Council, and Housing Authority)
Staffrecommendation: The Council/Agency approve the minutes.
3. RESOLUTION AR-1644, RESOLUTION OF THE REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA, OPPOSING THE PROPOSED RELOCATION OF A DRY
DOCK TO THE SOUTHBAY BOAT YARD AND/OR ANY EXPANSION OR
INTENSIFICATION OF BOAT YARD OPERATIONS OR OTHER HEAVY
INDUSTRIAL USES, AND DIRECTING STAFF TO TAKE ALL APPROPRIATE
MEASURES TO ENSURE THAT DESIRABLE DEVELOPMENT OCCURS ON THE
BA YFRONT
There are unprecedented opportunities to realize redevelopment on the Chula Vista bayfront.
It is important at this time to express a vision for the bayfront and to work in cooperation
with various public agencies, property owners, and the residential and business community
to realize this vision.
Staff recommendation: The Agency adopt the resolution.
4. RESOLUTION AR-I645, RESOLUTION OF THE REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA, ADOPTING NEGATNE DECLARATION IS-OO-OI AND
APPROVING OWNER PARTICIPATION AGREEMENT WITH MR. LORETO
ROMERO FOR THE DEVELOPMENT OF AN INDUSTRIAL BUILDING LOCATED AT
1480 FRONTAGE ROAD WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT
AREA
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CONSENT CALENDAR (Continued)
The proposed land use is an allowed use under the General Plan, Montgomery Specific Plan,
Southwest Redevelopment Plan, and Zoning Ordinance. The City's Environmental Review
Coordinator has determined that there would be no significant impacts.
Staff recommendation: The Agency adopt the resolution.
ACTION:
Mayor/Chair Horton moved to approve staff recommendations and offered the
Consent Calendar, headings read, texts waived. The motion carried 4-0.
ORAL COMMUNICATIONS
There were none.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
5. PUBLIC HEARING ON OTA Y VALLEY ROAD NAME CHANGE
RESOLUTION AR-1646, RESOLUTION OF THE REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA CHANGING THE NAME OF OTA Y V ALLEY ROAD TO
MAIN STREET AND CREATING AN OVERLAY OF AUTO PARK DRIVE FROM 1-805
TO BRANDYWINE AVENUE, AND APPROPRIATING $141,000 FROM THE
AVAILABLE FUND BALANCE IN THE OTAY VALLEY ROAD PROJECT FUND
(4/5TH'S VOTE REQUIRED)
Notice of the hearing was given in accordance with legal requirements, and the hearing was held on
the date and at the time specified in the notice.
Mayor/Chair Horton opened the public hearing and asked if anyone from the audience wished to
. speak.
John Scott, 1879 Nirvana Avenue, stated that the proposed name change would be confusing, and
he asked the Council/Agency not to approve the proposal merely to benefit the auto dealers.
Buck Martin, representing the Coors Amphitheatre, expressed concern about having to change street
names twice on amphitheatre literature and asked to meet with staff to address his concerns.
ACTION:
F ollowing Council/Agency discussion, Councill Agency Member Padilla moved to
adopt Agency Resolution No. 1646 and Council Resolution No. 19621 as amended
to change the name of Otay Valley Road to Heritage Road from the point where Otay
Valley Road begins turning south to the City ofChula Vista's southern boundary.
Council/Agency Member Davis seconded the motion, and it carried 4-0.
Doug Fuller, representing Fuller Ford, thanked the Council/ Agency for favorable consideration of
the request.
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10/05/99
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OTHER BUSINESS
6. DIRECTOR'S/CITY MANAGER'S REPORTS
There were none.
7. CHAIR'SIMAYOR'S REPORTS
There were none.
8. AGENCY/COUNCIL COMMENTS
There were none.
CLOSED SESSION
9. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO
GOVERNMENT CODE SECTION 54956.8
Property: Agency-owned parcels at the northwest corner of Third
Avenue and H Street
Negotiating Parties: Redevelopment Agency (Chris Salomone) and Chrismatt
Corporation, a California Corporation, dba Pieri Company
(James V. Pieri)
Under Negotiations: Price and terms for disposition/acquisition.
Closed Session was cancelled, and the above item was not discussed.
ADJOURNMENT
At 5:17 p.m., Mayor/Chair Horton adjourned the meeting to an Adjourned Meeting of the
Redevelopment Agency to be held on October 12, 1999 at 6:00 p.m., immediately following the City
Council meeting.
Respectfully submitted,
~~~~
Susan Bigelow, CMC/ AAE, City Clerk
Page 3 - Council/RDA Minutes
10/05/99
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.,. ".
MINUTES OF ADJOURNED MEETINGS OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
October 12,1999
6:00 p.rn.
Adjourned Meetings of the City Council and the Redevelopment Agency of the City ofChula Vista
were called to order by Chair/Mayor Horton at 7:06 p.rn. in the Council Chambers located in the
Public Services Building, 276 Fourth Avenue, Chula Vista, California.
1. ROLL CALL:
PRESENT: Agency/Councilmembers Davis, Moot, Padilla, Salas, and ChairlMayor
Horton.
ABSENT: None.
ORAL COMMUNICATIONS
There were none.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
2. PUBLIC HEARING: CONSIDERATION OF A DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF CHULA VISTA, REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA, AND ROHR, INC., OPERATING AS BFGOODRICH
AEROSPACE AEROSTRUCTURES GROUP, RELATED TO PROPERTY BOUNDED
BY BAY BOULEVARD TO THE EAST, THE REALIGNED MARINA P ARKW A Y TO
THE WEST, F STREET/LAGOON DRIVE TO THE NORTH, AND THE PROPOSED
EXTENSION OF H STREET TO THE SOUTH
Notice ofthe hearing was given in accordance with legal requirements, and the hearing was held on
the date and at the time specified in the notice.
Chair/Mayor Horton opened the public hearing and asked if anyone from the audience wished to
speak. There was no response.
ACTION:
Agency/Councilmember Padilla moved to continue the hearing to October 19, 1999.
Agency/Councilmember Davis seconded the motion, and it carried 5-0.
OTHER BUSINESS
3. DIRECTOR'S/CITY MANAGER'S REPORTS
There were none.
4. CHAIR' SIMA YOR'S REPORTS
There were none.
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OTHER BUSINESS (Continued)
5. AGENCY/COUNCIL COMMENTS
There were none.
CLOSED SESSION
ChairlMayor Horton noted that Closed Session was cancelled, and the following item was not
discussed:
6. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO
GOVERNMENT CODE SECTION 54956.8
Property: Agency-owned parcels at the northwest corner of Third
Avenue and H Street
Negotiating Parties: Redevelopment Agency (Chris Salomone) and Chrismatt
Corporation, a California Corporation, dha Pieri Company
(James V. Pieri)
Under Negotiation: Price and terms for disposition/acquisition.
ADJOURNMENT
At 7:09 p.m., Chair/Mayor Horton adjourned the meeting to the Regular Redevelopment Agency
Meeting to be held October 19, 1999 at 6:00 p.rn., immediately following the City Council meeting.
Respectfully submitted,
~V-~~
Susan Bigelow, CMC/ AAE, City Clerk
Page 2 - CouncillRDA Minutes
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10/12/99
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MINUTES OF AN ADJOURNED MEETING OF THE CITY COUNCIL
AND A REGULAR MEETING OF THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
October 19,1999
6:00 p.m.
An Adjourned Meeting ofthe City Council and a Regular Meeting ofthe Redevelopment Agency of
the City of Chula Vista was called to order by Mayor/Chair Horton at 10:22 p.m. in the Council
Chambers located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California.
CALL TO ORDER
1. ROLL CALL:
PRESENT: Agency/Councilmembers Davis, Moot, Padilla, Salas, ChairlMayor Horton.
ABSENT: None
2. APPROVAL OF MINUTES of Joint Meetings of the Redevelopment Agency and City
Council held July 13, July 20, July 27 and August 31, 1999; and Meetings of the
Redevelopment Agency held August 3 and August 10, 1999.
ACTION:
Mayor Horton moved to approve the minutes. Councilmember Davis seconded the
motion, and it carried 5-0, except that the minutes ofJuly 13 and August 31,1999,
were approved 4-0-1, with Agency/Councilmember Padilla abstaining, and the
minutes of August 3, 1999, were approved 4-0-1, with Agency/Councihnember Salas
abstaining.
ORAL COMMUNICATIONS
There were none.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
3. PUBLIC HEARING: CONSIDERATION OF A DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF CHULA VISTA, REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA, AND ROHR, INC., OPERATING AS BFGOODRICH
AEROSPACE AEROSTRUCTURES GROUP, RELATED TO PROPERTY BOUNDED
BY BAY BOULEVARD TO THE EAST, THE REALIGNED MARINA PARKWAY TO
THE WEST, F STREET/LAGOON DRIVE TO THE NORTH, AND THE PROPOSED
EXTENSION OF H STREET TO THE SOUTH
ORDINANCE APPROVING A DEVELOPMENT AGREEMENT BETWEEN THE CITY,
REDEVELOPMENT AGENCY AND ROHR, INC., OPERATING AS BFGOODRICH
AEROSPACE AEROSTRUCTURES GROUP, RELATED TO PROPERTY BOUNDED
BY BAY BOULEVARD TO THE EAST, THE REALIGNED MARINA PARKWAY TO
THE WEST, F STREETILAGOON DRIVE TO THE NORTH, AND THE PROPOSED
EXTENSION OF H STREET TO THE SOUTH
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PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES (Continued)
Notice of the hearing was given in accordance with legal requirements, and the hearing was held on
the date and at the time specified in the notice.
Chair/Mayor Horton opened the public hearing and asked if anyone from the audience wished to
speak. There was no response.
ACTION:
Chair/Mayor Horton moved to continue the hearing to Novernber 9, 1999.
Agency/Councilmember Davis seconded the motion and it carried 5-0.
OTHER BUSINESS
4. DIRECTOR'S/CITY MANAGER'S REPORTS
There were none.
5. CHAIR' SIMA YOR'S REPORTS
There were none.
6. AGENCY/COUNCIL COMMENTS
There were none.
CLOSED SESSION
Closed Session was cancelled, and the following item was not discussed.
7. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO
GOVERNMENT CODE SECTION 54956.8
Property: Agency-owned parcels at the northwest corner of Third
Avenue and H Street
Negotiating Parties: Redevelopment Agency (Chris Salomone) and Chrismatt
Corporation, a California Corporation, dba Pieri Company
(James V. Pieri)
Under Negotiation: Price and terms for disposition/acquisition.
ADJOURNMENT
At 10:24 p.rn., Chair/Mayor Horton adjourned the meeting to an Adjourned Redevelopment Agency
Meeting to be held October 26, 1999, at 6:00 p.rn., immediately following the City Council meeting.
Respectfully submitted,
~u. Ll.L13g~
Susan Bigelow, CMC/ AAE, City Clerk
Page 2 - CouncillRDA Minutes
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10/19/99
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MINUTES OF A REGULAR MEETING OF THE REDEVELOPMENT AGENCY
AND ADJOURNED MEETING OF THE CITY COUNCIL
OF THE CITY OF CHULA VISTA
November 9, 1999
6:00 p.m.
An Adjourned Meeting ofthe City Council and a Regular Meeting of the Redevelopment Agency of
the City of Chula Vista were called to order by ChairlMayor Horton at 6:24 p.m. in the Council
Chambers located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California.
CALL TO ORDER
I. ROLL CALL:
PRESENT: Agency/Councilmembers Davis, Moot, Padilla, Salas, ChairlMayor Horton.
ABSENT: Agency/Councilmembers: None
CONSENT CALENDAR
2. AGENCY RESOLUTION NO. 1647, EXTENDING THE OWNER PARTICIPATION
AGREEMENT WITH LAWRENCE M. AND STEPHEN P. CUSHMAN, DATED
SEPTEMBER I, 1991, FOR A PERIOD OF TWO YEARS (FINAL EXTENSION)
On September 1, 1992, the Agency entered into an Owner Participation Agreement (OP A)
for the development of approximately 10 acres located at 517 Shinohara Lane. The Agency
has approved several extensions ofthe OP A due to development issues the owners have had
with location, access, grading and design features. The owners have graded the property and
have requested an additional two-year extension in order to apply for building permits and
start construction. (Director of Community Development)
ACTION:
ChairlMayor Horton offered the Consent Calendar, heading read, text waived. The
motion carried 5-0.
ORAL COMMUNICATIONS
There were none.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
3. CONSIDERATION OF A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF
CHULA VISTA, REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA,
AND ROHR, INC., OPERATING AS BFGOODRICH AEROSPACE
AEROSTRUCTURES GROUP, RELATED TO PROPERTY BOUNDED BY BAY
BOULEVARD TO THE EAST, THE REALIGNED MARINA PARKWAY TO THE
WEST, F STREET/LAGOON DRIVE TO THE NORTH, AND THE PROPOSED
EXTENSION OF H STREET TO THE SOUTH (CONTINUED FROM OCTOBER 19,
1999)
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PUBLIC HEARINGS (Continued)
ORDINANCE NO. 2801 APPROVING A DEVELOPMENT AGREEMENT BETWEEN
THE CITY, REDEVELOPMENT AGENCY AND ROHR, INC., OPERATING AS
BFGOODRICH AEROSPACE AEROSTRUCTURES GROUP, RELATED TO
PROPERTY BOUNDED BY BAY BOULEVARD TO THE EAST, THE REALIGNED
MARINA PARKWAY TO THE WEST, F STREETILAGOON DRIVE TO THE NORTH,
AND THE PROPOSED EXTENSION OF H STREET TO THE SOUTH (FIRST
READING)
The proposed Development Agreement will assure BFG that they may proceed with
development in accordance with existing rules, regulations and official policies of the City
and Agency. In exchange, BFG has agreed to cooperate with adjacent Bayfront development
proposals and to certain development restrictions on its own property. (Director of
Community Development)
COUNCIL RESOLUTION NO. 19648 AND AGENCY RESOLUTION NO. 1648
APPROVING AN AMENDMENT TO THE RELOCATION AGREEMENT BETWEEN
THE CITY/AGENCY, BFGOODRICH AEROSPACE AEROSTRUCTURES GROUP,
AND THE SAN DIEGO UNIFIED PORT DISTRICT, AND AUTHORIZING THE
MAYOR/CHAIRMAN TO EXECUTE SAME
The City of Chula Vista, Redevelopment Agency, San Diego Unified Port District, and
BFGoodrich (BFG) approved the terms and conditions of a Relocation Agreement under
which certain land transfers will occur to facilitate the relocation and consolidation ofBFG
operations north ofthe planned "H" Street extension in the Bayfront Redevelopment Project
Area. At the direction of the Port Cornmission, a Phase II analysis has been conducted with
respect to the South Campus. In light of the extent of contamination found, the Port has
required that certain provisions of the Relocation Agreement be amended. (Director of
Community Development/City Attorney)
Notice ofthe hearing was given in accordance with legal requirements, and the hearing was held on
the date and at the time specified in the notice.
Assistant Director of Community Development Haynes presented the staff report on this item,
explaining the proposed development agreement and amendment to the relocation agreement.
ChairlMayor Horton opened the public hearing and asked if anyone from the audience wished to
speak. There was no response, and she declared the hearing closed.
Agency/Councilmember Moot asked why dewatering would not be permitted. David Merk, Director
of Environmental Services for the Port District, stated that no permanent dewatering would occur,
since recent experience with permanent dewatering systems had not been positive, the Regional
Water Board is not issuing permanent dewatering permits at this time, and the City of San Diego will
not receive the groundwater due to sewer capacity issues. Agency/Councilmember Moot asked if
there were any way underground parking could be accommodated without the dewatering process.
Mr. Merc responded negatively. Agency/Councilmember Moot stated that if a growing groundwater
contamination issue exists, it should be properly addressed. Assistant City Attorney Googins pointed
out that the agreement not to allow permanent dewatering on the south campus is an agreement
between the City, Agency, BFG and the Port District. From a legal standpoint, the agreement could
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PUBLIC HEARINGS (Continued)
be amended in the future by a unanimous agreement among all parties. Agency/Councilmember
Moot suggested that the agreement be modified to state that so long as the Regional Water Quality
Control Board is not issuing such permits, there will be no permanent dewatering.
Community Development Director Salomone expressed concern regarding the scheduling of the
process and the need to close the deal as soon as possible. Mr. Art Selgren, representing
BFGoodrich, obj ected to changing the proposed agreement and stated that the company would like
to move forward with the project.
Agency/Councilmember Salas asked who would bear the costs of any legal challenges to the
agreement. Assistant City Attorney Googins responded that any such costs would be borne by BFG.
ACTION:
ChairlMayor Horton offered Ordinance No. 2801, Approving a Development
Agreement Between the City, Redevelopment Agency and Rohr, Inc., Operating as
BFGoodrich Aerospace Aerostructures Group, Related to Property Bounded by Bay
Boulevard to the East, the Realigned Marina Parkway to the West, F Street/Lagoon
Drive to the North, and the Proposed Extension of H Street to the South, for first
reading, heading read, text waived. The rnotion carried 5-0.
ACTION:
ChairlMayor Horton offered Council Resolution No. 19648 and Agency Resolution
No. 1648, Approving an Amendment to the Relocation Agreement Between the
City/Agency, BFGoodrich Aerospace Aerostructures group, and the San Diego
Unified Port District, and Authorizing the Mayor/Chairman to Execute Same,
headings read, texts waived. The motion carried 4-1, with Agency/Councilmember
Moot voting in opposition.
4. CONSIDERATION OF A REQUEST TO ESTABLISH A VOCATIONAL POST-
SECONDARY SCHOOL AT 310 THIRD AVENUE WITHIN THE TOWN CENTRE I
REDEVELOPMENT PROJECT AREA
AGENCY RESOLUTION NO. 1649 APPROVING THE SPECIAL USE PERMIT TO
ALLOW THE ESTABLISHMENT OF A VOCATIONAL POST-SECONDARY SCHOOL
AT 310 THIRD AVENUE WITHIN THE TOWN CENTRE I REDEVELOPMENT
PROJECT AREA
The proposed school qualifies for a Class 1 categorical exemption as the leasing of an
existing facility per Section 15301 of the Guidelines for Implementation of the California
Environmental Quality Act. The requested land use permit requires consideration by the
Agency in accordance with the Town Centre I Redevelopment Plan. At its meeting on
October 13, 1999, the Town Centre Project Area Committee voted to recommend that the
Agency approve the application for a Special Use Permit. (Director of Community
Development)
Notice ofthe hearing was given in accordance with legal requirements, and the hearing was held on
the date and at the time specified in the notice.
Planning & Environmental Manager Hunter explained the request to establish the vocational school
at 310 Third Avenue.
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PUBLIC HEARINGS (Continued)
ChairlMayor Horton opened the public hearing and asked if anyone from the audience wished to
speak; there was no response. She then closed the public hearing.
ACTION:
Agency/Councilmember Davis offered Agency Resolution No. 1649, Approving the
Special Use Permit to Allow the Establishment of a Vocational Post-Secondary
School at 310 Third Avenue Within the Town Centre I Redevelopment Project Area,
heading read, text waived. The motion carried 5-0.
5. CONSIDERATION OF ADOPTION OF FIVE-YEAR IMPLEMENTATION PLANS
(2000-2004) FOR THE FOLLOWING REDEVELOPMENT PROJECT AREAS LOCATED
WITHIN THE CITY OF CHULA VISTA: TOWN CENTRE I; TOWN CENTRE II;
BA YFRONT; SOUTHWEST; AND OT A Y VALLEY ROAD
AGENCY RESOLUTION NO. 1650 ADOPTING FIVE-YEAR (2000-2004)
IMPLEMENTATION PLANS FOR THE TOWN CENTRE I, TOWN CENTRE II,
BAYFRONT, SOUTHWEST AND OTAY VALLEY ROAD REDEVELOPMENT
PROJECT AREAS (4/5THS VOTE REQUIRED)
The Implementation Plans will provide an overview of projected activities and identifY
anticipated programs and expenditures for the upcoming five-year period. The plans also
explain how the goals and objectives, programs and expenditures of each Implementation
Plan will eliminate blight within the project areas. Additionally, the plans address
requirements for low and moderate income housing. (Director of Community Development)
Notice ofthe hearing was given in accordance with legal requirements, and the hearing was held on
the date and at the time specified in the notice.
Redevelopment Manager Estes stated that the state Health and Safety Code requires the
Redevelopment Agency to adopt Implementation Plans every five years for each redevelopment
proj ect in its jurisdiction. The current Implementation Plans, adopted in 1994 for the period of 1995-
1999, expire in December. The plans were reviewed and updated at mid-term in August 1997, as
required by the enabling legislation. The new plans will cover the period ofJanuary 1,2000 through
December 31, 2004. The plans provide an overview of projected activities and identifY anticipated
programs and expenditures for the upcoming five-year period. They also explain how the goals and
objectives, programs and expenditures of each plan will eliminate blight within the project areas and
address requirements for low and moderate income housing. He then explained the revised
implementation plans, the projects accomplished during the past five years, and the planned
activities and redevelopment opportunities in each redevelopment area.
Mayor Horton opened the public hearing and asked if anyone from the audience wished to speak.
There was no response, and she closed the hearing.
Deputy Mayor Salas asked if the Agency would be reviewing the redevelopment project boundaries,
in particular for the Southwest area. Redevelopment Manager Estes agreed that the boundaries
needed to be addressed and stated that because of reforms in redevelopment law, many issues can be
resolved and potential expansions ofthe areas are a possibility. Deputy Mayor Salas stated that it is
important to those businesses just outside the current boundaries which are trying to upgrade their
properties to have other businesses follow suit.
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PUBLIC HEARINGS (Continued)
ACTION:
Councilmember Padilla offered Agency Resolution No. 1650 Adopting Five-Year
(2000-2004) Implementation Plans for the Town Centre I, Town Centre II, Bayfront,
Southwest and Otay Valley Road Redevelopment Project areas, heading read, text
waived. The motion carried 5-0.
OTHER BUSINESS
6. DIRECTOR'S/CITY MANAGER'S REPORTS
There were none.
7. CHAIR'SIMA YOR'S REPORTS
There were none.
8. AGENCY/COUNCIL COMMENTS
There were none.
CLOSED SESSION
Closed Session was cancelled, and the following item was not discussed:
9. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO
GOVERNMENT CODE SECTION 54956.8
Property: Agency-owned parcels at the northwest corner of Third
Avenue and H Street
Negotiating Parties: Redevelopment Agency (Chris Salomone) and Chrismatt
Corporation, a California Corporation, dba Pieri Company
(James V. Pieri)
Under Negotiation: Price and terms for disposition/acquisition.
ADJOURNMENT
At 7:43 p.m., ChairlMayor Horton adjourned the meeting to an Adjourned Redevelopment Agency
Meeting to be held November 16, 1999 at 6:00 p.m., immediately following the City Council
meeting.
Respectfully submitted,
:;:: ~IJ6-U~r~
Susan Bigelow, CMC/ AAE, City Clerk
Page 5 - CouncillRDA Minutes
11/09/99
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MINUTES OF AN ADJOURNED MEETING OF THE CITY COUNCIL
AND A REGULAR MEETING OF THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
November 16, 1999
6:00 p.m.
An Adjourned Meeting ofthe City Council and a Regular Meeting of the Redevelopment Agency of
the City of Chula Vista were called to order by Mayor/Chair Horton at 8:58 p.m. in the Council
Chambers located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California.
CALL TO ORDER
I. ROLL CALL:
PRESENT: Agency/Councilmembers Davis, Moot, Padilla, Salas, ChairlMayor Horton
ABSENT: Agency/Councilmember Moot
CONSENT CALENDAR
2. AGENCY RESOLUTION NO. 1647 APPROPRIATING $2,802 FROM THE
UNAPPROPRIATED BALANCE IN THE LOW AND MODERATE INCOME HOUSING
FUND FOR THE COLD WEATHER SHELTER PROGRAM (4/5THS VOTE REQUIRED)
The Cold Weather Shelter Program, administered through the County of San Diego, is an
annual program that provides assistance to homeless families and individuals during the
rainy months from December through April. This year marks the third year Chula Vista has
participated. Funds for the City's contribution to this program have been budgeted for this
fiscal year in the amount of $8,318; however, due to the overwhelming demand for the
program, the County has increased its program budget and is requesting an additional $2,802
in funding, for a total contribution of$II,120. (Director of Community Development)
Staff recommendation: The Agency adopt the resolution.
3. AGENCY RESOLUTION NO. 1648 ADOPTING A REPLACEMENT HOUSING PLAN
FOR THE GATEWAY CHULA VISTA PROJECT
California Redevelopment Law requires that a Redevelopment Agency adopt a Replacement
Housing Plan (RHP) prior to consideration of adoption of a Disposition and Development
Agreement (DDA) ifthe proposed project will displace households with moderate or lower
incomes. The Agency may soon be considering a DDA for an office and retail development
project proposed in the Town Centre I Redevelopment Project Area. A resolution approving
the RHP must be adopted a minimum of30 days prior to consideration of the DDA for the
project. On November 10, 1999, the Town Centre Project Area Committee unanimously
approved the Replacement Housing Plan. (Director of Community Development)
Staff recommendation: The Agency adopt the resolution.
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CONSENT CALENDAR (Continued)
4. ORDINANCE NO. 2801, APPROVING A DEVELOPMENT AGREEMENT BETWEEN
THE CITY, REDEVELOPMENT AGENCY AND ROHR, INC., OPERATING AS
BFGOODRICH AEROSPACE AEROSTRUCTURES GROUP, RELATED TO
PROPERTY BOUNDED BY BAY BOULEVARD TO THE EAST, THE REALIGNED
MARINA PARKWAY TO THE WEST, F STREET/LAGOON DRIVE TO THE NORTH,
AND THE PROPOSED EXTENSION OF H STREET TO THE SOUTH (SECOND
READING AND ADOPTION)
The proposed Developrnent Agreement will assure BFG that they may proceed with
development in accordance with existing rules, regulations and official policies of the City
and Agency. In exchange, BFG has agreed to cooperate with adjacent Bayfront development
proposals and to certain development restrictions on its own property.
Staff recommendation: The Agency and Council adopt the ordinance.
ACTION:
Chair/Mayor Horton offered the Consent Calendar, headings read, texts waived. The
motion carried 4-0.
ORAL COMMUNICATIONS
There were none.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
4. PUBLIC HEARING: CONSIDERATION OF COASTAL DEVELOPMENT PERMIT
NUMBER 73 FOR REMOVAL OF ABOVEGROUND FUEL OIL STORAGE TANKS AT
THESOUTHBAYPOWERPLANT
The proposed project involves the removal of aboveground fuel oil storage tanks at the South
Bay Power Plant located at 990 Bay Boulevard, just south of Marina View Park and
immediately west of Interstate 5. The project site is located within the Bayfront
Redevelopment Project Area and the Chula Vista Coastal Zone. It has been determined that
the issuance of a Coastal Development Permit is required pursuant to the Bayfront
Redevelopment Plan, as well as the Chula Vista Municipal Code. A Negative Declaration
and Findings of No Significant Impact, prepared and certified by the San Diego Unified Port
District, has determined that the overall project will have no potential significant adverse
impacts. (Community Development Director)
Staff recommendation: The Agency and Council adopt a joint resolution authorizing the
issuance of Coastal Development Permit Nurnber 73.
ACTION:
ChairlMayor Horton offered Council Resolution No. 19671 and Agency Resolution
No. 1649, Resolution Authorizing the Issuance of Coastal Development Permit
Number 72 for Removal of Aboveground Fuel Oil Storage Tanks at the Southbay
Power Plant, heading read, text waived. The motion carried 4-0.
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OTHER BUSINESS
5. DIRECTOR'S/CITY MANAGER'S REPORTS
There were none.
6. CHAIR'SIMAYOR'S REPORTS
There were none.
7. AGENCY/COUNCIL COMMENTS
There were none.
ADJOURNMENT
At 9:04 p.m., ChairlMayor Horton adjourned the Redevelopment Agency Meeting to an Adjourned
Regular Meeting to be held November 30, 1999 at 6:00 p.m., immediately following the City
Council meeting.
Respectfully submitted,
-
w.Cu..~...L-€l. )
Susan Bigelow, CMC/ AAE, City Clerk
Page 3 - CouncillRDA Action Agenda
11109/99
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"I' T1'
MINUTES OF AN ADJOURNED MEETING OF THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
November 30,1999
6:00 p.m.
An Adjourned Meeting of the Redevelopment Agency ofthe City ofChula Vista was called to order
by Chair Horton at 8:27 p.m. in the Council Chambers located in the Public Services Building, 276
Fourth Avenue, Chula Vista, California.
CALL TO ORDER
I. ROLL CALL:
PRESENT: Agency Members Davis, Moot, Padilla, Salas, Chair Horton.
ABSENT: Agency Members: None
CONSENT CALENDAR
2. RESOLUTION NO. 1650 APPROVING AN AMENDED AND RESTATED OWNER
PARTICIPATION AGREEMENT WITH THE GREENWALD COMPANY FOR THE
DEVELOPMENT OF 76,885 SQUARE-FOOT BUILDING AT 690 OXFORD STREET
WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT AREA
On September 22, 1998, the Agency approved an Owner Participation Agreement (OPA)
with the Greenwald Cornpany for the development of a 76,885 square-foot building at 690
Oxford Street. The project is cornplete and is being occupied by the County of San Diego.
The developer is in the process of obtaining permanent financing for the project and is
proposing to make changes to some of the provisions in the OP A in order to expedite the
lending process. The modifications are not substantial and will not affect the purpose and
intent of the OP A.
ACTION:
Chair Horton offered the Consent Calendar, heading read, text waived. The motion
carried 5-0.
ORAL COMMUNICATIONS
There were none.
OTHER BUSINESS
3. EXECUTIVE DIRECTOR'S REPORTS
There were none.
4. CHAIR'S REPORTS
There were none.
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OTHER BUSINESS (Continued)
5. AGENCY MEMBER COMMENTS
There were none.
ADJOURNMENT
At 8:34 p.m., Chair Horton adjourned the rneeting to the Regular Meeting of December 7, 1999, at
4:00 p.m., immediately following the City Council meeting.
Respectfully submitted,
_--11 .lA-u ~~~ (5). )
Susan Bigelow, CMC/ AAE, City Clerk
Page 2 - RDA Minutes
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,. 1:
REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM NO.:
MEETING DATE:
~
06/06/00
ITEM TITLE:
RESOLUTION ADOPTING NEGATIVE DECLARATION 15-00-13,
APPROVING COASTAL DEVELOPMENT PERMIT DRC-0038, AND
APPROVING AN OWNER PARTICIPATION AGREEMENT WITH JACK-
IN-THE-BOX INCORPORATED FOR THE DEVELOPMENT OF A GAS
STATION WITH CONVENIENCE STORE AND DRIVE-THRU
RESTAURANT WITHIN THE BAYFRONT REDEVELOPMENT PROJECT
AREA
COMMUNITY DEVELOPMENT DIRECTOR Lt!-~
EXECUTIVE DIRECTOR ?- oJ -I)'~
SUBMITTED BY:
REVIEWED BY:
4/ST"S VOTE: YES D NO 0
BACKGROUND
Jack-in-the-Box Incorporated is proposing to construct a gas station and convenience store and
drive-thru restaurant at the northeast corner of Bay Blvd. and J Street within the boundaries of the
Bayfront Redevelopment Project Area.
The proposed land use is allowed under the General Plan and Bayfront Specific Plan. The
Community Development Departmenfs Planning and Environmental Manager reviewed the
proposed project pursuant to the provisions of the California Environmental Quality Act and
determined that there are no significant impacts and recommends adoption of Negative
Declaration 15-00- 13.
The Bayfront Redevelopment Plan requires that Jack-in-the-Box enter into an Owner Participation
Agreement (OPA) which includes the design plans and a list of conditions. The OPA is being
presented to the Redevelopment Agency for consideration and approval.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the resolution odopting the Negative
Declaration 15-00-13, approving the Coastal Development Permit, and approving the Owner
Participation Agreement for development of a gas station with convenience store and drive-thru
resta u ra nt.
0).-1
ITEM NO.:
MEETING DATE:
"-
06/06/00
BOARDS AND COMMISSIONS RECOMMENDATION
The Design Review Committee reviewed the proposed project plans on April 17, 2000 and
recommended approval of the project as described in Exhibit A and subject to conditions listed in
Exhibit B of the Owner Participation Agreement. They further recommended that the gas canopy
and pole sign be designed to reflect the building's architecture. The Resource Conservation
Commission recommended adoption of the Negative Declaration on April 17,2000.
DISCUSSION
Owner Participation Aareement
The Owner Participation Agreement (OPA) runs with the land and outlines a number of
responsibilities of the developer. Among others, Jack-in-the-Box Incorporated will be required to:
1) Develop the property in accordance with the approved development proposal subject
to the conditions of all City Departments and the Design Review Committee;
2) Submit a sign program for Design Review Committee consideration;
3) Secure all necessary permits; and
4) Maintain the property in a first class condition.
Proiect Description
The applicant is proposing a co-brand building consisting of a Jack-in-the-Box restaurant with
drive-thru and a convenience store with gas sales. These are uses permitted by right as
identified within the Bayfront Specific plan (food sales commercial, convenience sales and service
commercial, and automotive servicing commercial), as well as, compatible with a Visitor
Commercial/Highway land use designation. Although no public input was received at the
hearing for the liquor license held by the Police Department, there are concerns regarding the
sale of alcohol and the proximity to a public park. Conditions have been added to the permit
which address these issues to the satisfaction of the Police Department.
Buildina Desian
While the use of standardized "corporate" architectural styles associated with chain-type facilities
is acceptable provided the design complies fully with the Design Manual guidelines, the
architecture for this site reflects the yacht club and marina rather than a fast food chain and a
gas station. The designer has borrowed architectural theming, materials and color from the
Chula Vista marina area and has employed variation in form, building details and siting in order
to create visual interest. The standing seam metal roof, wood trim, decorative lighting, and
masonite siding with a shiplap appearing design create an appropriate entrance to the Chula
Vista marina area. The building has been varied in height sa that it appears to be divided into
distinct massing elements to reduce building bulk as is strongly encouraged in the Design
Manual.
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PAGE 3, ITEM NO.:
MEETING DATE:
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06/06/00
Site Characteristics
The proposed project is located at the northeast corner of J Street and Bay Boulevard on a vacant
irregular shaped 1.8 acre parcel within Subarea 2 (Industrial Subarea) of the Bayfront Specific
Plan. The surrounding uses include office buildings to the west ond north separated by Bay
Boulevard, a vacant parcel to the south across J street, and a drainage structure and Interstate 5
to the east. The Specific Plan has been incorporated into the General Plan and identifies the land
use as Commercial Visitor/Highway.
Land Use Desianations
The project is located within Special Condition "F" (Section 19.87.003 of the Chula Vista
Municipal Code) within Subarea 2 of the Bayfront Specific Plan. Special development standards
specific to this site and Special Condition "F" will be identified and addressed throughout this
analysis. The Bayfront Specific Plan acts not only as the zoning and land use document for the
property, but is also the Local Coastal Plan.
Site Plan and Parkina:
Per Special Condition "F" building setbacks shall be:
REQUIRED
PROVIDED
J Street
Bay Boulevard
Adjacent to 1-5 Freeway
From intersection of J Street
and Bay Boulevard
50 feet
30 feet
50 feet
60 feet
>50 feet
30 feet
>50 feet
>60 feet
Proposed building area is 4,831 square feet (Floor Area Ratio .061). The maximum floor area
ratio allowed on site per Special Condition "F" is .55. Net landscape area is 26,029 square feet
or approximately 33% of the site. Special Condition "F" requires that landscaping of the site shall
be 15-20% of the total lot area. It also requires that the minimum landscaping depth along street
frontages shall be 15 feet in width. The landscape review indicated additional work needed to be
done, so the plan has been conditioned to provide a landscape plan to the satisfaction of the City
Landscape Planner.
Vehicular access is provided from two driveways off of Bay Boulevard and a single driveway off of
J Street. As noted previously 54 parking spaces are provided, as well as a stacking lane for
approximately 8 cars in the drive-thru lane. Total required parking is 39 spaces for automobiles.
5 spaces for bicycles are required for all fast food restaurants per the Specific Plan. The Plan has
been conditioned to provide a fixed storage rack designed to secure the frame and wheel of the
bicycle sufficient for five bicycles (to be shown On the landscape plan).
The Engineering Department has required a six foot additional right of way dedication along Bay
Boulevard along with construction of curb, gutter, and sidewalk along Bay Boulevard and J Street
and a pedestrian ramp per ADA standards at the intersection. Special condition "F" requires that
pedestrian linkages shall be provided to connect both sides of J Street as well as linking the
project to the Bayfront development.
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PAGE 4, ITEM NO.:
MEETING DATE:
~
06/06/00
Sianaae
While a complete signage package has not been submitted and the project will be conditioned to
submit a sign program to the Design Review Committee for their approval, the issue of freeway
signage is specifically important to this application.
The sign regulations (19.85.005(3)b.2) specific to subarea 2 for private signs state that,"...
service stations with freeway exposure shall be allowed freeway identification signs. Signs shall
be as small as possible and still have freeway identity, in no case to exceed 50 square feet total
sign area. Such signs shall be subject to strict review by the design review board." As this site is
located approximately 30 feet below freeway grade, and service station sites located above
freeway grade (such as at Interstate 5 and E Street) have approximately 30 foot high signs,
Community Development staff support a sign up to 60 foot in height from grade (30 feet above
the freeway). This is in keeping with the intent of this regulation, as well as, the general provision
that directs subarea provisions to supercede areawide provisions.
Conclusion
It is staff's opinion that the construction of the proposed gas station, convenience store and drive-
thru restaurant will be beneficial for the City, because it will put a vacant parcel to a higher and
better use, bring new development to the area, and will contribute to the elimination of blighting
influences, which further the goals and objectives of the Bayfront Redevelopment Plan. This land
use will not only provide Visitor Commercial/Highway uses as designated by the General Plan of
the City of Chula Vista, but will provide necessary services for day users of the adjacent park and
boat launch ramp facilities in a structure that is architecturally integrated with the yacht club and
marina. Staff recommends that the Negative Declaration be adopted and that the Coastal
Development Permit and Owner Participation be approved.
FISCAL IMPACT
The proposed project has an estimated voluation of $2.5 million over base year value. This will
generate an annual tax-increment revenue of approximately $25,000, which will be distributed as
follows: Twenty percent ($5000) for the Housing Set-Aside fund; and the remaining eighty percent
($20,000) will accrue to the Bayfront Redevelopment Project Area fund.
ATTACHMENTS
Locator Map
Attachment A - Negative Declaration
Attachment B - Coastal Development Permit
Attachment C - Owner Participation Agreement with the following:
Exhibit A - Design Plans
Exhibit B - Design Review and Agency Conditions of Approval
H, \HOME\COMMDEV\ST AFF. REP\06.06-00\jackapa.dac
Ol.. - t./
.,. ".
RESOLUTION
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA ADOPTING NEGATIVE DECLARATION IS-00-13, APPROVING COASTAL
DEVELOPMENT PERMIT DRC-0038, AND APPROVING OWNER PARTICIPATION
AGREEMENT WITH JACK-IN-THE-BOX INCORPORATED FOR THE
DEVELOPMENT OF A GAS STATION WITH CONVENIENCE STORE AND DRIVE-
THRU RESTAURANT VVITHIN THE BAYFRONT REDEVELOPMENT PROJECT
AREA
WHEREAS. Jack-in-the-Box Incorporated has presented development plans for the construction of a co-brand
building consisting of a Jack-in-the-Box restaurant with drive-thru and a convenience store with gas sales ["Projecr']; and
VVHEREAS, the site for the proposed Project is located at the northeast corner of J Street and Bay Boulevard on
a vacant 1.8 acre parcel within Subarea 2 of the Bayfront Specific Plan within the Bayfront Redevelopment Project Area
under the jurisdiction and control of the Redevelopment Agency of the City of Chula Vista, which is diagrammatically
shown in the Locator Map attached to the Owner Participation Agreement and incorporated herein by reference; and,
WHEREAS, the City's Community Development Department Planning and Environmental Manager reviewed the
proposed Project and issued Negative Declaration IS-00-13 for the project in accordance with CEQA; and,
WHEREAS. after a public hearing. the Design Review Committee reviewed and recommended that the
Redevelopment Agency approve the Coastal Development Permit DRC-0038 of the proposed Project subject to the
conditions listed in Exhibit B of the Owner Participation Agreement; and,
WHEREAS. the Redevelopment Agency of the City of Chula Vista has been presented an Owner Participation
Agreement, said agreement being on file in the Office of the Secretary to the Redeveiopment Agency and known as
document RACO 00-_. approving the development of a gas station with convenience store and drive-thru restaurant
within the Subarea 2 of the Bayfront Specific Plan within the Bayfront Redevelopment Project Area, depicted in Exhibit A
and subject to conditions listed in Exhibits B of said agreement.
NOVV, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby find,
order, determine and resolve as follows:
1. The proposed project will not have a significant impact on the environment; accordingiy Negative declaration
IS-00-13 was prepared and is hereby adopted in accordance with CEQA.
2. The proposed project is allowed under the General Plan and is consistent with the Baytront Specific Plan
and shall implement the purpose thereof; the project shall assist with the elimination of blight in the Project
Area.
3. The Redevelopment Agency of the City of Chula Vista hereby approves the Owner Participation Agreement
with the Jack-in-the-Box Incorporated for the development of a gas station with convenience store and drive-
thru restaurant at the northeast comer of J Street and Bay Boulevard, in the form presented in accordance
with plans attached thereto as Exhibit A and subject to conditions listed in Exhibits B of said agreement.
4. The Agency hereby approves the issuance of Coastal Development Permit DRC-0038 pursuant to the
conditions imposed by the Design Review Committee and attached to the Owner Participation Agreement
as Exhibit B.
5. The Chairman of the Redevelopment Agency is hereby authorized to execute the subject Owner
Participation Agreement between the Redevelopment Agency and Jack-in-the-Box Incorporated.
6. The Secretary of the Redevelopment Agency is authorized and directed to record said Owner Participation
Agreement in the Office of the County Recorder of San Diego, California.
Presented by:
~~
Chris Salomone
Community Development Director
Approved as to form by:
H:\HOME\COMMDEVlRESOS\Jack-in-the-Box.DOC
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~ BAYSIDE
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PROlE , /
lOCAT
_.,:~
CHULA VISTA PLANNING AND BUILDING DEPARTMENT
LOCATOR ~~~~I~~Trr: TRAVIS ENGINEERING (Karl Huy)
C) PROJECT 685 Bay Blvd. Northwest comer of
ADDRESS: "J" Street and Bay Boulevard
SCALE: FILE NUMBER:
NORTH No Scale PCC - 00-23
h:lhomelplanninglhectorllocatorslpcc0023.cdr 12/16/99
PROJECT DESCRIPTION:
CONDITIONAL USE PERMIT
Request: Proposed development and construction of a Jack
In the Box drive-thru restaurant, and convenience
store with gasoline sales.
.,. ".
negative
declaration
ATTACHMENT A
PROJECT NAME:
Jack In the Box /Gasoline SaleslMini-Mart
PROJECT LOCATION:
NEC of Bay Blvd. and "J" St., City ofChula Vista
ASSESSOR'S PARCEL NO.:
571-330-15
PROJECT APPLICANT:
Travis Engineering
CASE NO.:
IS-00-13
DATE: March 27,2000
A. Project Setting
The project site consists of a vacant 1.8 acre parcel located on the north east corner of Bay
Boulevard West and "J" Street in the city's Bayfront specific plan. Surrounding uses are as
follows: North: office professional building; East: Interstate 5; South: a vacant site; West:
industrial development (BF Goodrich). The project site is zoned I (Industrial). The Bayfront
Specific Plan designates the site for Visitor Commercial.
The project site has been cleared of all vegetation and therefore there is no viable habitat for
any sensitive animal species. There is also an existing cement lined drainage ditch east of
the project site that would help convey storm waters away from the site.
Bay Boulevard West and "J" Street are designated as Class 1 Collectors by the City's
Circulation Element. A
B. Proiect Description
The proposed project consists of the construction of a drive-thru restaurant, a three island
gasoline service station and convenience grocery store. The proposed project when
completed would operate 24 hours and 7 days a week.
Forty-two parking spaces will be provided along the front perimeter of the proposed drive-
thru restaurant and convenience store. New landscaped areas, totaling approximately 795
sq. ft., will be provided essentially along the perimeter of the project site with special
emphasis along Bay Boulevard West and "J" Street frontage. The landscaped area will
include grass turf, shrubs and trees.
The applicant proposes to install underground fuel tanks and ancillary equipment which will
A:\l1b\linda\is9807.neg
city of chula vista planning department
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CITY Of
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be subject to local, state and federal regulations as applicable. Discretionary actions involve
approval by the Design Review Committee, the granting of a sign variance by the Zoning
Administrator and the approval by the City's Redevelopment Agency.
C. Compatibilitv with Zoning and Plans
The current zoning on-site is I (Industrial) and the site is designated as Visitor Commercial
by the Bayfront Specific Plan. The proposed project is in compliance with the Zoning
designation and the Bayfront Specific Plan.
D. Identification of Environmental Effects
An Initial Study conducted by the City ofChula Vista (including an attached Environmental
Checklist form) determined that the proposed project will not have a significant
environmental effect, and the preparation of an Environmental Impact Report will not be
required. This Negative Declaration has been prepared in accordance with Section 15070 of
the State CEQA Guidelines.
I. Public Services Impact
Fire
The nearest fire station is located about 2 miles from the project site. The estimated
response time is less than seven (7) minutes. The response time complies with the
City Threshold Standards for fire and medical response time. The applicant will
need to obtain a permit from the fire department with respect to the installation of
underground fuel tanks, fuel lines and related electrical systems. This review process
will be coordinated with other Regulatory Agency review processes to ensure that
no aspect ofthe proposed project will have an adverse impact on project site soils,
underground water table or the surrounding residents and the physical environment.
Police
The Police Department indicates the Average Response Time for Priority I calls is
4 minutes, 47 seconds. This is just slightly above the Threshold Standard of 4
minutes and 30 seconds. The response time for Priority 2 calls is 6 minutes and 21
seconds, and this does comply with the Threshold Standard. The Police Department
will be able to provide adequate service to the proposed land uses.
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2. Utilitv and Service Svstems
Soils - geotechnical
A geotechnical soils report dated September 28, 1999 was prepared by Giles
Engineering & Associates, Inc for the project site. The Soils Engineer indicates that
this is a standard report with recommendations that can be made part of the review
process. The report indicates that clayey (cohesive) soils or soils which possess clay
particles (d<0.005mm) in excess of20 percent (Seed and Idriss, 1982) are generally
not considered to be susceptible to liquefaction, nor are those soils which are above
the static groundwater table. A telephone conversation with the Project Manager for
Giles Engineering, confirms that the upper crust soils of the site are extremely hard
clayey soils.
The soils report indicates that the results of the liquefaction analysis indicate the non-
cohesive granular soils below the water table are subjected to liquefaction under the
assumed seismic event as is the case with any development under similar
circumstances in seismically active Southern California. Standard recommendations
for site development and design of the building foundations are included in the report
and will become standard conditions of the grading and construction permitting
process as confirmed by the City Engineering Division. No mitigation is required
Soils - underground installation of fuel tanks
The applicant shall obtain appropriate permits and clearance from the County of San
Diego Health Department, Hazardous Material Management Division and the
Regional Water Quality Control as applicable regarding installation of underground
fuel tanks and ancillary fuel lines and equipment. The County of San Diego Health
Department has a specific program outlining the installation of fuel tanks and is
prepared to assist the applicant as part of the permitting process. The City Fire
Department and Building Division will also be involved in the standard regulated
permitting process. No mitigation is required.
Drainage
The Federal Emergency Management Agency (FEMA) maps show the project site
to be within the 500 year flood plain. The 100 year flood is contained in the adjacent
cement lined channel east of the project site. The Engineering Division indicates that
the existing off-site drainage facilities are adequate to serve the proposed project. As
a standard condition of approval that will adequately address the 500 year flood plain
issue, the Engineering Division has requested that the applicant prepare a hydraulic
study with the first submittal of grading improvement plans to identify the method
to be used to convey on-site water surface runoff.
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Water
The Sweetwater Authority indicates there is currently no water service to the project
site. The applicant will be required to enter into an agreement for water facility
improvements with the water Authority and obtain a "Will Serve" letter prior to the
issuance of a building pennit.
Sewer
Sewage flows and volumes are currently being adequately maintained. The
Engineering Division indicates there is adequate sewer capacity to serve the project.
The applicant, as a matter of record, will need to provide EDU calculations to
.complete their DRC application and comply with the City Engineering Standards.
No mitigation will be required.
Streets/Traffic
The Threshold Standards Policy requires that all intersections must operate at a Level
of Service (LOS) "C" or better, with the exception that Level of Service (LOS) "D"
may occur during the peak two hours of the day at signalized intersections. No
intersection may reach an LOS "F" during the average weekday peak hour.
Intersections of arterials with freeway ramps are exempt from this policy. The
proposed project would comply with this Threshold Policy for the immediately
affected intersection of Bay Boulevard West and "J" Street.
OFF-SITE CIRCULATION
A traffic study prepared by Kimley-Horn & Associates, Inc. for this project analyzed
on-site circulation of gasoline trucks, drive-thru lane circulation, fueling positions,
vehicle capacity and off-site traffic impacts to two intersections. The two analyzed
intersections were "J" Street and Bay Boulevard West (a four-way stop controlled
inersection) and '']'' Street and the 1-5 bound southbound off-ramp (signalized with
a two-phase signal). The project will generate approximately 3,122 "driveway"
vehicle trips per day. The traffic study indicates that a significant number of vehicles
will be already traveling on the adjacent roadway. The total new traffic to be added
to the roadway system by the project is estimated to be 1.678 trios on a daily basis.
The morning peak hour traffic would involve 66 inbound and 65 outbound trips. The
evening peak hour traffic would involve 65 inbound and 63 outbound trips. The
study determined that the intersection of "J' Street and Bay Boulevard West would
operate at a Level of Service (LOS) "A" in the morning peak hour, and at LOS "B"
in the evening peak hour. The Intersection of"J" Street and the 1-5 southbound off-
ramp will operate at LOS "B" in both the morning and evening peak hours. The
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project will not cause unacceptable operating conditions at either intersection and
will continue to comply with the City of Chula Vista Traffic Threshold standard of
LOS "C" or better for both intersections.
ON-SITE CIRCULATION
Fuel trucks approaching the site from the east via "J" Street, will enter the project
driveway located on "J" Street. The underground tanks will be accessible from this
driveway. The refueling would not interfere with customers approaching the site for
fueling purposes or using the convenience store/drive-thru restaurant. Tank re-
fueling activities would typically occur outside the project's peak hours of operation.
The driveways as proposed would adequately service the site. Adequate stacking of
vehicles utilizing the drive-thru restaurant has also been provided.
The Engineering Division indicates that the overall project has been found to be
consistent with the criteria established in the City's Transportation Phasing Plan and
General Plan Traffic Element. However, as standard conditions of approval
additional street dedication and improvements along Bay Boulevard West and "J"
Street frontages will be required by the Engineering Division.
3. Air Oualitv
The applicant shall obtain a permit from the Air Pollution Control District (APCD)
regarding the installation of a vapor/fume recovery system for the proposed fuel
tanks.
4. Aesthetics
The proposed project will be subject to review and approval by the Design Review
Committee (DRC). The proposed site plan, architectural design, landscaping and
lighting plans will be subject to review by Planning and the DRC to ensure the
proposed project will complement surrounding development and comply with the
Bayfront development plan.
E. Mitigation Necessary to Avoid Significant Effects
NO MITIGATION WILL BE REQUIRED
Name,
Title
Date
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F. Consultation
I. Individuals and Organizations
City of Chula Vista:
Benjamin Guerrero, Community Development
Muna Cuthbert, Engineering
Majed Al-Ghafry, Engineering
Ralph Leyva, Engineering
Brad Kemp, Building Division
Doug Perry, Fire Marshal
Richard Preuss, Crime Prevention
Brian Hunter, Community Development
Marilyn Ponseggi, Planning Division, Env'l Sec.
Chula Vista City School District: Dr. Lowell Billings
Sweetwater Union High School District: Katy Wright
Applicant's Agent: Karl Huy, Engineering Consultant
2. Documents
Chula Vista General Plan (1989) and EIR (1989)
Title 19, Chula Vista Municipal Code
Traffic Impact Analysis, Jack-In-The-Box, Kimley-Horn & Associates, Inc. (3/00)
Geotechnical Engineering Exploration & Analysis, Jack-In-The-Box, Giles
Engineering & Associates, Inc. 9/28/99
3. Initial Studv
This environmental determination is based on the attached Initial Study, any
comments received on the Initial Study and any comments received during the public
review period for this Negative Declaration. The report reflects the independent
judgement of the City of Chula Vista. Further information regarding the
environmental review of this project is available from the Chula Vista Planning
Department, 276 Fourth Avenue, Chula Vista, CA 91910.
~~~~~
Date:
2,7lim
Planning & Environmental Manager
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Case No. IS-OO-13
ENVIRONMENTAL CHECKLIST FORM
I. LAND USE AND PLANNING: Would the
proposal:
a) Conflict with general plan designation or
zoning?
b) Conflict with applicable environmental plans or
policies adopted by agencies with jurisdiction
over the project?
c) Affect agricultural resources or operations (e.g.,
impacts to soils or farmlands, or impacts from
incompatible land uses)?
d) Disrupt or divide the physical arrangement of
an established community (including a low-
income or minority community)?
Comments: The vacant site is zoned Commercial (C) and designated for Visitor Commercial use by
the City's General Plan. The proposed project would require the granting of a
Conditional Use Permit and sign variance and review and approval by the Design
Review Committee and Redevelopment Agency. No impacts or conflicts with the
zoning or General Plan are noted.
1.
Name of Proponent:
2.
Lead Agency Name and Address:
3. Address and Phone Number of Proponent:
4.
Name of Proposal:
5.
Date of Checklist:
Jack In The Box
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
South Gate, CA. 90280
(562) 928-0100
Jack in the Box Restaurant & Service
Station/Convenience store
March 22, 2000
Potentially
Signilkant
Impact
Potentially
Significant
t"nless
~Iitiglted
N.
Impact
less than
Significant
Impact
o
o
o
IliI
o
o
o
IliI
o
o
o
IliI
o
o
o
IliI
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Potentially
Significanl
Impacl
Potenlially
Significant
Unless
Miligated
Less than
Significant
Impacl
N.
Impact
II. POPULATION AND HOUSING: Would the
proposal:
a) Cumulatively exceed official regional or local 0 0 0 181
population projections?
b) Induce substantial growth in an area either 0 0 0 181
directly or indirectly (e.g., through projects in
an undeveloped area or extension of major
infrastructure)?
c) Displace existing housing, especially affordable 0 0 0 181
housing?
Comments: Project implementation would not contribute to local population growth nor displacement
of existing housing. No adverse impacts are noted.
Ill. GEOPHYSICAL: Would the proposal result in or
expose people to potential impacts involving:
a) Unstable earth conditions or changes in 0 0 0 181
geologic substructures?
b) Disruptions, displacements, compaction or 0 0 0 181
overcovering of the soil?
c) Change in topography or ground surface relief 0 0 0 181
features?
d) The destruction, covering or modification of 0 0 0 181
any unique geologic or physical features?
e) Any increase in wind or water erosion of soils, 0 0 0 181
either on or off the site?
f) Changes in deposition or erosion of beach 0 0 0 181
sands, or changes in siltation, deposition or
erosion which may modifY the channel of a
river or stream or the bed of the ocean or any
bay inlet or lake?
g) Exposure of people or property to geologic 0 0 181 0
hazards such as earthquakes, landslides, mud
slides, ground failure, or similar hazards?
Comments: A geotechnical soils report dated September 28, 1999 was prepared by Giles Engineering
Associates, Inc. for the project site. The report indicates that highly compact clayey
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lr TT
Potentially
Potentially Significant Less than
Signifiunt Unlm Signifiunt No
Impact Mitigated Impact Impact
soils are found in the upper crust (8-12 ft.) of the project site. The report indicates that
potentially liquefiable soils exist below the water table under the assumed seismic event
as would be the case with any development in similar circumstances in seismically
active southern California. The applicant shall comply with the standard report
recommendations for site development and design of the building foundations intended
to reduce potential post-seismic liquefaction induced settlements. The applicant shall
also comply with the San Diego Regional Water Quality Control Board requirements as
applicable through the permitting process. The Engineering Division indicates that it
IS standard practice for the applicant to comply with the geotechnical report
recommendations and also it is standard practice for the soils engineer to be present
during grading and construction activities. The Engineering Division will ensure this
process is followed by making it as standard condition of the grading permit. No
mitigation will be required.
j) Substantial reduction in the amount of water
otherwise available for public water supplies?
Comments: The Engineering Division indicates that the project site is located in a SOD-year flood
boundary as delineated by the Federal Emergency Management Agency (FEMA) maps.
IV. WATER: Would the proposal result in:
a) Changes in absorption rates, drainage patterns,
or the rate and amount of surface runoff?
b) Exposure of people or property to water related
hazards such as flooding or tidal waves"
c) Discharge into surface waters or other alteration
of surface water quality (e.g., temperature,
dissolved oxygen or turbidity)?
d) Chang~s in the amount of surface water in any
water body?
e) Changes in currents, or the course of direction
of water movements, in either marine or fresh
waters?
f) Change in the quantity of ground waters, either
through direct additions or withdrawals, or
through interception of an aquifer by cuts or
excavations?
g) Altered direction or rate of flow of
groundwater?
h) Impacts to groundwater quality?
i) Alterations to the course or flow of flood
waters?
o
o
181
o
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
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Potenlially
Potentially Significant Less than
Significant Unless Significant No
Impact Mitigated Impact Impact
The City has stonn drainage facilities adjacent to the project site that would result in
proper conveyance of any potential flood waters. No adverse impact regarding flood
waters is noted. The Engineering Division indicates that on-site drainage facilities need
to take into consideration pollution prevention measures to prevent pollutants from
restaurants and gas station from entering stonn drainage systems. A stonnwater
industrial penn it may be required from the State Water Resources Control Board. A
wastewater industrial penn it may be required from the City of San Diego Metropolitan
Wastewater Department. The Engineering Division will not require a Stonn Water
Pollution Prevention Plan (SWPPP) nor a National Pollutant Discharge Elimination
System (NPDESS) due to the size of the project site. As a standard condition of the
grading penn it the applicant will be required to implement Best Management practices
to prevent pollution of stonn drainage systems. No adverse impacts are noted. No
mitigation will be required.
V. AIR QUALITY: Would the proposal:
a) Violate any air quality standard or contribute to
an existing or projected air quality violation?
b) Expose sensitive receptors to pollutants?
c) Alter air movement, moisture, or temperature,
or cause any change in climate, either locally or
regionally?
d) Create objectionable odors?
e) Create a substantial increase in stationary or
non-stationary sources of air emissions or the
deterioration of ambient air quality?
Comments:
o
o
o
181
o
o
o
181
o
o
o
181
o
o
o
181
o
o
181
o
The applicant will be required to obtain penn its from the County of San Diego
Environmental Health Department Hazardous Material Division as necessary regarding
the underground fuel tanks for the proposed gas station. The applicant will also need to
obtain a pennit from the Air Pollution Control District (APCD) regarding the installation
of a vapor/fume recovery system for the proposed fuel tanks. No mitigation will be
required.
VI. TRANSPORTATION/CIRCULATION: Would
the proposal result in:
a) Increased vehicle trips or traffic congestion?
b) Hazards to safety from design features (e.g.,
sharp curves or dangerous intersections) or
incompatible uses (e.g., fann equipment)?
o
o
181
o
o
o
o
181
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c) Inadequate emergency access or access to
nearby uses?
d) Insufficient parking capacity on-site or off-site?
e) Hazards or barriers for pedestrians or
bicyclists?
f) Conflicts with adopted policies supporting
alternative transportation (e.g. bus turnouts,
bicycle racks)?
g) Rail, waterborne or air traffic impacts?
h) A "large project" under the Congestion
Management Program? (An equivalent of2400
or more average daily vehicle trips or 200 or
more peak-hour vehicle trips.)
Comments:
Potentially
Potentially Significant Less Ihan
Significant Unless Significant No
Impact Mitigated Impact Impact
0 0 0 I'l
0 0 0 I'l
0 0 0 1>1
0 0 0 1>1
o
o
o
1>1
o
o
I'l
o
A traffic study was prepared by Kimley-Horn & Associates, Inc. for this project on
March 6, 2000. The traffic study analyzed on-site circulation of gasoline trucks, drive-
thru lane circulation and off-site traffic impacts to two intersections. The two analyzed
intersections were "J" Street and Bay Boulevard West (a four-way stop sign controlled
intersection) and "J" Street and the 1-5 bound southbound off-ramp (signalized with a
two-phase signal). The project is associated with a total generation of3,122 "driveway"
vehicle trips per day. This number is the projected number of trips projected to enter
and exit the site at the proposed driveways. The study indicates that a significant
amount of the traffic associated with the proposed project will involve traffic which is
already traveling on the adjacent roadway. The total new traffic to be added to the
roadway system by the project is estimated to be J. 678 trillS on a daily basis, with 66
inbound and 65 outbound trips in the morning peak hour, and 65 inbound and 63
outbound trips in the evening peak hour. The majority of the traffic is assumed to come
from and return to the east via J Street. The study detennined that the intersection of"J"
Street and Bay Boulevard West would operate at a Level of Service (LOS) "A" in the
morning peak hour, and LOS "B" in the evening peak hour. The project would
contribute I second of delay or less at this intersection. The intersection of"J" Street
and the 1-5 southbound off-ramp will operate at LOS "B" both in the morning and
evening peak hours. The project will not cause unacceptable operating conditions at
either intersection and will continue to comply with the City of Chula Vista Traffic
Threshold standard of LOS "C" or better.
Fuel trucks approaching the site from the east via "J" Street, will enter the project
driveway located on "J" Street. The underground fuel tanks will be accessible from this
driveway and adequate manuevering area exists to allow re-fueling without impeding
access to this site. Additionally, tank re-fueling activities will typically occur outside the
project's peak hours of operation.
The City ofChula Vista Engineering Division concurs with the conclusions of the traffic
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Potentially
Potentially Significant Less than
Significant Unless Significant No
Impact Mitigated Impact Impact
study prepared by Kimley-Horn. The Engineering Division concurs that "J" Street and
Bay Boulevard West have the capacity to handle traffic generated by the proposed
project and maintain a Level of Service "C" or better. The project will not require traffic
mitigation but will be subject to standard right-of-way dedication and improvements for
Bay Blvd. West and street improvements along "J" Street, as well as widening and
improvements to the intersection.
VII. BIOLOGICAL RESOURCES: Would the
proposal result in impacts to:
a) Endangered, sensitive species, species of
concern or species that are candidates for
listing?
b) Locally designated species (e.g., heritage
trees)?
o
o
o
III
o
o
o
III
c) Locally designated natural communities (e.g,
oak forest, coastal habitat, etc.)?
d) Wetland habitat (e.g., marsh, riparian and
vernal pool)?
o
o
o
III
o
o
o
III
e) Wildlife dispersal or migration corridors?
f) Affect regional habitat preservation planning
efforts?
o
o
o
III
o
o
o
III
Comments:
The project site is located in an urbanized area and has been cleared of all vegetation.
Environmental staff have conducted field visits and have found no sensitive plant or
animal species on-site. No impacts to biological resources are noted. No mitigation is
required.
VIII. ENERGY AND MINERAL RESOURCES:
Would the proposal:
a) Conflict with adopted energy conservation 0 0 0 III
plans?
b) Use non-renewable resources in a wasteful and 0 0 0 III
inefficient manner?
c) If the site is designated for mineral resource 0 0 0 III
protection, will this project impact this
protection?
Comments: No impacts to non-renewable resources are noted.
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a) A risk of accidental explosion or release of
hazardous substances (including, but not limited
to: petroleum products, pesticides, chemicals or
radiation)?
b) Possible interference with an emergency
response plan or emergency evacuation plan?
Potentially
Potentially Significant Less than
Significant Unless Significant No
Impact Mitigated Impact Impa!;t
0 0 0 Il!l
IX. HAZARDS: Would the proposal involve:
o
o
o
Il!l
c) The creation of any health hazard or potential
health hazard?
o
o
o
Il!l
d) Exposure of people to existing sources of
potential health hazards?
o
o
Il!l
o
e) Increased fire hazard in areas with flammable
brush, grass, or trees?
o
o
o
Il!l
Comments: The proposed project will comply with all applicable required permitting processes
administered by local, state and federal agencies. Compliance with established
standard procedures will enSure that people will not be exposed to accidental explosions
or health hazards. The project proponent as standard procedure will need to obtain a
letter of clearance from the County of San Diego Environmental Health Department
Hazardous Management Division regarding the placement of underground fuel tanks
associated with the proposed gasoline service station. No adverse impacts are noted.
No mitigation will be required.
X. NOISE: Would the proposal result in:
a) Increases in existing noise levels?
b) Exposure of people to severe noise levels?
o
o
Il!l
o
o
o
o
Il!l
Comments: Temporary construction noise would occur at the site, however, the short term nature
of the noise, the proximity ofInterstate 5 freeway and the commercial nature of the
surrounding area results in less than significant impacts. No adverse impacts are
noted. No mitigation will be required.
XI. PUBLIC SERVICES: Would the proposal have
an effect upon, or result in a need for new or
altered government services in any of the following
areas:
a) Fire protection? 0 0 0 Il!l
b) Police protection? 0 0 0 Il!l
c) Schools? c 0 0 Il!l
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1r "IT
POI~nlially
Pot~ntial1y Significant Less than
Significant rnJ~s Significant :'Iio
Impact Mitigated Impact Impact
d) Maintenance of public facilities, including 0 0 0 III
roads?
e) Other governmental services? 0 0 0 III
Comments: No new Governmental services will be required to serve the project. No adverse impacts
are noted. Fire and police protection can adequately be provided. Appropriate school
fees will be paid. Street dedication and improvements along "J" Street and Bay
Boulevard West will be made in accordance with City Standards. No mitigation will be
required.
o
o
o
III
XII. THRESHOLDS: Will the proposal adversely
impact the City's Threshold Standards?
As described below, the proposed project does not adversely impact any of the seen
Threshold Standards.
a) Fire/EMS
o
o
o
III
The Threshold Standards requires that fire and medical units must be able to respond to calls
within 7 minutes or less in 85% of the cases and within 5 minutes or less in 75% of the
cases. The City of Chula Vista has indicated that this threshold standard will be met, since
the nearest fire station is 3 miles away and would be associated with a less than 7-minute
response time. The proposed project will comply with this Threshold Standard.
Comments:
The Fire Department indicates that adequate fire service and protection can be
provided to the proposed project site.
b) Police
o
o
III
o
The Threshold Standards require that police units must respond to 84% of Priority I calls
within 7 minutes or less and maintain an average response time to all Priority 1 calls of 4.5
minutes or less. Police units must respond to 62.10% of Priority 2 calls within 7 minutes or
less and maintain an average response time to all Priority 2 calls of 7 minutes or less. The
proposed project is located in an area where police ART complies with these Threshold
Standards.
Comments:
Crime Prevention personnel are available to assist the applicant with security
recommendations. No adverse impacts to Police service are noted. The Police
Department indicates that they will continue to provide current levels of service to the
project area. No mitigation will be required.
c) Traffic
o
o
III
o
The Threshold Standards require that all SIGNALIZED ARTERIAL SEGMENTS
operate at a Level of Service (LOS) "cn or better, with the exception that Level of
Service (LOS) "0" may occur during the peak two hours of the day. Intersections west
of 1-805 are not to operate at a LOS below their 1987 LOS. No intersection may reach
LOS "E" or "F" during the average weekday peak hour. Intersections of arterials with
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Potentially
Significant
Impact
Potentially
Significant
Unless
Mitigated
less than
Significant
Impact
N.
Impact
freeway ramps are exempted from this Standard. The proposed project will comply with
this Threshold Standard.
Comments:
The Engineering Division concurs with the conclusions as found in the trafic study
prepared by Kimley-Hom (3/2000)indicating that the current Level-of- Service (LOS)
"e" or better enjoyed by")" Street, a four-lane major arterial, would remain the same
with approval of the proposed project.
d) Parks/Recreation
o
o
o
181
The Threshold Standard for Parks and Recreation is 3 acresll ,000 population. This
standard does not apply to the proposed project.
Comments: No adverse impacts to parks or recreational opportunities are noted.
e) Drainage
o
o
o
181
The Threshold Standards require that stonn water flows and volumes not exceed
City Engineering Standards. Individual projects will provide necessary
improvements consistent with the Drainage Master Plan(s) and City Engineering
Standards. The proposed project will comply with this Threshold Standard.
Comments:
Off-site drainage capacities will not be affected by project approval.
f) Sewer
o
o
o
181
The Threshold Standards require that sewage flows and volumes not exceed City
Engineering Standards. Individual projects will provide necessary improvements
consistent with Sewer Master Plan(s) and City Engineering Standards. The
proposed project will comply with this Threshold Standard.
Comments: Sewer capacities will not be adversely affected through project implementation. The
existing adjacent sewer lines are adequate to serve the proposed project as detennined
by the Engineering Division. EDU calculations will be prepared by the applicant.
g) Water
o
o
o
181
The Threshold Standards require that adequate storage, treatment, and transmission facilities
are constructed concurrently with planned growth and that water quality standards are not
jeopardized during growth and construction. The proposed project will comply with this
Threshold Standard.
Applicants may also be required to participate in whatever water conservation or fee off-
set program the City of Chula Vista has in effect at the time of building penn it issuance.
Comments:
Water quality standards would not be affected through project implementation. The
project area will be serviced by the Sweetwater Authority. The applicant will need to
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Potenti811y
Potenti8Uy Signifil;:8nt L~s th8n
Significant Unless Significant No
Imp8c:t Mitig8ted Imp8c:t Imp8c:t
obtain a "Will Serve" letter from the Sweetwater Authority prior to the issuance of any
building permits. The Authority will determine if there is a need for new water systems
or substantial alteration to the existing water system.
XIII UTILITIES AND SERVICE SYSTEMS: Would
the proposal result in a needfor new systems, or
substantial alterations to the following utilities:
h) Power or natural gas? 0 0 0 IlII
i) Communications systems? 0 0 0 IlII
j) Local or regional water treatment or distribution 0 0 0 IlII
facilities?
k) Sewer or septic tanks? 0 0 0 IlII
I) Storm water drainage? 0 0 0 IlII
m) Solid waste disposal? 0 0 0 IlII
Comments:
The proposed uses will not generate a need for new systems or alteration to the
aforementioned utilities. No mitigation will be required.
XIV AESTHETICS: Would the proposal:
n) Obstruct any scenic vista or view open to the 0 0 0 IlII
public or will the proposal result in the creation
of an aesthetically offensive site open to public
view?
0) Cause the destruction or modification of a 0 0 0 IIlI
scenic route?
p) Have a demonstrable negative aesthetic effect? 0 0 181 0
q) Create added light or glare sources that could 0 0 0 IlII
increase the level of sky glow in an area or
cause this project to fail to comply with Section
19.66.100 of the Chula Vista Municipal Code,
Title 19?
r) Reduce an additional amount of spill light? 0 0 0 IlII
Comments: Approval of the project design and landscaping is subject to a discretionary Design
Review process. This process will help ensure that the project design is consistent with
the goals and objectives of the Bayfront Specific Plan. No mitigation will be required.
XV CULTURAL RESOURCES: Would the proposal:
A: 11Ibllinda lis9808ck. fnn
Page 10
0'2.-.2 ::a...
11" .".
Potentially
Potentially Significant Lcssthan
Significant Unless Significant "
Impact Mitigated Impact Impact
s) Will the proposal result in the alteration of or 0 0 0 181
the destruction or a prehistoric or historic
archaeological site?
t) Will the proposal result in adverse physical or 0 0 0 181
aesthetic effects to a prehistoric or historic
building, structure or object?
u) Does the proposal have the potential to cause a 0 0 0 181
physical change which would affect unique
ethnic cultural values?
v) Will the proposal restrict existing religious or 0 0 0 181
sacred uses within the potential impact area?
w) Is the area identified on the City's General Plan 0 0 0 181
EIR as an area of high potential for
archeological resources?
Comments: There are no identified cultural resources within the project area.
XVI PALEONTOLOGICAL RESOURCES: Will the
proposal result in the alteration of or the 0 0 0 181
destruction of paleontological resources?
Comments: There are no paleontological resources within the project are~.
XVII RECREATION: Would the proposal:
x) Increase the demand for neighborhood or 0 0 0
regional parks or other recreational facilities?
y) Affect existing recreational opportunities? 0 0 0
z) Interfere with recreation parks & recreation 0 0 0
plans or programs?
181
181
181
Comments:
There are no recreational facilities that will be adversely affected by the project. The
proposed project will complement the Marina Park facility nearby.
XVIII MANDATORY FINDINGS OF
SIGNIFICANCE: See Negative Declarationfor
mandatory findings of significance. If an EIR is
needed, this section should be completed
z) Does the project have the potential to degrade
the quality ofthe environment, substantially
reduce the habitat of a fish or wildlife species,
cause a fish or wildlife population to drop
below self-sustaining levels, threaten to
o
o
o
181
A:\llb\linda\is9808ck.fnn
Page 11
.2.~.3
1r .. 1T
eliminate a plant or animal community, reduce
the number or restrict the range of a rare or
endangered plant or animal or eliminate
important examples of the major periods or
California history or prehistory?
Potentially
Significant
Impact
Polenlia\Jy
Significant
Unless
Mitigated
Lmlhan
Significant
Impact
N.
Impact
Comments: As the site is an existing developed site within an urbanized area, no sensitive plant or
animal resources will be affected.
aa) Does the project have the potential to achieve
short-term, to the disadvantage of long-term,
environmental goals?
o
o
o
IliI
Comments:
The scope and nature of the project would not result in the curtailment of any long-term
environmental goals.
bb) Does the project have impacts that are
individually limited, but cumulatively
considerable? ("Cumulatively considerable"
means that the incremental effects of a project
are considerable when viewed in connection
with the effects of past projects, the effects of
other current projects, and the effects of
probable future projects.)
Comments: There are no incremental impacts associated with the project.
o
o
o
IliI
cc) Does the project have environmental effect
which will cause substantial adverse effects on
human beings, either directly or indirectly?
Comments: No adverse effects to human beings is anticipated from project approval.
o
o
o
IliI
XIX. PROJECT REVISIONS OR MITIGATION MEASURES: NO MIllGllON MEASURES WILL
BE REQUIRED
XX. ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED: NONE CHECKED
The environmental factors checked below would be potentially affected by this project, involving at least
one impact that is a "Potentially Significant Impact" or "Potentially Significant Unless Mitigated," as
indicated by the checklist on the following pages.
D Land Use and Planning D T ransportation/C irculation D Public Services
D Population and Housing D Biological Resources D Utilities and Service
Systems
D Geophysical D Energy and Mineral Resources D Aesthetics
A:\llb\linda\is9808ck. frm
Page 12
~-~'1
T" 1T
D Water
D Hazards
D Cultural Resources
o Air Quality
o Noise
o Recreation
D Mandatory Findings of Significance
XXI. DETERMINATION:
On the basis of this initial evaluation:
I find that the proposed project COULD NOT have a significant effect on the 181
environment, and a NEGATIVE DECLARATION will be prepared.
I find that although the proposed project could have a significant effect on the 0
environment, there will not be a significant effect in this case because the mitigation
measures described on an attached sheet have been added to the project. A MITIGATED
NEGA TIVE DECLARATION will be prepared.
I find that the proposed project MAY have a significant effect on the environment, and an 0
ENVIRONMENTAL IMPACT REPORT is required.
I find that the proposed project MAY have a significant effect(s) on the environment, but 0
at least one effect: 1) has been adequately analyzed in an earlier document pursuant to
applicable legal standards, and 2) has been addressed by mitigation measures based on the
earlier analysis as described on attached sheets, if the effect is a "potentially significant
impacts" or "potentially significant unless mitigated." An ENVIRONMENTAL IMPACT
REPORT is required, but it must analyze only the effects that remain to be addressed.
I find that although the proposed project could have a significant effect on the
environment, there WILL NOT be a significant effect in this case because all potentially 0
significant effects (a) have been analyzed adequately in an earlier EIR pursuant to
applicable standards and (b) have been avoided or mitigated pursuant to that earlier EIR,
including revisions or mitigation measures that are imposed upon the proposed project.
An addendum has been prepared to provide a record of this determination.
l~~
March 27. 2000
Date
Planning & Environmental Manager
City ofChula Vista
A:\llb\linda\is9808ck.frm
Page 13
ol- .2S
.,. ".
~{~
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--::. -=
CITY OF CHlJLA VISTA
Planning & Building Depamnent
276 Fourth Avenue
(619)691-5101
ATTACHMENT B
Development Processing
,l\poiication Form - Type A
Page One
0lY OF
CHUlA. VISfA
II
X Conditional Use Permit
ZI Variance (fbu: 51(.~)
}>If Design Review
..:. Special Land Use Permit
(Redevelooment Aree Dnlyj
~ Miscellaneous:
l~oo-oq3
f:rI (1_- 0 D- ..23/JIJjt-Oo-O~
(STaff use oniv) Case No.:71lTj'-h/"J-/0 ~2'
Filing Dare: II .I~.qq -By: fV'b..--
Assigned PI~.J..,u-f
Receipt No.:
ProjectAoct: R L- - ~ ~:j'ftt. ,3
DeposrrAcot: ,eede..<Jeh~ __
Relaied Cases:""":5-CO-13
o z.Jl.. )Zf Publlo Hearing
TYPE OF REVIEW REQUESTED
II
APPLICANT INFORMATION
II
i~;v~~t ~;;~/N6CRJN6 rKA2L ;Ivy)
,.i\D:::Jiicam Address
i Phone No.
714.7,0.O"}"'j1
/C2453 t..E.WI5 5Tl!c:er. 5tJ/TE #2.01. c,.111!PCiJ &/2ovC: c.A 1284lJ
:,AD:Jlican~.s Interest in Property , If o:J;:>i1canr is nOi OVVT1er. owners authonzaiion
...J Own )r Leese ...J In Escrow 0 Option TO Durcn:Jse is re_aulre~ TO Qrooess rea~es;. See SignaTUre
on !-'oge Iwe,
,Pnone No.
.,A.rchitect/Agent
'1"J?Ai/15 ElJ6/;Jc.6e; Ak"
!Architect/Agent Address
7/1.750.09'11
! /, 4<; L.E.wI5 57). c:.T VI1E=: #2/)/ bll-~ b.L~IIG cA '12 40
I GENERAL PROJECT DESCRIPTION (for all types)
iProject Name I r'iODOS d Us
~ d'AQ( IN THE. BoX ,~It5/ "roo; 1A.J/&/t50L.lN6 5-4L.c5
I General Description of Proposed Project
: (Please use ADpendix A to provide a full description and justifioation for fhe project) ,
I'R.O~5CJ) f'i?o;:rc.c:r I/tJcLUPc5 rrlC: IMj?.(ov&M6tlT Or A Yd-rANT LOT 10 /Nav'PG !
It 5iltTc 'Of".THtE',1...z..f ~1jc..K IN tHE 80)( IZc.5r,.'fu,e/1,VT; P!<li/E TIIRt!- c-.450t../NE :
JIILC.S /ttJP c..ONVC;'Nlclt/c.6 5r0/26. IMfJRovEl'1eA!13 /1t..SD /NCL.u"tlG ;
, f1A/I/Nt;, S/f;;;V1t6e A-tJtJ tJtilJP5cAPIN6.. !
YC:S
I Has a representative attended a Pre-ApplicaTIon Conference to discuss this Rroject?
i If so, what was the. daie? S€ff 3 I"'" Pre-App No.: IJNKNIJoJN
.
11 SUBJECT PROPERTY INFORMATION (for all types)
; Location/Street Address
: /JJE5I
1;1/~,.ij ~<:5":' ~,eNc=,e ()~ ''J''STl!..6€.T e lMy !3otJLcvM'.f)
Assessors Parcel No. iTotal Acreage
. fi71-'~30-/5-00 I /.8 ACRee.?
,
'CurrenT General Plan Designation jcurrent LOne DeSignation ~
I COMmeLClI1L 'Jt51/oR. -H/lJY. ,C{)/'1mazO/h.. J1/JITOR. -;lwj
i
Ii
I Redevelopmem Area [if opplicablel '
, IMYrlZ.cWT (5t181U-€1f zJ
,PI:Jnned Community [if applicable)
-
!Currem Lana Use
,
i VACAAJt LOT
.2 - .2(.
FORIv11A-DEV PL (F!4.GE 1 0= 2)
7/99
"!r".
".
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=~::.-
- - -
- - -
CITY OF CHULA Y15;A
Planning &. Building Departmem
276 Founh Avenue
(619169]-5]01
Deveiopmem PrOcessing
!~pplicotion f=orm
CJ1Y OF
CHULA VISrA
II
PROPOSED PROJECT (all types)
o -
,ogelwD
I (57aff use on IV) ~1't.-OD-;23 ~
Case No.2AJ-DD-oG; iJf'-t -00-0
l.
33%
0./%
iType of Use Proposed
'=I Residenfial ~ Comm.
o Ind. 0 Other
, Landscape Coverage ('Ie of Lot)
i Building Coverage ['Ie of Lot)
II
jType of Dwelling Unit{s)
RESIDEl'.'TIAL PROJECT SUMMARY
I,
i Numoer of LOTS
INo. of Dwelling Units
Pro Dosed
=X1sting
~/
~-
~
iDensny (uLlS/ocreJ
1 Bi<
2Bi<
3+Bi<
---
TOTal ______
,lv1axlmum Builainc Ciela~Iv1lnlmum La; ~;ze
~
. AverG;;1S L:J7 ::::;2=
iP:Jrki;l:J S:J:J::::S
JaTO 1
Dfr-srre-:::,i
- " -
I yoe OT i':JfKlng is:ze: wne,:-,.s.~ ::::ver-e:::
Provided:
jOpen Space Descrtpfion (Acres eac,~ of prrvCIie. commm, Dnd lanascaplng)
,
II NON-RESIDENTgL PROJECT SUMMARY I!
'Gross Hoar Area (sf) Proposed =xlS1lng . BUllaing Helgm
4,S3/ :5Q.ff. g ,2'5'-/{:/'
IHours of Operaiion [Days & ,",ours)
: ;;1 f/-tJuR-5/ 7 IJA '7'5
IAnficipaied Total # Empiovees Max. # of cmoloyees OT anyone Time
I vA/KNOWN 10eS
lParklng Spaces Requirea Type of parKing (Size)
3~ NLL Stze of 11141Jt)tc.J/fP
:#01
opaCITy
G,8
---
..---
;<:AI!.L #u( /\
P~')PPlicont or Age~
l1uw10 ~ (/ .)
Print Owner I~ome
11/4/0/9
DOTe
~r.;:16).t:tJ !lboJr Ab1
Owner SignOTure'
{Pea'.Jired if ADpfi8C1nt is not Owne!}
DOTe
'" Letter of owner cO'lsent r:lCJV :)8 used in lie'.) a: signCTure.
.2-,),7
F::07M 1A.PAGE 2 0.= 2
7/09
...."..
Appendix A
PROJECT DESCRIPTION AND JUSTIFICATION
PROJECT NAME: :::rAcK It-,) TIt'::: B07\
APPLICANT NAME: 1~vls 6~6r/tJEE.,e.,tJc.. (KIIR..1... Hut)
Please describe fully the proposed project, any and all construction that may be
accomplished as a result of approval of this project and the project's benefits to yourself,
the property, the neighborhood and the City of Chula Vista. Include any details
necessary to adequately explain the scope andlor operation of the proposed project.
You may include any background information and supporting statements regarding the
reasons for, or appropriateness of, the application. Use an addendum sheet if
necessary .
For all Conditional Use Permits or Variances, please address the required "Findings" as
listed in listed in the Application Procedural Guide.
Descriotion & Justification.
Project Justification
Justification for this proposed project is based on the desire to develop and improve a vacant and
blight parcel ofland within one of the City's active redevelopment zones. The project will provide
a necessary and vital use to service the needs of the existing and proposed other uses in the
bayfront marina area that are lacking today. The gas component of the proposed project will
service the demands of the increasing boat traffic of the marina, while the c-store component will
service the needs of the marina patrons. The proposed project will increase tax revenue generation,
increase the tax increment on the property, and provide a state-of-the-art facility at the gateway
into the City's Bayfront redevelopment zone that may promote and attract additional development
in the area. The project will provide necessary street, utility and landscaping improvements for this
area.
Project Description
The proposed project site is located at the intersection of "J" Street and Bay Boulevard (northeast
corner). The property under consideration is the northeast corner of said intersection and is
currently undeveloped and vacant. The site is surrounded by Interstate 5 on the east, a vacant and
undeveloped property to the south, a city park to the southwest, office and industrial uses to the
west and public roadway improvements and other office uses to the north.
The proposed project involves the development of said vacant property to include a fast food Jack
in the Box restaurant with drive thru operations functioning on a 24-hoursf7day format. In addition
to the restaurant use, the project will include a co-brand use that combines the restaurant use with
a state of the art convenience store. The convenience store will accommodate the sale of gasoline
fuel. The site will be improved with three structures (main co-brand building, gasoline fuel island
canopy and a trash enclosure). Additional improvements include paving, landscape and irrigation
improvements, signage, curb, gutter and sidewalks. Both components of the project (fast food and
convenience store) will be owned and operated by Jack in the Box Inc. This will be a corporate
run facility. Fuel will be supplied by one of the six major fuel companies serving the San Diego
area (i.e., Mobil, ARCO, Chevron, Texaco, and Shell).
dl-.;L.'i
T-" 'TT
Summary of Request
This application is being submitted as a request to the City to review and approve the development
and modification of an existing vacant parcel of land within the City's corporate boundaries. There
are no structures or operations currently occurring on the subject parcel. This project involves the
approval of a CUP application and a sign variance to allow the construction and installation of a
freeway oriented pole sign. As proposed, the project being considered involves:
I. The development and construction of a company owned state-of-the-art Jack in the Box
Restaurant drive-thru facility with proper dining operations. This facility will offer 24-hour
drive thru service.
" The development and construction of a company owned state-of-the-art convenience store
facility, which will be accommodated within the same building as the Jack in the Box
Restaurant activity. The convenience store will offer all ofthe typical mini-mart and freeway
oriented goods to local and freeway patrons. The convenience store is proposed to be open 24-
hours a day and will be owned and operated by Jack in the Box Inc. Included in this project
submittal is a request to sell beer and wine through the convenience store component.
3. The development and construction of a state-of-the-art fuel system and gasoline facility which
will include an illuminated fuel island canopy, six fueling positions, six multiple product
dispensers. All three major grades of unleaded fuel (regular, special and super) will be sold at
each dispenser. Fueling activity is proposed for 24 hours operation. The site plan has been
designed to accommodate fueling activity for marina patrons and boats. As is the case with the
convenience store, the fueling operation will be owned and operated by Jack in the Box Inc.
also.
4. The construction and installation of signage improvements allowed by current development
regulations and by the submitted sign variance for a 60' -0" high freeway pole sign.
5. The construction and installation ofJandscaping and irrigation improvements.
6. The construction and installation of handicap and ADA required improvements.
7. The construction and installment of all required Federal, State and local government agency
required safety and environmental protection regulations and devices.
dJ..-,z,
11'"." iT
Appendix B
THE CITY OF CHULA VISTA DISCLOSURE STATEMENT
You are required to file a Statement of Disclosure of certain ownership or financial interests. paymems.
or campaign contributions, on all matters which will require discretionary action on the part of the Citv
CounciL Planning Commission. and all other official bodies. The following information must be disclosed
1. List the names of all persons having financial interest in the property which is the subject of the
application or the contract, e.g., owner applicant, contractor, subcontractor, material supplier.
r05ra.. INi/CSUeJr 6ltJcJfJ
:fAU:: IN rile. 130)( /A/C .
2. If any person' identified pursuant to (1) above is a corporation or partnership, list the names of all
individuals owning more than 10% of the shares in the corporation or owning any partnership interest
in the partnership.
NONe
3. If any oerson' identified pursuant to (1) above is non-profit organization or a trust. list the names of
any Derson serving as director of the non-profit organization or as trustee or beneficiary or trustor of
the Trust.
JJJ1
4. Have you had more than $250 worth of business transacted with any member of the City staff,
Boards, CommissiDns, Committees, and Council within the past twelve months? Yes No V-
If yes, please indicate person(s):
5. Please identify each and every person, including any agents, employees, consultants. Dr
independent contractors who you have assigned to represent you before the City in this matter.
1/L//VI5 ENG.I#cE.I!/1'o.it4
6. Have you and/or your officers or agents, in the aggregate, contributed more than $1,000 to a
Counciimember in the current or preceding election period? Yes _ No ~ If yes, state which
Councilmember(s):
(NOTE: A TTACH ADDITIONAL PAGES AS NECES :/lRY,)
Date: NdV. 4, /991
,
KltIZL ;Iv
Print or type name of contractor
.;1- .30
* Person is defined as. '"An:].' individual, firm, co-partnership. joint venzure, asSOCiation, socia! club, Iremernal organi:axion. corporarior:.
estate. trust. receiver. svndicQle, this and any other counry, CilY and country. city municipality, discricI, or other political subdivision. or ar..1'
other group or comoination acrIng as a unit. ..
,.' 11
Recording Requested By:
CHULA ViSTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
ATTACHMENT C
When Recorded Mail To:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Judi Bell
APN: 571.330.15
(Space Above This Line For Recorder)
OWNER PARTICIPATION AGREEMENT
Jack-in-the-Box Incorporated
Northeast corner of J Street and Bay Bivd.
THIS AGREEMENT ("AGREEMENT") is entered into by the REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA, a public body corporate and politic (hereinafter referred to as "AGENCY"), and Jack-in.the.Box
Incorporated, a California Corporation, ("DEVELOPER") effective as of June 6, 2000.
WHEREAS, the DEVELOPER desires to develop real property within the BAYFRONT REDEVELOPMENT
PROJECT AREA which is subject to the jurisdiction and control of the AGENCY; and,
WHEREAS, the DEVELOPER has presented plans for development to the Design Review Committee for the
construction of a gas station, with a convenience store and drive-through restaurant, and a 60 foot freeway oriented sign
(the "Project"); and,
WHEREAS, said plans for development have been recommended for approval by said committee; and,
WHEREAS, the AGENCY has considered the Design Review Committee's recommendation and has approved
the Project and design plans subject to certain terms and conditions; and,
WHEREAS, the AGENCY desires that said Project be implemented and completed as soon as it is practicable
in accordance with the tenns of this Agreement.
NOW, THEREFORE, the AGENCY and the DEVELOPER agree as follows:
1. The property to be developed is described as Assessor's Parcel Number 571.330.15 located at the
northeast comer of J Street and Bay Boulevard, Chula Vista, CA., shown on locator map attached
hereto and by this reference incorporated herein ("Property").
2. The DEVELOPER covenants and agrees by and for itself, it's heirs, executors, administrators and
assigns and all persons claiming under or through them the following:
A. DEVELOPER shall develop the Property with the Project in accordance with the AGENCY
approved development proposal attached hereto as Exhibit "A".
B. DEVELOPER shall obtain all necessary federal/state and locai governmental permits and
approvals and abide by all applicable federal, state and locai laws, regulations, pOlicies and
approvals in connection with the development of the Project. DEVELOPER further agrees
that this Agreement is contingent upon DEVELOPER securing said penn its and approvals.
DEVELOPER shall pay all appiicable development impact and processing fees.
.2.-~'
.., ".
C. DEVELOPER shall obtain building permits within one year from the date of this Agreement
and to actually develop the Property with the Project within one year from the date of
issuance of the building permits. In the event DEVELOPER fails to meet these deadlines,
the Agency's approval of DEVELOPER's development proposals shall be void and this
Agreement shall have no further force or effect.
D. In all deeds granting or conveying an interest in the Property, the following language shall
appear:
"The grantee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, national origin
or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure,
or enjoyment of the premises herein conveyed, nor shall the grantee
himself or any persons claiming under or through him establish or permit
any such practice of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenant lessees, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land. "
E. In all leases demising an interest in all or any part of the Property, the following language
shall appear:
"The lessee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through him,
and this lease is made and accepted upon and subject to the following
conditions:
That there shall be no discrimination against or segregation of, any person
or group of persons, on account of race, color, creed, national origin, or
ancestry, in the leasing, subleasing, transferring use, occupancy, tenure,
or enjoyment of the premises herein leased, nor shall the lessee himself
or any persons claiming under or through him, establish or permit any such
practices of discrimination or segregation with reference to the selection,
location, number or use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased. "
3. The Property shall be developed subject to the conditions imposed by the Design Review Committee
and the AGENCY as described in Exhibit "8" attached hereto and incorporated herein by this
reference. DEVELOPER acknowledges the validity of and agrees to accept such conditions.
4. DEVELOPER shall maintain the premises in FIRST CLASS CONDITION.
A. DUTY TO MAINTAIN FIRST CLASS CONDITION. Throughout the term of this Agreement,
DEVELOPER shall, at DEVELOPER's sole cost and expense, maintain the Property which
includes all improvements thereon in first class condition and repair, and in accordance with
all applicable laws, permits, licenses and other governmental authorizations, rules,
ordinances, orders, decrees and regulations now or hereafter enacted, issued or promulgated
by federal, state, county, municipal, and other governmental agencies, bodies and courts
having or claiming jurisdiction and all their respective departments, bureaus, and officials.
If the DEVELOPER fails to maintain the Property in a "first class condition", the
Redevelopment Agency of the City of Chula Vista or its agents shall have the right to go on
c:J - .3"-.
"'!r.." ".
the Property and perfonn the necessary maintenance and the cost of said maintenance shall
become a lien against the Property. The Agency shall have the right to enforce this lien
either by foreclosing on the Property or by forwarding the amount to be collected to the Tax
Assessor who shall make it part of the tax bilL
S. DEVELOPER shall promptly and diligently repair, restore, alter, add to, remove, and replace,
as required, the Property and all improvements to maintain or comply as above, or to remedy
all damage to or destruction of all or any part of the improvements. Any repair, restoration,
alteration, addition, removal, maintenance, replacement and other act of compliance under
this Paragraph (hereafter collectively referred to as "Restoration") shall be completed by
DEVELOPER whether or not funds are available from insurance proceeds or subtenant
contributions.
C. In order to enforce all above maintenance provisions, the parties agree that the Community
Deveiopment Director is empowered to make reasonabie determinations as to whether the
Property is in a first ciass condition. If he determines it is not, he (1) will notify the
DEVELOPER in writing and (2) extend a reasonable time to cure. If a cure or substantial
progress to cure has not been made within that time, the Director is authorized to effectuate
the cure by City forces or otherwise, the cost of which will be promptly reimbursed by the
DEVELOPER. .
D. FIRST CLASS CONDITION DEFINED. First class condition and repair, means an efficient
and attractive condition, at least substantially equal in quality to the condition which exists
when the Project has been completed in accordance with all applicable laws and conditions.
5. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein shall run
with the land. DEVELOPER shall have the right, without prior approval of AGENCY, to assign its
rights and delegate its duties under this Agreement.
6. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein are for
the express benefit of the AGENCY and for all owners of real property within the boundaries of the
SAYFRONT REDEVELOPMENT PROJECT AREA as the same now exists or may be hereafter
amended. AGENCY and DEVELOPER agree that the provisions of this Agreement may be
specifically enforced in any court of competent jurisdiction by the AGENCY on its own behalf or on
behalf of any owner of real property within the boundaries of the SA YFRONT REDEVELOPMENT
PROJECT AREA.
7. AGENCY and DEVELOPER agree that this Agreement may be recorded by the AGENCY in the Office
of the County Recorder of San Diego County, California.
8. DEVELOPER shall and does hereby agree to indemnify, protect, defend and hold hannless AGENCY
and the City of Chula Vista, and their respective Council members, officers, employees, agents and
representatives, from and against any and all liabilities, losses, damages, demands, claims and costs,
including court costs and reasonable attomeys' fees (collectively, "liabilities") incurred by the AGENCY
arising, directly or indirectly, from (a) AGENCY's approval of this Agreement, (b) AGENCY's or City's
approval or issuance of any other permit or action, whether discretionary or non-discretionary, in
connection with the Project contemplated herein, and (c) DEVELOPER's construction and operation
of the Project pennitted hereby.
9. In the event of any dispute between the parnes with respect to the obligations under this AGREEMENT
that results in litigation, the prevailing party shall be entitled to recover its reasonable attorney's fees
and court costs from the non-prevailing party.
10. Time is of the essence for each and every obligation hereunder.
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11. If DEVELOPER fails to fulfill its obligations hereunder after due notice and reasonable opportunity to
cure, DEVELOPER shall be in default hereunder, and in addition to any and all other rights and
remedies AGENCY may have, at law or in equity, the AGENCY shall have the right to terminate its
approval of the Project and this Agreement.
Signature Page Follows
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Signature Page
To Owner Participation Agreement with
Jack-in.the-Box Incorporated
IN WITNESS WHEREOF THE PARTIES HAVE ENTERED INTO THIS AGREEMENT EFFECTIVE AS OF THE DATE
FIRST WRITTEN ABOVE.
"AGENCY"
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
By:
Shirley Horton, Chairman
"DEVELOPER"
Jack-in-the-Box Incorporated
By:
Jack-in-the-Box Incorporated
(print name and title)
NOTARY: Please attach acknowledgment card.
APPROVED AS TO FORM BY:
John M. Kaheny, Agency Attorney
ATTEST:
Chris Salomone, Executive Secretary
C1-3~
.. ".
EXHIBIT A
Design Plans
Owner Participation Agreement
Jack-in.the-Box Incorporated
Exhibit A
Reduced Copies of Design Plans
Follow
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CH U LA VISTA PLANNING AND BUILDING DEPARTMENT
LOCATOR PROJECT TRAVIS ENGINEERING (Karl Huy) PROJECT DESCRIPTION:
~ APPLlCAN-r. CONDITIONAL USE PERMIT
PROJECT 685 Bay Blvd. Northwest corner of
ADDRESS: "J" Street and Bay Boulevard Request: Proposed development and construction of a Jack
in the Box drive-thru restaurant, and convenience
SCALE: FILE NUMBER: store with gasoline sales.
NORTH No Scale PCC - 00-23
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REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM NO.: j
MEETING DATE: 06/06/00
ITEM TIlLE:
RESOLUTION APPROVING AN OWNER PARTICIPATION AGREEMENT
WITH THE ORTIZ CORPORATION FOR THE DEVELOPMENT OF A
GARAGE/WAREHOUSE AT 788 ENERGY WAY WITHIN THE OTAY
VALLEY ROAD REDEVELOPMENT PROJECT AREA
EXECUTIVE DIRECTOR
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SUBMlnED BY:
REVIEWED BY:
COMMUNITY DEVELOPMENT DIRECTOR
4/5THS YOTE: YES D NO 0
BACKGROUND
The Ortiz Corporation is proposing to construct a 3,533 square foot garage/warehouse at their
existing construction yard located at 7BB Energy Way within the boundaries of the Otay Valley Road
Redevelopment Project Areo. The building will be used for minor repair and maintenance of
vehicles, and storage.
The proposed land use is allowed under the General Plan, Otay Valley Road Redevelopment
Plan, and Zoning Ordinance. The City's Community Development Department Planning and
Environmental Manager reviewed the proposed project pursuant to the provisions of the
California Environmental Quality Act and determined that the project qualifies for a Class 3
Categorical Exemption, and a Notice of Exemption has been filed.
The Otay Valley Road Redevelopment Plan requires that Ortiz Corporation enter into an Owner
Participation Agreement (OPA) (which includes the design plans and a list of conditions). The OPA
(Attachment 1) is being presented to the Redevelopment Agency for consideration and approval.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the resolution approving the Owner
Participation Agreement for the development of a garage/warehouse at 7BB Energy Way.
BOARDS/COMMISSIONS RECOMMENDATION
The Design Review Committee reviewed the proposed project plans on April 17, 2000 and
recommended approval of the project as described in Exhibit A ond subject to conditions listed in
Exhibit B of the Owner Participation Agreement
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PAGE 2, ITEM NO.:
MEETING DATE:
J
06/06/00
DISCUSSION
Owner Participation Aareement
The Owner Participation Agreement (OPA) runs with land and autlines a number of responsibilities
of the developer. Among others, Ortiz Corporation will be required to:
1) Develop the property in accordance with the approved development proposal and
subject to the conditions of the Design Review Committee;
2) Secure all necessary permits; and
3) Maintain the property in a first class condition.
Proiect Description
The praject involves the construction of a 3,533 sq. ft. garage/warehouse and associated wash area
adjacent to the northern property line (see Exhibit A of the OPAl. The structure will be used for minor
repair and maintenance of the existing Ortiz work fleet, as well as storage of equipment. The
proposed rectangular block building will be compatible with and meet the standards of quality of the
surrounding development. The colors and stucco for the proposed garage/warehouse are to match
the existing office building on site. The proposed parking is placed adjacent to a significont non-
landscaped slope that drops dawn to property adjacent to Maxwell Raad. This site is highly visible
from the public right-of-way and parking in this area will need to be screened. Prior to issuance of a
building permit, a revised landscape plan addressing the above issue is required to be submitted to
the City Landscape Planner for review and approval.
Site Characteristics
The project is located at the western end of the Energy Way cul-de-sac adjacent to AII-Z Auto
Wrecking and Bradford Metals. Further west down a substantial slope is a vacant property
adjacent to Maxwell Road that has previously been used as a canstruction yard. The site area is
appraximately 1.8 acres. There is an existing 2,100 sq. ft. office building, wrought iron fence,
landscaping, paved parking areas and drives, and a construction yard.
Land Use Desianations
The property is presently being used as a construction yard and office for the Ortiz Corporation. The
garage/warehouse is a typical accessory structure to such a use. The zoning allows private service
and storage yards and storage and warehousing as permitted uses and other accessory buildings
customarily appurtenant to such use such as administrative offices and garages. The proposed
garage/warehouse building has the capability, if not the stated purpose, of being used for heavier
repair uses than is allowed by right within the I-L zone. Therefore, as a courtesy to the end user, the
project is specifically conditioned to not allow rebuilding of engines, bodywork, or overall vehicle
painting without the granting of a special permit as identified within the Otay Valley Road
Redevelapment Project Implementatian Plan Section 3.2(5)b and d.
J-.J..
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PAGE 3, ITEM NO.:
MEETING DATE:
.3
06/06/00
It was determined the project qualified for 0 Class 3 (new construction of small structures) categorical
exemption per Section 15303 of the California Environmental Quality Act and a Notice of Exemption
was filed.
Conclusion
It is staff's opinion that the construction of the proposed building will be beneficial for the City
and Agency because it will facilitate the existing business operations of Ortiz Corporation. The
improvements to the property will contribute to the elimination of blighting influences, which
further the goals and objectives of the Otay Valley Road Redevelopment Plan. Staff recommends
approval of the OPA.
FISCAL IMPACT
This project will have limited impact to the Otay Valley Road Redevelopment Project Fund due to the
relatively low improvement value.
ATTACHMENTS
Attachment 1 - Owner Participation Agreement with the following:
Exhibit A - Design Plans
Exhibit B - Design Review and Agency Conditions of Approval
Attochment 2 - Ownership Disclosure Statement
H :\HOME\COMMDEV\ST AFF. REP\06-06-00\ortizopo .doc
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RESOLUTION
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA APPROVING AN OWNER PARTICIPATION AGREEMENT WITH THE
ORTIZ CORPORATION FOR THE DEVELOPMENT OF A
GARAGEIWAREHOUSE AT 788 ENERGY WAY WITHIN THE OTAY VALLEY
ROAD REDEVELOPMENT PROJECT AREA
WHEREAS, the Ortiz Corporation owns property at 788 Energy Way, which is diagrammaticaliy shown in the
Locator Map attached to the Owner Participation Agreement and incorporated herein by reference; and,
WHEREAS, the Ortiz Corporation has presented deveiopment pians for the construction of a 3,533 sq. ft.
garagelwarehouse to be used for minor repair and maintenance of vehicles and storage at their existing construction
yard ("Project"); and
WHEREAS, the site for the proposed Project is located within the Otay Valiey Road Redevelopment Project
Area under the jurisdiction and control of the Redevelopment Agency of the City of Chula Vista; and,
WHEREAS. the Design Review Committee reviewed and recommended that the Redevelopment Agency
approve the proposed Project subject to the conditions iisted in Exhibit B of the Owner Participation Agreement; and,
WHEREAS, the Redeveiopment Agency of the City of Chuia Vista has been presented an Owner
Participation Agreement, said agreement being on file in the Office of the Secretary to the Redeveiopment Agency
and known as document RACO 00-_, approving the construction of a 3,533 sq. ft. garagelwarehouse to be used
for minor repair and maintenance of vehicles and storage. depicted in Exhibit A and subject to conditions listed in
Exhibits B of said agreement.
NOW, THEREFORE. THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby
find. order, determine and resolve as foliows:
1. The proposed project is consistent with the Otay Valiey Road Redevelopment Plan and shali implement
the purpose thereof; the project shali assist with the elimination of blight in the Project Area.
2. The Redevelopment Agency of the City of Chula Vista hereby approves the Owner Participation
Agreement with the Ortiz Corporation for the construction of a 3.533 sq. ft. garage/warehouse at their
existing construction yard located at 788 Energy Way. in the form presented in accordance with plans
attached thereto as Exhibit A and subject to conditions listed in Exhibits B of said agreement.
4. The Chairman of the Redevelopment Agency is hereby authorized to execute the subject Owner
Participation Agreement between the Redevelopment Agency and the Ortiz Corporation.
5. The Secretary of the Redevelopment Agency is authorized and directed to record said Owner
Participation Agreement in the Office of the County Recorder of San Diego, California.
Presented by:
Approved as to form by:
CL~
Chris Salomone
Community Development Director
John
Agenc
-
H:\HOMEICOMMDEVlRESOSIORTIZ.DOC
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11' 1i
ATTACHMENT 1
Recording Requested By:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
When Recorded Mail To:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Judi Beil
APN: 644-181-29
(Space Above This Line For Recorder)
OWNER PARTICIPATION AGREEMENT
Ortiz Corporation
788 Energy Way
THIS AGREEMENT ("AGREEMENT") is entered into by the REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA, a public body corporate and politic (hereinafter referred to as "AGENCY"), and Ortiz Corporation, a
California Corporation, ("DEVELOPER") effective as of June 6, 2000.
WHEREAS, the DEVELOPER desires to develop real property within the OTAY VALLEY ROAD
REDEVELOPMENT PROJECT AREA which is subject to the jurisdiction and control of the AGENCY; and,
WHEREAS, the DEVELOPER has presented plans for development to the Design Review Committee for the
construction of a 3,533 square foot garagelwarehouse with associated wash area at an existing corporation yard
(the "Project"); and,
WHEREAS, said plans for development have been recommended for approval by said committee; and,
WHEREAS, the AGENCY has considered the Design Review Committee's recommendation and has approved
the Project and design plans subject to certain terms and conditions; and,
WHEREAS, the AGENCY desires that said Project be implemented and completed as soon as it is practicable
in accordance with the terms of this Agreement.
NOW, THEREFORE, the AGENCY and the DEVELOPER agree as foilows:
1. The property to be developed is described as Assessor's Parcel Number 644-181.29 located at 788
Energy Way, Chula Vista, CA., shown on locator map attached hereto and by this reference
incorporated herein ("Property").
2. The DEVELOPER covenants and agrees by and for itself, it's heirs, executors, administrators and
assigns and ail persons claiming under or through them the foilowing:
A. DEVELOPER shail develop the Property with the Project in accordance with the AGENCY
approved development proposal attached hereto as Exhibit "A".
B. DEVELOPER shail obtain ail necessary federal/state and local governmental permits and
approvals and abide by ail applicable federal, state and local laws, regulations, policies and
approvals in connection with the development of the Project. DEVELOPER further agrees
that this Agreement is contingent upon DEVELOPER securing said permits and approvals.
DEVELOPER shail pay ail applicable development impact and processing fees.
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C. DEVELOPER shall obtain building permits within one year from the date of this Agreement
and to actually develop the Property with the Project within one year from the date of
issuance of the building permits. In the event DEVELOPER fails to meet these deadlines,
the Agency's approval of DEVELOPER's development proposals shall be void and this
Agreement shall have no further force or effect.
D. In all deeds granting or conveying an interest in the Property, the following language shall
appear:
'The grantee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, national origin
or ancestl}' in the sale, lease, sublease, transfer, use, occupancy, tenure,
or enjoyment of the premises herein conveyed, nor shall the grantee
himself or any persons claiming under or through him establish or permit
any such practice of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenant lessees, or vendees in the premises herein conveyed. The
foregoing covenants shaff run with the land. '
E. In all leases demising an interest in all or any part of the Property, the following language
shall appear:
'The lessee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through him,
and this lease is made and accepted upon and subject to the following
conditions:
That there shaff be no discrimination against or segregation of, any person
or group of persons, on account of race, color, creed, national origin, or
ancestl}', in the leasing, subleasing, transferring use, occupancy, tenure,
or enjoyment of the premises herein leased, nor shaff the lessee himself
or any persons claiming under or through him, establish or permit any such
practices of discrimination or segregation with reference to the selection,
location, number or use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased.'
3. The Property shall be developed subject to the conditions imposed by the Design Review Committee
and the AGENCY as described in Exhibit "B" attached hereto and incorporated herein by this
reference. DEVELOPER acknowledges the validity of and agrees to accept such conditions.
4. DEVELOPER shall maintain the premises in FIRST CLASS CONDITION.
A. DUTY TO MAINTAIN FIRST CLASS CONDITION. Throughout the term of this Agreement,
DEVELOPER shall, at DEVELOPER's sole cost and expense, maintain the Property which
includes all improvements thereon in first class condition and repair, and in accordance with
all applicable laws, permits, licenses and other govemmental authorizations, rules,
ordinances, orders, decrees and regulations now or hereafter enacted, issued or promulgated
by federal, state, county, municipal, and other governmental agencies, bodies and courts
having or claiming jurisdiction and all their respective departments, bureaus, and officials.
If the DEVELOPER falls to maintain the Property in a 'first class condition", the
Redevelopment Agency of the City of Chula Vista or its agents shall have the right to go on
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the Property and perform the necessary maintenance and the cost of said maintenance shall
become a lien against the Property. The Agency shall have the right to enforce this lien
either by foreclosing on the Property or by forwarding the amount to be collected to the Tax
Assessor who shall make it part of the tax bill.
B. DEVELOPER shall promptly and diligently repair, restore, alter, add to, remove, and replace,
as required, the Property and all improvements to maintain or comply as above, or to remedy
all damage to or destruction of all or any part of the improvements. Any repair, restoration,
alteration, addition, removal, maintenance, replacement and other act of compliance under
this Paragraph (hereafter collectively referred to as "Restoration") shall be completed by
DEVELOPER whether or not funds are available from insurance proceeds or subtenant
contributions.
C. In order to enforce all above maintenance provisions, the parties agree that the Community
Development Director is empowered to make reasonable determinations as to whether the
Property is in a first class condition. If he determines it is not, he (1) will notify the
DEVELOPER in writing and (2) extend a reasonable time to cure. If a cure or substantial
progress to cure has not been made within that time, the Director is authorized to effectuate
the cure by City forces or otherwise, the cost of which will be promptly reimbursed by the
DEVELOPER.
D. FIRST CLASS CONDITION DEFINED. First class condition and repair, means an efficient
and attractive condition, at least substantially equal in quality to the condition which exists
when the Project has been completed in accordance with all applicable laws and conditions.
5. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein shall run
with the land. DEVELOPER shall have the right, without prior approval of AGENCY, to assign its
rights and delegate its duties under this Agreement.
6. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein are for
the express benefit of the AGENCY and for all owners of real property within the boundaries of the
OTAY VALLEY ROAD REDEVELOPMENT PROJECT AREA as the same now exists or may be
hereafter amended. AGENCY and DEVELOPER agree that the provisions of this Agreement may be
specifically enforced in any court of competent jurisdiction by the AGENCY on its own behalf or on
behalf of any owner of real property within the boundaries of the OTAY VALLEY ROAD
REDEVELOPMENT PROJECT AREA.
7. AGENCY and DEVELOPER agree that this Agreement may be recorded by the AGENCY in the Office
of the County Recorder of San Diego County, California.
8. DEVELOPER shall and does hereby agree to indemnify, protect, defend and hold harmless AGENCY
and the City of Chula Vista, and their respective Council members, officers, employees, agents and
representatives, from and against any and all liabilities, losses, damages, demands, claims and costs,
including court costs and reasonable attomeys' fees (collectively, "liabilities") incurred by the AGENCY
arising, directly or indirectly, from (a) AGENCY's approval of this Agreement, (b) AGENCY's or City's
approval or issuance of any other permit or action, whether discretionary or non-discretionary, in
connection with the Project contemplated herein, and (c) DEVELOPER's construction and operation
of the Project permitted hereby.
9. In the event of any dispute between the parties with respect to the obligations under this AGREEMENT
that results in litigation, the prevailing party shall be entitled to recover its reasonable attorney's fees
and court costs from the non-prevailing party.
10. Time is of the essence for each and every obligation hereunder.
.3-7
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11. If DEVELOPER fails to fulfill its obligations hereunder after due notice and reasonable opportunity to
cure, DEVELOPER shall be in default hereunder, and in addition to any and all other rights and
remedies AGENCY may have, at law or in equity, the AGENCY shall have the right to terminate its
approval of the Project and this Agreement.
Signature Page Follows
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Signature Page
To Owner Participation Agreement with
Ortiz Corporation
IN WITNESS WHEREOF THE PARTIES HAVE ENTERED INTO THIS AGREEMENT EFFECTIVE AS OF THE DATE
FIRST WRITTEN ABOVE.
"AGENCY"
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
By:
Shirley Horton, Chairman
"DEVELOPER"
Ortiz Corporation
By:
Ortiz Corporation
(print name and title)
NOTARY: Please attach acknowledgment carel.
APPROVED AS TO FORM BY:
John M. Kaheny, Agency Attorney
ATTEST:
Chris Salomone, Executive Secretary
.1,,9
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EXHIBIT A
Design Plans
Owner Participation Agreement
Ortiz Corporation
788 Energy Way
Chula Vista. CA
Exhibit A
Reduced Copies of Design Plans
Follow
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EXHIBIT B
Conditions of Approval
Owner Participation Agreement
Main Square Corporation
3089 Main Street
Chula Vista. CA
DESIGN REVIEW
CONDITIONS OF APPROVAL
1. No rebuilding of engines, bodywork, or overall vehicle painting may take place on site without the issuance of
a special permit as identified within Section 3.2(5)b and d of the Otay Valley Road Redevelopment Project Area
Implementation Plan.
2. Prior to issuance of a building permit, a revised landscape plan and a water management plan shall be
submitted to the City Landscape Planner for review and approval.
3. The project shall comply with all requirements of the City of Chula Vista Engineering, Fire, and Police
Departments throughout the building plan check process.
4. Prior to issuance of a building permit, elevations of trash disposal/recycling stations and their proposed locations
shall be submitted to Planning staftfor review and approval, and shall conform with Section 19.58.340 of the
Chula Vista Municipal Code and the Chula Vista Design Manual.
5. Any deviations from the approved site plan must be approved by the Zoning Administrator
[FI6.:H:IHOMEICOMMOEV\TAPIAIOPASI3089 Main Street.OPA (May 23. 2000 2:43 PM)]
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ATTACHMENT 2
THE CITY OF CIIllLA VISTA DlSCLOSl.lU ST41'EMENT
s....... of dUloJo."", of........m -ip ........... P")'1ll""". or 0IIIlplIj... """!rib.tiatlO. DO a11_".rs wh<.h
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ne roIlowi.ua iIIfonauillll Dill be dlIdo8ld:
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REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM NO.:
MEETING DATE:
-4
06/06/00
ITEM TITLE: RESOLUTION ADOPTING NEGATIVE DECLARATION 15-00-12 AND
APPROVING OWNER PARTICIPATION AGREEMENT WITH THE MAIN
SQUARE CORPORATION FOR THE DEVELOPMENT OF AN
INDUSTRIAL BUILDING LOCATED AT THE SOUTHEAST CORNER OF
MAIN STREET AND FOURTH AVENUE WITHIN THE SOUTHWEST
REDEVELOPMENT PROJECT AREA
SUBMlnED BY: COMMUNITY DEVELOPMENT DIRECTOR ~~ t.$
REVIEWED BY: EXECUTIVE DIRECTOR {pJ;;o\~
4/5THS VOTE: YES D NO ~
BACKGROUND
The Main Square Corporation is proposing to construct a 22,640 sq. ft. industrial building at the
southeast corner of Main Street and Fourth Avenue within the boundaries of the Southwest
Redevelopment Project Area. The building will be used for the establishment of automobile repair
shops. The project is being constructed on a graded vacant lot and includes the construction of a
parking lot and landscaped areas.
The proposed land use is allowed under the General Plan, Southwest Redevelopment Plan, and
Zoning Ordinance. The City's Community Development Department Planning and
Environmental Manager reviewed the proposed project pursuant to the provisions of the
California Environmental Quality Act and determined that it would have no significant impacts
and recommended adoption of Negative Declaration IS-00-12.
Since the proposed project is within the Southwest Redevelopment Project Area, the environmental
document and the Owner Participation Agreement (which includes the design plans and a list of
conditions) are being presented to the Redevelopment Agency for consideration and approval.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the resolution adopting the Negative
Declaration and approving, subject to conditions, the Owner Participation Agreement for the
development of an industrial building at the southeast corner of Main Street and Fourth Avenue.
4-1
.,. ".
ITEM NO.:
MEETING DATE:
"
06/06/00
BOARDS/COMMISSIONS RECOMMENDATION
The Design Review Committee reviewed the proposed project pions on April 17, 2000 and
recommended opproval of the project os described in Exhibit A and subject to conditions listed in
Exhibit B of the Owner Participation Agreement.
DISCUSSION
Proiect Description
The project consists of the construction of a 22,640-square foot building (to be divided into
individual shop spaces with area ranging between 1,000 to 3,000 square feet); a 50-space parking
lot; and landscaped areas. The proposed building will consist of split-face concrete block
construction with the addition of glass storefronts and windows, as well as roll-up door to provide
access to the repair shop for the automobiles. The project will have access via one curb cuts along
Main Street and another curb-cut along Fourth Avenue. The building will be located with its
southern-most edge along the property line providing a front setback of 78 feet from the northern
sidewalk to provide for the parking lot. The landscaped area, approximately 5,400 square feet, will
be provided essentially along the Main Street frontage and around the west side of the building on
Fourth Avenue. The proposal includes a variety of landscape materials including groundcovers,
shrubs, and trees.
Site Characteristics
The site for the proposed project is located at the southeast corner of Main Street and Fourth
Avenue. It is located within the City's light industrial district, which is composed of a mixture of
industrial, commercial and vacant lots. The subject site is approximately 1.13 acres in area and is
currently vacant. Existing uses surrounding the subject include the old Palomino Cocktail Lounge to
the north across Main Street, a strawberry field to the west across Fourth Avenue, and storage
warehouses to the south and east. The site is relatively graded and cleared of all vegetation.
Land Use Desianations
The subject site is designated Industrial-Research & Limited Manufacturing by the General Plan and
is zoned Limited Industrial (I-L). These designations allow a variety of light industrial and heavy
commercial activities, such minor automobile repair shop. Based on type of uses that will occupy the
facility, the proposed project is consistent with the General Plan, the Southwest Redevelopment Plan,
and the Zoning Ordinance.
Conclusion
It is staff's opinion that the construction of the proposed building will be beneficial for the City,
because it will put a vacant parcel to a higher and better use, bring new development to the area,
and will contribute to the elimination of blighting influences, which further the goals and
objectives of the Southwest Redevelopment Plan.
4-l.
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PAGE 3, ITEM NO.: ~
MEETING DATE: 05/16/00
FISCAL IMPACT
The proposed proiect has an estimated valuation of $1,000,000. This will generate an annual tax-
increment revenue of approximately $10,000, which will be distributed as follows: Twenty percent
($2,000) for the Housing Set-Aside fund; of the remaining $8,000, fifty three percent ($4,240) will
be allocated to other taxing entities as part of the tax sharing pass-thru agreements; the rest
($3,760) will accrue to the Southwest Redevelopment Project Area fund.
ATTACHMENTS
Attachment A - Negative Declaration 15-00- 12
Attachment B - Owner Participation Agreement with the following:
Exhibit A - Design Plans
Exhibit B - Design Review and Agency Conditions of Approval
Exhibit C - Locator Map
H:\HOME\COMMDEV\STAFF.REP\06-06-00\3089 Main Street.doc
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RESOLUTION
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA ADOPTING NEGATIVE DECLARATION IS-00-12 AND APPROVING
OWNER PARTICIPATION AGREEMENT WITH THE MAIN SQUARE
CORPORATION FOR THE DEVELOPMENT OF AN INDUSTRIAL BUILDING
LOCATED AT THE SOUTHEAST CORNER OF MAIN STREET AND FOURTH
AVENUE WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT AREA
WHEREAS. the Main Square Corporation owns the property at the southeast corner of Main Street and
Fourth Avenue, which is diagrammatically shown in the Locator Map attached to the Owner Participation Agreement
and incorporated herein by reference; and,
WHEREAS, the Main Square Corporation has presented development plans for the construction of a 22,640-
square foot industrial building and associated lot improvements ("Project"); and
WHEREAS, the site for the proposed Project is located within the Southwest Redevelopment Project Area
under the jurisdiction and control of the Redeveiopment Agency of the City of Chula Vista; and,
WHEREAS, the City's Community Development Department Planning and Environmental Manager reviewed
the proposed Project and issued Negative Declaration IS-00-12 for the project in accordance with CEQA; and,
WHEREAS, the Design Review Committee reviewed and recommended that the Redevelopment Agency
approve the proposed Project subject to the conditions listed in Exhibit B of the Owner'Participation Agreement; and.
WHEREAS, the Redevelopment Agency of the City of Chula Vista has been presented an Owner
Participation Agreement, said agreement being on file in the Office of the Secretary to the Redevelopment Agency
and known as document RACO 00-05, approving the construction of a 22,640-square foot industrial building located
at the southeast corner of Main Street and Fourth Avenue. depicted in Exhibit A and subject to conditions listed in
Exhibits B of said agreement.
NOW, THEREFORE. THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby
find. order, determine and resolve as follows:
1. The proposed project will not have a significant impact On the environment; accordingly Negative
declaration IS-00-12 was prepared and is hereby adopted in accordance with CEQA.
2. The proposed project is consistent with the Southwest Redevelopment Plan and shall implement the
purpose thereof; the project shall assist with the elimination of blight in the Project Area.
3. The Redevelopment Agency of the City of Chula Vista hereby approves the Owner Participation
Agreement with the Main Square Corporation for the construction of a 22,640-square foot industrial
building at the southeast corner of Main Street and Fourth Avenue, in the form presented in accordance
with plans attached thereto as Exhibit A and subject to conditions listed in Exhibits B of said agreement.
4. The Chairman of the Redevelopment Agency is hereby authorized to execute the subject Owner
Participation Agreement between the Redevelopment Agency and the Main Square Corporation.
5. The Secretary of the Redevelopment Agency is authorized and directed to record said Owner
Participation Agreement in the Office of the County Recorder of San Diego, California.
Presented by:
r~
Approved as to form by:
~~'-
Chris Salomone
Community Development Director
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PROJECT
LOCATION
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4-S"
CHULA VISTA PLANNING AND BUILDING DEPARTMENT
LOCATOR PROJECT MAIN SQUARE CORPORATION PROJECT DESCRlPllON:
C) APPUCANT: DESIGN REVIEW
PROJECT Southeast comer of Fourth
ADDRESS: Avenue & Main Street Request Proposed construction of a single story 22,500 SF
industrial building with (55 parking spaces) for
SCALE: FILE NUMBER: minor auto repair.
NORTH No Scale DRC - 00-34
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negative
declaration
ATTACHMENT A
PROJECT NAME:
Main Square
PROJECT LOCATION:
SEC of Fourth Avenue and Main St., City ofChula Vista
ASSESSOR'S PARCEL NO.:
629-050-08
PROJECT APPLICANT:
Sam Sepehri, Corporate president
CASE NO.:
IS-00-12
DATE: March 7, 2000
A. Project Setting
The project site consists of a vacant 1.13 acre parcel located on the south east corner of
Fourth Avenue and Main Street in the city's southwest redevelopment area. The site has
been cleared of all vegetation. The site is zoned ILP (Limited Industrial-Precise Plan) . The
Chula Vista General Plan designates the site for Limited Industrial development. The
surrounding properties also contain the same general plan and zoning designation.
The area surrounding the site is fully developed with commercial and mini-warehouse
development with the exception of property located beyond Fourth A venue to the west which
is presently used to grow seasonal strawberry crops.
Main Street and Fourth Avenue are designated as four-lane major arterials by the City's
Circulation Element.
B. Project Description
The applicant proposes to construct a 22,500 square foot industrial building to be used for
minor auto repair. The proposed project when completed would operate 10 hours daily and
6 days a week.
Fifty-one parking spaces will be provided along the front perimeter adjacent to Main Street.
The proposed building will be setback along the southerly property line, adjacent to existing
mini-warehouse storage buildings. New landscaped areas, totaling approximately 5,400 sq.
ft. will be provided essentially along the perimeter of the project site with special emphasis
along Main Street frontage. The landscaped area will include groundcover, shrubs and trees.
The proposed auto minor repair uses will be subject to local, state and federal regulations as
applicable. Discretionary actions include approval by the Design Review Committee and
the Redevelopment Agency.
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city of chura vista planning department 01Y OF
envlronm..ntal ,..vi..... ....tlnn ("HIllA VI<;TA
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C. Compatibilitv with Zoning and Plans
The site is zoned ILP (Limited Industrial-Precise Plan). The Chula Vista General Plan
designates the site for Limited Industrial development. The proposed minor auto repair
shops are in compliance with the Zoning designation and General Plan designation.
D. Identification of Environmental Effects
An Initial Study conducted by the City ofChula Vista (including an attached Environmental
Checklist form) determined that the proposed project will not have a significant
environmental effect, and the preparation of an Environmental Impact Report will not be
required. This Negative Declaration has been prepared in accordance with Section 15070 of
the State CEQA Guidelines.
I. Public Services Impact
Fire
The nearest fire station is located about 2 miles from the project site. The estimated
response time is less than five (5) minutes. The response time complies with the City
Threshold Standards for fire and medical response time. The applicant will need to
coordinate standard inspections with the fire department with respect to the proposed
uses. This standard review process will be coordinated with other Regulatory
Agency review processes to ensure that no aspect of the proposed project will have
an adverse impact on project site soils, underground water table or the surrounding
physical environment as outlined below.
Police
The Police Department indicates that they will be able to provide current levels of
adequate service to the proposed project.
2. Utilitv and Service Svstems
Soils
The Engineering Division indicates that a Soils Report will be required with the first
submittal of the grading improvement plans as a standard
Drainage
The Engineering Division indicates that existing off-site drainage facilities are
adequate to serve the proposed project. As a standard condition of approval, the
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Engineering Division has requested that the applicant prepare a drainage study to
identify the method to be used to convey on-site water surface runoff. On-site
drainage facilities will also incorporate pollution prevention as a standard condition
of approval. Coordination with regulatory agencies may also result in requirements
for a stormwater industrial permit.
Sewer
Sewage flows and volumes are currently being adequately maintained. The
Engineering Division indicates that the proposed project will comply with the City
Engineering Standards. The Engineering Division indicates that the Salt Creek
Trunk sewer will provide additional capacity to the area to ensure adequate capacity
and flow. The City of San Diego Metropolitan Wastewater Department may require
a wastewater industrial permit through their standard review process.
Streets/Traffic
The Threshold Standards Policy requires that all intersections must operate at a Level
of Service (LOS) "C" or better, with the exception that Level of Service (LOS) "D"
may occur during the peak two hours of the day at signalized intersections. No
intersection may reach an LOS "F" during the average weekday peak hour.
Intersections of arterials with freeway ramps are exempt from this policy. The
proposed project would comply with this Threshold Policy for the immediately
affected intersection of Main Street and Fourth Street.
The project is associated with an Average Daily Traffic of 450 one-way trips. The
Engineering Division indicates that the overall project has been found to be
consistent with the criteria established in the City's Transportation Phasing Plan and
General Plan Traffic Element. The applicant will be required to make standard street
dedication and improvements along Main Street (3 ft.) and Fourth Avenue (10 ft.)
frontages.
Biology
On one field visit of the site in the month of December, environmental staff observed
the presence of a burrowing owl. Several visits later the burrowing owl was not seen.
A representative from the U.S. Department ofFish & Wildlife Service was contacted
by staff in order to determine the status of this species. The representative indicated
that this species was not covered by the Endangered Species Act, but that it was
protected under the Migratory Treaty Act. The recommendation by the Service staff
was to continue to check to see if the bird was observed or detected. The Service
indicated that this bird was migratory and that it was probably stopping by to forage.
Subsequent visits to the site resulted in the bird not being observed and the Service
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reconunendation was to proceed with the project without any further studies since the
site is located in the midst of a highly urbanized and trafficked area and did not
represent viable habitat for this species.
Hazards
The applicant shall obtain appropriate permits and clearance from the County of San
Diego Health Department, Hazardous Material Management Division regarding
proper disposal of used oils and by-products. The County of San Diego Health
Department has a specific program outlining the installation of fuel tanks and is
prepared to assist the applicant as part of the permitting process. The City Fire
Department and Building Division will also be involved in the permitting process.
3. Aesthetics
The proposed project will be subject to review and approval by the Design Review
Conunittee (DRC). The proposed site plan, architectural design, landscaping and
lighting plans will be subject to review by Planning and the DRC to ensure the
proposed project will help properties in the southwest redevelopment area.
E. Consultation
I. Individuals and Organizations
City ofChula Vista:
Benjamin Guerrero, Community Development
Muna Cuthbert, Engineering
Majed Al-Ghafry, Engineering
Frank Herrera, Planning
Brad Kemp, Building Division
Doug Perry, Fire Marshal
Richard Preuss, Crime Prevention
Brian Hunter, Community Development
Chula Vista City School District: Dr. Lowell Billings
Sweetwater Union High School District: Katy Wright
Applicant's Agent: Sam Sepehri, President, Main Square Corporation
2. Documents
Chula Vista General Plan (1989) and EIR (1989)
Title 19, Chula Vista Municipal Code
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3. Initial Studv
This environmental determination is based on the attached Initial Study, any
comments received on the Initial Study and any comments received during the public
review period for this Negative Declaration. The report reflects the independent
judgement of the City of Chula Vista. Further information regarding the
environmental review of this project is available from the Chula Vista Planning
Department, 276 Fourth Avenue, Chula Vista, CA 91910.
J)~~~
Brian Hunter
Planning & Environmental Manager
Date: '3. '6 . 00
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Case No. IS-OO-12
ENVIRONMENTAL CHECKLIST FORM
1.
Name of Proponent:
Main Square Corporation
2.
Lead Agency Name and Address:
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
3.
Address and Phone Number of Proponent:
23 Spinnaker Way
Coronado, CA. 92118
(619) 429-0186
4.
Name of Proposal:
Main Square
5.
Date of Checklist:
March 3, 2000
Potentially
Significant
Impact
Potentially
Significant
Unless
Mitigated
Lesslhan
Significant
Impact
N.
Impact
I. LAND USE AND PLANNING: Would the
proposal:
a) Conflict with general plan designation or
zoning?
o
o
o
181
b) Conflict with applicable environmental plans or
policies adopted by agencies with jurisdiction
over the project?
c) Affect agricultural resources or operations (e.g.,
impacts to soils or farmlands, or impacts from
incompatible land uses)?
d) Disrupt or divide the physical arrangement of
an established community (including a low-
income or minority community)?
o
o
o
181
o
o
o
181
o
o
o
181
Comments:
The vacant site is zoned Limited Industrial Precise Plan (ILP) and designated for
Research and Limited Industrial use by the City's General Plan. The proposed project
would require review by the Design Review Committee. No adverse impacts or conflicts
with the zoning or General Plan are noted.
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II. POPULA nON AND HOUSING: Would the
proposal:
a) Cumulatively exceed official regional or local
population projections?
b) Induce substantial growth in an area either
directly or indirectly (e.g., through projects in
an undeveloped area or extension of major
infrastructure)?
c) Displace existing housing, especially affordable
housing?
Comments:
Potentially
Significant
Impact
Potentially
Significant
linless
Mitigated
N.
Impact
LeSSlhan
Significant
Impact
o
o
o
III
o
o
o
III
o
o
o
III
Project implementation would not contribute to local population growth nor displacement
of existing housing. No adverse impacts are noted.
III. GEOPHYSICAL: Would the proposal result in or
expose people to potential impacts involving:
a) Unstable earth conditions or changes in
geologic substructures?
b) Disruptions, displacements, compaction or
overcovering of the soil?
c) Change in topography or ground surface relief
features?
d) The destruction, covering or modification of
any unique geologic or physical features?
e) Any increase in wind or water erosion of soils,
either on or off the site?
f) Changes in deposition or erosion of beach
sands, or changes in siltation, deposition or
erosion which may modify the channel of a
river or stream or the bed of the ocean or any
bay inlet or lake?
g) Exposure of people or property to geologic
hazards such as earthquakes, landslides, mud
slides, ground failure, or similar hazards?
o
o
o
III
o
o
o
III
o
o
o
III
o
o
III
o
o
o
o
III
o
o
o
III
o
o
o
III
Comments: No adverse impacts regarding soils or geophysical conditions are noted. A soils report
and compliance with the applicable recommendations will be required as a standard
condition of grading permit approval. No mitigation will be required.
IV. WATER: Would the proposal result in:
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Potentially
Potentially Significant Less than
Significant Unless Significant No
Impact Mitigated Impact Impact
a) Changes in absorption rates, drainage patterns, 0 0 Illl 0
or the rate and amount of surface runoff?
b) Exposure of people or property to water related 0 0 0 !ill
hazards such as flooding or tidal waves?
c) Discharge into surface waters or other alteration 0 0 0 Illl
of surface water quality (e.g., temperature,
dissolved oxygen or turbidity)?
d) Changes in the amount of surface water in any 0 0 0 Illl
water body?
e) Changes in currents, or the course of direction 0 0 0 !ill
of water movements, in either marine or fresh
waters?
f) Change in the quantity of ground waters, either 0 0 0 !ill
through direct additions or withdrawals, or
through interception of an aquifer by cuts or
excavations?
g) Altered direction or rate of flow of 0 0 0 Illl
groundwater?
h) Impacts to groundwater quality? 0 0 0 !ill
i) Alterations to the course or flow of flood 0 0 0 Illl
waters?
j) Substantial reduction in the amount of water 0 0 0 !ill
otherwise available for public water supplies?
Comments: The subject site is located in a fully urban setting and represents infill development. On-
site drainage facilities design would need to take into consideration, pollution prevention
from auto repair shops to the storm water facilities. The City has existing storm drainage
facilities that would result in proper conveyance of storm waters. No adverse impact
regarding storm waters is noted. The Engineering Division is requesting that drainage
facilities be incorporated in the design with the first submittal of the grading and
improvement plans as part of the standard requirements for new construction. Existing
off-site drainage facilities adequately convey water per City Engineering Division. No
adverse impacts are noted. No mitigation will be required.
V. AIR QUALITY: Would the proposal:
a) Violate any air quality standard or contribute to 0 0 0 !ill
an existing or projected air quality violation?
b) Expose sensitive receptors to pollutants? 0 0 0 !ill
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c) Alter air movement, moisture, or temperature,
or cause any change in climate, either locally or
regionally?
d) Create objectionable odors?
e) Create a substantial increase in stationary or
non-stationary sources of air emissions or the
deterioration of ambient air quality?
Comments:
POlenlially
Potentially Significanl Less than
Significanl Unless Significant No
Impact Mitigated Impact Impact
0 0 0 0
o
o
o
o
o
o
o
o
The project does not propose any operations that would violate air quality standards or
contribute additional pollutants in the air. The proposed minor auto repair operations
would ensure that vehicles are functioning at their peak performance and thus minimize
impacts to the ambient. No mitigation will be required.
VI. TRANSPORTATION/CIRCULATION: Would
the proposal result in:
a) Increased vehicle trips or traffic congestion?
b) Hazards to safety from design features (e.g.,
sharp curves or dangerous intersections) or
incompatible uses (e.g., farm equipment)?
c) Inadequate emergency access or access to
nearby uses?
d) Insufficient parking capacity on-site or off-site?
e) Hazards or barriers for pedestrians or
bicyclists?
f) Conflicts with adopted policies supporting
alternative transportation (e.g. bus turnouts,
bicycle racks)?
g) Rail, waterborne or air traffic impacts?
h) A "large project" under the Congestion
Management Program? (An equivalent of2400
or more average daily vehicle trips or 200 or
more peak-hour vehicle trips.)
Comments:
o
o
181
o
o
o
o
181
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
The Engineering Division estimates that the combined proposed land uses will generate
approximately 450 one-way vehicular trips per day. Main Street and Fourth Avenue will
provide the primary access to the project site and both are classified by the City's
Circulation Element as four-lane major arterials. Based on Engineering analysis both
roadways presently have the capacity to handle traffic generated by the proposed project
and maintain a Level of Service "C", thus meeting the City's Traffic Threshold Standards.
No mitigation will be required.
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VII. BIOLOGICAL RESOURCES: Would the
proposal result in impacts to:
..~
a) Endangered, sensitive species, species of
concern or species that are candidates for
listing?
b) Locally designated species (e.g., heritage
trees)?
c) Locally designated natural communities (e.g,
oak forest, coastal habitat, etc.)?
d) Wetland habitat (e.g., marsh, riparian and
vernal pool)?
e) Wildlife dispersal or migration corridors?
f) Affect regional habitat preservation planning
efforts?
Comments:
Potentially
Significant
Impact
Potentially
Significant
Unless
Mitigated
N.
Impact
Less than
Significant
Impact
o
o
I<l
o
o
o
o
I<l
o
o
o
I<l
o
o
o
I<l
o
o
o
I<l
o
o
o
I<l
The project site is located in an urbanized area and is cleared of all vegetation. There are
presently no native plants or sensitive animal species. On one field visit of the site in the
month of December, environmental staff observed the presence of a burrowing owl.
Several visits later the burrowing owl was not seen. A representative from the U.S. Fish
& Wildlife Service was contacted by staff in order to detennine the status of this species.
The representative indicated that this species was not covered by the Endangered Species
Act, but that it was protected under the Migratory Treaty Act. The recommendation by
the Service staff was to continue to check to see if the bird was observed. The Service
indicated that this bird was migratory and that it was probably stopping over to forage.
Subsequent visits to the site during the months of January and February resulted in the
bird species not being observed and the Service recommendation was to proceed with the
project without the need for any studies since the site is located in the midst of a highly
urbanized and trafficked area and did not represent viable habitat for this species.
VIII. ENERGY AND MINERAL RESOURCES:
Would the proposal:
a) Conflict with adopted energy conservation 0 0 0 I<l
plans?
b) Use non-renewable resources in a wasteful and 0 0 0 I<l
inefficient manner?
c) If the site is designated for mineral resource 0 0 0 I<l
protection, will this project impact this
protection?
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Potentially
Significant
Impact
Comments: No impacts to non-renewable resources are noted.
Potentially
Significant
Unless
Mitigated
Less than
Significant
Impact
No
Impact
IX. HAZARDS: Would the proposal involve:
a) A risk of accidental explosion or release of
hazardous substances (including, but not limited
to: petroleum products, pesticides, chemicals or
radiation)?
b) Possible interference with an emergency
response plan or emergency evacuation plan?
o
o
o
I8l
o
o
o
I8l
c) The creation of any health hazard or potential
health hazard?
o
o
o
I8l
d) Exposure of people to existing sources of
potential health hazards?
o
o
I8l
o
e) Increased fire hazard in areas with flammable
brush, grass, or trees?
o
o
o
I8l
Comments:
The proposed project shall comply with all applicable standard required permitting
processes administered by local, state and federal agencies. Compliance with established
standard procedures will ensure that people will not be exposed to accidental health
hazards. The project proponent will need to obtain a letter of clearance from the County
of San Diego Environmental Health Department Hazardous Management Division
regarding the proposed minor auto repair shops. No adverse impacts are noted. No
mitigation will be required.
X. NOISE: Would the proposal result in:
a) Increases in existing noise levels?
o
o
I8l
o
b) Exposure of people to severe noise levels?,
o
o
o
I8l
Comments: Temporary construction noise would occur at the site, however, the short term nature of
the noise, the proximity of major arterials and the commerciallindustrial nature of the
surrounding area results in less than significant impacts. No adverse impacts are noted.
No mitigation will be required.
XI. PUBLIC SERVICES: Would the proposal have
an effect upon. or result in a needfor new or
altered government services in any of the follOWing
areas:
a) Fire protection?
b) Police protection?
o
o
o
I8l
o
o
o
I8l
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Potentially
Potentially Signifitant Less than
Signifkant Unless Signifkant N"
Impad Mitigated Impatt Impatt
C) Schools? 0 0 0 IIll
d) Maintenance of public facilities, including 0 0 0 IIll
roads?
e) Other governmental services? 0 0 0 till
Comments: No new Governmental services will be required to serve the project. No adverse impacts
are noted. Fire and police protection can adequately be provided. Appropriate school
fees will be paid. Street dedication and improvements along Main Street and Fourth
A venue will be made in accordance with City Standards. No mitigation will be required.
o
o
o
IIll
XII. THRESHOLDS: Will the proposal adversely
impact the City's Threshold Standards?
As described below, the proposed project does not adversely impact any of the seen Threshold
Standards.
a) FirefEMS
o
o
o
IIll
The Threshold Standards requires that fire and medical units must be able to respond to calls
within 7 minutes or less in 85% of the cases and within 5 minutes or less in 75% of the case$.
The City of Chula Vista has indicated that this threshold standard will be met, since the
nearest fire station is 2 miles away and would be associated with a 5-minute response time.
The proposed project will comply with this Threshold Standard.
Comments:
The Fire Department indicates that nearest fire station is located within 2 miles and
adequate fire service and protection can be provided to the proposed project site.
b) Police
o
o
o
IIll
The Threshold Standards require that police units must respond to 84% of Priority I calls
within 7 minutes or less and maintain an average response time to all Priority I calls of 4.5
minutes or less. Police units must respond to 62.10% of Priority 2 calls within 7 minutes or
less and maintain an average response time to all Priority 2 calls of 7 minutes or less. The
proposed project is located in an area where police ART data for priority I and Priority 2 calls
is currently unavailable.
Comments: The Police Department indicates that current police service can continue to be provided
to the area where the subject site is located. Crime Prevention personnel are available to
assist the applicant with security recommendations. No significant adverse impacts to
Police service are noted. No mitigation will be required.
c) Traffic
o
o
IIll
o
The Threshold Standards require that all intersections must operate at a Level of Service
(LOS) "C" or better, with the exception that Level of Service (LOS) "0" may occur during
the peak two hours of the day at signalized intersections. Intersections west 00-805 are
not to operate at a LOS below their 1987 LOS. No intersection may reach LOS "E" or "F"
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Comments:
Potentially
Potentially Significant Leulhan
Significant Unless Significant No
Impact Mitigated Impact Impatt
during the average weekday peak hour. Intersections of arterials with freeway ramps are
exempted from this Standard. The proposed project will comply with this Threshold
Standard.
The Engineering Division has detennined that the current Level-of- Service (LOS) "C"
enjoyed by Main Street and Fourth Avenue, four lane major arterials, would remain the
same with approval of the proposed project. The Engineering Division reviewed traffic
data for Main Street and Fourth Avenue and concluded that these would be adequate to
serve the proposed project subject to standard dedication of necessary R.O.W. and
widening of both Main Street and Fourth Avenue to City Engineering standards. No
mitigation will be required.
d) Parks/Recreation
Comments:
o
o
o
181
The Threshold Standard for Parks and Recreation is 3 acresll ,000 population. This
standard does not apply to the proposed project.
No adverse impacts to parks or recreational opportunities are noted.
e) Drainage
Comments:
t) Sewer
Comments:
g) Water
o
o
o
181
The Threshold Standards require that stonn water flows and volumes not exceed
City Engineering Standards. Individual projects will provide necessary
improvements consistent with the Drainage Master Plan(s) and City Engineering
Standards. The proposed project will comply with this Threshold Standard.
Off-site drainage capacities will not be affected by project approval.
o
o
181
o
The Threshold Standards require that sewage flows and volumes not exceed City
Engineering Standards. Individual projects will provide necessary improvements
consistent with Sewer Master Plan(s) and City Engineering Standards. The
proposed project will comply with this Threshold Standard.
Sewer capacities will not be adversely affected through project implementation. The
existing adjacent sewer lines will be evaluated by the Engineering Division as necessary
at the design stage of the project. The Salt Creek Trunk Sewer will eliminate any potential
capacity problems. No mitigation is required.
o
o
o
181
The Threshold Standards require that adequate storage, treatment, and transmission facilities
are constructed concurrently with planned growth and that water quality standards are not
jeopardized during growth and construction. The proposed project will comply with this
Threshold Standard.
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Potentially
Potentially Significant Less than
Significant Unless Significant No
Impact Mitigated Impact Impact
Applicants may also be required to participate in whatever water conservation or fee off-
set program the City ofChula Vista has in effect at the time of building permit issuance.
Comments: Water quality standards would not be affected through project implementation.
XIII UTILITIES AND SERVICE SYSTEMS: Would
the proposal result in a needfor new systems, or
substantial alterations to the following utilities:
a) Power or natural gas? 0 0 0 I1<l
b) Communications systems? 0 0 0 I1<l
,y
c) Local or regional water treatment or distribution 0 0 0 I1<l
facilities?
d) Sewer or septic tanks? 0 0 0 I1<l
e) Storm water drainage? 0 0 0 I1<l
f) Solid waste disposal? 0 0 0 I1<l
Comments: The proposed uses will not generate a need for new systems or cause alteration to the
aforementioned utilities. The existing sewer lines along Main Street currently have the
capacity to handle the proposed sewer per the Engineering Division. The Salt Creek
Trunk sewer will provide additional capacity in the future. Chula Vista Municipal Code
Section 14.20.120 requires the incorporation of stonn water pollution prevention
measures into the proposed auto repair facility. A stonnwater industrial penn it may be
required from the State Water Resources Control Board. A wastewater industrial pennit
may also be required from the City of San Diego Metropolitan Wastewater Department.
No mitigation will be required, since these would become standard conditions of project
of approval once a detennination is made that these will be required.
XIV AESTHETICS: Would the proposal:
a) Obstruct any scenic vista or view open to the
public or will the proposal result in the creation
of an aesthetically offensive site open to public
view?
o
o
o
I1<l
b) Cause the destruction or modification of a
scenic route?
o
o
o
I1<l
c) Have a demonstrable negative aesthetic effect?
d) Create added light or glare sources that could
increase the level of sky glow in an area or
cause this project to fail to comply with Section
19.66.100 of the Chula Vista Municipal Code,
Title 19?
o
o
o
I!l
o
o
o
I1<l
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e) Reduce an additional amount of spill light?
Potentially
Potentially Significant Lnsthan
Significant l'nless Significant No
Impact Mitigated Impact Impact
0 0 0 c;l
Comments:
Approval of the project design and landscaping is subject to a discretionary Design
Review process. No mitigation will be required.
XV CULTURAL RESOURCES: Would the proposal:
a) Will the proposal result in the alteration of or 0 0 0 c;l
the destruction or a prehistoric or historic
archaeological site?
b) Will the proposal result in adverse physical or 0 0 0 c;l
aesthetic effects to a prehistoric or historic
building, structure or object?
c) Does the proposal have the potential to cause a 0 0 0 c;l
physical change which would affect unique
ethnic cultural values?
d) Will the proposal restrict existing religious or 0 0 0 c;l
sacred uses within the potential impact area?
e) Is the area identified on the City's General Plan 0 0 0 c;l
EIR as an area of high potential for
archeological resources?
Comments: There are no identified cultural resources within the project area.
XVI PALEONTOLOGICAL RESOURCES: Will the
proposal result in the alteration of or the
destruction of paleontological resources?
o
o
o
c;l
Comments: There are no identified paleontological resources within the project area.
XVII RECREATION: Would the proposal:
a) Increase the demand for neighborhood or 0 0 0 c;l
regional parks or other recreational facilities?
b) Affect existing recreational opportunities? 0 0 0 c;l
c) Interfere with recreation parks & recreation 0 0 0 c;l
plans or programs?
Comments: There are no recreational facilities that will be adversely affected by the proposed auto
repair operations.
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XVIII MANDATORY FINDINGS OF
SIGNIFICANCE: See Negative Declarationfor
mandatory findings of significance. If an EIR is
needed, this section should be completed.
a) Does the project have the potential to degrade
the quality of the environment, substantially
reduce the habitat of a fish or wildlife species,
cause a fish or wildlife population to drop
below self-sustaining levels, threaten to
eliminate a plant or animal community, reduce
the number or restrict the range of a rare or
endangered plant or animal or eliminate
important examples of the major periods or
California history or prehistory?
Comments: The site is presently vacant and cleared and graded of all plant materials. The site lies
within a fully urbanized area and does not represent viable habitat for any sensitive
animal species.
b) Does the project have the potential to achieve
short-term, to the disadvantage of long-term,
environmental goals?
Potentially
Significant
Impact
Potentially
Significant
Unless
Mitigated
No
Impact
Leulhan
Significant
Impact
o
o
o
till
o
o
o
till
Comments: The scope and nature of the project would not result in the curtailment of any long-term
environmental goals.
c) Does the project have impacts that are
individually limited, but cumulatively
considerable? ("Cumulatively considerable"
means that the incremental effects of a project
are considerable when viewed in connection
with the effects of past projects, the effects of
other current projects, and the effects of
probable future projects.)
o
o
o
till
Comments: There are no incremental impacts associated with the project.
d) Does the project have environmental effect
which will cause substantial adverse effects on
human beings, either directly or indirectly?
o
o
o
till
Comments: No adverse effects to human beings is anticipated from project approval.
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XIX. PROJECT REVISIONS OR MITIGATION MEASURES:
NO MITIGATION WILL BE REQUIRED
XX. ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED: NONE
The environmental factors checked below would be potentially affected by this project, involving at least
one impact that is a "Potentially Significant Impact" or "Potentially Significant Unless Mitigated," as
indicated by the checklist on the following pages.
0 Land Use and Planning 0 T ransportation/C irculation 0 Public Services
D Population and Housing D Biological Resources D Utilities and Service
Systems
0 Geophysical 0 Energy and Mineral Resources 0 Aesthetics
D Water D Hazards D Cultural Resources
0 Air Quality 0 Noise 0 Recreation
0 Mandatory Findings of Significance
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XXI. DETERMINATION:
On the basis of this initial evaluation:
I find that the proposed project COULD NOT have a significant effect on the 181
environment, and a NEGATIVE DECLARATION will be prepared.
I find that although the proposed project could have a significant effect on the 0
environment, there will not be a significant effect in this case because the mitigation
measures described on an attached sheet have been added to the project. A MITIGATED
NEGATIVE DECLARATION will be prepared.
I find that the proposed project MAY have a significant effect on the environment, and an 0
ENVIRONMENTAL IMPACT REPORT is required.
I find that the proposed project MAY have a significant effect(s) on the environment, but 0
at least one effect: I) has been adequately analyzed in an earlier document pursuant to
applicable legal standards, and 2) has been addressed by mitigation measures based on the
earlier analysis as described on attached sheets, if the effect is a "potentially significant
impacts" or "potentially significant unless mitigated." An ENVIRONMENTAL IMPACT
REPORT is required, but it must analyze only the effects that remain to be addressed.
I find that although the proposed project could have a significant effect on the 0
environment, there WILL NOT be a significant effect in this case because all potentially
significant effects (a) have been analyzed adequately in an earlier EIR pursuant to
applicable standards and (b) have been avoided or mitigated pursuant to that earlier EIR,
including revisions or mitigation measures that are imposed upon the proposed project.
An addendum has been prepared to provide a record of this determination.
~~~
Brian Hunter
Planning & Environmental Manager
City of Chula Vista
March 3. 2000
Date
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ATTACHMENT B
Recording Requested By:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
When Recorded Mail To:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Judi Bell
APN: 629.050.09
(Space Above This Line For Recorder)
OWNER PARTICIPATION AGREEMENT
Main Square Corporation
3089 Main Street
THIS AGREEMENT is entered into by the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA,
a public body corporate and politic (hereinafter referred to as "AGENCY"), and Main Square Corporation, a Califomia
Corporation, hereinafter referred to as "DEVELOPER") effective as of June 6, 2000.
WHEREAS, the DEVELOPER desires to develop real property within the SOUTHWEST REDEVELOPMENT
PROJECT AREA which is subject to the jurisdiction and control of the AGENCY; and,
WHEREAS, the DEVELOPER has presented plans for development to the Design Review Committee for the
construction of a 22,640 square foot industrial building (the "Project"); and,
WHEREAS, said plans for development have been recommended for approval by said committee; and,
WHEREAS, the AGENCY has considered the Design Review Committee's recommendation and has approved
the Project and design plans subject to certain terms and conditions; and,
WHEREAS, the AGENCY desires that said Project be implemented and completed as soon as it is practicable
in accordance with the terms of this Agreement.
NOW, THEREFORE, the AGENCY and the DEVELOPER agree as follows:
1. The property to be developed is described as Assessor's Parcel Number 629.050-09 located at 3089
Main Street, Chula Vista, CA., shown on locator map attached hereto and by this reference
incorporated herein ("Property').
2. The DEVELOPER covenants and agrees by and for himself, his heirs, executors, administrators and
assigns and all persons claiming under or through them the following:
A. DEVELOPER shall develop the Property with the Project in accordance with the AGENCY
approved development proposal attached hereto as Exhibit "A".
B. DEVELOPER shall obtain all necessary federal/state and local govemmental permits and
approvals and abide by all applicable federal, state and local laws, regulations, policies and
approvals in connection with the development of the Project. DEVELOPER further agrees
that this Agreement is contingent upon DEVELOPER securing said permits and approvals.
DEVELOPER shall pay all applicable development impact and processing fees.
'" - 2.. "
.,. ~
C. DEVELOPER shall obtain building permits within one year from the date of this Agreement
and to actually develop the Property with the Project within one year from the date of
issuance of the building permits. In the event DEVELOPER fails to meet these deadlines,
the Agency's approval of DEVELOPER's development proposals shall be void and this
Agreement shall have no further force or effect.
D. In all deeds granting or conveying an interest in the Property, the following language shall
appear:
'The grantee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through
them, that fhere shall be no discriminafion against or segregafion of, any
person or group of persons on account of race, color, creed, national origin
or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure,
or enjoyment of the premises herein conveyed, nor shall the grantee
himself or any persons claiming under or through him establish or permit
any such practice of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenant lessees, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land. '
E. In all leases demising an interest in all or any part of the Property, the following language
shall appear.
'The lessee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through him,
and this lease is made and accepted upon and subject to the following
conditions:
That there shall be no discrimination against or segregation of, any person
or group of persons, on account of race, color, creed, national origin, or
ancestry, in the leasing, subleasing, transferring use, occupancy, tenure,
or enjoyment of the premises herein leased, nor shall the lessee himself
or any persons claiming under or through him, establish or permit any such
practices of discrimination or segregation with reference to the selection,
location, number or use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased. '
3. The Property shall be developed subject to the conditions imposed by the Design Review Committee
and the AGENCY as described in Exhibit "B" attached hereto and incorporated herein by this
reference. DEVELOPER acknowledges the validity of and agrees to accept such conditions.
4. DEVELOPER shall maintain the premises in FIRST CLASS CONDITION.
A. DUTY TO MAINTAIN FiRST CLASS CONDITION. Throughout the term of this Agreement,
DEVELOPER shall, at DEVELOPER's sole cost and expense, maintain the Property which
includes all improvements thereon in first class condition and repair, and in accordance with
all applicable laws, permits, licenses and other governmental authorizations, rules,
ordinances, orders, decrees and regulations now or hereafter enacted, issued or promUlgated
by federal, state, county, municipal, and other governmental agencies, bodies and courts
having or claiming jurisdiction and all their respective departments, bureaus, and officials.
If the DEVELOPER fails to maintain the Property in a 'first class condition', the
Redevelopment Agency of the City of Chula Vista or its agents shall have the right to go on
4 - 2.S-
.,. ".
the Property and perform the necessary maintenance and the cost of said maintenance shall
become a lien against the Property. The Agency shall have the right to enforce this lien
either by foreclosing on the Property or by forwarding the amount to be collected to the Tax
Assessor who shall make it part of the tax bill.
B. DEVELOPER shall promptly and diligently repair, restore, alter, add to, remove, and replace,
as required, the Property and all improvements to maintain or comply as above, or to remedy
all damage to or destruction of all or any part of the improvements. Any repair, restoration,
alteration, addition, removal, maintenance, replacement and other act of compliance under
this Paragraph (hereafter collectively referred to as 'Restoration') shall be completed by
DEVELOPER whether or not funds are available from insurance proceeds or subtenant
contributions.
C. In order to enforce all above maintenance provisions, the parties agree that the Community
Development Director is empowered to make reasonable determinations as to whether the
Property is in a first class condition. If he determines it is not, he (1) will notify the
DEVELOPER in writing and (2) extend a reasonable time to cure. If a cure or substantial
progress to cure has not been made within that time, the Director is authorized to effectuate
the cure by City forces or otherwise, the cost of which will be promptly reimbursed by the
DEVELOPER.
D. FIRST CLASS CONDITION DEFINED. First class condition and repair, means an efficient
and attractive condition, at least substantially equal in quality to the condition which exists
when the Project has been completed in accordance with all applicable laws and conditions.
5. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein shall run
with the land. DEVELOPER shall have the right, without prior approval of AGENCY, to assign its
rights and delegate its duties under this Agreement.
6. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein are for
the express benefit of the AGENCY and for all owners of real property within the boundaries of the
SOUTHWEST REDEVELOPMENT PROJECT AREA as the same now exists or may be hereafter
amended. AGENCY and DEVELOPER agree that the provisions of this Agreement may be
specifically enforced in any court of competent jurisdiction by the AGENCY on its own behalf or on
behalf of any owner of real property within the boundaries of the SOUTHWEST REDEVELOPMENT
PROJECT AREA.
7. AGENCY and DEVELOPER agree that this Agreement may be recorded by the AGENCY in the Office
of the County Recorder of San Diego County, Califomia.
8. DEVELOPER shall and does hereby agree to indemnify, protect, defend and hold harmless AGENCY
and the City of Chula Vista, and their respective Council members, officers, employees, agents and
representatives, from and against any and all liabilities, losses, damages, demands, claims and costs,
including court costs and reasonable attorneys' fees (collectively, 'liabilities") incurred by the AGENCY
arising, directly or indirectly, from (a) AGENCY's approval of this Agreement, (b) AGENCY's or City's
approval or issuance of any other permit or action, whether discretionary or non-discretionary, in
connection with the Project contemplated herein, and (c) DEVELOPER's construction and operation
of the Project permitted hereby.
9. In the event of any dispute between the parties with respect to the obligations under this AGREEMENT
that results in litigation, the prevailing party shall be entitled to recover its reasonable attomey's fees
and court costs from the non-prevailing party.
10. Time is of the essence for each and every obligation hereunder.
4 - z..(.
'T'" ".
11. If DEVELOPER fails to fulfill its obligations hereunder after due notice and reasonable opportunity to
cure, DEVELOPER shall be in default hereunder, and in addition to any and all other rights and
remedies AGENCY may have, at law or in equity, the AGENCY shall have the right to terminate its
approval of the Project and this Agreement.
Signature Page Follows
4- .2.. 7
,." iT
Signature Page
IN WITNESS WHEREOF THE PARTIES HAVE ENTERED INTO THIS AGREEMENT EFFECTIVE AS OF THE DATE
FIRST WRITTEN ABOVE.
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
"AGENCY"
DATED:
By:
Shirley Horton, Chairman
"DEVELOPER"
DATED:
B~/~~
Sam Sepehri, President
Main Square Corporation
NOTARY: Please attach acknowledgment card.
APPROVED AS TO FORM BY:
John M. Kaheny, Agency Attorney
4-3.1
"!'"". ~
CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT
State of California }
County o.f San Diego }
On ~ before me,,6L. A-IJ.{~ p~;L.) tAJ,LSoD , notary public,
personally !ppeare~1l1 .:;;eTJ Ftr,(tl personally known
to be (or preyed te m. eR the banis ef "tisfacter)' .':iden.e} to be the person (s) whose name(s) is/a...
subscribed to the within instrument and acknowledged to me that he/s!le4Iley executed the same in
hislh~ authorized capacity(ies), and that by hislhllf4fteH. signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
(This area for official notarial seal)
,,~.ut?~ ,,;"14_
------- ------l
~ @ ElAlNE fERN WIlSON
CommIsslon'I237177 5
~, Notay PublIc - CaIIfaria !:
z San Diego County 1
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EXHIBIT B
Conditions 01 Approval
Owner Participation Agreement
Main Square Corporation
3089 Main Street
Chula Vista, CA
DESIGN REVIEW
CONDITIONS OF APPROVAL
1. The project shall comply with all requirements 01 the Chula Vista Landscape Planner and the Chula Vista Fire
and Engineering Departments, The Design Review Committee recommends that two leet 01 landscaping over
the utility easement the applicant is required to dedicate shall be included in the 15-loot landscaping the
applicant is required to install behind Iront property line, Also, driveway entries shall be enhanced with
decorative paving and designed to the satisfaction of the landscape architect.
2. Prior to issuance of a building permit, a revised landscape plan and a water management plan shall be
submitted to the City Landscape Planner for review and approval.
3, Prior to issuance of a building permit, a sign program conforming with Section 19.44,060 of the Chula Vista
Municipal Code and the Chula Vista Design Manual shall be submitted to Planning staff for review and approval.
4. Prior to issuance of a building permit, elevations 01 trash disposaUrecycling stations and their proposed locations
shall be submitted to Planning staff for review and approval, and shall conform with Section 19.58.340 of the
Chula Vista Municipal Code and the Chula Vista Design Manual.
5, Prior to issuance of a building permit, elevations that clearly show adequate screening for roof equipment shall
be submitted to the Planning staff for review and approval.
6, Prior to issuance 01 building permits, the site plan shall be revised to add/amend the lollowing: relocate building
to conlorm with all setbacks; add all required parking spaces and correct numbers under Project Data; show
all exterior lighting; show all necessary trash dumpsters and recycle bins, with screening; and correct square
footage of mezzanines,
7. A graffiti resistant treatment shall be specified for all wall and building surfaces. This shall be noted on any
building and wall plans and shall be reviewed and approved by the Planning Director prior to issuance of
building permits. Additionally, the project shall conlorm to Sections 9.20.055 and 9.20,035 of the Chula Vista
Municipal Code regarding graffiti control.
8, Tenant uses shall be only those uses allowed in the IL-Limited Industrial Zone of Chula Vista.
9. All ground-mounted utility appurtenances such as transformers, AC condensers, etc., shall be located out 01
public view and adequately screened through the use 01 a combination of concrete or masonry walls, berming,
and/or landscaping to the satisfaction 01 the Planning Director.
10. All roof appurtenances, including air conditioners and other rool mounted equipment and/or projections shall
be shielded irom view and the sound buffered from adjacent properties and streets as required by the Planning
Director. Such screening shall be architecturally integrated with the building design and constructed to the
satisfaction 01 the Planning Director. Details shall be included in building plans.
4-3t
T. ".
EXHIBIT B
Conditions 01 Approval
Owner Participation Agreement
Main Square Corporation
3089 Main Street
Chula Vista, CA
11. Applicant shall comply with the following two mitigation measures:
A. In order to prevent the possibility of spills going into the sewer system, a filtration system shall be
implemented for washing down by-products, chemicals, etc., in areas used to service vehicles.
B. If grading has not commenced by November 1, 2000, burrowing owl surveys shall be conducted in
accordance with the State Department of Fish and Game Department protocol, within three weeks
prior to grading.
[FI6.:H:IHOMEICOMMDEV\TAPIAIOPASI3089 Main Slreet.OPA (May 18. 2000 11 :33 AM)]
4-l!"
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PROJECT
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C HULA VISTA PLANNING AND BUILDING DEPARTMENT
LOCATOR PROJECT MAIN SQUARE CORPORATION PROJECT DESCRlP110N: - -.
C) APPUCANT: . ~ ~ ;. i'.'_.'.......
DESIGN REVIEW
PROJECT Southeast comer of Fourth
ADDRESS: Avenue & Main Street Request Proposed construction of a single story 22,500 SF
SCALE: I fiLE NUMBER: industrial building with (55 parKing spaces) for
NORTH No Scale DRe -- OO-:M minor auto repair,
'T" ".
JOINT REDEVELOPMENT AGENCY / CITY COUNCIL
AGENDA STATEMENT
.:
ITEM NO.: oJ
MEETING DATE: 06/06/00
ITEM TITLE: PUBLIC HEARING TO CONSIDER ADOPTION OF A DISPOSITION AND
DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY
AND GATEWAY CHULA VISTA LLC FOR THE PURPOSE OF DEVELOPING A
304,000 SQUARE FOOT MIXED OFFICE AND RETAIL DEVELOPMENT AND
1,014 SPACE PARKING STRUCTURE, ENTITLED THE GATEWAY CHULA
VISTA PROJECT, ON A 16 PARCEL SITE AT THE NORTHWEST CORNER OF
THIRD AVENUE AND "H" STREETS IN DOWNTOWN CHULA VISTA WITHIN
THE TOWN CENTRE I REDEVELOPMENT PROJECT AREA
JOINT AGENCY/COUNCIL RESOLUTION (A) APPROVING A
DISPOSITION AND DEVELOPMENT AGREEMENT AND RELATED
AGREEMENTS BETWEEN THE AGENCY AND GATEWAY CHULA VISTA, LLC
FOR THE DEVELOPMENT OF A MIXED-USE COMMERCIAL/OFFICE
PROJECT AT THE NORTHWEST CORNER OF THIRD AND H STREET; (B)
MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH; (C)
AUTHORIZING EXECUTION OF SAID AGREEMENT; AND (D) APPROVING
FUNDING OF THE PROJECT WITH VARIOUS AGENCY SOURCES AND
CDBG FUNDS
SUBMITTED BY: COMMUNITY DEVELOPMENT DIRECTOR c.S.
REVIEWED BY: CITY MANAGER 7i fL:)V
"" " \
~ .,-
4/STHS VOTE: YES D NO 0
BACKGROUND
The corner of Third Avenue and "H" Street represents a unique redevelopment opportunity that
links the Third Avenue downtown shopping district with the South County Government Center and
the Chula Vista Shopping Center. In order to activate this important location and strengthen the
emerging Chula Vista office and retail market, Agency staff have been negotiating with the
development team for the Gateway Chula Vista Project since June 16, 1998, with the adoption by
the Agency Board of a Semi-Exclusive Negotiating Agreement (SENA) with the Chrismatt
Corporation. The SENA was extended for six months in June of 1999, with Gateway Chula Vista
LLC as the new development entity, during which the final terms of the business deal were
negotiated. During the past several months, the specifics of the Disposition and Development
Agreement (DDA) have been negotiated, including all aspects of the sale of Agency land and
other terms and conditions of the development proposal, as described in greater detail herein.
.5-1
PAGE 2, ITEM NO.:
MEETING DATE:
!f
06/06/00
The DDA has been crafted to mitigate adverse impacts to the City and Agency should the Project
fail to be completed for unforeseen reasons, while providing assurances to the Developer that the
Agency is prepared to provide the necessary financial support for the Project upon Developer's
obtaining all necessary Project entitlements and funding sources. Because the Project is proposed
to be built in three Phases over approximately six to eight years, the document includes many
specific provisions for each Phase, which adds some complexity. The resultant DDA is, therefore,
definitely not a boiler plate or "one size fits all" document. In addition to the DDA itself, the
document also includes 17 attachments, with a detailed Schedule of Performance and Scope of
Development, as well specific sub-agreements and informational attachments.
In addition to this Agenda Statement summary, the DDA package includes the 33433 Summary
Report and the Reuse Analysis Report which provide additional background and analysis of the terms
of the DDA, and justification for the proposed Agency project subsidy. The Summary Report has
been available for public review for a minimum of two weeks prior to this hearing and the Agency
has posted a published notice regarding the hearing for a minimum of two weeks prior to this
hearing date, pursuant to State redevelopment law.
RECOMMENDATION
Hold the required public hearing, consider all testimony presented and adopt the resolutions of
the City Council and Agency Board approving project funding sources, making all required
findings, approving the Disposition and Development Agreement (DDA), and all implementing
agreements with Gateway Chula Vista LLC, and authorizing the Chairman to execute same.
BOARDS/COMMISSIONS RECOMMENDATION
The Town Centre Project Area Committee (TCPAC) has had numerous presentations from staff
and from the Developer concerning the proposed Project over the past year. On February 8,
2000, the TCPAC voted unanimously to recommend support of the Project and the DDA to the
Redevelopment Agency Board. (The TCPAC, in addition to serving as advisory body to the Board
on redevelopment matters, also functions as the Planning Commission for development
proposals in the Town Centre I Redevelopment Project Area.) In addition, the Economic
Development Commission has had numerous presentations on the Project and has consistently
supported moving forward with the development of the Project.
DISCUSSION
The Gateway Chula Vista Project is the most significant new development in downtown Chula
Vista's Town Centre I Redevelopment Project Area since the early 1980s. The Project is poised to
bring the first high-end, Class A office development to the downtown marketplace. The Project
will also provide a retail component, including an upscale restaurant and other amenities.
Agency staff anticipate that the Project will playa critical role in downtown revitalization, as well
as help re-position Chula Vista as a participant in the corporate office market. The Project should
s-~
PAGE 3, ITEM NO.:
MEETING DATE:
~
06/06/00
also provide a critical link between the Third Avenue pedestrian shopping district and the Chula
Vista Shopping Center and South County Government Center on "H" Street.
The Project also promises to provide, in addition to over 1 ,000 new downtown employees,
significant direct and indirect economic benefits to the City, These ore projected to include:
. $82,000 in new annual sales tax to the General Fund
. Development of a larger, expanded market for downtown businesses
. New impetus for downtown market-rate housing development
. Potential catalyst for additional upscale office and retail
. Re-positions downtown as the premier South County office venue
. Creates new urban design, development, and parking standards
. Converts under-utilized property at a key City intersection to a' higher and better use
. Provides physical and landscape improvements to "H" Street and Third Avenue
Description of the Proiect
Located at the northwest corner of Third Avenue and "H" Streets, the Gateway Chula Vista Project
will be constructed in up to three Phases and consists of 304,000 square feet of office and retail,
as well as a four-tier 1014 space parking structure. The retail component will include up to
81,000 square feet and include a restaurant, deli, coffee shop, and other retail uses. A financial
institution is also planned.
Phase I will include 94,000 square feet in five stories and is located on the easterly portion of the
site. Phase II includes 117,000 square feet in six stories, Phase III, located on the westerly
portion of the site, includes 93,000 square feet in five stories.
The complex has been designed by Tom McCabe, formerly of Brian Paul & Associates architects.
The Project will be sheathed in Indiana Red granite, with lower floor interior walls of a light-
colored Mirabella limestone. Windows are of green tinted glass. Upper floors include lighter
colored tinted glass and metal columns. The corner of Third and "H" Street is setback and lower
scale, creating a pedestrian entry point and design statement. The Phase II building is taller and
creates a skyline focal point. Retail storefronts face Third Avenue and "H" Street on the ground
floor. Two courtyards are created between the three Phases and will include publicly accessible
art and sculpture as well as extensive landscaping and water features. A main sculptural element
will be provided at the Third Avenue and "H" Street corner entrance. The DDA requires "First
Class, First Quality" architectural and design details throughout the development,
The 1 014-space parking structure will be constructed in Phases along the northerly portion of the
Site, The precise configuration of the parking spaces, sizes and other design details will be
finalized during the Specific Plan Entitlement process. Retail parking will be on the first level, with
regular office use parking on levels 2 through 4. The visible portions of the structure will include
decorative concrete spandrels. The current plan for ingress and egress calls for vehicular access
from both "H" Street and Third Avenue.
5'.3
T "IT
PAGE 4, ITEM NO.:
MEETING DATE:
5
06/06/00
Additional project details and components will be developed and refined in the processing of the
Specific Plan and other required land use entitlements. Issues to be addressed include: public
infrastructure requirements, parking structure design, and ingress and egress,
Aaencv Assistance and Participation
The Agency will participate in the development of the Gateway Chula Vista Project in several key
areas:
. sale of four Agency-owned Parcels to the Developer valued at $313,000
. reimbursement of development Permit Fees of up to $600,000, if all three Phases are
completed
. reimbursement to Developer of up to $300,000 in Public Improvements to Third Avenue and
"H" Street
. cash incentive payments at key performance milestones, equal to the net present value of
expected Agency tax increment revenues generated by the Project over the life of the Project
Area (valued at up to $6,145,000)
The DDA sets forth the financial provisions of the development subsidy in Section 800, et seq.
The development subsidy was predicated on a financial gap analysis completed by the Agency's
financial consultant, Keyser Marston Associates (KMA.) This gap analysis provided strong
justification for Agency assistance, given the pioneering nature of this Project in the Chula Vista
marketplace. The analysis indicated that a maximum subsidy of $7,358,000 was warranted if
the full three-Phase Project was completed. In addition, the analysis noted that if only the first two
Phases were completed, the financing gap declined to $5,268,000. The table below summarizes
the financial feasibility gap analysis Phase by Phase for the Project:
Gateway Chula Vista Project Financial Feasibility Gap Summary
Phase 1 Phase 2 Phase 3 Total
Estimated Net
Operating Income $1,616,000 $2,069,000 $1,637,000 $5,322,000
Return Threshold 11.0% 11.0% 11.0%
Warranted Private
Investment $14,691,000 $18,809,000 $14,882,000 $48,382,000
Development Costs
Including Site
Assembly Costs ($17,687,000) ($21,081,000) ($16,972,000) ($55,740,000)
Financial Feasibility
Gap ($2,996,000) ($2,272,000) ($2,090,000) ($7,358,000)
Based on this gap analysis and pursuant to California redevelopment law, staff utilized the
financing gap numbers as maximum caps on Agency financial assistance. The following chart
graphically depicts the Agency subsidy package, including key performance milestones:
s-cJ
,. 1i
PAGE 5, ITEM NO.: S
MEETING DATE: 06/06/00
Gateway Project Financial Assistance package
Installment Number
Agency Participation
1 st 2nd
Installment "Trigger"
Tax-Increment Rebate
Design Build Public Improvements
Phase 1: 50% of Estimated Permit Fees
Phase II: 50% of Estimated Permit Fees
Phase III: 100% of Estimated Permit Fees
Total Agency Participation
Phase 1
Building
Permit
1,500,000
300,000
91,000
5th
Phase III
Phase II Phase II Phase III 2 Years After
Certificate of 75% Lease- Certificate of Certificate of
Occupancy Up Occupancy Occupancy.
1,713,000 1,352,000 700,000 1,193,000
3rd
4th
110,500
91,000
110,500
1,891,000 1,823,500 1,553,500
197,000
897,000
1,193,000
Cumulative Agency Participation at:
Certificate of Occupancy for Phases I and /I
Certificate of Occupancy for Phases I, /I
and /II
Two Years After C. of O. for Phase 11/
.Contingent Incentive Payment per DDA Section 802.7.
the Project exceeds current tax increment projections.
5,268,000
6,165,000
7,358,000
This installment will only be paid to the extent that
In addition to financial participation, the Agency has or will provide:
. expedited permit processing services as the Project moves through the Entitlement Phase
. staff recommendation that the Project be determined to be in compliance with the Town
Centre Fine Arts Policy because of its quality of design and provision of public art and
sculpture
. pre-development consultant services, including traffic analysis and extensive legal analysis
. on-going technical assistance with Developer's property acquisition and relocation process
Fundina Sources for Pavment of the Subsidv
The majority of the subsidy proposed for the Project represents net present value (NPV) of
property tax increment projected to be received by the Agency from the Project over time (25
years,) KMA reviewed property tax increment generation by the Project and determined that,
when discounted at six percent NPV over 25 years, the Project would generate approximately
$5,887,000 in net property tax increment to the Agency. Given that a portion of the Project site
in Phase III lies outside the Town Centre I Redevelopment Project Area, if this area were included
within the Project Area, the net tax increment would rise to $7,180,000, Agency staff will review
the feasibility of initiating the legal process to consider adding this additionol territory into the
Project Area in the coming months.
s-~
" ".
PAGE 6, ITEM NO.: S
MEETING DATE: 06/06/00
In order to provide, up-front, the projected tax increment generated by the Project over time, staff
proposes to finance the majority of the subsidy through redevelopment project funds available in
the merged Bayfront/T own Centre I Project Fund. These project funds will be generated from
repayments to the Bayfront/T own Centre I Fund from the proposed Town Centre II Tax Allocotion
Bond, the Otoy Valley Road Tax Allocation Bond, and the Southwest Tax Allocation Bond. These
TABs are projected to be releosed in Summer, 2000. Bond proceeds must be substantially
utilized within three years of issuance. Therefore, it is anticipated that installment payments 4
and 5 will need to be financed directly from project funds available at the time of need from the
Bayfront/T own Centre I Fund,
If for unforeseen reasons the tax allocation bonds are not issued, the Agency will not be required
to subsidize the Project with other Agency funds. In these unlikely circumstances, the DDA Agency
participation would then either be financed by other means or the DDA may be terminated by the
Agency and become null and void.
In addition to the cash payments noted above, Agency staff propose to fund the subsidy from the
value of Agency land ($313,000) and from Community Development Block Grant funds for
Public Improvements to Third Avenue and "H" Street ($300,000). CDBG and HUD staff have
confirmed the eligibility of the Public Improvements for CDBG funding and staff will work closely
with HUD on any potential contracting issues.
Property Conveyance Provisions
The primary way in which redevelopment agency's in California participate financially in the
development of projects is through the write-down and transfer of land from public to private
ownership. In this way, the Developer can benefit from the Agency participation through the land
(and subsidy) transfer and the community and Agency can be assured that the Developer will put
into place the Project and development conditions which they are expecting. Based on this
fundamental concept of redevelopment practice, the DDA provides for the Developer assembling
the property through a conveyance/re-conveyance process. For each Phase of the development,
the Developer will acquire all properties and assign all legal rights to acquire each parcel to the
Agency, after which, on the same day, the Agency will re-convey and reassign all legal rights
back to the Developer. In this way, the Agency will subject all development parcels to all of the
terms and conditions of this DDA and the Agency will pay the Developer, through the Agency
Participation installment payments, for the imposition of these terms and conditions which will
then run with the land. The 33433 Summary Report explains this process in additional detail,
Cost Reconciliation Provisions
Prior to being obligated to make the second installment payment (upon completion of Phase II)
and the fourth installment payment (upon completion of Phase III), the DDA requires that a full
reconciliation of costs be conducted by our financial consultant in order to determine whether or
not the Developer has expended sufficient funds on the development to continue to warrant the
Agency subsidy, The entire subsidy is predicated on the substantial cost involved in building a
Project of such high quality, As a result, the DDA requires the Developer to expend at least 90
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percent of what they estimate they will spend on the development (as agreed upon in a Pro-
Forma that is made an attachment to the DDA), If the Developer spends within this 90 percent
range and meets all other conditions, the applicable Agency Participation payment will be made
in full. If, however, the Developer expends less, a formula has been created to reduce the
Agency payments accordingly. (The 90 percent threshold is reduced to 85 percent if the
development of Phases I and II are accomplished together, given the potential for cost savings if
both Phases are constructed together.) The reduction formula is stipulated in Sections 802.3 and
802,6 of the DDA.
Other Sianificant Provisions and Aareements
1) Conditions to Aaencv's Obliaations to Subsidize the Proiect. Agency obligations under the
DDA are expressly contingent upon the Agency's sale of tax allocation bonds and
Developer's obtaining all necessary Project development permits. The Agency retains its
total legislative discretion to approve or disapprove such matters without being in default
under the DDA Substantial additional conditions are imposed on Agency's obligations to
convey each Phase of land to the Developer and to pay each installment of the subsidy.
These conditions are designed to not precommit the Agency prematurely and to assure
that Project development milestones are achieved before the outlay of public funds.
2) Relocation Three-Party Aareement. The Agency and the Developer have entered into a
separate agreement with Pacific Relocation Services to provide relocation assistance and
advice, A number of businesses will be displaced by the development over the next
several years. The relocation consultant will help ensure that the Agency is shielded from
any financial impacts from relocation claims. In addition, the Agreement clearly requires
the Developer to be responsible for all relocation costs that may be incurred.
3) Reentry and Revestina of Title. Should the Developer default in development of the site,
the Agency has the option to reacquire the properties at Developer's cost and to terminate
the effectiveness of the DDA Default of the Agreement includes failure to timely
commence construction, abandonment or lengthy suspension of construction, and
unapproved or involuntary transfer of the properties to another party. The DDA includes
provisions for reimbursement to the Agency of any costs incurred by the Agency in the
development to the point of default.
4) liauidated Damaaes. If the Developer fails to commence Phase I of the Project, the
Agency will be entitled to received $100,000 in liquidated damages. Should Phase II fail
to move forward, the Agency will be entitled to receive $50,000 in liquidated damages,
liquidated damages do not apply to Phase III.
5) Use and Operatina Covenants. The Agreement requires the development of a minimum
of approximately 21,000 square feet of commercial retail in each Phose, of which not
more than 10,000 per Phose may be retail banking and, in aggregate, bonking may not
be more than 20,000 square feet of the retail space for 011 three Phases. In addition, not
less than 6,000 square feet must be devoted to a First Closs, First Quality Restaurant
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facility in Phase I or Phase II of the development. Certain specific types of uses are
prohibited in the DDA and all users are required to conform to the First Class, First
Quality provisions.
6) Indemnity and Insurance Provisions. The Developer has been required to indemnify the
Agency against all risks and liabilities associated with the Agency's approvals of the
Project and its construction and operations. These indemnity obligations are backed up
with substantial insurance policies which name the Agency and City as additional
insureds,
7) Potential for Acauisition of Property by the Aaency. The Developer has acquired site
control of substantially all the properties required for the development of Phases I and II
of the Project. (The owner of the San Diego County Credit Union has indicated that they
will not negotiate until a DDA is approved.) The Developer is still negotiating for
acquisition of the Phase III properties, but has indicated that a deal is imminent. If for any
reason the Developer is not able to acquire all parcels necessary for the Proiect, the
Agency has agreed to attempt to acquire them itself at Developer's sole cost. If negotiated
acquisition cannot be achieved, the Agency has also agreed to consider eminent domain.
The DDA does not commit the Agency to exercise eminent domain authority, however,
and the Agency reserves the right to approve or disapprove such an action in its sole
discretion. Note: A substantial portion of the Phase III property lies outside the Town
Centre I Proiect Area, but within the "survey area" that was studied at the time the Town
Centre I Project Area was adopted. Redevelopment Law does contemplate the use of
eminent domain within the survey area (see Health and Safety Code Section 33391).
Specific Plan and Environmental Review Process
The Gateway Chula Vista Project is a large, urban-infill development which requires entitlements
for a parcel map, design review, parking variance and General Plan amendment. With the
exception of the General Plan amendment, staff have determined that the other discretionary
actions can be included within an omnibus Specific Plan. The Specific Plan process has begun
and the full submittal will be processed through the Community Development Planning and
Environmental Division and the Town Centre Project Area Committee (TC PAC) , which acts as
Planning Commission for the Town Centre I Project Area. The Developer has retained Brian
Mooney & Associates to draft the Specific Plan and staff is working closely with them to help
ensure an adequate, thorough and expeditious process.
A program EIR for the Town Centre I Project Area was adopted at the time of project area
formation, This EIR was most recently updated pursuant to the adoption of PEIR98-2 in connection
with the Fifth Amendment to the Project Area, Project specific environmental impact analysis at this
time consists of an Initial Study conducted by Recon and a preliminary traffic study. Completion
of the CEQA process for the Project is not feasible at this time because the Project needs to be
further defined in the land use Entitlement process and additional Project information is required.
Information still to be determined includes the distribution, location, extent and size of major
infrastructure components needed to serve the Proiect and the Project's consistency with the
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General Plan, Once the Specific Plan is formally submitted, the environmental review process will
proceed apace with the Specific Plan and General Plan amendment. Recon will conduct the
remaining analysis required to meet the requirements of the California Environmental Quality Act
(CEQA). As noted above, the DDA expressly conditions the Agency's commitment to the Project
on the completion of the Entitlement and CEQA process.
"H" Street Widenina Issue and Proposed General Plan Amendment
The Project as proposed requires that "H" Street retain its existing width at 4 lanes. The City's
General Plan Circulation Element portrays "H" Street at eventual build-out as a 6 lane road, As
a result, the Project will be required to process a General Plan amendment to the Circulation
Element. Agency staff have met extensively with Advance Planning and Traffic Engineering staff
to discuss the "H" Street issue. As a result of these meetings, the General Plan amendment will
specify 4 lanes only for that segment of "H" Street located between Fourth and Third Avenues.
The remainder of "H" Street will continue to be designated for eventual build-out to 6 lanes.
Staff have retained the BRW traffic consultant firm to analyze potential traffic and level-of-service
(LOS) impacts posed by the Project. At the present time, "H" Street is operating at a "C" level of
service, except during the afternoon rush hour, when the level of service falls to "D." BRW's initial
analysis indicated that there would be no significant adverse impacts from the Project's traffic
generatian. Their analysis indicated that with full build-out of the three Phases, level of service
along "H" Street would remain at an acceptable level. In addition, the analysis indicated that
LOS would remain acceptable with the build-out of an additional project of similar size.
However, given that the County is now contemplating the expansion of the South County
Government Center, additional traffic analysis was deemed warranted. BRW is now conducting
further analysis to determine any Project-specific impacts given the City's Growth Management
Ordinance LOS standards, CEQA requirements, and potential additional development project's
along "H" Street, including the County's proposed new 300,000 square foot annex noted above.
The study will provide proposed mitigation measures, as needed, and the City reserves the right
to impose all appropriate mitigation measures as part of the Entitlement process.
In addition, should the traffic analysis indicate concerns with Growth Management Ordinance
LOS with build-out of other, future developments in the downtown core, staff will return to
Council with additional traffic mitigation strategies, Absent these direct concerns, staff will
continue to work through the General Plan update process to provide sustainable traffic policies
for the development of a more urban downtown. The Agency should be aware that if the
analysis indicates that future projects may cause LOS to fall below level "D," additional downtown
development opportunities could be ieopardized. In this case, staff will bring forward additional
options to consider - including potential amendments to the Growth Management Ordinance
specific to the downtown district.
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Timina of the Proiect Construction
Once the DDA has been approved, the Project enters the Entitlement process
Project's Specific Plan, General Plan amendment and associated actions).
construction schedule includes the following major milestones:
(including the
The current
. Phase I construction begins- February 1,2001
. Phase I construction completed - January 31 , 2002
. Phase II construction begins - July 1, 2002
. Phase II construction completed - June 30, 2003
. Phase III construction begins - February 1, 2004
. Phase III construction completed - January 31,2005
FISCAL IMPACT
The Project represents a substantial financial commitment by the Agency over the next six to eight
years, during which the Project will reach build-out. The proposed financial subsidy includes up
to five payments made to the Project over the course of the development, as well as Public
Improvements to "H" Street and Third Avenue to be funded separately through Community
Development Block Grant funds (capped at $300,000.) The five payments include the value of
four parcels Agency-owned land ($313,000), reimbursement for Permit Fees (capped at no more
than $600,000 for all Phases), and cash payments triggered by specific Project development
milestones. All funding will be the subject of separate appropriation actions or included in
Agency annual budget appropriations,
First Installment Payment
The first payment will occur at the issuance of a building permit for Phase I of the Project and is
expected to be disbursed in late 2000 or early 2001. The payment consists of 50% of Phase I
Permit Fees up to $91,000; Agency-owned land valued at $200,000; $1,300,000 rebate of
projected net present value tax increment generated by the Project; and reimbursement of up to
$300,000 for Public Improvements (construction and reimbursement for public improvements
may be phased, in which case any remaining reimbursements would be disbursed in the Second
Installment Payment.) This total payment of $1,891,000 will be disbursed from Bayfront(Town
Centre I project funds ($1,591,000 - funds are anticipated to be generated from the 2000 Tax
Allocation Bond issuance now pending) and Community Development Block Grant funds (up to
$300,000.)
Second Installment Payment
The second payment will occur at the issuance of the Certificate of Occupancy for Phase II of the
Project and is expected to be disbursed in Summer, 2003. The payment consists of 50% of Phase
II Permit Fees up to $110,500; Agency-owned land valued at $113,000; and $1,600,000 rebate
of projected net present value tax increment generated by the Project. The total payment of
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$1,823,500 will be disbursed from Bayfront/T own Centre I project funds. Funds are anticipated
to be generated from the 2000 Tax Allocation Bond issuance now pending.
Third Payment
The third payment will occur at 75% lease-up of Phase II of the Proiect and is expected to be
disbursed in Fall, 2003. The payment consists of the remaining 50% of Permit Fees from Phase I
(up to $91,000) and the remaining 50% of Permit Fees from Phase II (up to $110,500); and
$1,352,000 rebate of projected net present value tax increment generated by the Project. The
total payment of $1,553,500 will be disbursed from Bayfront/T own Centre I project funds.
Depending on the final scheduled date of disbursement of the Third Payment, funds are
anticipated to be generated from the 2000 Tax Allocation Bond issuance now pending.
Fourth Payment
The fourth payment will occur at issuance of the Certificate of Occupancy for Phase III of the
Project and is expected to be disbursed in Spring 2005. The payment consists of 100% of Permit
Fees for Phase III up to $197,000; and $700,000 rebate of projected net present value tax
increment generated by the Project. It is expected that the total payment of $897,000 will be
disbursed from as yet to be identified Bayfront/T own Centre I proiect funds. The Fourth Payment
is not anticipated to be generated from the 2000 Tax Allocation Bond issuance.
Fifth (and Final) Payment
The fifth payment is a contingent incentive payment only to be disbursed if the Proiect out-
performs the original estimates of tax increment generation. The payment is subject to a financial
analysis to be conducted two years following issuance of the Certificate of Occupancy for Phase
III, The amount of the final incentive payment is up to $1,193,000. It is expected that the total
payment, if any, will be disbursed from as yet to be identified BayfrontlT own Centre I project
funds. The Fifth Payment is not anticipated to be generated from the 2000 Tax Allocation Bond
issuance. Payments, if any, are expected to be made beginning in Spring, 2007. If an incentive
payment is determined to be payable based on Project performance and such amount exceeds
$500,000, the Agency reserves the right to pay such amount in five (5) installments over a 4 year
period plus interest.
AnACHMENTS
33433 Summary Report
Reuse Appraisal Report
Disposition and Development Agreement and DDA Attachments
H:\HOME\COMMDEV\ST AFF. REP\05- 2 3 -OO\GA TEW A Y DDAdoc
S ..II
,.. ..,.
RESOLUTION NO.
A JOINT RESOLUTION OF THE CITY COUNCIL AND
THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA (A) APPROVING A DISPOSITION AND
DEVELOPMENT AGREEMENT AND RELATED AGREEMENTS
BETWEEN THE AGENCY AND GATEWAY CHULA VISTA,
LLC FOR THE DEVELOPMENT OF A MIXED-USE
COMMERCIAL/OFFICE PROJECT AT THE NORTHWEST
CORNER OF THIRD AND H STREET; (B) MAKING
CERTAIN FINDINGS IN CONNECTION THEREWITH; (C)
AUTHORIZING EXECUTION OF SAID AGREEMENT; AND
(D) APPROVING FUNDING OF THE PROJECT WITH
VARIOUS AGENCY SOURCES AND CDBG FUNDS
WHEREAS, the Redevelopment Agency of the City of Chula Vista
(the "Agency") is a redevelopment agency organized and existing
under the California Community Redevelopment Law, Health and
Safety Code Section 33000, et seq., (the "CRL") and has been
authorized to transact business and exercise the powers of a
redevelopment agency pursuant to action of the City Council ("City
Council") of the City of Chula Vista ("City") and the Agency is
engaged in activities necessary to carry out and redevelopment
activities within the City; and
WHEREAS, the City Council, acting pursuant to the provisions
of the CRL has adopted the Redevelopment Plan (the "Redevelopment
Plan" ) for the Town Centre I Redevelopment proj ect which
established the boundaries of the Town Centre I Redevelopment
Project Area (the "Project Area") by Ordinance No. 1691 on ..
July 6, 1976, and amended by Ordinance No. 1872 on July 17, 1979,
by Ordinance No. 2146 on April 22, 1986, and by Ordinance No. 2585
on January 4, 1994, and amended by Ordinance No. 2735 on
June 23, 1998 (collectively said ordinances comprise the
"Redevelopment Plan" herein); and
WHEREAS, the Agency and the Developer, Gateway Chula Vista,
LLC, a California limited liability company, have negotiated the
terms of a Disposition and Development Agreement (DDDAD) relating
to the redevelopment, development, and operation of a phased First
Class, First Quality mixed-use commercial/office project with
restaurant and retail components with common areas, including one
parking structure that spans all Phases of the Project (the
DProjectD); and
WHEREAS, capitalized terms used in this resolution are as set
forth in the DDA, unless separately defined herein; and
WHEREAS,
the
amount
of
the Agency Participation was
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determined after an independent financial analysis of the
Developer's pro forma for the Project by the Agency's independent
economic advisor, and said financial analysis determines the
amount of Agency Participation is necessary and feasible to induce
the Developer to undertake, complete, and operate the First Class,
First Quality Project and to provide necessary Public Improvements
for the proper use, operation, and success of the Project and this
portion of the Project Area for the community; and
WHEREAS, the City will expend such funds to finance, in
part, the value of the land for and the cost of the installation
and construction of certain Public Improvements to and adjacent to
the Project being constructed and completed by the Developer; and
WHEREAS, the Agency and City desire to achieve the Project
and enter into the DDA in order to implement the provisions of the
Redevelopment Plan for the Project Area prepared pursuant to
Section 33490 of the CRL, consistent with the objectives of such
plans, resulting in the redevelopment of existing commercial
property in the Project Area; and
WHEREAS, the financial assistance to be provided by the
Agency under the DDA is an inducement to cause the undertaking and
completion of the Project by the Developer and in order to obtain
the covenants relating to use, maintenance, and operation of the
Project in conformity with Section 1000, et seq. of the DDA, which
covenants will be of benefit to the Project Area and the entire
community of Chula Vista; and
WHEREAS, in addition to the DDA the Agency will be entering
into a Reimbursement Agreement with the Developer for the design,
construction, and completion of all of the Public Improvements at
a guaranteed maximum price not to exceed $300,000.00; and
WHEREAS, the construction and development of
Improvements and the completion of all of the private
are and will be a single integrated project; and
the Public
Improvements
WHEREAS, the Public Improvements will be appurtenant to and
an integral part of the private Improvements and because of the
integrated nature of the privately owned land and improvements
that comprise the Site, the construction and completion of all the
private Improvements and all of the Public Improvements by the
Developer, without competitive bidding by the Agency of the Public
Improvements, is and will be advantageous to, and in the best
public interest of, the Agency, and the City; and
WHEREAS, causing the Developer to design, construct, and
complete all of the Public Improvements will obtain the best
economic result for the public, in part because the amount of the
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Agency Participation to be provided by the Agency to the Developer
for the land for and cost of installation and construction of the
Public Improvements is capped under the DDA, and the estimated
costs to pay for a part of the value of the land for and
construction and installation of the Public Improvements may
exceed $300,000.00; and
WHEREAS, under the DDA the Developer assumes, and under the
Reimbursement Agreement the Developer will assume, complete
financial responsibility for the design, construction, and
completion of the Public Improvements, even if the total costs to
undertake and complete such improvements exceeds $300,000.00,
therefore, an economic advantage arises because competitive
bidding would be incongruous and will not result in any additional
benefit or cost savings to the Agency or the City in their efforts
and objective to contract for the greatest public benefit; and
WHEREAS, Section 33445 of the CRL authorizes a redevelopment
agency, with the consent of the legislative body, to pay all or
part of the value of the land for and the cost of the installation
and construction of any building, facility, structure, or other
improvement which is publicly owned either within or without the
project area upon certain findings; and
WHEREAS, pursuant to CRL Section 33433, the Agency is
authorized, with the approval of the City Council after public
hearing, to accept an assignment and thereafter reassign interests
in the Site for development pursuant to the Redevelopment Plan
upon a determination by the City Council that the consideration
for such sale or is not less than fair market value in accordance
with covenants and conditions governing the sale or lease or with
respect to any sale or lease at less than estimated value,
determined at the highest use permitted under the Redevelopment
Plan, that the lesser consideration is necessary to effectuate the
purposes of the Redevelopment Plan; and
WHEREAS, a joint public hearing of the Agency and City
Council on the proposed DDA was duly noticed in accordance with
the requirements of CRL Section 33433; and
WHEREAS, the proposed DDA, and a summary report meeting the
requirements of CRL Section 33433, were available for public
inspection consistent with the requirements of CRL Section 33433;
and
WHEREAS, at said public hearing, the Agency and City received
evidence that the following environmental compliance has occurred:
(1) a program EIR was adopted at the time of Town Centre I
Project Area formation in 1976. This EIR was most
recently updated pursuant to the adoption of PEIR98-2
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in connection with the Fifth Amendment to the Project
Area. PEIR98-2 concluded that the Fifth Amendment
would trigger new development but that such development
was already planned for by the City.
(2)
a preliminary
which showed
similar size
improvements,
traffic study was completed
that this project and two
could be accommodated on
in June 1999
proj ects of
the existing
(3 )
an updated traffic study to address changes in
and the project has been commissioned and
completed within eight weeks, and
the area
will be
(4)
the developer has completed a Phase I
Material Study for a portion of the property,
Hazardous
WHEREAS, the approvals herein and in the implementing
documentation are fully conditioned on the City and Agency
complying with California Environmental Quality Act (CEQA). Until
the City Council and Agency have considered all appropriate
environmental documentation the City and Agency are not committed
to a definite course of action and retain full and unfettered
discretion to approve or disapprove the Project; and
WHEREAS, the approval of the DDA is an approval of a
contingent financial transaction with no impacts on the
environment; completion of the CEQA process at this time is not
feasible due to the fact the proj ect has not been sufficiently
defined and incomplete information is available; Project
definition and refinement, will occur as part of the processing of
the Specific Plan and other required entitlements for the Project;
and
WHEREAS, the Agency and City Council held a joint public
hearing on the proposed DDA for the purpose of receiving public
input and comment on the proposed Project and related implementing
contracts and evaluated all of the information, testimony, and
evidence presented during the joint public hearing; and
WHEREAS, the Agency and City Council have reviewed the
summary report required pursuant to CRL Section 33433 and
evaluated other information provided to it pertaining to the
finding required pursuant to Section 33433; and
WHEREAS, all actions required by all applicable laws with
respect to the proposed DDA have been taken in an appropriate and
timely manner; and
WHEREAS, the Agency and City Council have duly considered all
terms and conditions of the proposed DDA and believe that the
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redevelopment of the Site pursuant thereto is in the best
interests of the City of Chula Vista and the health, safety, and
welfare of its residents, and in accord with the public purposes
and provisions of applicable state and local laws and
requirements; and
WHEREAS, the City Council and Agency have reviewed the
summary report, the DDA, and related documents and conducted a
joint public hearing on the proposed expenditure of tax increment
funds toward part of the value of the land for and costs of
installation and construction of the Public Improvements and for
payment of the Agency Participation, and has heard and considered
the public testimony thereon; and
WHEREAS, the Agency's financing of a portion of the value of
the land for and costs of installation and construction of the
Public Improvements is of benefit to the Project Area and the
surrounding development, and is necessary to effectuate the
purposes of the Redevelopment Plan by assisting the Agency in the
elimination of blight in the Project Area, increasing economic
activity, causing redevelopment and economic improvement of the
Site, increasing employment opportunities within the Project Area,
generating additional local revenues and taxes with which the
community can cause other redevelopment projects and other public
benefit, including, but not limited to, increasing and improving
the community's supply of low-and moderate-income housing and
providing an environment for the social, economic, and
psychological growth and well-being of the citizens of the City,
making available to the City, Agency and Developer a First Class,
First Quality Project in the Project Area; and
WHEREAS, the Project and the provision of
Improvements is consistent with the Implementation
Agency adopted pursuant to CRL Section 33490; and
the Public
Plan of the
WHEREAS, there are no other reasonable means of financing
part of the value of the land for and the costs of the planning,
design, installation, construction, and development of the Public
Improvements available to the community without such partial
funding by the Agency, in particular capital and other funds of
the community are already committed to other public programs,
projects, and purposes, and the economic feasibility of causing
the Site to be redeveloped requires the financial assistance; and
WHEREAS, the Agency has determined the expenditure of the tax
increment funds is in the best interest of the City and the
health, safety and welfare of its residents, and is in accord with
the public purposes and provisions of applicable state and local
laws and requirements under which the Redevelopment Project and
its Redevelopment Plan have been undertaken; and
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WHEREAS, the redevelopment of the Site and the installation
and construction of the Public Improvements will assist in the
elimination of blight by facilitating the development and
operation of a First Class, First Quality Project, which will be
properly designed, constructed and maintained, and will be of
benefit to the community by increasing economic activity,
reversing and correcting the continued economic decline of the
Site, and eliminating blight consistent with original objectives
of the Redevelopment Plan to cause redevelopment of the commercial
properties in the Project Area, to cause redevelopment of
underutilized property, and to assist in the provision of public
infrastructure to facilitate redevelopment of commercial property
in the Project Area; and
WHEREAS, pursuant to Sections 33132, 33133, and 33600 of the
CRL, the City may provide and the Agency may accept financial or
other assistance from any public or private source, for the
Agency's activities, powers, and duties, and expend any funds so
received for any of the purposes of the CRL; and
WHEREAS, the City is
cooperation to the Agency
construction, or operation of
Section 33220 of the CRL; and
authorized to provide aid and
in the planning, undertaking,
redevelopment projects pursuant to
WHEREAS, all actions required by all applicable law with
respect to the proposed DDA have been taken in an appropriate and
timely manner; and
WHEREAS, the City Council and Agency have duly considered
all terms and conditions of the proposed DDA and believes it is in
the best interests of the City and the health, safety, and welfare
of its residents, and in accord with the public purposes and
provisions of applicable state and local laws and requirements i
and
WHEREAS, the undertaking and completion of the Project
pursuant to the DDA, the Reimbursement Agreement, and all other
ancillary agreements, and the fulfillment generally of the DDA are
in the vital and best interests of the City and the health,
safety, and welfare of its residents and in accord with the
provisions of applicable federal, state and local law; and
WHEREAS, the goals of the Redevelopment Plan, and the DDA,
the Bond Documents, the Reimbursement Agreement, and other
implementing agreements are intended to be contracts within the
meaning of Government Code Section 53511; and
NOW THEREFORE, THE CITY COUNCIL AND REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA DO HEREBY JOINTLY FIND, RESOLVE AND
DETERMINE AS FOLLOWS:
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Section 1. The City Council and Agency find and determine
the foregoing Recitals are true and correct and are a substantive
part of this Resolution,
Section 2. The City Council and Agency do hereby declare
that any and all project approvals are contingent upon and subject
to preparation, approval and implementation of all necessary CEQA
documents and mitigation measures. City Council and Agency retain
in their sole discretion the right to approve or disapprove the
environmental documentation and project.
Section 3. The City Council and Agency do hereby find and
determine, based upon substantial evidence provided in the record
before it that the consideration for the Agency's acceptance of
the assignment and thereafter reassignment of the Site pursuant to
the terms and conditions of the Disposition and Development
Agreement is not less than fair reuse value in accordance with
covenants and conditions governing the disposition, determined at
the highest use permitted under the Redevelopment Plan, that such
consideration is necessary to effectuate the purposes of the
Redevelopment Plan.
Section 4. The City Council and Agency find and determine no
other reasonable means of financing the payment of a portion of
the value of the land for and cost of installation and
construction of the Public Improvements are available to the
community, in particular capital and other funds of the community
are already committed to other public programs, projects, and
purposes. The amount of the Agency Participation was determined
after an independent financial analysis of the Developer's pro
forma for the Project by the Agency's independent economic
advisor, and said financial analysis determines the amount of
Agency Participation is necessary and feasible to induce the
Developer to undertake, complete, and operate the First Class,
First Quality Project and to provide necessary public improvements
for the proper use, operation, and success of the Project and this
portion of the Project Area for the community. The Project and
the provision of the Agency Participation therefor, inclusive of
the Public Improvements, is consistent with the Implementation
Plan of the Agency adopted pursuant to CRL Section 33490.
Section 5. The City Council and Agency do find and determine
financing of the Agency participation and a portion of the costs
of the Public Improvements is of benefit to the Project Area and
the surrounding development, and is necessary to effectuate the
purposes of the Redevelopment Plan by assisting the Agency in the
elimination of blight in the Project Area, increasing economic
acti vity, causing redevelopment and economic improvement of the
Site, increasing employment opportunities within the Project Area,
generating additional local revenues and taxes with which the
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community can cause other redevelopment projects and public
benefit, including, but not limited to increasing and improving
the community's supply of low- and moderate income housing and
providing an environment for the social, economic, and
psychological growth and well-being of the citizens of the City,
making available to the City, Agency and Developer a First Class,
First Quality Project.
Section 6. The City Council and Agency do find and determine
the partial funding of the value of the land for and the
installation and construction of the Public Improvements will
eliminate blight within the Project Area by providing for the
proper development of public improvements and facilities and the
proper improvement, reuse, and redevelopment of a portion of the
Project Area.
Section 7. The City Council and Agency do find and determine
the Developer's design, construction and completion of the Public
Improvements pursuant to the DDA and the Reimbursement Agreement
without competitive bidding by the Agency creates an economic
advantage to the City and the Agency, because competitive bidding
would be incongruous and will not result in any additional benefit
or cost savings in their effort and objective to contract for the
greatest public benefit,
Section 8. The Agency and City Council do hereby approve the
sale of the Agency and Developer parcel in the manner set forth in
the DDA.
Section 9. The Agency and City Council hereby find and
determine that the DDA between the Agency and Chula Vista Gateway,
LLC is approved in substantially the form presented subject to
minor modifications as may be required or approved by the City
Attorney.
Section 10. The Chairman of the Agency is hereby authorized
and directed to execute all documents necessary and appropriate to
carry out and implement the DDA and Agency staff is hereby
authorized and directed to take all necessary and appropriate
actions to implement same.
Presented by
Approved as to form by
~,~~
Chris Salomone
Director of Community
Development
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SUMMARY REPORT PURSUANT TO
SECTION 33433 OF THE
CALIFORNIA COMMUNITY REDEVELOPMENT LAW
ONA
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
AND
GATEWAY CHULA VISTA, LLC.
INTRODUCTION
The following Summary Report has been prepared pursuant to Section 33433 of the California
Health and Safety Code. The report sets forth certain details of the proposed Disposition and
Development Agreement (Agreement) between the Redevelopment Agency of the City of Chula
Vista ("Agency") and Gateway Chula Vista, LLC. ("Developer").
The Agreement requires the Agency and the Developer to undertake the following land
assemblage activities:
1. The Site shall be assembled in Phases;
2. The Agency shall accept assignment of all the Developer's interest in and all legal rights
to acquire each of the Developer Parcels which are a part of the applicable Phase;
3. The Agency shall re-assign all interest in and all legal rights back to the Developer, with
such re-assignment being subject to all terms, conditions and covenants of the
Agreement, and;
4. The Agency will convey to the Developer the applicable Agency parcels for Phase I and
Phase II.
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The Site, which is the subject matter of this Agreement ("Property") is approximately 4.3 acres
of land consisting of sixteen (16) separate parcels. These properties are grouped into the
following categories:
· "Agency Owned Parcels" (four parcels totaling approximately 19,863 square feet of
land area);
· "Developer Parcels" (nine parcels totaling approximately 105,928 square feet of land
area), and;
· "Acquisition Parcels" (three parcels totaling approximately 60,117 square feet of land
area).
The assembled Site being conveyed to the Developer in three (3) phases totals 185,908 square
feet ("Site").
The Agreement requires the Developer to attempt to acquire privately owned parcels totaling
166,045 square feet of land area. However, if the Developer is unable to acquire any or all of
the Acquisition Parcels, the Agency will assist in the acquisition of the parcels with cost to be
advanced by the Developer.
The Agreement requires the Developer to construct, in three phases, a high-quality 304,000
square foot office project, which includes over 60,000 square feet of retail space and a new
four-level 1 ,014 space parking structure on the Site (collectively referred to as the "Project").
The three Project Phases are described as follows:
. Phase 1: The Developer will construct a five-story office building totaling
approximately 71,079 square feet of gross rentable area (GRA) with commercial/
retail space of approximately 21,333 square feet GRA and the provision of 314
parking spaces;
. Phase 2: The Developer will construct a six-story office building totaling
approximately 93,886 square feet of gross rentable area (GRA) with
commercial/retail space of approximately 21,137 square feet GRA and the provision
of 390 parking spaces, and;
· Phase 3: The Developer will construct a five-story office building totaling
approximately 71,079 square feet of gross rentable area (GRA) with
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commercial/retail space of approximately 20,350 square feet GRA and the provision
of 310 parking spaces.
This Summary Report is based upon information contained within the Agreement, and is
organized into the following seven sections:
I. Salient Points of the Agreement: This section includes a description of the Project,
and the major responsibilities imposed on the Developer and the Agency by the
Agreement.
II. Cost of the Agreement to the Agency: This section details the total net cost to the
Agency associated with implementing the Agreement.
III. Estimated Value of the Interests to be Conveyed Determined at the Highest Use
Permitted Under the Redevelopment Plan: This section estimates the value of the
interests to be conveyed determined at the highest use permitted under the existing
zoning, and the requirements imposed by the Towne Centre I Redevelopment Plan
("Redevelopment Plan").
IV. Estimated Reuse Value of the Interests to be Conveyed: This section summarizes
the valuation estimate for the Site based on the required use, and with the conditions
and covenants required by the Agreement.
V, Consideration Received and Comparison with Established Fair Reuse Value: This
section describes the compensation to be received by the Agency, and explains any
difference between the compensation to be received and the established fair reuse value
of the Site.
VI. Blight Elimination: This section describes the existing blighting conditions on the
Development Site, and explains how the Agreement will assist in alleviating the blighting
influence,
VII. Conformance with the AB1290 Implementation Plan: This section describes how the
Agreement achieves goals identified in the Agency's adopted AB1290 Implementation
Plan.
This report and the Agreement are to be made available for public inspection prior to the
approval of the Agreement.
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I. SALIENT POINTS OF THE AGREEMENT
The Agreement provides for construction of a high-quality 304,000 square foot office Project,
which includes over 60,000 square feet of retail space and a new four-level 1 ,014 space parking
structure on the Site to be completed in three Phases,
A, Project Description
The Developer intends to cause in three Phases the development of a high-quality 304,000
square foot office project, which includes over 60,000 square feet of retail space. The Project
entails the development of two five-story Class A First Class First Quality office buildings and
one six-story Class A First Class First Quality office building. It is anticipated that each building
would have 20,000 square foot floor plates. The retail component contains an upscale
restaurant and shop space on the ground floor of the office buildings. In addition, a new four-
level 1,014 space parking structure will be constructed on-site.
B. Developer Responsibilities
The Agreement requires the Developer to complete the following activities:
1. The Developer shall be responsible for negotiating the acquisition of the
Developer Parcels and seek to acquire the Acquisition Parcels (Properties);
2. The Developer shall be responsible for financing all up front land acquisition
costs for Phases 1, 2 and 3 Properties;
3. The Developer shall assign its negotiated property rights to acquire Developer
Parcels to the Agency;
4. The Developer shall advance Agency funds necessary to acquire the Acquisition
Parcels;
5. The Developer shall be responsible for relocation of all existing occupants;
6. The Developer shall be responsible for disclosure of relocation rights and
obtaining "knowing" waivers through a process approved by the Agency;
7. The Developer shall retain a Relocation Specialist approved by the Agency;
8. The Developer shall indemnify the Agency against relocation claims, and;
9. The Developer shall develop the project consistent with the scope of
development and schedules.
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C. Agency Responsibilities
Under the Agreement, the Agency must complete or cause the following activities:
1. The Agency shall "write-down" the cost of the Project by an amount equal to
$5,013,000;
2. The Agency shall accept the Developer's negotiated rights to acquire Developer
Parcels;
3. The Agency shall acquire Acquisition Parcels and convey to the Developer;
4. The Agency shall convey the Developer Parcels to the Developer in exchange for
"fair reuse value";
5. The Agency shall sell to the Developer Agency Parcels for a total of $313,000;
6. The Agency shall fund up to $300,000 towards the off-site Public Improvements,
and;
7. The Agency will provide assistance, including the land write-down, public
improvements and fee waivers in an amount not to exceed $7,358,000.
II. COST OF THE AGREEMENT TO THE AGENCY
The Agency is to provide cumulative financial assistance to the Developer, subject to the
Developer satisfying the Conditions Precedent to Disbursement. The Agency participation shall
be paid in up to five (5) installment payments in a cumulative amount not to exceed $7,358,000
for construction, development and operation of all three Phases of the project and subject to
satisfaction of all Conditions Precedent. Installment payments of the Agency Participation are
as follows:
· First Installment Payment of Agency Participation - Total amount $1,500,000, inclusive of
$200,000 as repayment for Phase I Agency parcels. Payment shall be made after the
Conditions Precedent to Conveyance of the Agency Parcels and the Conditions Precedent
to the First Installment Payment are satisfied.
. Second Installment Payment of Agency Participation -- Total amount $1,713,000, inclusive
of $113,000 as repayment for Phase II Agency parcels, Payment shall be made after the
Conditions Precedent to the Second Installment Payment are satisfied and the Certificate of
Occupancy by the City's building official for the Phase II Improvements has been issued.
. Third Installment Payment of Agency Participation -- Total amount $1,352,000, plus
reimbursement for the balance of the Permit Fees for Phases I and II not-to-exceed
$403,000. Payment shall be made after the Conditions Precedent to the Third Installment
Payment are satisfied and seventy-five percent (75%) of the gross leaseable space of
Phase II Improvements has been leased to third parties by the Developer.
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. Fourth Installment Payment of Agency Participation -- Total amount $700,000 to be paid
after the issuance of the Certificate of Occupancy for the Phase III Improvements by the
City's building official.
. The above totals $5,668,000.
. Fifth and Final Installment Payment of Agency Participation - The fifth and final installment
payment, which is and shall be a contingent obligation of the Agency and incentive payment
to the Developer subject to criteria and provisions of Section 802.7 of the Disposition and
Development Agreement. If eligible for payment such amount shall in no event exceed
$7,358,000 less the cumulative amount of funds paid by the Agency to the Developer
toward and as Agency Participation from the First Installment Payment through and
inclusive of the Fourth Installment Payment.
The revenues that will be received by the Agency to defray the implementation costs consist of
the Property Tax Increment generated by the Project. The net cost of the Agreement to the
Agency is estimated as follows:
Agency Costs
Amount funded from Bond/Loan Proceeds
Amount funded from Non-Bond/Loan Proceeds
Interest on Bond/Loan Proceeds
Total Agency Cost
$5,268,000
2,090,000
5,409,850
Present Value Cost to Agency
(Less): Present Value Property Tax Increment 1
Net Agency (Revenue)Cost
$12,767,850
$7,358,000
(7,180,000)
$178,000
The Agency will fund a portion of the assistance through the use of bond or loan proceeds.
These funds will be repaid by the Agency from tax increment over the 28-year term of the
bond/loan. To reflect that these funds will be repaid over the 30-year term, it is appropriate to
calculate the present value of the debt service payments, discounted at the interest rate applied
to the bond/loan. The present value of the Agency's cost is therefore estimated at $7,358,000.
Similarly, offsetting Agency costs are the tax increment revenues generated by the development
over the life of the redevelopment plan. When these revenues are discounted at the Agency's
cost of funds rate, the present value of the tax increment is $7,180,000.
1 Includes housing set aside dollars
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The net costs to the Agency of the agreement is therefore $178,000.
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN
Pursuant to Section 33433 of the California Health and Safety Code, this section presents an
analysis of the fair market value of the subject property at the highest and best use, No specific
development plan is assumed. However, the proposed use of the subject property must be
consistent with the redevelopment plan and the subject property must be developed soon after
the transfer of the property; i.e., land speculation is not allowed.
In appraisal terminology, the highest and best use can be defined as the legal use (i.e" uses
allowed under the redevelopment plan) that will yield the highest value to the land, Therefore,
the definition of highest and best use is based solely on the value created and not on whether or
not it enhances or carries out the redevelopment goals and policies established by the City of
Chula Vista Redevelopment Agency.
In reviewing the highest and best use of this subject property, Keyser Marston Associates, Inc.,
economic consultant to the Agency (KMA) has conducted an analysis of the subject site. KMA
has concluded that a low-rise mixed-use development including retail, restaurant, and office is
the highest and best use for the property.
The Agency has commissioned appraisals for it's commercially zoned properties located within
the downtown. Based on these appraisals, the fair market value of the Site cleared of
improvements is $15.76 per square foot of land area. Thus, the highest and best use value of
the 185,908 square foot Site being conveyed to the Developer by the Agency is estimated at
$2.9 million.
IV, ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
In a report dated March 2000, KMA presented a reuse valuation analysis of the Project. That
analysis concluded that given the terms and restrictions required by the Agreement, the reuse
value of the Site is equal to $4,00 per square foot of land area. This equates to $745,000 for
the 185,908 square foot Site being conveyed to the Developer.
The fair reuse value for each phase of the Proposed Project is shown below:
Phase 1
Phase 2
Phase 3
Total
($201,000)
$737,000
$209,000
$745,000
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V. CONSIDERATION RECEIVED AND COMPARISON WITH THE FAIR REUSE VALUE
After consideration of the minimum City and Agency assistance provided in the agreement the
Developer land cost is $2.7 million. If the Developer were to receive the maximum assistance
allowable under the Agreement, the Developer land cost would be $1.6 million, which is in
excess of the fair reuse value of $747,000.
VI. BLIGHT ELIMINATION
The Town Centre I Redevelopment Project Area was adopted in 1976 in order to eliminate
conditions of blight which were impacting the economic and physical viability of the area. The
Town Centre I Redevelopment Plan identifies the following blighting conditions in the project
area:
1. The under-utilization and mixed character of land in and adjacent to the project area;
2. The prevalence of small lots, which are inadequate for large scale development and restrict
the expansion of existing compatible uses;
3, The design limitations in the basic layout and platting, the clutter of the utility lines and signs
and an inadequate traffic circulation system;
4. The obsolescence, structural inadequacy, lack of architectural unity and deterioration of
buildings within the area;
5. The general decline and shifting nature of commercial activity within the area, and;
6. The inadequate governmental revenue generation (property and sales tax) and an
increasing need for public services within the area.
Since the adoption of the Redevelopment Plan in 1976, the Redevelopment Agency has worked
to eliminate certain identified blighting conditions through providing certificates of participation,
acquisition and consolidation of properties, financial assistance, and expedition development
plan processing.
Over $100 million of combined private and public development dollars have been invested in the
Town Centre I Project Area since the inception of the Town Centre I Project. These investment
dollars have contributed to the economic growth and physical improvement of the
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redevelopment Project Area. The current objective of the Agency is to revitalize the Town
Centre Area as the commercial-civic focus of the City. The proposed Development is consistent
with Agency's actions to eliminate the stated blighting conditions.
VII. CONFORMANCE WITH THE AB1290 IMPLEMENTATION PLAN
The Agency has adopted the Five-year Implementation Plan for the City's Town Centre I
Redevelopment Project. The Implementation Plan identifies the goals and objectives to
alleviate remaining blight within the project area.
The proposed Project specifically addresses the goal of the Implementation Plan, which is to "
Revitalize the Town Centre area as the commercial-civic focus of the City". As indicated in the
Implementation Plan, the blight to be alleviated by the Project includes developing underutilized
land, eliminating incompatible uses, eliminating small and irregular lot and block subdivision and
correcting faulty planning.
The proposed Project will replace the older uses that have become functionally obsolete.
Through the Project, the Agency will consolidate multiple parcels under separate ownership to
provide a coherent development on the block along H Street between 3cd and 4th Avenues.
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GATEWAY CHULA VISTA REUSE ANALYSIS
Prepared for:
CITY OF CHULA VISTA
Prepared by:
Keyser Marston Associates, Inc,
APRIL 2000
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TABLE OF CONTENTS
Page
I. SUMMARY OF SALIENT FACTORS AND CONDITIONS.,...........,...................,...............,.,.,.,.,....,.......,.,.......1
A. ASSIGNMENT ................................ ................................ ............................. .......................... ...............1
B. PROJECT DESCRiPTION................. .............................. .............................. ............................. .......................1
C. LOCATION............................................................................................................................. .........................1
D. LAND AREA.............. ..................................... ........................... .................................................................2
E. ZONING................................................................................................................................... ....................2
F. REUSE CONDITIONS .......................... ....................... .......................... ............................. ...............2
1. Developer Responsibilities ......... ................................. ................................... ...................... ..............2
2. City and Agency's Responsibifities...... .............................. ..................................... ........................ ........3
G. DATE OF VALUATION ........................ ............................... ......................... ........................... ................3
H. FINAL ESTIMATE OF VALUE...................... ................................. .................................. ...................... ..........4
II. NATURE OF THE ASSIGNMENT ...............................,...............,..........,.,....,...................,.........,.............,.......4
A. PURPOSE OF THE ANALYSIS ....................... ................................ ................................... ..................................4
B. DEFINITION - REUSE VALUE.. ................................. ................................... ................................. ....................4
C. RIGHT TO BE VALUED .................................................... ....................................... ...........................................6
III. DESCRIPTION OF THE SITE AND PROPOSED DEVELOPMENT .......,.......,.,............,.,.,....................,.,...6
A. DESCRIPTION OFTHE SITE ................................ .............................. ...................................... ..................... ...6
1. Ownership........ ................................. .............................. ..................................... ........................ .......6
2. Land Area ..................................... ............. .................. ......................................... .......................... ......6
3. Regional Access....................... .................... ....................................... ........................... .........6
4. Site Description................................. ................................. ..................................... ........................ .....6
B. DESCRIPTION OF IMPROVEMENTS .................................. ................................... ............................. .................7
IV. V ALUA TION .,...........................................,....,........,.,............,.....................,.,.,...........................,.................. 7
A. PHASE 1.................................. ................................. ..................................... ............................ ...................8
1. Development Cost Estimate .......... ................................................................................................... ........8
2. Net Operating Income Estimate ................. .................................... ................................... ......................9
3. Estimated Surplus/(Warranted Assistance) and Fair Reuse Value. .................................. .....................10
B. PHASE 2........................ ...................................... .................................. ............................. ..................10
1. Deve/opment Cost Estimate............................................................... ............................ ..................11
2. Net Operating Income Estimate ............................... ..................................... ............................ ............12
3. Estimated Surplus/(Warranted Assistance) and Fair Reuse Value............ .............................................13
C. PHASE 3 .................................. ...................................... ... ...................................... ......................... ...........13
1. Development Cost Estimate .................... ........................................ ................................. .....................13
2. Net Operating Income Estimate.. .................................. ....................................... .................................14
3. Estimated Surplus/(Warranted Assistance) and Fair Reuse Value ............................... .........................15
D. SUMMARy..... .............................................. ....................................... .................................... .....................16
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L SUMMARY OF SALIENT FACTORS AND CONDITIONS
A, Assignment
Keyser Marston Associates, Inc. (KMA) has been retained to estimate the fair reuse
value of a proposed multi-phased office project to be developed at the northwest corner
of 3rd Avenue and H Street located within the Town Centre I Redevelopment Project
Area. Chrismatt Corporation proposes to develop in three phases a major mixed-use
project, which includes three mid-rise office/retail buildings totaling 304,000 square feet.
The project would also include the construction of a four-level parking structure.
B. Project Description
For the purposes of this analysis, Keyser Marston Associates, Inc. (KMA) has assumed
the Project will consist of the following:
Office Component
Retail Component
Total Office/Retail Space
243,000 Sq.Ft.
61,000 Sq.Ft.
304,000 Sq,Ft.
The Developer intends to cause in three phases the development of a high-quality
304,000 square foot office project, which includes over 60,000 square feet of retail
space. The project entails the development of two five-story Class A office buildings and
one six-story Class A office building. It is anticipated that each building would have
25,000 square foot floor plates. The retail component contains an upscale restaurant
and shop space on the ground floor of the office buildings. In addition, a new four-level
1,014 space parking structure will be constructed on-site.
C. Location
In an effort to rehabilitate areas of Downtown Chula Vista, the City of Chula Vista (City)
and the Redevelopment Agency of the City of Chula Vista (Agency) created the Town
Centre I Redevelopment Project Area (Area). Located within the Area is the project site
(Site), which is generally bounded by 4th Avenue on the west, H Street on the south, 3rd
Avenue on the east and Roosevelt Street on the north,
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D. land Area
The Site contains approximately 4.3 acres, of which the Agency currently owns 0.45
acres.
E. Zoning
The Site is currently zoned commercial (C,O. & C.C.).
F. Reuse Conditions
The property is subject to a wide range of land use and quality controls that govern both
the initial development and ongoing maintenance of the property. These controls/
conditions are defined in the proposed Disposition and Development Agreement (DDA).
Insofar as this reuse analysis is concerned, the following provides a summary of the
salient conditions that impact the value of the land.
1. Developer Responsibilities
Under the terms of the DDA, the Developer agrees to accept the following
responsibilities:
1, The Developer shall be responsible for negotiating the acquisition of the Developer
Parcels and seek to acquire the Acquisition Parcels (Properties);
2. The Developer shall be responsible for financing all up front land acquisition costs for
Phases 1, 2 and 3 Properties;
3. The Developer shall assign its negotiated property rights to acquire Developer
Parcels to the Agency;
4. The Developer shall advance Agency funds necessary to acquire the Acquisition
Parcels;
5. The Developer shall be responsible for relocation of all existing occupants;
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6. The Developer shall be responsible for disclosure of relocation rights and obtaining
"knowing" waivers through a process approved by the Agency;
7. The Developer shall retain a Relocation Specialist approved by the Agency;
8. The Developer shall indemnify the Agency against relocation claims, and;
9. The Developer shall develop the project consistent with the scope of development
and schedules.
2. City and Agency's Responsibilities
Under the terms of the DDA, the City and Agency agree to accept the following
responsibilities:
1. The Agency shall "write-down" the cost of the Project by an amount equal to
$5,013,000;
2. The Agency shall accept the Developer's negotiated rights to acquire Developer
Parcels;
3. The Agency shall acquire Acquisition Parcels and convey to the Developer;
4. The Agency shall convey the Developer Parcels to the Developer in exchange for
"fair reuse value";
5. The Agency shall sell to the Developer Agency Parcels for a total of $313,000;
6. The Agency shall fund up to $300,000 towards the off-site Public Improvements,
and;
7. The Agency will provide assistance, including the land write-down, public
improvements and fee waivers in an amount not to exceed $7,358,000.
G. Date of Valuation
May 11, 2000
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H, Final Estimate of Value
The fair reuse value of the land for each phase is as follows:
Phase 1 ($201,000)
Phase 2 737,000
Phase 3 209,000
Total $745,000
II. NATURE OF THE ASSIGNMENT
A. Purpose of the Analysis
The purpose of this analysis is to determine the fair reuse value of the parcels of land to
be sold by the Agency for the office and retail development.
The establishment of the reuse value takes into consideration the controls and
restrictions embodied in the proposed DDA entered into by the Developer and the
Agency. Fundamental to this analysis is the fact that the Site is being transferred for
development and not for land speculation. The DDA restricts, among other things, both
the scope of development and the time frame under which development must proceed.
B. Definition - Reuse Value
Reuse value is defined as the highest price, in terms of money, which a property is
expected to bring to a specific use in a competitive and open market under the reuse
conditions established by the buyer and seller, each acting prudently, knowledgeably,
and assuming the price is not affected by undue stimulus. Also, essential to an estimate
of a fair reuse value is the notion that the Agency is interested in near-term development
and not speculation.
Implicit in this definition is the consummation of a transfer as of a specified date and the
passing of title from seller to buyer under conditions whereby:
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1. 80th parties are well informed and well advised and each acting prudently in
what he/she considers his/her own best interest.
2. The property will be assembled and cleared in a reasonable time.
3. Financing, if any, is on terms generally available in the community for the use
proposed at the date the property is ready for construction, The reuse value
represents a normal consideration for the property purchased, unaffected by
special financing amounts and/or terms, services, fees, costs, or credits incurred
in the financing transaction,
4. The definition of reuse value is further augmented due to certain conditions
imposed by the Agency and assumptions, as follows:
a. The transferor is a public agency having definite controls over the
development. Due to the complexity of the overall plan of development,
the Developer of the land parcel must contend with a series of regulations
and controls that are not common in the conventional real estate market.
The Agency will maintain a continuing review with respect to the ability of
the Developer to perform within the prescribed time frame and quality
conditions,
b. The Developer, like the Agency, is unique in the real estate market. Due
to the various development requirements and time restrictions imposed
by the development program, the potential Developers are limited to
individuals or organizations with substantial development experience,
financial resources, and the ability to develop a first class project. In
addition, in order to appeal to the limited market of potential Developers,
not land speculators, market value must be equated to the maximum
price the potential Developer is warranted in paying, based upon risk and
required investment returns.
c. The development plan imposes extraordinary development restrictions
and/or requirements, Accordingly, the market value must reflect the
advantages created by the Project, as well as the requirements and
limitations on land uses to be imposed on the Developer by the public
agency.
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C. Right to be Valued
The property to be transferred has been valued based on the proposed leases and the
DDA requirements, free and clear of all other encumberances, special assessments and
liens.
III, DESCRIPTION OF THE SITE AND PROPOSED DEVELOPMENT
A. Description of the Site
1. Ownership
The Agency and the Developer agree that the Site shall be assembled in Phases, Phase
1 and/or Phase 2, together or separately, and thereafter Phase 3. The Agency currently
owns 0.45 acres of the Site. The remainder of the Site, 3.85 acres, is currently owned
by outside parties, Per the DDA, the Developer shall assign to the Agency all interest in
and all legal rights to acquire each of the remaining parcels, which are part of the
applicable Phase. The Developer shall also provide to the Agency all necessary up front
funds to purchase the remaining acreage.
2. Land Area
The subject parcel is comprised of approximately 4.3 acres of land area.
3. Regional Access
H Street and 4th Avenue are major thoroughfares in the region and provides direct
access to the Site. State Highway 17 is located less than one mile north of the Site,
while State Highway 805 is approximately 1,5 miles east of the Site,
4. Site Description
The subject property is bounded by H Street to the south, 3'd Avenue to the east,
Roosevelt Street to the north and 4th Avenue to the west. There are improvements
currently located on the Site. These improvements will be purchased and then cleared
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from the Site. It is anticipated that tenants would be relocated in accordance to an
Agency approved Relocation Plan submitted by the Developer.
B. Description of Improvements
For the purposes of this analysis, it is assumed the Project will consist of the following:
Office Project
Retail
243,000 Sq,Ft.
61,000 Sq.Ft.
1. Office Development - Three five- to six-story office buildings of approximately
243,000 square feet with about 25,000 square foot floor plates will be
constructed in three phases. The office space will meet Class A quality
standards.
2, Retail - The current plan proposes about 61,000 square feet of retail space.
Included in this amount is a 10,000 square foot restaurant with the remainder of
the space divided among retailers.
IV. VALUATION
The valuation of real estate is derived principally through three approaches to market
value: the cost approach, the income approach, and the market data comparison
approach. From the indications of these separate analyses, an opinion of value is
reached, based on the quantity and quality of the factual data considered, and tempered
by the judgment and experience of the analyst who is utilizing commonly accepted
methods and techniques within the framework of the valuation process. Because this
analysis is for the valuation of the parcel of land without the proposed improvements, the
cost approach is not applicable.
Income properties are normally valued relative to their ability to produce income. For the
purpose of determining the reuse value of the subject parcel, the value of the land can
be defined as the difference between the development cost of the Project, excluding
land, and the total amount the Developer (or investor) can invest such as to achieve a
market rate return. The amount the Developer can invest is based upon the cost and
income of the Project and the present (and anticipated) money market conditions
impacting such factors as the cost of mortgage funds and required minimum rates of
retu rn.
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The market data comparison approach to value is based upon the principle of
substitution; that is, when a property is replaceable in the market, its value tends to be
set at the cost of acquiring an equally desirable substitute property, assuming no costly
delay in making the substitution, The typical technique used to estimate value through
substitution involves the collection and analysis of sales and listings data on various
properties having many similar characteristics to the property being appraised.
In this instance, the development of the subject parcel is being limited to office and retail
uses, and the Project is subject to extraordinary conditions. As such, the use of the
market data comparison, i.e., land sales approach is difficult to use. Few comparables
exists that were sold under the same conditions as are being applied to the subject
parcel.
Given the specific conditions governing the sale of the subject property, primary reliance
has been placed on the use of the income approach to value as summarized below.
The income approach for the Project is based on a pro forma analysis of projected
development costs, project income and anticipated return.
A. Phase 1
Provided in Tables 1 b through 3b is the pro forma analysis for Phase 1 of the Proposed
Project.
1. Development Cost Estimate
The estimated development costs for Phase 1 of the Project are shown in Table 1 b.
Acquisition Costs
1. The estimated cost to acquire the Parcels required for Phase 1 development, is
approximately $44 per square foot, $2.79 million.
Direct Costs
1. Off-site improvements are estimated at $437,000.
2, Demolition costs for the entire Site are estimated at $80,000.
3. Total site-work costs are estimated at $155,000.
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A. Shell costs are estimated at $56 per square foot. Tenant Improvement (TI) costs
are estimated at $23.70 per square foot.
5. Per the Developer, the parking structure of 314 spaces will cost $8,000 per
space, $2.5 million.
Indirect Costs
The majority of the indirect costs are estimated as a percentage of direct costs or as an
allowance.
1. Entitlements, permits & fees are estimated at $2.30 per square foot, $216,000.
2. Retail leasing commissions are $3.00 per square foot of retail space, $64,000.
3, Office leasing commissions are based on the scheduled lease term and turnover.
The majority of space is assumed to be leased for a 1 O-year term with
commissions equal to 6% of the first five years gross lease income.
Financinq Costs
Assuming the Project supports a loan value of $14.3 million, the total interest costs at a
blended rate of 8,8% are $1.54 million and the loan fee at 3 points is $431,000. Total
financing costs are estimated at $1.9 million.
The total development costs are estimated at $17.6 million or $188 per square foot of
building space.
2. Net Operating Income Estimate
The estimated Net Operating Income (NOI) for Phase 1 is shown in Table 2b.
Income
Project revenues will be generated by the retail, office and parking developments,
1. Annual rental income for the retail tenants is estimated at $22.40 per square foot,
$478,000.
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2. Annual office rent is estimated at $18.30 per square foot, $1.3 million.
3. Parking income is projected to be generated by one third of unreserved spaces
at $35 per space per month. Total parking income is estimated at $47,000.
Total project income is estimated at $1.8 million. Assuming a 5% vacancy factor on the
office and retail income, then the gross operating income is estimated at $1.7 million.
Operating Expenses
Operating Expenses relate to the ongoing costs to maintain a quality development.
1. Building expenses are estimated at $7.00 per square foot, $32,000.
2. A reserve fund equal to 3% of gross operating income is required,
3, A management fee equal to 2% of the gross retail income is included.
Total operating expenses are $119,000. The resultant NOI is $1.6 million,
3. Estimated Surp/us/(Warranted Assistance) and Fair Reuse Value
As shown in Table 3b, the estimated surplus/warranted assistance was calculated
utilizing the Return on Total Investment method. This valuation does not include the
value of Agency assistance.
Return on Total Investment
The return on total investment analysis considers the supportable return for the Project
based on its NO!. Assuming an 11 % return on costs is required by the Developer for a
mixed-use project of this type, the Project can support a value of $14.6 million,
Considering development costs of $17.6 million, then the warranted assistance for the
Project is $3.0 million. When this amount is deducted from the acquisition costs the fair
reuse value is a negative $201,000.
B. Phase 2
Provided in Tables 4b through 6b is the pro forma analysis for Phase 2 of the Proposed
Project.
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1. Development Cost Estimate
The estimated development costs for Phase 2 of the Project are shown in Table 4b.
Acquisition Costs
1. The estimated cost to acquire the Parcels required for Phase 2 development is
approximately $46 per square foot, $3.01 million.
Direct Costs
1. Off-site improvements are estimated at $37,000,
2, Demolition costs for the entire Site are estimated at $65,000.
3. Total site-work costs are estimated at $92,000.
4. Shell costs are estimated at $56 per square foot. Tenant Improvement (TI) costs
are estimated at $23.70 per square foot.
5, Per the Developer, the parking structure of 390 spaces will cost $8,000 per
space, $3.1 million.
Indirect Costs
The majority of the indirect costs are estimated as a percentage of direct costs or as an
allowance.
1, Entitlements, permits & fees are estimated at $2.30 per square foot, $269,000.
2. Retail leasing commissions are $3.00 per square foot of retail space, $63,000.
3. Office leasing commissions are based on the scheduled lease term and turnover.
The majority of space is assumed to be leased for a 1 O-year term with
commissions equal to 6% of the first five years gross lease income.
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Financinq Costs
Assuming the Project supports a loan value of $18.3 million, the total interest costs at a
blended rate of 8.8% are $2,2 million and the loan fee at 3 points is $552,000, Total
financing costs are estimated at $2,7 million.
The total development costs are estimated at $21,0 million or $180 per square foot of
building space.
2. Net Operating Income Estimate
The estimated NOI for Phase 2 is shown in Table 5b.
Income
Project revenues will be generated by the retail, office and parking developments,
1. Annual rental income for the retail tenants is estimated at $24.00 per square foot,
$507,000.
2. Annual office rent is estimated at $19.00 per square foot, $1.7 million.
3. Parking income is projected to be generated by one third of unreserved spaces
at $35 per space per month. Total parking income is estimated at $47,000.
Total project income is estimated at $2,3 million. Assuming a 5% vacancy factor on the
office and retail income, then the gross operating income is estimated at $2.2 million.
OperatinQ Expenses
Operating Expenses relate to the ongoing costs to maintain a quality development.
1. Building expenses are estimated at $7.00 per square foot, $41,000.
2. A reserve fund equal to 3% of gross operating income is required.
3, A management fee equal to 2% of the gross retail income is included.
Total operating expenses are $152,000. The resultant NOI is $2.0 million.
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3. Estimated Surplus/(Warranted Assistance) and Fair Reuse Value
As shown in Table 6b, the estimated surplus/warranted assistance was calculated
utilizing the Return on Total Investment method. This valuation does not include the
value of Agency assistance.
Return on Total Investment
The return on total investment analysis considers the supportable return for the Project
based on its NO!. Assuming an 11 % return on costs is required by the Developer for a
mixed-use project of this type, the Project can support a value of $18.8 million.
Considering development costs of $21.1 million, then the warranted assistance for the
Project is $2.2 million. When this amount is deducted from the acquisition costs, the fair
reuse value is $737,000.
c. Phase 3
Provided in Tables 7b through 9b is the pro forma analysis for Phase 3 of the Proposed
Project.
1. Deve/opment Cost Estimate
The estimated development costs for Phase 3 of the Project are shown in Table 7b.
Acquisition Costs
1. The estimated cost to acquire the parcels required for Phase 3 development is
approximately $35 per square foot, $2,29 million.
Direct Costs
1. Off-site improvements are estimated at $37,000.
2. Demolition costs for the entire Site are estimated at $45,000.
3. Total site-work costs are estimated at $91,000.
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4. Shell costs are estimated at $56 per square foot. Tenant Improvement (TI) costs
are estimated at $23.70 per square foot.
5. Per the Developer, the parking structure of 310 spaces will cost $8,000 per
space, $2.4 million.
Indirect Costs
The majority of the indirect costs are estimated as a percentage of direct costs or as an
allowance.
1. Entitlements, permits & fees are estimated at $2.30 per square foot, $214,000,
2. Retail leasing commissions are $3.00 per square foot of retail space, $61,000,
3. Office leasing commissions are based on the scheduled lease term and turnover.
The majority of space is assumed to be leased for a 10-year term with
commissions equal to 6% of the first five years gross lease income.
Financinq Costs
Assuming the Project supports a loan value of $14.5 million, the total interest costs at a
blended rate of 8.8% are $2.07 million and the loan fee at 3 points is $437,000. Total
financing costs are estimated at $2.5 million,
The total development costs are estimated at $16.9 million or $182 per square foot of
building space.
2. Net Operating Income Estimate
The estimated NOI for Phase 3 is shown in Table 8b.
Income
Project revenues will be generated by the retail, office and parking developments.
1. Annual rental income for the retail tenants is estimated at $24.00 per square foot,
$488,000.
2. Annual office rent is estimated at $18.50 per square foot, $1.3 million,
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3. Parking income is projected to be generated by one third of unreserved spaces
at $35 per space per month. Total parking income is estimated at $47,000.
Total project income is estimated at $1.8 million. Assuming a 5% vacancy factor on the
office and retail income, then the gross operating income is estimated at $1.7 million.
Operatinq Expenses
Operating Expenses relate to the ongoing costs to maintain a quality development.
1. Building expenses are estimated at $7,00 per square foot, $32,000.
2, A reserve fund equal to 3% of gross operating income is required.
3. A management fee equal to 2% of the gross retail income is included.
Total operating expenses are $120,000. The resultant NOI is $1.6 million.
3. Estimated Surp/us/(Warranted Assistance) and Fair Reuse Value
As shown in Table 9b, the estimated surplus/warranted assistance was calculated
utilizing the Return on Total Investment method. This valuation does not include the
value of Agency assistance.
Return on Total Investment
The return on total investment analysis considers the supportable return for the Project
based on its NO!. Assuming an 11 % return on costs is required by the Developer for a
mixed-use project of this type, the Project can support a value of $14,8 million,
Considering development costs of $16.9 million, then the warranted assistance for the
Project is $2.09 million. When this amount is deducted from the acquisition costs the fair
reuse value is $209,000.
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D. Summary
The fair reuse value for each phase of the Proposed Project is shown below:
Phase 1
Phase 2
Phase 3
Total
($201,000)
$737,000
$209,000
$745,000
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TABLE 1B
ESTIMATED DEVELOPMENT COSTS - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 1
CHULA VISTA, CALIFORNIA
I. Site Acauisition 1
Parking Parcel 31,336 Sq. Ft. land $43.89 I Sq. Ft. $1,375,000
Building Parcel 32,345 Sq. Ft. land $43.89 I Sq. Ft. 1,420,000
Total Acquisition Costs $2,795,000
II. Direct Costs
Demolition 2 Allowance $85,000
Off-Site/lnfrastructure/Utilities 2 Allowance 437,000
On-Site Improvements 63,681 Sq. Ft. $2,44 I Sq. ft. 155,000
Structured Parking 314 Spaces $8,000 I Space 2,510,000
Shell Construction 94,000 Sq. Ft. GBA $56.00 I Sq. ft. 5,264,000
Tenant Improvements 94,000 Sq. Ft. GBA $23.70 I Sq. Ft. 2,228,000
Total Direct Costs $10,679,000
III. Indirect Costs
Architecture & Engineering Fees 5.0% Direct Costs $534,000
Public Permits & Fees 94,000 Sq. Ft. GBA $2.30 I Sq. Ft. 216,000
Legal, Accntng, Taxes & Ins. 2.0% Direct Costs 214,000
Marketing Allowance 69,000
Leasing Commissions
Commercial/Retail3 21,333 Sq. ft. GRA $3.00 I Sq. Ft. 64,000
Office 3 6.0% Gross Lease Income - 5 Yrs. 390,000
Development Management 4.0% Direct Costs 427,000
Contingency 3.0% Direct Costs 320,000
Total Indirect Costs $2,234,000
IV. Financlna Costs
Construction Financing
Land $2,795,000 Financed @ 8.80% Int. 4 $369,000
Building $14,892,000 Financed @ 8.80% Int. 5 1,179,000
Financing Fees (Con & Perm) $14,364,000 Financed @ 3.0 PI. 6 431,000
Total Financing Costs $1,979,000
V. Total Development Costs $17,687,000
Per Square Foot 94,000 Sq. ft. $188
2
3
Pro rata allocation of total acquisition costs based on Phase 1 land area.
To be verified by City Public Works Department.
Based on gross rentable area.
Assumes conventional financing with 80% debt at 8.5% and 20% equity at 10.0%. Also assumes 18-month holding period
and 100% average outstanding balance.
Assumes conventional financing with 80% debt at 8.5% and 20% equity at 10.0%. Also assumes 18-month construction period
and 60% average outstanding balance.
4
Prepared By: Keyser Marston Associates, Inc.
File Name: 1:\chrismatt11.xls; ph 1 kma; VVDL; 5/11/2000; 4:53 PM
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Based on a 80% loan to value ratio and a 9.0% cap rate.
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TABLE 2B
ESTIMATED NET OPERATING INCOME - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 1
CHULA VISTA, CALIfORNIA
I, Income INNNI
Commercial/Retail 1 21,333 Sq. Ft. GRA $22.40 I Sq. Ft. GRA $478,000
Office 1 71,079 Sq. Ft. GRA $18.30 I Sq. Ft. GRA 1,301,000
Monthly Parking 2 113 Spaces $35.00 I Month 47,000
Gross Income $1,826,000
(Less) Vacancy & Collection 5.0% Gross Income (91,000)
Effective Gross Income $1,735,000
II. Ooeratina EXDenses
CAM Charges on Vacant Space 4,600 Sq. Ft. $7.00 I Sq. Ft. ($32,000)
Property Management 2.0% Effective Gross Income (35,000)
Capital Reserves 3.0% Effective Gross Income (52,000)
Total Expenses ($119,000)
1111. Net Operating Income $1,616,000 I
2
Based on gross rentable areas.
Developer assumes only a third of the parking spaces will generate separate parking income.
Implicit in this assumption is that the remaining two thirds of parking spaces will be included in base office rent.
Developer also assumed that the operating expenses for the parking garages will be billed to the tenants.
Prepared By: Keyser Marston Associates, Inc.
File Name: 1:\chrismatt11.xls; ph 1 kma; WDL; 5/11/2000; 4:53 PM
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TABLE 3B
fEASIBILITY GAP CALCULATION - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 1
CHULA VISTA, CALIfORNIA
Return on Total Investment
I. Warranted Investment
Net Operating Income
Threshold Return on Cost
TABLE 2B
$1,616,000
11.0%
Total Warranted Investment
$14,691,000
II. SUDDortable Investment
Total Warranted Investment
(Less) Development Costs
TABLE 1 B
$14,691,000
(17,687,000)
III. Project feasibility Gap
($2,996,000)
IV. Residual Land Value
Land Acquisition Costs
(Less) Assistance Required
2,795,000
($2,996,000)
Residual Land Value
(201,000)
Prepared By: Keyser Marston Associates, Inc.
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TABLE 4B
ESTIMATED DEVELOPMENT COSTS - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 2
CHULA VISTA, CALIFORNIA
I. Site Acauisition 1
Parking Parcel 30,867 Sq. Ft. Land $46.29 I Sq. Ft. $1.429,000
Building Parcel 34,130 Sq. Ft. Land $46.29 I Sq. Ft. 1,580,000
Total AcquisitIon Costs $3,009,000
11. Direct Costs
Demolition 2 Allowance $65,000
Off-Site/lnfrastructure/Utilities 2 Allowance 37,000
On-Site Improvements 64,997 Sq. Ft. $1.41 I Sq. Ft. 92,000
Structured Parking 390 Spaces $8,000 I Space 3,117,000
Shell Construction 117,000 Sq. Ft. GBA $56.00 I Sq. Ft. 6,552,000
Tenant Improvements 117,000 Sq. Ft. GBA $23.70 I Sq. Ft. 2,773,000
Total Direct Costs $12,636,000
111, Indirect Costs
Architecture & Engineering Fees 5.0% Direct Costs $632,000
Public Permits & Fees 117,000 Sq. Ft. GBA $2.30 I Sq. Ft. 269,000
Legal, Accntng, Taxes & Ins. 2.0% Direct Costs 253,000
Marketing Allowance 23,000
Leasing Commissions
Commercial/Restaurant 3 21,137 Sq. Ft. GRA $3.00 I Sq. Ft. 63,000
Office 3 6.0% Gross Lease Income - 5 Yrs. 535,000
Development Management 4.0% Direct Costs 505,000
Contingency 3.0% Direct Costs 379,000
Total Indirect Costs $2,659,000
IV. Financing Costs
Construction Financing
Land $3,009,000 Financed @ 8.80% Int. 4 $794,000
Building $18,072,000 Financed @ 8.80% Int. 5 1.431,000
Financing Fees (Con & Perm) $18,391,000 Financed @ 3.0 Pt. 6 552,000
Total Financing Costs $2,777,000
V, Total Development Costs $21,081,000
Per S uare Foot 117,000 Sq. Ft. $180
2
3
4
Pro rata allocation of total acquisition costs based on Phase 2 land area.
To be verified by City Public Works Department
Based on gross rentable area.
Assumes conventional financing with 80% debt at 8.5% and 20% equity at 10.0%. Also assumes 36-month holding period
and 100% average outstanding balance.
Assumes conventional financing with 80% debt at 8.5% and 20% equity at 10.0%. Also assumes 18-month construction period
and 60% average outstanding balance.
5
Prepared By: Keyser Marston Associates, Inc.
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6
Based on a 80% loan to value ratio and a 9.0% cap rate.
Prepared By: Keyser Marston Associates, Inc.
File Name: J:\chrismatt11.xls; ph 2 kma; WDL; 5/11/2000; 4:53 PM
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TABLE 5B
ESTIMATED NET OPERATING INCOME - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 2
CHULA VISTA, CALIfORNIA
I. Income (NNNl
Commercial/Restaurant 1 21,137 Sq. Ft. GRA $24.00 I Sq. Ft. GRA $507,000
Office 1 93,886 Sq. Ft. GRA $19.00 I Sq. Ft. GRA 1,784,000
Monthly Parking 2 113 Spaces $35.00 I Month 47,000
Gross Income $2,338,000
(Less) Vacancy & Collection 5.0% Gross Income (117,000)
Effective Gross Income $2,221,000
II, ODerattna EXDenses
CAM Charges on Vacant Space 5,800 sq. ft. GBA $7.00 I Sq. ft. ($41,000)
Property Management 2.0% Effective Gross Income (44,000)
Capital Reserves 3.0% Effective Gross Income (67,000)
Total Expenses ($152,000)
1111. Net Operating Income $2,069,000 I
2
Based on gross rentable area calculations.
Developer assumes only a third of the parking spaces will generate separate parking income.
Implicit in this assumption is that the remaining two thirds of parking spaces will be included in base office rent.
Developer also assumed that the operating expenses for the parking garages will be billed to the tenants.
Prepared By: Keyser Marston Associates. Inc.
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TA8LE 68
FEASIBILITY GAP CALCULATION - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 2
CHULA VISTA, CALIfORNIA
Return on Total Investment
I. Warranted Investment
Net Operating Income
Threshold Return on Cost
TABLE 5B
$2,069,000
11.0%
$18,809,000
Total Warranted Investment
II. SUDDortable Investment
Total Warranted Investment
(Less) Development Costs
TABLE 4B
$18,809,000
(21,081,000)
III. Project feasibility Gap
IV. Residual Land Value
land Acquisition Costs
(Less) Assistance Required
3,009,000
($2,272,000)
Residual La'nd Value
($2,272,000)
737,000
Prepared By: Keyser Marston Associates, Inc.
File Name: 1:\chrismatt11.xls; ph 2 kma; WDL; 5/11/2000; 4:53 PM
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TABLE 7B
ESTIMATED DEVELOPMENT COSTS - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 3
CHULA VISTA, CALIfORNIA
I. Site Acaulsltion 1
Parking Parcel 25,658 Sq. Ft Land $34.98 I Sq. ft $897,000
Building Parcel 40,071 Sq. Ft Land $34.98 I Sq. Ft 1 ,402,000
Total Acquisition Costs $2,299,000
II, Direct Costs
Demolition 2 Allowance $45,000
Off-Sitellnfrastructure/Utilities 2 Allowance 37,000
On-Site Improvements 65,729 Sq. ft $1.39 I Sq. Ft 91,000
Structured Parking 310 Spaces $8,000 I Space 2,478,000
Shell Construction 93,000 Sq. ft GBA $56.00 I Sq. Ft 5,208,000
Tenant Improvements 93,000 Sq. ft GBA $23.70 I Sq. Ft 2,204,000
Total Direct Costs $10,063,000
III. Indirect Costs
Architecture & Engineering Fees 5.0% Direct Costs $503,000
Public Permits & Fees 93,000 Sq. Ft GBA $2.30 I Sq. ft 214,000
Legal, Accntng, Taxes & Ins. 2.0% Direct Costs 201,000
Marketing Allowance 23,000
Leasing Commissions
Commercial/Retail3 20,350 Sq. ft GRA $3.00 ISq. Ft 61,000
Office 3 6.0% Gross Lease Income - 5 Yrs. 394,000
Development Management 4.0% Direct Costs 403,000
Contingency 3.0% Direct Costs 302,000
Total Indirect Costs $2,101,000
IV. Flnancina Costs
Construction Financing
Land $2,299,000 Financed @ 8.80% Int. 4 $910,000
Building $14,673,000 Financed @ 8.80% Int 5 1,162,000
Financing Fees (Con & Perm) $14,551,000 Financed @ 3.0 Pt.6 437,000
Total Financing Costs $2,509,000
V. Total Development Costs $16,972,000
Per S uare Foot 93,000 Sq. Ft $182
3
4
Pro rata allocation of total acquisition costs based on Phase 3 land area.
To be verified by City Public Works Department
Based on gross rentable area.
Assumes conventional financing with 80% debt at 8.5% and 20% equity at 10.0%. Also assumes 54-month holding period
and 100% average outstanding balance.
Assumes conventional financing with 80% debt at 8.5% and 20% equity at 10.0%. Also assumes 18-month construction period
and 60% average outstanding balance.
5
Prepared By: Keyser Marston Associates, Inc.
File Name: 1:\chrismatt11.xls; ph 3 kma; WDl; 5/11/2000; 4:53 PM
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Based on a 80% loan to value ratio and a 9.0% cap rate.
Prepared By: Keyser Marston Associates. Inc.
File Name: 1:\chrismatt11.xls; ph 3 kma; WDL; 5/1112000; 4:53 PM
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TABLE 8B
ESTIMATED NET OPERATING INCOME - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 3
CHULA VISTA, CALIfORNIA
I. Income INNNl
Commercial/Restaurant 1 20,350 Sq. Ft GRA $24.00 I Sq.Ft GRA $488,000
Office 1 71,079 Sq. Ft GRA $18.50 I Sq. Ft GRA 1,315,000
Monthly Parking 2 113 Spaces $35.00 I Month 47,000
Gross Income $1,850,000
(Less) Vacancy & Collection 5.0% Gross Income (93,000)
Effective Gross Income $1,757,000
II. ODeratina EXDenses
CAM Charges on Vacant Space 4,600 sq. ft. GBA $7.00 I Sq. Ft ($32,000)
Property Management 2.0% Effective Gross Income (35,000)
Capital Reserves 3.0% Effective Gross Income (53,000)
Total Expenses ($120,000)
1111. Net Operating Income $1,637,000 I
2
Based on gross rentable area.
Developer assumes only a third of the parking spaces will generate separate parking income.
Implicit in this assumption is that the remaining two thirds of parking spaces will be included in base office rent.
Developer also assumed that the operating expenses for the parking garages will be billed to the tenants.
Prepared By: Keyser Marston Associates, Inc.
File Name: 1:\chrismatt11.xls; ph 3 kma; WDL; 5/11/2000; 4:53 PM
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TABLE 9B
FEASIBILITY GAP CALCULATION - KMA ESTIMATES
THIRD & H STREET PROJECT PHASE 3
CHULA VISTA, CALIfORNIA
Return on Total Investment
I. Warranted Investment
Net Operating Income
Threshold Return on Cost
TABLE 8B
$1,637,000
11.0%
Total Warranted Investment
$14,882,000
II. SUDDortable Investment
Total Warranted Investment
(Less) Development Costs
TABLE 7B
$14,882,000
(16,972,000)
III. Project feasibility Gap
($2,090,000)
IV. Residual Land Value
Land Acquisition Costs
(Less) Assistance Required
2,299,000
($2,090,000)
Residual Land Value
209,000
Prepared By: Keyser Marston Associates, Inc.
File Name: 1:\chrismatt11.xls; ph 3 kma; WDL; 5/11/2000; 4:53 PM
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DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA,
a public body, corporate and politic
and
GA TEW A Y CHULA VISTA, LLC,
a California
limited liability company
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100. INTRODUCTORY PROVISIONS. .................................................................,.....................4
101. DEFINITIONS ............................................................................................................4
102. Representations and Warranties. ............................................................................26
102.1 Agency Representations...................................................................26
102.2 Developer Representations ..............................................................26
103. Prohibition Against Change in Ownership, Management and Control of
Developer .....................................,.............................................................................28
103.1 Agency Consent Reqnired ...............................................................28
103.2 Permitted Assignments ....................................................................29
103.3 Effect of Non-Approved Assignment.......,..................,...................30
103.4 Permitted Successors Obligated......................................................30
103.5 Notice to Agency Required ..............................................................30
103.6 Termination of Assignment Restrictions........................................31
200. ASSEMBLY OF THE SITE. ................................................................................................31
201. Assembly of Phase I Portion of Development Site. ................................................31
201.1 Phase I Agency Parcels and Certain Developer Parcels...............31
201.2 Phase I Assignment of Developer Parcels to Agency and Re-
Assignment to Developer in Connection with the Phase I
Conveyance .......................................................................................31
202. Assembly of Phase II Portion of Development Site................................................32
202.1 Phase II Agency Parcels and Certain Developer Parcels .............32
202.2 Phase II Assignment of Developer Parcels to Agency and Re-
Assignment to Developer .................................................................32
203. Assembly of Phase III Portion of Development Site. .............................................32
203.1 Phase III Acquisition Parcels and Certain Developer Parcels.....32
203.2 Phase III Assignment of Developer Parcels to Agency and Re-
Assignment to Developer .................................................................33
204. Title Condition; Preliminary Report for the Site...................,...............................33
204.1 Review of Preliminary Report. .......................................................33
204.2 Approved Title Exceptions...........................,..................................34
205. Parcelization of the Site and Parcel Map Process for All Phases of Project........34
206. Right of Access...........................................................................................................35
207. Environmental Condition of the Site.......................................................................35
207.1
207.2
207.3
207.4
Hazardous Materials..................................................................,.....35
Initial Environmental Report..........................................................35
Agency's Environmental Contingency.,.........................................36
Environmental Indemnity ...............................................................38
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208. Occupants of the Site ................................................................................................38
208.1 Relocation.........................................................................................,38
208.2 Developer Obligation to Advance Additional Funds as Security
for Payment of Relocation Expenses ..............................................40
209, Fine Arts Fee Waiver and Conditions Precedent Thereto ....................................40
210. Management and Operation of Existing Improvements to Phase II Parcels and
Phase III Parcels Pending Commencement of Construction of Applicable Phase40
211. Demolition of Existing Improvements as to Each Applicable Phase of the Project41
212. Right of Entry Agreement ........................................................................................41
300. DISPOSITION OF PHASE I PARCELS FOR PHASE I OF PROJECT........................42
301. Disposition of the Phase I Agency Parcels for the Phase I Development............. 42
302. Phase I Escrow for Phase I Conveyance .................................................................42
303. Delivery of Grant Deed for Phase I Agency Parcels ..............................................42
303.1 Fees, Charges and Costs for Phase I Conveyance .........................42
303.2 Execution and Delivery of Phase I Documents..............................43
304, Escrow Agent Authority ...........................................................................................43
305. Additional Escrow lustructions ...............................................................................43
306. Conditions Precedent to the Phase I Conveyance ..................................................44
306.1 Agency Conditions Precedent to Phase I Conveyance..................44
306.2 Developer Conditions Precedent to Phase I Conveyance .............46
307. Conveyance of Title and Delivery of Possession of Agency Parcels......................46
308. Condition of Title. .....................................................................................................47
308.1 Phase I Agency Parcels ....................................................................47
308.2 Phase I Developer Parcels for Assignment and Reassignment ....47
309. Time for and Place of Delivery of Deed................................................................... 47
310. Recordation of Deed.................................................................................................. 47
311. Title Insurance........................................................................................................... 47
312. Taxes and Assessments ...............................................................,.............................48
313. Condition Subsequent; Reentry and Revesting of Title in the Agency of the
Agency Parcels After the Phase I Conveyance.......................................................48
314. Developer Grants Option to Agency for Phase I Developer Parcels ....................50
314.1 Option Assignable by Agency to Successor Developer .................51
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400. ASSEMBLY OF THE PHASE II PARCELS, INCLUSIVE OF THE PHASE II
ACQUISITION PARCELS. .................................................................................................51
401. Proceedings to Acquire the Phase II Acquisition Parcels......................................51
401.1 Good Faith Negotiations to Acquire Phase II Acquisition Parcels51
401.2 Consideration and Action on Resolution of Necessity to Acquire
Phase II Acquisition Parcels by Eminent Domain .....................,..51
401.3 Effective Order of Prejudgment Possession Sufficient to Convey
Title to Any Phase II Acquisition Parcels ......................................52
401.4 Indemnification Agreement between Agency and Title Company53
401.5 Reports on Status of Assembly of Phase II Parcel........................53
402. Phase II Developer Advance for Acquisition of Phase II Acquisition Parcels.....53
402.1 Phase II Letter of Credit Requirements.........................................54
402.2 Expenditures from the Proceeds of the Letter of Credit .............. 55
403. Promissory Note and Deed of Trust as Security for the Phase II Developer
Advance ......................................................................................................................56
403.1 Phase II Developer Advance Note...................................................56
403.2 Inclusion in Deed of Trust as Phase II Acquisition Parcels
Acquired............................................................................................56
403.3 Lender Policy of Title Insurance.....................................................57
403.4 Limited Liability for Repayment of Phase II Developer Advance
Note.................................................................................................... 57
403.5 Cancellation or Payment of the Phase II Developer Advance Note.57
403.6 SalelResale of Acquired Phase II Acquisition Parcels, Phase II
Agency Parcels, and Phase II Developer Parcels Prior to the
Phase II Conveyance ................................................,.......................58
500. AGENCY DISPOSITION OF PHASE II PARCELS FOR PHASE II OF PROJECT. .59
501. Sale and Purchase of the Phase II Agency Parcels and Phase II Acquisition
Parcels ........................................................................................................................ 59
501.1 Delay of Disposition of Phase II Parcels and Commencement of
Grading for Phase II Improvements Upon Certain Conditions ..59
502. Escrow for Disposition of Phase II Agency Parcels and Phase II Acquisition
Parcels for the Phase II Development .....................................................................61
503. Delivery of Grant Deed for Phase II Agency Parcels and Phase II Acquisition
Parcels ........................................................................................................................ 61
503.1 Fees, Charges and Costs for Phase II Conveyance ..................,....61
503.2 Execution and Delivery of Phase II Documents ............................62
504. Escrow Agent Authority ...........................................................................................62
505. Additional Escrow Instructions ............................................................................... 62
506. Conditions Precedent to the Phase II Conveyance.................................................63
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506.1 Agency Conditions Precedent to Phase II Conveyance ................63
506.2 Developer Conditions Precedent to Phase II Conveyance............65
507, Conveyance of Title and Delivery ofPossession.................................................,...65
508. Condition of Title. ..................................................................................................... 66
508.1 Phase II Agency Parcels...................................................................66
508.2 Phase II Developer Parcels for Assignment and Reassignment...66
509. Time for and Place of Delivery of Grant Deed for Phase II Conveyance ............66
510. Recordation of Deed.................................................................................................. 66
511. Title Insurance........................................................................................................... 66
512. Taxes and Assessments .............................................................................................67
513. Condition Subsequent; Reentry and Revesting of Title in the Agency of the
Phase II Agency Parcels and Phase II Acquisition Parcels After the Phase II
Conveyance ................................................................................................................67
514. Developer Grants Option to Agency for Phase II Developer Parcels...................69
514.1 Option Assignable by Agency to Successor Developer ................. 70
600. ASSEMBLY OF THE PHASE III PARCELS, INCLUSIVE OF THE PHASE III
ACQUISITION PARCELS. ................................................................................................. 70
601. Proceedings to Acquire the Phase III Acquisition Parcels. ................................... 70
601.1 Good Faith Negotiations to Acquire Phase III Acquisition Parcels70
601.2 Consideration and Action on Resolution(s) of Necessity to
Acquire Phase III Acquisition Parcels by Eminent Domain ........ 70
601.3 Effective Order of Prejudgment Possession Sufficient to Convey
Title to Any Phase III Acquisition Parcel...................................... 71
601.4 Indemnification Agreement between Agency and Title Company72
601.5 Reports on Status of Assembly of Phase III Parcels ..................... 72
602. Phase III Developer Advance for Assembly of Phase III Acquisition Parcels..... 72
602.1 Phase III Letter of Credit Requirements ....................................... 73
602.2 Expenditures from the Proceeds of the Letter of Credit.............. 74
603. Promissory Note and Deed of Trust as Security for the Phase III Developer
Advance ...................................................................................................................... 75
603.1 Phase III Developer Advance Note................................................. 75
603.2 Inclusion in Deed of Trust as Each Phase III Acquisition Parcel
Acquired ............................................................................................ 75
603.3 Lender Policy of Title Insurance..................................................... 76
603.4 Limited Liability for Repayment of Phase III Developer Advance
N ote.................................................................................................... 76
603.5 Cancellation or Payment of the Phase III Developer Advance
Note.................................................................................................... 76
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603.6 SalelResale of Acquired Phase III Acquisition Parcels and Phase
III Developer Parcels Prior to the Phase III Conveyance ............ 77
700. AGENCY DISPOSITION OF PHASE III ACQUISITION PARCELS TO THE
DEVELOPER. ..................................................................................................,.................... 78
701. Sale and Purchase of the Phase III Acquisition Parcels ........................................ 78
701.1 Delay of Disposition of Phase III Parcels and Commencement of
Grading for Phase III Improvements Upon Certain Conditions.79
702. Escrow for Phase III Conveyance............................................................................80
703. Delivery of Phase III Acquisition Parcels Grant Deed ..........................................80
703.1 Fees, Charges and Costs for Phase III Conveyance......................80
703.2 Execution and Delivery of Phase III Documents...........................81
704. Escrow Agent Authority ...........,...............................................................................81
705. Additional Escrow Instructions ...............................................................................82
706. Conditions Precedent to the Phase III Conveyance ............................................... 82
706.1 Agency Conditions Precedent to the Phase III Conveyance ........82
706.2 Developer Conditions Precedent to Phase III Conveyance ..........84
707. Conveyance of Title and Delivery of Possession ...................................,...........,..... 85
708. Condition of Title. .....................................................................................................85
708.1 Phase III Acquisition Parcels ..........................................................85
708.2 Phase III Developer Parcels for Assignment and Reassignment .86
709. Time for and Place of Delivery of Deed for the Phase III Conveyance................86
710. Recordation of Deed for the Phase III Acquisition Parcels...................................86
711. Title Insurance........................................................................................................... 86
712. Taxes and Assessments .............................................................................................86
713. Condition Subsequent; Right of Reentry and Revesting of Title in the Agency of
the Acquisition Parcels After the Phase III Conveyance.......................................87
714. Developer Grants Option to Agency for Phase III Developer Parcels.................89
714.1 Option Assignable by Agency to Successor Developer .................89
800. FINANCIAL PROVISIONS - AGENCY PARTICIPATION........................................... 90
801. Provision of Agency Participation ........................................................................... 90
802. Amount of and Conditions Precedent to Each Installment Payment of Agency
Partici pation .............................................................................................................. 90
802.1 Conditions Precedent to First Installment Payment of Agency
Partici pation ............. ..............................................,......................... 91
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802.2 Conditions Precedent to Second Installment Payment of Agency
Participation .....................................................................................92
802.3 Evaluation of Estimated Versus Actual Construction Costs for
Phase I Improvements and Phase II Improvements in Relation to
Amount of Cash Payment Due for Second Installment Payment of
Agency Participation........................................................................ 94
802.4 Conditions Precedent to Third Installment Payment of Agency
Participation .....................................................................................95
802.5 Conditions Precedent to Fourth Installment Payment of Agency
Participation .....................................................................................96
802.6 Evaluation of Estimated Versus Actual Construction Costs for
Phase III Improvements and Total Project Costs in Relation to
Amount of Cash Payment Due for Fourth Installment Payment of
Agency Participation..........,............................................................. 97
802.7 Amount of and Conditions Precedent to Final Fifth Installment
Payment of Agency Participation ...................................................98
900. PLANS AND DRA WINGS .................................................................................................101
901. Agency Review of Plans and Drawings .................................................................101
902. Basic Concept Drawings .........................................................................................101
903. Schematic Drawings ........................................................................................,.......1 02
904. Grading Plans ..........................................................................................................1 02
905. Landscaping Plans ..................................................................................................102
906. Construction Drawings and Related Documents Relating to Specific
Improvements ..........................................................................................................1 03
907. Progress Meetings ...................................................................................................103
908. Agency Approval of Plans, Drawings, and Related Documents .........................103
908.1 Agency Approval or Disapproval of Developer Submittals .......104
909. Costs of Construction..............................................................................................104
910. Developer Covenants to Complete Construction of Each Phase of Improvementsl04
910.1 Schedule of Performance for Completion of the Project............ 105
911. City and Other Governmental Agency Permits ...................................................105
1000. COVENANTS, CONDITIONS AND RESTRICTIONS.................................................. 105
1001. Covenants of Project Completion, Opening, Use, and Tenant Qualifications... 105
1001.1 Project Completion and Scope...................................................... 106
1001.2 Use and Operating Covenants....................................................... 106
1001.3 Minor Deviations of TenantfUser Restrictions............................ 109
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1001.4 Developer Covenant to Cause Tenants and all Businesses to
Conform with Section 1000, et seq. Use, Operation, and
Maintenance Covenants during the Term of Their Applicable
Leases ..............................................................................................109
1 002. Maintenance..................................................................................................,..........109
1003. Rights of Access .......................................................................................................110
1004. Nondiscrimination ...................................................................................................11 0
1005. Effect of Violation of the Terms and Provisions of this Agreement...................l11
1100. GENERAL PROVISIONS..................................................................................................111
1101. Notices, Demands and Communications Among the Parties ..............................111
1102. Conflicts of Interest .................................................................................................112
1103. Enforced Delay; Force Majeure; Extension of Times of Performance.............. 112
1104. Nonliability of Officials and Employees of the Agency........................................ 113
1105. Commencement of Agency Review Period ...........................................................113
1106. Prohibition Against Real Estate Speculation........................................................ 113
1200. DEF AUL TS AND REMEDIES ....................................................................,.....................113
1201. Defaults -- General.................................................................................................. 113
1201.1 Notice of Default .............................................................................114
1202. Failure of Developer to Commence Any Phase of the Improvements and
Liquidated Damages Therefor. ..............................................................................114
1202.1 Failure to Commence Construction of Phase I Improvements and
Liquidated Damages Therefor ......................................................114
1202.2 Failure of Developer to Commence Construction of Phase II
Improvements and Liquidated Damages Therefor..................... 115
1202.3 Failure of Developer to Commence Construction of Phase III
Improvements ............,.......................................................,............117
1203. Legal Actions .......................................................................................,...................117
1203.1 Institution of Legal Actions ...........................................................117
1203.2 Applicable Law............................................................................... 118
1203.3 Acceptance of Service of Process ..................................................118
1203.4 Attorney's Fees ...............................................................................118
1204. Rights and Remedies Are Cumulative ..................................................................118
1205. Inaction Not a Waiver of Default........................................................................... 118
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1300. SPECIAL PROVISIONS .......,............................................................................................118
1301. Indemnification ofthe Agency and City ..............,........................................,.......118
1301.2 Indemnity for Professional Liability ............................................119
1301.3 Indemnity for Liability Other Than Professional Liability .......119
1301.4 Other General Indemnity Provisions ...........................................120
1302. Real Estate Commissions........................................................................................ 1 20
1303. Successors In Interest...................................................................................,........., 120
1304. Developer Insurance Requirements ......................................................................121
1304.1 Categories of Coverage ..................................................................121
1304.2 Commencement of Coverage.............................................,........... 124
1305. Rights of Access .......................................................................................................124
1306. Local, State and Federal Laws ..........................................................,....................124
1307. Nondiscrimination During Construction ..............................................................124
1308. Encumbrances, Liens and Assessments ................................................................124
1308.1 Taxation of Site...................................................,........................... 124
1309. Financing of the Project and Each Phase Thereof...............................................125
1309.1 Election for Developer Financing .................................................125
1309.2 Form of Evidence of Construction Loan Financing for Each
Phase of Project ..............................................................................126
1309.3 Consideration of Submittals.......................................................... 126
1309.4 Phase III Evidence of Financing; Sources of Funds.................... 127
1310. Mortgage, Deed of Trust, Sale and Lease-Back Financing; Rights of Holders. 127
1310.1 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and
Lease-Back for Development......................................................... 127
1310.2 Holder Not Obligated to Construct Improvements ....................127
1310.3 Notice of Default to Mortgagee or Deed of Trust Holders; Right
to Cure ........................................................................,....................128
1310.4 Failure of Holder to Complete Developer Improvements ..........128
1310.5 Right ofthe Agency to Cure Mortgage or Deed of Trust Default129
1310.6 Right of the Agency to Satisfy Other Liens on the Site After Title
Passes ...............................................................................................129
1311. Release of Construction Covenants .......................................................................129
1312. Consideration of Subordination Documentation and Estoppel Certificates .....130
1312.1 Consideration by Agency............................................................... 130
1312.2 Consideration by Developer ..........................................................130
1313. Annual Financial Statements .................................................................................130
1314. Developer Reimbursement of Agency's Third Party Costs................................. 131
1315. Amendments to this Agreement............................................................................. 131
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1316. Entire Agreement ....................................................................................................131
1316.1 Counterparts......",...........",,,,.....,,,.........................,,,,........,,,......... 1 32
1316.2 Integration ..........................................................................",.....",.132
1317. W aivers.....................................................................................................................132
1318. Reasonableness of Actions.......................................................",.............",.....",.... 132
1319. Affirmative Covenants of Agency and Developer to Use Good Faith in
Performance under the Agreement ......................",.................................",.......", 132
1320. Execution of Agreement........................",............................................................... 13 2
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DISPOSITION AND DEVELOPMENT AGREEMENT
This DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is
entered into as of by and between the REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA, a public body corporate and politic (the "Agency") and
GATEWAY CHULA VISTA, LLC, a California limited liability company (the "Developer").
RECITALS
The following recitals are a substantive part of this Agreement.
A. Capitalized terms used in this Agreement are defined in Section 101 herein, or are
otherwise separately defined in the Redevelopment Plan for the Town Center I Redevelopment
Project Area, which plan was approved and adopted by the City Council of the City of Chula Vista
by Ordinance No. ]691 on July 6, ]976, and amended by Ordinance No, 1872 on July] 7, 1979, by
Ordinance No. 2146 on April 22, 1986, and by Ordinance No. 2585 on January 4, ] 994, and
amended by Ordinance No, 2735 on June 23, 1998 (collectively said ordinances comprise the
"Redevelopment Plan" herein).
B. The Agency is authorized and empowered under the Community Redevelopment
Law to enter into agreements to assist in the redevelopment of real property within a redevelopment
project area in conformity with a redevelopment plan adopted for such area; to receive consideration
for the provision by the Agency of redevelopment assistance; to make and execute contracts and
other instruments necessary or convenient to the exercise of its powers; and to incur indebtedness to
finance or refinance redevelopment projects. ]n particular the Agency is expressly authorized to
permit and facilitate participation in the redevelopment of property pursuant to the Community
Redevelopment Law and the Redevelopment Plan,
C. The Developer has secured rights to acquire, certain parcels of real property herein
referred to as the Developer Parcels, which are a part of the proposed development Site in the
Redevelopment Project Area. The proposed development Site includes approximately 4.39 acres of
real property consisting of sixteen (16) separate parcels, including the Developer Parcels, the Agency
Parcels (certain Agency-owned parcels of real property), and the Acquisition Parcels (certain other
parcels of real property owned by one or more third parties) located both within and outside the
Redevelopment Project Area. Thus, the Site herein comprises the entire proposed development
property which is the subject of this Agreement, and, together with the Improvements and the Public
Improvements required hereunder, is referred to herein as the Project. The Project, if the Site is
assembled, will be developed in up to three (3) Phases, and, when completed, shall include, a First
Class, First Quality mixed-use commercial/office project with Restaurant and retail components with
common areas, including one parking structure that spans all three Phases ofthe Project.
D. The proposed development Project is located in the City of Chula Vista, is within, or
directly adjacent to, the boundaries of the Town Centre I Redevelopment Project Area, and is
generally bounded by the following public rights-of-way: G Street to the north, Third A venue to the
east, H Street to the south, and Fourth Avenue to the west. The Site, including the Developer
Parcels, the Agency Parcels, the Acquisition Parcels, is more fully depicted on the Site Map attached
hereto as Attachment No, I, and is more particularly described in the Description of the Site for
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Recording attached hereto as Attachment No.2. The Agency and the Developer desire to enter into
this Agreement in order to implement the provisions of the Redevelopment Plan and the Agency's
Implementation Plan for the Redevelopment Project Area prepared pursuant to Section 33490 of the
Community Redevelopment Law, both of which state as an objective, the redevelopment of existing
commercial properties in the Project.
E. The amount of the Agency Participation was determined after an independent
financial analysis by the Agency's independent economic advisor of the Developer's pro forma for
the Project, the fair market value of the Site, and the fair reuse value of the Site. The fair reuse value
of the Site was determined based on the conditions, covenants, and restrictions imposed by the
Agency on the Developer by this Agreement relating to the construction, development, use,
operation, quality of construction and architecture, and schedule of the Project. Said financial
analysis concludes the amount of Agency Participation is necessary and feasible to induce the
Developer to undertake, complete, and operate the First Class, First Quality commercial office and
retail Project. The Agency and the City will receive substantial benefits from the Project, including
achievement of specific goals and objectives of the Redevelopment Plan and Implementation Plan.
F. The Agency Participation assistance hereunder is further provided as an inducement
to cause the undertaking and completion of the Project by the Developer and in order to obtain the
long term covenants relating to use, maintenance, and operation of the Project in conformity with
Section 1000, et seq. herein and the Agreement Affecting Real Property.
G. Pursuant to this Agreement the Developer shall be obligated to cause the
implementation of the Project, and each Phase thereof, which includes the development and
improvement of the Phase I Parcels, the Phase II Parcels, and the Phase III Parcels into a First Class,
First Quality commercial office retail project through the development of the private Improvements
by it, and the design, construction, and completion of all of the Public Improvements under contract
with the City pursuant to the terms of the Reimbursement Agreement.
H. The Project, including the private Improvements and the Public Improvements, when
completed, shall include, approximately: (i) Phase I: an office building of five (5) floors with a total
of about 94,000 square feet gross with professional/administrative office space uses, the first floor to
include retail and service/banking uses of 21,333 square feet gross in conformity with Section
1000, et seq. herein, and 314 parking spaces; (ii) Phase II: an office building of six (6) floors with a
total of about 117,000 square feet gross with professional/administrative office space uses, the first
floor to include retail and service/banking uses of 21,137 square feet gross in conformity with
Section 1000, et seq., and 390 parking spaces; and (iii) Phase Ill: an office building of five (5) floors
with a total of about 93,000 square feet gross with professional/administrative office space uses, with
the first floor to include retail and service/banking uses of 20,350 square feet gross in conformity
with Section 1000, et seq, herein, and 310 parking spaces, all of which shall be a First Class, First
Quality commercial office retail center on the Site. To improve access and provide more vehicle
capacity the Project (and the Public Improvements) includes certain improvements to Third Avenue
and H Street adjacent to the Project.
I. The Public Improvements may be caused to be constructed and completed in one of
two alternative ways, as elected by the Agency, either (i) design, construction, and completion by the
Developer with reimbursement by the Agency pursuant to the terms of the Reimbursement
Agreement, or (ii) design, construction, and completion by the Agency (or the City) through
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public works contract(s), In addition to the foregoing election, the Public Improvements may be
constructed in one or more phases during the Phase I and Phase II construction, subject to approval
by the City Engineer in his/her sole discretion as a part of the Entitlement process. It is anticipated
that due to the integrated nature of the Public Improvements to the private Improvements, as
hereinafter more fully described, it may be most feasible physically and economically for the
Developer to cause design, construction, and completion of the Public Improvements, The Agency
Executive Director shall elect which method will be undertaken for completion of the Public
Improvements in (i) or (ii) above, and the City Engineer shall approve, in his/her sole discretion as a
part of the Entitlement process whether the construction of the Public Improvements will occur in
phases during the Phase I and Phase II construction or all at the same during the Phase I construction
period.
J. The construction and development of the Public Improvements by the Developer
(or the Agency, as hereinafter set forth) subject to the terms and conditions herein, and the
completion of the Improvements to the Site are and will be a three-phase project, and when
completed a single integrated development. The Public Improvements will be directly adjacent to
and/or attached to the private Improvements and a significant number of the access points to the Site
will be through these Public Improvements. The Public Improvements will be constructed as a part
of Phase I or Phase I and Phase II, as approved by the City Engineer in his/her sole discretion, and
the election of whether such Public Improvements will be undertaken by the Agency or the
Developer, shall be as elected by the Agency Executive Director as hereinafter set forth.
K. If the Agency elects for the Developer to complete the Public Improvements pursuant
to the Reimbursement Agreement (in one or more phases as approved by the City Engineer), the
following findings are a substantive basis for such election, if it is made. Because of the integrated
nature of the privately owned land and improvements that comprise the Site, each Phase thereof, and
the Project, and each Phase thereof, and the Public Improvements, the construction and completion of
all of the private Improvements and all of the Public Improvements by the Developer, without
competitive bidding of the Public Improvements by the Agency, is and will be advantageous to, and
in the best public interest of the Agency and the community. The Public Improvements to be
constructed and completed hereunder are an integral part of the Project, and such integral nature
evidences that competitive proposals would be unavailing and would not produce an advantage,
whether economic or otherwise, to the public or to the Agency or the community. Causing the
Developer to design, construct, and complete the Public Improvements will obtain the best economic
result for the City and the Agency. In addition to this Agreement, the Agency may enter into a
separate contract with the Developer, an agreement contract entitled the "Reimbursement Agreement
for Public Improvements (Gateway Chula Vista, LLC Commercial OfficelRetail Project)"(referred to
herein as the "Reimbursement Agreement") for the design, construction, and completion of all of the
Public Improvements, at a guaranteed maximum price out-of-pocket to the Agency of $300,000.00.
L. Under this Agreement the Developer assumes, and under the Reimbursement
Agreement the Developer does and shall assume, if the Agency elects to proceed with such
agreement, complete financial responsibility for the design, site assessment, site preparation,
construction, and completion of the Public Improvements, even if the total costs incurred by the
Developer to undertake and complete such improvements exceed $300,000.00. An economic
advantage arises to the City and the Agency because competitive bidding would be incongruous and
will not result in any additional benefit and no cost savings to the Agency or the City in their efforts
and objective to contract for the greatest public benefit.
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M. The construction of the Project, including the private Improvements, the
Public Improvements, the overall undertaking and completion of the Project, and the provision by the
Agency of the Agency Participation are in the best interests of the health, safety and welfare of the
City of Chula Vista and its residents.
N. In furtherance of the Community Redevelopment Law and the Redevelopment Plan,
the Agency desires to enter into this Agreement for the redevelopment of the Site because such
actions will help to eliminate blight in the Redevelopment Project, to further the redevelopment
objective to provide for participation in the redevelopment of property in the Redevelopment Project
Area, to obtain restrictive use, maintenance, and operating covenants recorded against the Site in
order to ensure long term economic, aesthetic, and community benefits, to increase the employment
opportunities within the Redevelopment Project, and to generate additional local revenues to the City
and the Agency, with which the community can increase and improve the supply of low- and
moderate-income housing and assist in providing an environment for the social and economic growth
and well-being of the residents of the City, The undertaking and completion of the Project pursuant
to this Agreement and the Reimbursement Agreement, and all other ancillary agreements, and the
fulfillment generally of this Agreement are in the vital and best interests of the City and the health,
safety, and welfare of its residents and in accord with the provisions of applicable federal, state and
local law. The Agreement and all other ancillary contracts related to the Project pertain to and affect
the ability of the Agency (and the City) to finance their statutory obligations and for all affected
parties to finance and carry out the purposes of this Agreement and the other related agreements and
the goals of the Redevelopment Plan, This Agreement and such other agreements are intended to be
contracts within the meaning of Government Code Section 53511.
NOW THEREFORE the Agency and the Developer hereby agree as follows:
100. INTRODUCTORY PROVISIONS.
101. DEFINITIONS. The following terms shall have the respective meanings assigned to
them in this Section 10 I unless the context in which they are used clearly requires otherwise. The
parties acknowledge and agree one or more of these definitions include performance obligations of a
party or parties and such definitions and performance obligations shall be read in harmony and
conjunction with the all other provisions of this Agreement.
"Acquisition Parcels" mean those parcels of real property currently owned by one or more
third parties, and not the Agency, nor the Developer, nor subject to rights to acquire by the
Developer, and so depicted on the Site Map. One or more Acquisition Parcels are located within the
Phase II Parcels and one or more Acquisition Parcels are located within the Phase 1II Parcels. One or
more of the Acquisition Parcels may become a Developer Parcel when under contract for acquisition
by the Developer from one or more of the third party owner(s) of such parcels.
"Agency" means the Redevelopment Agency of the City ofChula Vista, a public body,
corporate and politic, exercising governmental functions and powers and organized and existing
under Chapter 2 of the Community Redevelopment Law, and any assignee of or successor to its
rights, powers and any assignee of or successor to its rights, powers and responsibilities,
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"Agency Indebtedness" shall mean any and all indebtedness incurred by the Agency for any
bonds, notes, interim certificates, debentures, certificates of participation, pledges, contracts to pay,
or other financial obligations incurred, issued, or otherwise entered into by the Agency as it deems
necessary or appropriate in implementation and for the furtherance of the Redevelopment Plan and
all other redevelopment project areas of the Agency in the City pursuant to Article 5 (commencing
with Section 33640) of Chapter 6, Part I of the Community Redevelopment Law, and all contracts of
the Agency which qualify as indebtedness and are listed on the Agency statement of indebtedness
most recently filed with the County of San Diego by the Agency, including the refunding,
refinancing, and/or renegotiation thereof, so long as the original principal amount of such debt is not
increased, and which indebtedness was incurred by the Agency prior to the Date of Agreement;
provided however, the parties acknowledge and agree that any and all indebtedness incurred by the
Agency, all or a portion of the proceeds of which are necessary and/or will be used to meet the
financial obligations of the Agency to the Developer under this Agreement whether incurred before
or after the Date of Agreement, is/are expressly and intentionally included within this definition of
Agency Indebtedness. This definition is to be construed broadly and in favor of the Agency's
authority and ability to meet all financial obligations of the Agency incurred prior to the Date of
Agreement and for the Agency to incur new debt sufficient and adequate to meet its financial
obligations hereunder, and that all such obligations are, and shall remain, prior and/or superior to the
financial obligations of the Agency to the Developer hereunder.
As an independent condition subsequent under this Agreement, the parties expressly and
knowingly agree that the Agency shall have issued new Agency Indebtedness, including without
limitation for example new bonded indebtedness such as tax allocation bonds, which debt issuance
generated proceeds which become available to the Agency for the Project Area sufficient to satisfy
the Agency's financial obligations to the Developer hereunder to provide the First Installment of
Agency Participation, the Second Installment of Agency Participation, and the Third Installment of
Agency Participation related to completion of the Phase I Improvements and the Phase II
Improvements ("DDA Financing"). The Agency and Developer expressly and knowingly agree that
the issuance of such DDA Financing (whether pre- or post- Date of Agreement) is a necessary
requirement for the Agency to meet such financial obligations to the Developer hereunder, in
particular payment of the specified Agency Participation installment payments. In the event the
Agency does not successfully issue such DDA Financing, then the Agency may elect, in its sole and
absolute discretion, to terminate this Agreement. If the Agency elects to terminate this Agreement,
then the Agreement shall be deemed terminated as of the date of notice of election thereof is
transmitted to the Developer, and thereafter, there shall be no further rights, obligations, and/or
remedies between the parties.
In connection with the DDA Financing (whether pre- or post- Date of Agreement) and
without in any respect prejudging whether such bonds will be issued, the Agency agrees to exercise
good faith and work diligently toward the issuance of such DDA Financing on or before
December 31, 2000. In the event the Agency has not commenced the issuance of such DDA
Financing by that date, then the Agency or the Developer may elect to terminate this Agreement.
In the event the Agency has commenced but not completed the issuance of such DDA Financing by
such date, then the Agency shall have one additional period of sixty (60) days (March 1, 200 I ) to
complete issuance of such new indebtedness. If the extension period of sixty (60) days expires and
the Agency still has not completed such issuance of the DDA Financing by March 1,2001, then the
Agency may elect, in its sole and absolute discretion, to terminate this Agreement. If either the
Agency elects, or the Developer elects, to terminate this Agreement based on the non-issuance of the
DDA Financing, then the Agreement shall be deemed terminated as of the date of notice of election
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thereof is transmitted to the other party, and thereafter, there shall be no further rights, obligations,
and/or remedies between the parties.
"Agency Parcels" are those parcels of real property currently owned in fee by the Agency
and so depicted on the Site Map. One or more Agency Parcels are located within the Phase I Parcels
and one or more Agency Parcels are located within the Phase II Parcels.
"Agency Participation" shall mean the cumulative financial assistance to be provided by the
Agency to the Developer, subject to the Developer satisfying the Conditions Precedent to
Disbursement, as more fully defined in Section 800, et seq. The Agency Participation shall be paid
in up to five (5) installment payments in a cumulative amount not to exceed $7,358,000.00 for
construction, development and operation of all three Phases of the Project, and subject to satisfaction
of all applicable Conditions Precedent set forth herein. The five (5) installments of the Agency
Participation shall include: (i) the First Installment Payment of Agency Participation, (ii) the Second
Installment Payment of Agency Participation, (iii) the Third Installment Payment of Agency
Participation, (iv) the Fourth Installment Payment of Agency Participation, and (v) the Final Fifth
Installment Payment of Agency Participation (all as defined hereinafter in this definition of Agency
Participation); provided however, in no event shall the cumulative amount of total Agency
Participation exceed $7,358,000.00, inclusive of all monetary payments, and/or Permit Fees
reimbursements, The Fine Arts Fee Waiver is in addition to the Agency Participation in the amount
of$7,358,000.00. All installment payments of the Agency Participation are more fully described in
Section 800, et seq.
(i) "First Installment Payment of Agency Participation" means the first (I st)
installment payment of the Agency Participation in an amount up to One Million Five
Hundred Thousand Dollars ($1,500,000.00), inclusive of $200,000.00 as repayment for the
Phase I Agency Parcels, which amount is the fair market value of the Phase I Agency Parcels
included in the Phase I development, plus reimbursement for the costs of the Public
Improvements pursuant to the terms of the Reimbursement Agreement in an amount not to
exceed $300,000.00 (assuming the Agency elects to proceed with design, construction and
completion of the Public Improvements via the Reimbursement Agreement and assuming
such Public Improvements are completed as a part of Phase I), plus reimbursement for fifty
percent (50%) of the Phase I Permit Fees (estimated at Date of Agreement to be $91,000,00),
the total of which shall be paid after the Conditions Precedent to Conveyance of the Agency
Parcels and the Conditions Precedent to the First Installment Payment are satisfied.
(ii) "Second Installment Payment of Agency Participation" means the second
(2nd) installment payment of the Agency Participation in an amount up to One Million Seven
Hundred Thirteen Thousand Dollars ($1,713,000,00) (assuming all Public Improvements
were developed as a part of Phase I Improvements; provided however that if a portion of
Public Improvements are approved by the City Engineer as a part of the Entitlement process
to be completed as a part of Phase II as herein described and permitted, then the shortfall
difference between $300,000 and the amount reimbursed to the Developer as a part of the
First Installment Payment attributable to the Public Improvements shall be added to this
Second Installment Payment, but in no event shall the cumulative reimbursement for Public
Improvements constructed or caused to be constructed by the Developer as a part of Phase I
and/or Phase I and Phase II exceed $300,000.00), inclusive of $113,000.00 as repayment for
the Phase II Agency Parcels, which amount is the fair market value of the Phase II Agency
Parcels included in the Phase II development, less the amount, if any, calculated and
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deducted due to "reconciliation of costs" pursuant to Section 802.3, plus reimbursement for
fifty percent (50%) of the Phase II Permit Fees (estimated at Date of Agreement to be
$ I 10,500,00), the total of which shall be paid after the Conditions Precedent to the Second
Installment Payment are satisfied,
(iii) "Third Installment Payment of Agency Participation" means the third (3rd)
installment payment of the Agency Participation in the amount of One Million Three
Hundred Fifty-Two Thousand Dollars ($ I ,352,000.00) plus reimbursement for the balance
[remaining 50%] of the Permit Fees for the Phase I Improvements and the Phase II
Improvements (estimated at Date of Agreement to be $20] ,500 [cumulatively, 100% of
Phase I and Phase II Permit Fees is estimated to be $403,000] and provided however, in no
event shall the cumulative amount of reimbursed Phase I and Phase II Permit Fees exceed
$403,000, the total of which shall be paid after the Conditions Precedent to the Third
Installment Payment are satisfied.
(iv) "Fourth Installment Payment of Agency Participation" means the
fourth (4th) installment payment of the Agency Participation in an amount up to $700,000.00,
to be paid after the issuance of the Certificate of Occupancy for the Phase III Improvements
by the City's building official (exclusive of interior tenant improvements), and less or plus
the amount, if any, calculated and deducted due to "reconciliation of costs" pursuant to
Section 802.6, plus one hundred percent (100%) of the Phase III Permit Fees (estimated at
Date of Agreement to be $197,000,00), the total of which shall be paid after the Conditions
Precedent to the Fourth Installment Payment are satisfied and after completion of all
Improvements which comprise the Project (i.e., after completion of Phase 1II Improvements);
provided however, the cumulative amount of reimbursed Permit Fees for all Phases of the
Project (as reimbursed and paid through previous installment payments and this installment
payment of the Agency Participation) shall in no event exceed $600,000.00.
(v) "Fifth and Final Installment Payment" means the fifth (5th) and final
installment payment, which is and shall be a contingent obligation of the Agency and
incentive payment to the Developer subject to the criteria and provisions of Section 802,7
et seq., and if eligible for payment such amount shall in no event exceed $7,358,000.00 less
the cumulative amount of funds paid by the Agency to the Developer toward and as
Agency Participation from the First Installment Payment through and inclusive of the
Fourth Installment Payment.
"Agreement" means this Disposition and Development Agreement by and between the
Agency and the Developer.
"Agreement Affecting Real Property" means that agreement attached hereto as
Attachment No.6 and incorporated herein by reference setting forth the use, operating, maintenance
covenants, and conditions, obligations and other restrictions affecting the Site and to be recorded
against each Phase of the Project, the Phase I Parcels, the Phase II Parcels, and the Phase III Parcels,
(recorded at the time of disposition of the applicable Phase properties) and which shall be a lien on
each Phase of the Site prior, superior, and non-subordinate to any and all monetary liens and all
non-monetary encumbrances (other than non-delinquent taxes and assessments), including without
limitation the lien(s) of the Construction Financing and any permitted and approved permanent
financing. Developer is solely responsible to obtain all necessary subordination documents relating
to existing exceptions to title, if any; provided however, any necessary subordination document(s)
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shall be in a legal form reasonably acceptable to the Agency Executive Director and legal counsel.
Said covenants, restrictions, and obligations provided by the Developer to and for the benefit of the
Agency under the Agreement Affecting Real Property are a substantive part of the consideration
hereunder, and the Agency Participation would not be provided but for such consideration provided
by the Developer to the Agency.
"Annual Financial Statements" is defined in Section 1313,
"Approved Title Exceptions" is defined in Section 204.3 of this Agreement.
"Assignment Price" means the consideration to be paid by the Agency to the Developer for
assignment of rights to acquire all of the Developer Parcels, The Assignment Price reflects the fair
reuse value of the Site as determined pursuant to the provisions of Section 33433 and other
applicable sections of the Community Redevelopment Law. The Agency Participation is to be paid
in installment payments as defined and described herein, and the Agency is paying the Assignment
Price by its satisfaction of the various Conditions Precedent to, and payment of, each installment
payment of the Agency Participation.
"Authorized Representative" means: (a) with respect to the Agency, its Executive Director,
Secretary or Treasurer, or any other person designated as an Authorized Representative of the
Agency by a Written Certificate of the Agency signed by its Executive Director, and filed with the
City; and (b) with respect to the City, its City Manager, or any other person designated as an
Authorized Representative of the City by a Written Certificate of the City signed by its City Manager
and filed with the Agency.
"Base Pro Formafor Phase I" means the pro forma line item budget of the Project Costs for
the Phase I Improvements which budget is substantially comparable in categories, amounts, and total
Project Costs as the budget submitted by the Developer to the Agency's economic consultant and to
the Agency legal counsel prior to the Date of Agreement in connection with the Agency's (and its
economic consultant's) evaluation and determination of the amount of Agency Participation to be
provided hereunder. The parties acknowledge that this full pro forma line item budget is proprietary
in nature and the work product of Developer. Further, to the extent permitted by law such full budget
shall be and remain confidential and not a public document until the applicable Phase Improvements
are completed. A summary statement of this complete Base Pro Forma for Phase I is attached hereto
as part of Attachment No. 15 and fully incorporated by this reference. The Developer represents to
the Agency the full budget is the Developer's best estimate of all line item Project Costs for the
Phase I Improvements. Further, Developer represents that the budget submitted, or to be submitted,
to its Construction Lender for the Phase I Improvements, whether pre- or post- Date of Agreement,
shall be substantially comparable to the submitted budget. The parties acknowledge and agree such
Base Pro Forma of the Project Costs for Phase I shall be used by the Agency (through its consultants
and staff) in connection with the Project Costs reconciliation related to certain installment payment(s)
of the Agency Participation as more fully set forth in Section 802, et seq,
"Base Pro Forma for Phase II" means the pro forma line item budget of the Project Costs
for the Phase II Improvements which budget is substantially comparable in categories, amounts, and
total Project Costs as the budget submitted by the Developer to the Agency's economic consultant
and to the Agency legal counsel prior to the Date of Agreement in connection with the Agency's (and
its economic consultant's) evaluation and determination of the amount of Agency Participation to be
provided hereunder. The parties acknowledge that this full pro forma line item budget is proprietary
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in nature and the work product of Developer, Further, to the extent permitted by law such full budget
shall be and remain confidential and not a public document until the applicable Phase Improvements
are completed, A summary statement of this complete Base Pro Forma for Phase II is attached
hereto as part of Attachment No, 15 and fully incorporated by this reference, The Developer
represents to the Agency the full budget is the Developer's best estimate of all line item Project Costs
for the Phase II Improvements. Further, Developer represents that the budget submitted, or to be
submitted, to its Construction Lender for the Phase II Improvements, whether pre- or post- Date of
Agreement, shall be substantially comparable to the submitted budget. The parties acknowledge and
agree such Base Pro Forma of the Project Costs for Phase II shall be used by the Agency (through its
consultants and staff) in connection with the Project Costs reconciliation related to certain installment
payment(s) of the Agency Participation as more fully set forth in Section 802, et seq.
"Base Pro Forma for Phase III" means the pro forma line item budget of the Project Costs
for the Phase 1lIlmprovements which budget is substantially comparable in categories, amounts, and
total Project Costs as the budget submitted by the Developer to the Agency's economic consultant
and to the Agency legal counsel prior to the Date of Agreement in connection with the Agency's
(and its economic consultant's) evaluation and determination of the amount of Agency Participation
to be provided hereunder. The parties acknowledge that this full pro forma line item budget is
proprietary in nature and the work product of Developer. Further, to the extent permitted by law
such full budget shall be and remain confidential and not a public document until the applicable
Phase Improvements are completed. A summary statement of this complete Base Pro Forma for
Phase 1lI is attached hereto as part of Attachment No. 15 and fully incorporated by this reference,
The Developer represents to the Agency the full budget is the Developer's best estimate of all line
item Project Costs for the Phase III Improvements, Further, Developer represents that the budget
submitted, or to be submitted, to its Construction Lender for the Phase 1lI Improvements, whether
pre- or post- Date of Agreement, shall be substantially comparable to the submitted budget.
The parties acknowledge and agree such Base Pro Forma of the Project Costs for Phase 1lI shall be
used by the Agency (through its consultants and staff) in connection with the Project Costs
reconciliation related to certain installment payment(s) of the Agency Participation as more fully set
forth in Section 802, et seq.
"Basic Concept Drawings" is defined in Section 900, et seq.
"Board" means the Board of Directors of the Agency.
"Building Loan Agreement" or "Building Loan Agreements" means the construction loan
agreement(s) and related documents between the Developer and its Construction Lender(s) for the
Construction Financing of each Phase of the Project.
"Business Day" means a day (other than a Saturday or a Sunday) on which banks located
within the City are not required or authorized to remain closed.
"CEQA" means the California Environmental Quality Act, California Public Resources Code
Section 2 I 000, et seq. and the implementing regulations thereto in California Code of Regulations,
Title 14, Chapter 3, Section 15000, et seq.
"City" means the City of Chula Vista, a California municipal corporation and charter city
organized and existing under the laws ofthe State.
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.,.
"Closing for Phase I" and/or the "Phase I Conveyance" is defined in Section 300, et seq.
hereof and shall mean the date of the recordation of the various documents to be recorded in the
Official Records, County of San Diego, for the Conveyance of the Phase I Agency Parcels and the
disposition of the Phase I Parcels to the Developer all in connection with the development of
Phase I of the Project.
"Closing for Phase II" and/or the "Phase II Conveyance" is defined in Section 500, et seq.
hereof and shall mean the date of the recordation of the various documents to be recorded in the
Official Records, County of San Diego, for the Conveyance of the Phase II Agency Parcels and the
disposition of the Phase II Parcels to the Developer all in connection with the development of
Phase II of the Project.
"Closing for Phase III" and/or the "Phase III Conveyance" is defined in
Section 700, et seq. hereof, and shall mean the date of the recordation of the various documents to be
recorded in the Official Records, County of San Diego, for the Conveyance of the Acquisition
Parcel(s), ifany, and disposition of the Phase III Parcels to the Developer in connection with the
development of Phase III of the Project.
"Closing Date for Phase I" is defined in Section 300, et seq.
"Closing Date for Phase II" is defined in Section 500, et seq.
"Closing Date for Phase III" is defined in Section 700, et seq.
"Community Redevelopment Law" means the California Community Redevelopment Law,
Health and Safety Code Sections 33000, et seq., as the same now exists or may hereafter be
amended.
"Conditions Precedent" shall mean those conditions precedent to the disposition of the
Phase I Parcels, Phase II Parcels, and Phase III Parcels and the conditions precedent to the
disbursement of the Agency Participation, as applicable to each installment payment and each Phase
of the Project, as more fully set forth herein, There shall be up to three (3) dispositions for the
various parcels comprising the Site and there shall be up to five (5) installment payments of the
Agency Participation and there are and shall be a separate set of conditions precedent to each
installment payment made by the Agency to the Developer from and during the construction,
development, and operation of the Project, including: (i) Conditions Precedent to the Phase I
Conveyance (Conveyance of the Agency Parcels), (ii) Conditions Precedent to the Phase II
Conveyance, (iii) Conditions Precedent to the Phase III Conveyance, (iv) Conditions Precedent to
First Installment Payment of Agency Participation, (v) Conditions Precedent to Second Installment
Payment of Agency Participation, (vi) Conditions Prec.edent to Third Installment Payment of Agency
Participation, (vii) Conditions Precedent to Fourth Installment Payment of Agency Participation, and
(viii) Conditions Precedent to Final Fifth Installment Payment of Agency Participation, all as more
fully defined and set forth in Section 800, et seq.
"Construction Financing" means the financing to be obtained by the Developer from the
Construction Lender(s) for the construction and completion of the Project, as obtained for each
Phase, multiple Phases, or for all Phases, subject to the terms, provisions, and conditions set forth in
Section 1309, et seq., hereof.
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"Construction Financing Closing Date" shall mean each date for the closing of
Construction Financing for each Phase of the Project obtained by the Developer to construct and
complete the Improvements for the applicable Phase or Phases in accordance with the provisions of
this Agreement. There shall be up to three (3) Construction Financing Closing Dates, one for each
Phase of the Project, each to occur at or before the times set forth in the Schedule of Performance.
"Construction Insurance Requirements" shall mean the requirements set forth in
Attachment No, 8 attached hereto and incorporated herein by reference relating to the construction
and completion of the Project, inclusive of the private Improvements and the Public Improvements,
Said insurance requirements are separate and distinct from, but in addition to, the ongoing insurance
requirements of Section 1304, et seq. herein.
"Construction Lender" means the approved lender (or lenders) secured by the Developer
which provide(s) the Construction Financing for the Phase I Improvements, the Phase II
Improvements, and/or the Phase III Improvements, (developed in Phases or as one Project), pursuant
to the terms of one or more Building Loan Agreements and related loan documents for a commercial
construction and term loan or loans, the proceeds of which shall be expended by the Developer on
Project Costs for the design, construction, and completion of the Improvements and the Public
Improvements (prior to reimbursement) with such proceeds disbursed pursuant to a disbursement
schedule mutually agreed to between the Developer and such lender(s), and with such disbursement
schedule reviewed and approved by the Agency Executive Director. Construction Financing
provided by each Construction Lender is more fully described in Section 1309, et seq. herein.
"County" shall mean the County of San Diego, State of California.
"Date of Agreement" means the date the Agency Board considered and approved this
Agreement at a public meeting of the Agency and after a duly noticed public hearing relating thereto,
which date is , 2000.
"DDA Financing" is defined and described in the definition of Agency Indebtedness herein.
"Default" means the failure of a party to perform any action or covenant required by this
Agreement within the time periods provided herein following notice and opportunity to cure, as set
forth in Section 1200, et seq.; provided however, one party's failure to satisfy a condition
(or conditions) hereunder is not a default, but shall be a basis for the other party's non-performance
of an obligation that is subject to such condition(s), except as provided in Section 1200, et seq.
herein.
"Description of Site for Recording"means the legal description of the Site for recording of
the Memorandum of Disposition and Development Agreement, including the Agency Parcels, the
Developer Parcels, and the Acquisition Parcels, and the Phase I Parcels, the Phase II Parcels, and the
Phase III Parcels, which is attached hereto as Attachment No.2 and incorporated herein by this
reference.
"Developer" shall mean and include Gateway Chula Vista, LLC, a California limited liability
company, and any assignee or successor to the Developer, permitted and, to the extent approval is
required, approved pursuant to the terms of this Agreement. The Developer entity, limited liability
company, as of the Date of Agreement includes the following members: (i) Coast Pacific
Properties, LLC, as co-managing member, with James V. Pieri, as manager of Coast Pacific
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Properties, LLC, and (ii) Chula Vista Asset Management, LLC, as co-managing member, with
Jess Rae Booth, as manager of Chula Vista Asset Management, LLC.
"Developer Advance" means the full amount of money advanced by the Developer to the
Agency for assembly of the Acquisition Parcels which are a part of the Phase II Parcels and Phase III
Parcels, as more fully described in Sections 400 et seq. and 600, et seq. There may be two (2)
Developer Advances, one for the assembly of the Phase II Parcels, and one for the assembly ofthe
Phase III Parcels. The Developer Advance shall include funds necessary to the financial obligations
of the Developer of Section 208, et seq. relating to relocation of occupants/businesses within the Site,
except to the extent separately funded by the Developer pursuant to the Three Party Relocation
Agreement,
"Developer Advance Note" means the promissory note(s) substantially in the form of
Attachment No. 10, attached hereto and incorporated by this reference, which note(s) evidence(s) the
Developer's advance of funds for assembly of the Acquisition Parcels and relocation of all occupants
thereon, and is more fully described in Sections 400, et seq. and Section 600, et seq. There may be
two (2) Developer Advance Notes, one for the assembly of the Phase II Parcels, and one for the
assembly of the Phase III Parcels.
"Developer Parcels" shall mean that certain real property either owned by the Developer in
fee, or to which the Developer has legal rights to acquire fee title to such property, and which parcels
are a part of the Project and located in the City of Chula Vista and either within, or directly adjacent
to, the boundaries of the Redevelopment Project Area. The Developer Parcels are delineated on the
Site Map. There are Developer Parcels within each Phase of the proposed development Site.
The acquisition by the Developer offee title to the Phase I Developer Parcels and the Phase II
Developer Parcels is a necessary precondition to the Agency's obligation to convey the Phase I
Agency Parcels and the Phase II Agency Parcels hereunder. The acquisition by the Developer of
fee title to the Phase III Developer Parcels is a necessary precondition to the Agency's obligation to
convey the Phase III Acquisition Parcels.
"Entitlement" is defined to include each application and discretionary action of the City,
its Planning Commission, the Agency, the Town Centre Project Area Committee (TCPAC),
the Resource Conservation Committee (RCC), and the Design Review Committee (ORe) for each
Phase of the Project, inclusive of the Phase I Improvements, the Phase II Improvements, the Phase III
Improvements, the Public Improvements, and this Agreement, including without limitation each
discretionary action described below in this definition of Entitlement, and any and all conditions of
approval related thereto, and any amendments, supplements, modifications to such Entitlement.
The Agency and the Developer acknowledge and agree the ultimate development of the Site,
and all Phases thereof, shall be governed by and subject to certain discretionary governmental
approval(s) obtained from the City which collectively comprise the Entitlement, including
entitlements which must be obtained from the City, its Planning Commission, the Agency, the
TCP AC, the RCC, and the DRC, any other public agencies with jurisdiction over the construction
through completion and operation of the Improvements. The parties hereto expressly acknowledge
and agree that the Agency cannot grant any such entitlement or cause any other governmental
agency, including the City, to grant any such Entitlement, each action must be applied for and
processed by the Developer with the applicable government entities, boards, commissions, and
committees. Accordingly, the parties hereto expressly agree that, notwithstanding approval of this
Agreement by action of the Agency Board on the Date of Agreement, every obligation of each party
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hereto shall be knowingly and expressly contingent upon the receipt of the Entitlement, and all parts
thereof, required for the development of the Site, and each Phase thereof, in the manner set forth in
this Agreement, and the performance obligations of each party hereto shall only arise upon the
receipt of the full Entitlement, and further, the final Scope of Development for the Phase I
Improvements, the Phase II Improvements, and the Phase III Improvements are and shall be subject
to all conditions of approval set forth in the Entitlement, The foregoing provisions relating to
Developer obtaining the Entitlement is an express condition subsequent in this Agreement.
The Agency and the Developer understand and acknowledge the City and Agency expressly
and intentionally reserve the right to exercise their discretion as to all matters which they are, by law,
entitled or required to exercise their discretion relating in any respect to the Entitlement.
It is not the intent (nor shall it be deemed or construed in any respect), by the Agency's
approval and execution or City's consent to the disposition provided for under this Agreement, that
the City or the Agency are granting approval of the Project or the Scope of Development
contemplated in this Agreement or any aspect or item which comprise the Entitlement. Further, in no
event shall the Agency or the City be under any obligation approve such development or any part or
parts of the Entitlement by virtue of having approved and entered into this Agreement.
Except for intentional misconduct and a gross abuse of discretion by an individual officer,
employee, or agent, the Developer hereby knowingly and voluntarily releases the City, the Agency,
and their officers, employees, and agents from any liability based upon the Developer's failure to
obtain the full Entitlement, or any part thereof, and Developer expressly agrees that in no event shall
any exercise of the City's or Agency's discretion to approve, condition, or disapprove any part of the
Entitlement, or any act or inaction to approve, condition, or disapprove any part of the Entitlement,
or any part thereof, be deemed to be a violation of this Agreement, an unreasonable abuse of
discretion, or negligent act or inaction in any respect whatsoever by the City, the Agency, or any of
their officers, employees, and/or agents,
The obligation to initiate and process all applications to obtain the required Entitlement shall
be Developer's. The performance obligations of each party hereto shall not arise until Developer
shall have applied for and City and all other applicable public entities shall have considered and
approved all required parts of the Entitlement required for the construction through completion and
operation of the Improvements. The Entitlement includes, but may not be limited to the following:
I. An Amendment of the Chula Vista General Plan changing the Circulation
Element to reclassify H Street between Interstate 5 and Third Avenue from
six-lane Major Street to four-lane lane Major Street;
2. Approval of Specific Plan No. PCM-QQ-II for the Site in the Town Center I
Project Area (due to height of structures, parking requirements, and other
matters);
3, City Council certification of an environmental impact report (ElR) or
mitigated negative declaration, as applicable and required under CEQA,
reviewing all of the required entitlements and other discretionary actions
necessary to authorize construction of the proposed Project on the Site, and
each and all Phases thereof, and City Council adoption of all findings
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required by law; adoption of a mitigation monitoring program; and adoption,
if applicable, of a statement of overriding considerations;
4, Approval of the Parcel Map(s), including without limitation, as applicable a
lot line adjustment, lot consolidation, consolidation plates), and/or
parcel map(s), pursuant to all city and state law requirements, including
without limitation the California Government Code, Subdivision Map Act;
5. Approval of a parking variance for the Project, and each Phase thereof; and
6. Approval of the Fine Arts Fee Waiver by the Agency.
In the event that all of the Entitlement, and each part thereof, has not been approved within
eighteen (18) months of the Date of Agreement (subject to the extension(s) hereinafter described), or
in the event that the City, the Agency, or any other public entity with jurisdiction over the Site and/or
the Project shall deny any of the requested discretionary approvals or disapprove any required part of
the Entitlement or other agreement necessary for construction through completion and operation of
the Improvements, and each Phase thereof within such 18 month period (subject to the extension(s)
hereinafter described), then this Agreement shall be of no force and effect and none of the parties
shall have any further obligation to any of the other parties pursuant to this Agreement. The parties
agree that the period for approval or disapproval of the Entitlement may be extended, at the option
and election of the Developer, for one (1) additional nine (9) month period, so long as Developer
elects such extension due to market conditions based on reasonable commercial standards and so
long as Developer is not in violation of this Agreement at the time of such election to extend, if so
elected. If and to the extent such extension(s) occur under this subparagraph, then the corresponding
timet s) for performance under the Schedule of Performance (inclusive of the time for commencement
and completion of construction of the applicable Phase Improvements) shall also be automatically
extended for an equivalent period of time.
"Environmental Law" means any state or local law, statute, ordinance or regulation
pertaining to environmental regulation, contamination or cleanup of any Hazardous Materials,
including, without limitation: (i) Sections 25115, 25117, 25122.7 or 25140 of the California Health
and Safety Code, Division 20, Chapter 6,5 (Hazardous Waste Control Law), (ii) Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous
Substance Account Act), (iii) Section 25501 of the California Health and Safety Code, Division 20,
Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous
Substances), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (vi)Section 311 of the Clean Water Act (33 V.S.c. Section 1317), (vii) Section 1004 of
the Resource Conservation and Recovery Act, 42 V.S.C. Sections 6901 et seq, (42 U.S.C. Section
6903), (viii)Section 101 of the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.c. Sections 9601 et seq., or (ix) any state or federal lien or "superlien" law, any
environmental cleanup statute or regulation, or any permit, approval, authorization, license, variance
or permission required by any governmental authority having jurisdiction.
"Exceptions" and/or "Approved Title Exceptions" are defined in Section 204.2 of this
Agreement.
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"Fine Arts Fee Waiver" means the waiver and/or deemed satisfaction of the Agency's fine
arts development fee to be imposed for the Project pursuant to "City of Chula Vista, Design Review
Committee Policy, Special Fine Arts Criteria and Requirements" a fine arts development fee
program, which fee (i) will be waived by the Agency if the Developer meets the specific criteria for
fine arts improvements in the Project, including without limitation, publicly accessible art features
and/or sculpture(s), that are constructed, developed and completed as a part of the Phase I
Improvements and depicted in the Basic Concept Drawings and the Schematic Drawings for the
Phase II Improvements and Phase III Improvements, as reasonably determined by the Agency in its
reasonable discretion pursuant to and in conformity with all applicable provisions of the
aforementioned fine arts fee policy, or (ii) shall be paid by the Developer if Developer fails to meet
the policy criteria. The Fine Arts Fee Waiver is a part of the Entitlement for the Project, By this
Agreement, the Agency does not (and it shall not be construed to) predetermine the Developer's
eligibility for waiver of the Fine Arts Fee Waiver. The Agency agrees to process the Developer's
application for the Fine Arts Fee Waiver and to cause the Agency staff to reasonably cooperate with
the Developer in such application,
"First Class and First Quality" shall mean and refer to the class and qual ity of:
architecture/design, construction and development, materials (both exterior and interior), furnishings,
fixtures, and equipment, and ongoing operation and maintenance of the Project, and each Phase
thereof, being superior to all office developments and office/retail developments located in the City
to ensure that as designed, constructed, developed, operated, tenanted, and maintained the Project,
and each Phase thereof, shall be and remain at a level of excellence that is equal and/or comparable
to other Class "A" first class, superior office properties in Downtown San Diego and in the
Golden Triangle area of San Diego, including the following properties/developments which are
examples of the type and quality of Improvements bargained for by the Agency and to be completed
and operated by the Developer: (i) Cornerstone Corporate Center located at 1903 Wright Place,
San Diego; (ii) The Plaza at La Jolla Village located at 4350 La Jolla Village Drive, San Diego; and
(iii) Insurance Company of the West located at 11455 El Camino Real, San Diego. The Scope of
Development will include copies of the elevations, plans, and narrative description of the materials
for the Improvements, which shall depict the First Class, First Quality design of the Improvements to
be constructed pursuant to this Agreement.
"Fiscal Year" means any twelve-month period extending from July I in one calendar year to
June 30 of the next succeeding calendar year, both dates inclusive, or any other twelve-month period
selected and designated by the Agency or the City, as applicable, as its official fiscal year.
"Governmental Requirements" means all valid and enforceable laws, ordinances, statutes,
codes, rules, regulations, orders and decrees of the United States, the State, the County, the City or
any other political subdivision in which the Site (or applicable Phase thereof) is located, and of any
other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the
Developer, the private Improvements, or the Public Improvements.
"Grant Deed" means one or more grant deeds to be used by the parties for disposition of the
Agency Parcels and Acquisition Parcels, if any, by the Agency to the Developer, substantially in the
form of the Grant Deed, Attachment No.9 hereto and fully incorporated herein by this reference.
"Hazardous Materials" means any substance, material or waste which is or becomes prior to
the Closing regulated by any local governmental authority, the State of California or the United
States Government, including, but not limited to, any material or substance which is (i) defined as a
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"hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under
Sections 25115,25117 or 25122.7, or listed pursuant to Section 25]40 of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20,
Chapter 6,8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a
"hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous
Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under
Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article II of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances"
pursuant to Section 311 of the Clean Water Act (33 U.S.c. Section 13] 7), (x) defined as a
"hazardous waste" pursuant to Section ] 004 of the Resource Conservation and Recovery Act,
42 U.S.c. Sections 6901 et seq. (42 U.S.c. Section 6903) or (xi) defined as "hazardous substances"
pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability
Act, (CERCLA) 42 U.S.C, Sections 960], et seq.
"Improvements" shall mean all of the private improvements to be constructed and completed
by Developer for the Project, and each Phase thereof, all as more particularly described in the Scope
of Development, Attachment No.4, the Basic Concept Drawings and the Schematic Drawings, when
and if approved, the Entitlement, when and if approved, and the construction drawings described in
Section 900, et seq., when and if approved. The Improvements to the Site shall include:
development of a 304,000 square feet First Class, First Quality Class "A" office and retail center
with structured parking for at least one thousand fourteen (1014) vehicles, with associated
landscaping and appurtenances. The Improvements may be referred to in Phases, including the
Phase I Improvements, the Phase II Improvements, and the Phase III Improvements.
The architectural scheme, design, and completed construction and appearance of the Project
shall be First Class and First Quality. The Project shall be an upscale office and retail development
with stone fa9ade elements, non-reflective glass, strong articulation among elements, pedestrian
orientation and internal circulation providing for easy access to Third A venue and H Street, all as
more particularly described in the Scope of Development and the Entitlement, if and when approved.
Subject to the ongoing covenants set forth in Section] 000, et seq., the Agency acknowledges
and agrees that construction and completion of each Phase of the Improvements in accordance with
the approved Basic Concept Drawings and the Schematic Drawings and with the construction plans
and specifications, when and if approved, by the Agency in conformity with the requirements of
Section 900, et seq., the Entitlement, and all applicable Governmental Requirements shall be deemed
to satisfy the preceding paragraphs of this definition.
"Initial Environmental Report" is defined in Section 204, et seq. hereof.
"Initial Preliminary Report" is defined in Section 203 hereof.
"LAIF" means the Local Agency Investment Fund, a pooled investment fund of local public
entities of which the City is a member.
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"Member" is an entity or person owning a membership interest in the limited liability
company, Gateway Chula Vista, LLC, the original Developer entity, or a person or entity owning a
membership interest of an approved successor-in-interest to the original Developer entity which is
also formed as a limited liability company.
"Memorandum of Disposition and Development Agreement" or "Memorandum of
Agreement" means the memorandum attached hereto as Attachment NO.7 and incorporated herein
by this reference.
"Net Property Tax Increment Base Amount" means $3,717,889.00, which amount was
derived from the assessed valuation of the Site by the County of San Diego for the 1999-2000 fiscal
year for all parcels which comprise the Site. The base amount of each of the sixteen (16) parcels
which comprise the Site is set forth on the attached and hereby incorporated Attachment No. I I.
"Net Property Tax Increment Revenues" or "Net Property Tax Increment" shall mean all
taxes annually allocated, paid to, and received by the Agency pursuant to Article 6 of Chapter 6
(commencing with Section 33670) of the Community Redevelopment Law, as said statute may be
amended from time to time, and Section 16 of Article XVI of the Constitution of the State of
California and as provided in the Redevelopment Plan, attributable to the assessed value of the Site,
and each Phase thereof, exceeding the Net Property Tax Increment Base Amount following the
Date of Agreement, including all payments, subventions, and reimbursements, if any, to the Agency
specifically attributable to ad valorem taxes and property taxes lost by reason of tax exemptions and
tax rate limitations. These revenues are Site specific and shall in no event be construed to include, or
calculated to include, any revenues outside the boundaries of the Site.
The term and definition of Net Property Tax Increment Revenues shall expressly and
specifically exclude the following:
(a) the portion of tax increment revenues from the Site attributable to charges for County
administrative charges, fees, or costs; and
(b) the portion of tax increment revenues from the Site attributable to any special taxes or
assessments or voter-approved indebtedness approved on or after January I, 1989 in conformity with
section 33670(e) of the Community Redevelopment Law; and
(c) the portion of tax increment revenues from the Site deposited into the Agency's Low
and Moderate Income Housing Fund to meet the Agency's obligations pursuant to Section 33334.3,
et seq. of the Community Redevelopment Law (including any amendments or successor statutes
thereto), but in no event less than the percentage of the gross amount of such taxes required to be set
aside and deposited into the Agency's Low and Moderate Income Housing Fund generally for
redevelopment project area(s); the parties acknowledge that as of the Date of Agreement the statutory
housing set aside obligation is twenty percent (20%) of the gross amount of such taxes; and
(d) the portion of tax increment revenues from the Site which are attributable and
payable to public entities other than the Agency pursuant to the Community Redevelopment Law, if
any, or which in I ieu of payment to such taxing entities the Agency otherwise pledges to the payment
of bonded indebtedness, the DDA Financing, or other Agency Indebtedness (or ajoint powers
authority of which the Agency is a member, or pledges or pays to the City for bonded indebtedness
for which Agency revenues are pledged);
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(e) the portion of tax increment revenues from the Site attributable to any and all
state-mandated payments or deductions to property tax increment required by the Community
Redevelopment Law, the California Revenue and Taxation Code, or other or additional legislation or
statutory requirements applicable to the Agency, whether now existing or as amended or added by
the legislature after the Date of Agreement; and
(f) any payment or debt service on Agency Indebtedness existing on the Date of
Agreement (including any refunding or refinancing thereof) plus the DDA Financing or other
Agency Indebtedness incurred after the Date of Agreement so long as such debt was incurred so that
all or a portion of the proceeds thereof were necessary and/or used to meet the specified financial
obligations of the Agency to the Developer hereunder. It is expressly understood by the parties
hereto that under this definition of Net Property Tax Increment Revenues and for purposes of this
Agreement, any rights of Developer under this Agreement as to timing of the receipt the Final Fifth
Installment Payment of the Agency Participation calculated by an evaluation of Net Property Tax
Increment Revenues, and all obligations of the Agency to make payment(s) of Agency Participation
to Developer hereunder are and will be unsecured, with no lien or claim of encumbrance against tax
increment revenues or other revenues of the Agency. The parties hereto expressly agree that any
rights of the Developer under this Agreement as to the timing to receive the Final Fifth Installment
Payment of the Agency Participation attributable to Net Property Tax Increment are and will be
subject to any Agency Indebtedness (including, without limitation the DDA Financing) and shall be
payable only to the extent such amount exists after payment of Agency Indebtedness and as
permitted thereunder. For all purposes and for purposes of such Agency Indebtedness, the obligation
to pay any installment of the Agency Participation due to Developer under this Agreement, which
may be attributable to Net Property Tax Increment, are not and shall not be construed as a "pledge"
of property tax increment revenues by the Agency for purposes of Section 33671.5 of the
Community Redevelopment Law, or a pledge of any other revenues of the Agency or the City.
"Parcel Map" or "Parcel Maps" means each of the three (3) maps considered and approved
by the City pursuant to California Government Code, Subdivision Map Act, to separate, consolidate,
re-parcelize, and/or subdivide the Site into the Phase I Parcels, the Phase II Parcels, and the Phase III
Parcels, through a parcel map, lot line adjustment, lot consolidation, and/or, consolidation plat(s),
pursuant to all applicable city and state law requirements and subject to review, discretionary action,
and approval by the City, which maps are to be recorded with the Official Records, San Diego
County Recorder's Office. The Developer shall comply with all applicable State and local
requirements and City Building and Planning departments' requirements relating to preparation and
processing of each such map and all conditions of approval imposed by the City through such
process.
"Permit Fees" means the monetary fees assessed by the City or the Agency pursuant to
Section 66000, et seq, of the California Government Code and any fees for development imposed by
the City ofChula Vista in the consideration and approval of the various discretionary actions that are
a part of the Entitlement for the Project, and each Phase thereof, but expressly excluding any fees
assessed or imposed by any other public or governmental agency, and such City fees shall be actually
incurred and paid by the Developer for any improvement or work for each Phase of the Project from
the commencement of grading through completion of construction of the each applicable Phase.
The Agency and Developer acknowledge and agree that the estimated Permit Fees for the Project and
each Phase thereof are set forth on the attached and hereby incorporated Attachment No. 12.
The categories of types and estimated amounts of Permit Fees eligible for reimbursement are
included on Attachment No. 12, but the term Permit Fees shall expressly exclude any fee imposed by
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a public agency other than the City. In no event shall the Agency's obligation to reimburse the
Permit Fees for all Phases of the Project cumulatively exceed $600,000.00 through payment of the
Fourth Installment Payment of Agency Participation,
"Person" means any natural person, corporation, firm, association, government,
governmental agency, or any other entity, whether acting in an individual, fiduciary, or other
capacity,
"Phase" means any of the three (3) phases of the Project, and may refer to each separate
phase of the Project,
"Phase I" means the first phase of the Project, and includes the first five (5) story office
building and all common area improvements, including the first phase of the Project parking
structure, and the Public Improvements.
"Phase II" means the second phase of the Project, and includes the second six (6) story
office building and appurtenant improvements.
"Phase III" means the third and final phase of the Project, and includes the third five (5)
story office building and appurtenant improvements.
"Phase II Acquisition Parcels" means that certain parcel of real property currently owned by
one or more third parties and located within the boundaries of Phase II of the Project.
"Phase III Acquisition Parcels" means those certain parcels of real property currently
owned by one or more third parties and located within the boundaries ofthe Phase III of the Project.
"Phase I Agency Parcels" means those parcels of real property currently owned by the
Agency and located within the boundaries of Phase I of the Project.
"Phase II Agency Parcels" means those parcels of real property currently owned by the
Agency and located within the boundaries of Phase II of the Project.
"Phase I Parcels" means the Phase I Agency Parcels and those certain Developer Parcels
depicted and denoted on the Site Map as included in Phase I of the Project.
"Phase II Parcels" means the Phase II Agency Parcels, the Phase II Acquisition Parcels, and
those certain Developer Parcels depicted and denoted on the Site Map as included in Phase II of the
Project.
"Phase III Parcels" means the Phase III Acquisition Parcels and those certain Developer
Parcels depicted and denoted on the Site Map as included in Phase III of the Project.
"Phases" means collectively all phases of the Project, and including Phase I, Phase II, and
Phase III.
"Project" shall mean the construction, redevelopment, and improvement of the Site with all
of the Improvements, and the operation thereof, pursuant to this Agreement, and shall include the
Public Improvements, all completed in the three (3) Phases, Phase I, Phase II, and Phase III. The Site
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and Project are inclusive of the following assessor's parcel numbers, and any successor assessor's
parcel numbers thereto:
Agency Parcels: ASP 568-450-3900, 568-450-4100, 568-450-4200, and
568-450-4500;
Developer Parcels: ASP 568-450-3400, 568-450-3500, 568-450-3600,
568-450-3700,568-450-3800,568-450-4000, and 568-450-4400;
Acquisition Parcels within the Redevelopment Project Area: ASP 568-450-4300,
568-450-4600,568-450-4700, and 568-450-4800; and
Acquisition Parcel located au/side the Redevelopment Project Area:
ASP 568-450-4900.
"Project Costs" shall mean and include all of the following and shall be applicable in the
Project Costs reconciliation of Section 802, et seq. hereinafter:
(i) All Developer incurred costs to assemble and acquire all parcels for each
Phase of the Site, including land payments, relocation costs paid pursuant to Relocation Laws, and
typical and customary third party closing costs.
(ii) Developer costs incurred through construction contracts with third party
general contractor(s) pertaining to construction through completion of the Phase I Improvements, the
Phase II Improvements, and the Phase III Improvements, and the Public Improvements.
(iii) CEQA mitigation costs.
(iv) All Permit Fees paid by Developer.
(v) A predevelopment fee not to exceed $260,000.00 paid to Developer.
(vi) Reasonable and customary indirect costs incurred by the Developer including:
(I) design fees,
(2) a developer fee not-to-exceed five percent (5%) of the total of all
off-Site and on-Site construction costs [with such construction costs agreed between the parties as of
the Date of Agreement to be $33,500,000.00, of which 5% of that number is an amount not to exceed
$ 1,675,000.00] (inclusive of an administrative and overhead fee, but excluding the pre-development
fee described in subsection (v) above not to exceed $260,000.00),
(3) capitalized third party leasing commissions for the initial lease-up of
each Phase of the Improvements,
(4) reasonable legal and accounting fees,
(5) real estate taxes and insurance during the construction period, and
(6) third party marketing costs.
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(vii) Financial costs and fees, including bank fees, loan administration fees,
appraisal fees, third party brokerage fees for securing debt and equity, actual interest charges on
institutional construction financing loan(s), interest on equity or non-institutional financing at the
actual pay rate, but not-to-exceed the Wells Fargo Bank prime rate plus 200 basis points.
(viii) Project Costs shall be reduced by reimbursements received by the Developer
from third parties, including reimbursement by tenants for tenant improvements constructed and
completed, or caused to be constructed and completed, by the Developer.
The Project Costs shall be initially estimated and evidenced in the Base Pro Forma for
Phase I, the Base Pro Forma for Phase II, and the Base Pro Forma for Phase Ill, set forth in
Attachment No. ] 5, and, thereafter finally determined and evidenced in the Reviewed final
accounting of Project Costs for each Phase of the Project and for the completed final Project, as
approved by the Agency's economic consultant. The final Reviewed costs accounting for Phase]
and Phase II shall be used in connection with the reconciliation of costs pursuant to Section 802,3
and 802.6. The Reviewed costs accounting for Phase Ill, and therefore inclusive of the completed
Project, shall be used in connection with the evaluation and determination of eligibility for payment
of the Final Fifth Installment Payment of the Agency Participation pursuant to Section 802.7 herein.
The parties acknowledge and agree that as of the Date of Agreement the Base Pro F ormas
submitted by the Developer evidence estimated gross project costs for the Project, and all Phases
thereof, to be $57,542,000, but that the total dollar number of $57,238,000,00 is agreed by the parties
to be the estimated gross total Project Costs. The parties agree and acknowledge the initial gross
number has been adjusted and reduced by the parties to evidence only the allowed amount of a
developer fee to be an eligible Project Cost, which amount shall not-to-exceed five percent (5%) of
the total of all off-Site and on-Site construction costs as defined and described above in subparagraph
(vi)(2) above. Therefore, the parties agree and acknowledge that as of the Date of Agreement the
estimated gross total Project Costs are $57,238,000.00, which number will be used in the
reconciliation of costs pursuant to Sections 802.3 and 802.6 hereinafter.
"Public Improvements" means all of the public improvements to the Project, including the
value of the land for and the cost of the installation and construction of all public improvements to
the Site and appurtenant public right-of-way adjacent to the Site, including without limitation:
sidewalks, curbs, gutters, landscaping, lane reconfiguration, traffic signal reconfiguration and/or
installation, sewer lateral reconfiguration and/or installation, all as more particularly described in the
Scope of Development and the Reimbursement Agreement. The Public Improvements shall be
constructed as a part ofthe Phase] Improvements, whether elected by the Agency to be designed,
constructed, and completed by the Developer or the City, as herein described, unless the phasing of
the construction of the Public Improvements during Phase I and Phase II is approved in writing by
the City Engineer in his/her sole discretion as a part of the Entitlement process. ]n the exercise of
his/her discretion the City Engineer shall consider, to the extent reasonably feasible, the coordination
of those Public Improvements determined necessary and/or required for the applicable Phase] and/or
Phase II with the private improvements to such applicable Phase(s). The Public Improvements may
be caused to be constructed and completed in one of two alternative ways, as elected in the sole
discretion of the Agency, either (i) design, construction, and completion by the Developer with
reimbursement by the Agency pursuant to the terms of the Reimbursement Agreement, or (ii) design,
construction, and completion by the Agency (or the City) through a public works contract.
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If the Agency elects to cause design, construction, and completion of the Public
Improvements by itself (or the City), then the Agency covenants that it shall use reasonable best
efforts to coordinate the timing of the design, bidding, construction, and completion of the Public
Improvements with the Developer (and its contractor) and to coordinate the contracting by the
Agency (or City) with the contracting by the Developer for the Phase I Improvements, all with the
mutual objective to cause completion of construction of the Public Improvements at or near the time
of completion of construction of the private Phase I Improvements (unless phasing of construction of
the Public Improvements is elected and approved by the City Engineer in his/her sole discretion as
set forth above,) subject to the Developer's obligation to exercise good faith and use its reasonable
best efforts to cooperate with its contractor(s) and coordinate the contract(s) between Developer and
its contractor(s) with the Agency (or City) contract(s) for completion of the Public Improvements.
The Developer may, at its sole cost and expense, retain the services of a construction manager to
assist in coordination and oversight of the completion of the construction ofthe Public Improvements
with the completion of construction of the private Phase I Improvements (unless phasing of
construction of the Public Improvements is approved by the City Engineer in his/her sole discretion
as set forth above,) and in this regard the Agency shall cause its contractor(s) and staff to cooperate
with such Developer construction manager, and if the Public Improvements are undertaken by the
City, the Agency shall exercise reasonable best efforts to cause the City contractor(s) to cooperate
with such Developer construction manager.
If the Agency elects to cause design, construction, and completion of the Public
Improvements by itself (or the City), the Developer acknowledges and agrees the maximum
cumulative out of pocket costs to be incurred by the Agency for such Public Improvements will in no
event exceed $300,000.00. To the extent the lowest responsible bid(s) for completion of such Public
Improvements exceeds the maximum allowable cumulative costs the Agency may take steps
necessary to modify the scope of the Public Improvements or other steps so as to ensure the
cumulative out of pocket costs for completion of the Public Improvements does not exceed
$300,000.00, If the Agency elects to cause design, construction, and completion of the Public
Improvements by itself (or the City), then the amount of the First Installment Payment of the Agency
Participation shall be adjusted so as to ensure the Developer does not receive compensation for the
cost of the Public Improvements constructed and completed or caused to be constructed and
completed by the Agency.
"Redevelopment Plan" means the Redevelopment Plan for the Town Centre I
Redevelopment Project approved and adopted by the City Council of the City by Ordinance No.
1691 on July 6, 1976, and amended by Ordinance No. 1872 on July 17,1979, by Ordinance No. 2146
on April 22, 1986, by Ordinance No. 2585 on January 4, 1994, and by Ordinance No. 2735 on
June 23, 1998.
"Redevelopment Project Area" shall mean the Town Centre I Redevelopment Project Area,
and the boundaries thereof, of which were adopted by the City Council pursuant to and as a part of
the Redevelopment Plan.
"Reimbursement Agreement" means a contract substantially in the form of Attachment
No. 16 attached hereto and fully incorporated by this referenced. The Reimbursement Agreement
will be entered into between the Agency (and/or the City, as the Agency and City mutually
determine) and the Developer (or an approved affiliate of a Member of the Developer entity) for the
design, construction, construction management and administration, and completion of all the Public
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Improvements as a part of the Phase I Improvements of the Project, if the Agency elects to allow the
Developer to proceed with the design, construction and completion of the Public Improvements.
"Release o/Construction Covenants" means the document which evidences to the Agency
Developer's satisfactory completion of the construction of each Phase of the Improvements and the
Public Improvements to the Project, as set forth in Section 13 I I, et seq. hereof, in the form of
Attachment NO.5 which is incorporated herein by reference. There may be up to three (3) separate
releases to be issued by the Agency, one (I) for each Phase of the Project upon satisfactory
completion of each applicable Phase of the Improvements.
"Relocation Laws" means all applicable state and local relocation laws, including without
limitation, the California Relocation Assistance Law ("CRAL"), Government Code Section 7260,
et seq. and the implementing regulations thereto in California Code of Regulations, Title 24,
Section 6000, et seq. and the local implementing regulations thereto, and all applicable federal
relocation laws, including without limitation, the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 ("URA"), 42 U.S.C. 4201-4655, and 49 CFR part 24, and any other
applicable federal, state or local enactment, regulation or practice providing for relocation assistance
or compensation for property (including without limitation goodwill and furnishings, fixtures and
equipment, and moving expenses),
"Resolutions" means Agency Resolution No. _ adopted on , 2000 approving
this Agreement and making certain other findings in connection thereto, and City Council Resolution
No. _ adopted on ,2000 approving the disposition(s) called for herein, making the
required findings under the Community Redevelopment Law, and making certain other findings in
connection thereto. True copies of said Resolutions are attached hereto as Attachment No. 13 and
fully incorporated by this reference,
"Restaurant" shall mean and refer to a First Class and First Quality sit down, full service
restaurant tenant constructed and completed, or caused to constructed and completed, by the
Developer as a part of the Phase I Improvements or the Phase II Improvements, which restaurant
shall be not less than six thousand (6000) gross leaseable square feet. The architecture/design,
construction and development, materials (both exterior and interior), furnishings, fixtures, and
equipment, and ongoing operations of the restaurant tenant shall be and remain at a level of
excellence that is equal and/or comparable to other restaurants located at or adjacent to first class,
superior office properties in Downtown San Diego, the Gaslamp District, and in the Golden Triangle
area of San Diego, including the following restaurants, which are examples ofthe type and quality of
Restaurant bargained for by the Agency hereunder and to be completed and caused to tenanted by the
Developer: (i) Donovans; (ii) Tutte Mare; (iii) Flemings; (iv) Houston's; and (v) II Fornaio.
"Reviewed" shall mean and refer to a technical term used in generally accepted accounting
principles (GAAP) by certified public accountants. At the Date of Agreement the parties agree a
Reviewed accounting shall mean the following. A Reviewed accounting is review work completed
by a certified public accountant (CPA) on unaudited financial statements consisting primarily of
inquiry and analytical review procedures by the CPA. The information gained thereby is similar to
audit evidence, but the recommended limitation on procedures, as hereinafter listed, does not suggest
performance of typical auditing procedures of evaluating internal control, conducting physical
observation of tangible assets, sending confirmations or examining documentary details of
transactions. In a Reviewed accounting the CPA will: (i) obtain knowledge of the client's business;
(ii) know the accounting principles of the client's industry; (iii) understand the client's organization
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and operations; (iv) inquire about the accounting system and bookkeeping procedures; (v) perform
analytical review procedures to identify relationships and individual items that appear to be unusual;
(vi) inquire about actions taken at meetings of stockholders, directors and other important executive
committees; (vii) read/study the financial statements for indications that they conform with generally
accepted accounting procedures; (viii) obtain reports from other accountants who audit or review
significant components, subsidiaries or other investees; (ix) inquire of officers and directors about:
(I) conformity with generally accepted accounting principles; (2) consistent application of
accounting principles; (3) changes in the client's business or accounting practices; (4) matters about
which questions have arisen as a result of applying; (5) other procedures (as listed above); and
(6) events subsequent to the date of the financial statements; (x) perform any other procedures
considered necessary if the financial statements appear to be incorrect, incomplete or otherwise
unsatisfactory; (xi) prepare working papers showing the matters covered by the inquiry and analytical
review procedures, especially the resolution of unusual problems and questions; (xii) obtain a written
representation letter from the owner, manager or chief executive officer, and from the chief financial
officer.
A Review service does not provide a basis for expressing an opinion on financial statements.
Each page of the financial statements should be marked "See Accountant's Review Report."
The report on a completed services engagement for a Reviewed accounting should include
the following: (i) statement that a review service was performed in accordance with standards
established by the AICPA; (ii) statement that all information included in the financial statements is
the representation of the management or owners of the business; (iii) statement that a review consists
primarily of inquiries of company personnel and analytical procedures applied to financial data;
(iv) statement that a review service is substantially less in scope than an audit; (v) an opinion of
financial statements is not expressed; and (vi) statement that the CPA is not aware of any material
modifications that should be made or, if aware, a disclosure of departure(s) from generally accepted
accounting principles.
"Right of Entry Agreement" means that certain agreement between the Agency and the
Developer for use and access of the Phase II Agency Parcels by the Developer substantially in the
form of Attachment No. 17, attached hereto and fully incorporated by this reference.
"Sales Tax Revenues" means that portion of taxes (not to exceed one percent (1 %)) derived
and received by the City from the imposition of the Bradley-Bums Uniform Local Sales and Use Tax
Law commencing with Section 7200, et seq. of the California Revenue and Taxation Code,
as amended, or its successor statute, arising from all businesses and activities conducted at the
Project in accordance herewith which are subject to such Sales and Use Tax.
"Schedule of Performance" means that certain Schedule of Performance attached hereto as
Attachment No.3 and incorporated herein by reference, which schedule, subject to the provisions of
this Agreement, sets out the dates and/or time periods by which certain obligations set forth in this
Agreement must be accomplished. The Schedule of Performance is subject to revision from time to
time as mutually agreed upon in writing between the Developer and the Agency's Executive Director
based on extension(s) necessary due to changes in circumstances or other factors not known by the
parties as of the Date of Agreement. Each request for an extension of an item or items in the
Schedule of Performance shall be in writing stating the requested extension period, the reasons for
such extension, the facts and circumstances related to the need for such extension, and other
information reasonably necessary for the Agency staff, and the Agency Board, as and if required,
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(or the Developer, if the requested extension is for an Agency performance item) to understand the
basis for such request and the circumstances that did not exist as of the Date of Agreement that
necessitate such requested extension. The Agency's Executive Director is authorized on behalf of
the Agency to agree to make such revisions as he or she deems reasonably necessary based on
changes in circumstances or other factors not known as of the Date of Agreement; provided however,
in the event any proposed extension(s) to the Schedule of Performance being considered between the
Agency Executive Director and the Developer may cause the completion of construction date of any
Phase of the Improvements to be extended beyond six (6) months from the original date agreed
between the parties for date of completion of any Phase as such date is set forth in the Schedule of
Performance as of the Date of Agreement, then such extension(s) to the Schedule of Performance
shall require the consideration and approval by the Agency Board of an amendment to this
Agreement. It is understood that the Schedule of Performance is subject to all of the terms and
conditions set forth in the text of this Agreement. The summary of the items of performance in the
Schedule of Performance is not intended to supersede or modify the more complete description in the
text; in the event of any inconsistency between the Schedule of Performance and the text of this
Agreement, the text shall govern.
"Schematic Drawings" is defined in Section 900, et seq.
"Scope of Development" means that certain Scope of Development attached hereto as
Attachment No.4 and incorporated herein by reference, which describes the scope, amount, and
quality of development of each Phase of the Project and the Improvements to be constructed by the
Developer pursuant to the terms and conditions of this Agreement and the Entitlement, and also
includes a description of the Public Improvements. In addition to the narrative description set forth
in the Scope of Development, said attachment shall include copies of the elevations, plans, and
description of the materials for the Improvements (such as exterior skin of office buildings, exterior
common area improvements, type and materials for landscaping), which shall evidence and depict
the First Class, First Quality architecture, design, and construction of the Improvements to be
constructed pursuant to this Agreement. The final content of the Scope of Development shall be as
determined through and by the Entitlement process. All conditions of approval imposed and made a
part of the Entitlement shall be deemed a part of the Scope of Development.
"Site" means and includes the 4.39 acres of real property upon which the Project will be
developed and operated.
The Site is designated and depicted on the Site Map (Attachment No. I) and described in the
Description of the Site for Recording, (Attachment No.2).
The Site consists of the following:
I. The "Agency Parcels" are those parcels of real property currently owned by
the Agency and so depicted on the Site Map (Attachment No. I), including Assessors Parcels Nos.
568-450-3900, 568-450-4100, 568-450-4200, and 568-450-4500; and
2. The "Developer Parcels" are those parcels of real property currently owned
by the Developer, or for which the Developer has legal rights to acquire fee title to such parcels, and
so depicted on the Site Map (Attachment No. I), including Assessors Parcels Nos. 568-450-3400,
568-450-3500,568-450-3600,568-450-3700, 568-450-3800, 568-450-4000, and 568-450-4400; and
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3. The "Acquisition Parcels" include those parcels of real property currently
owned by one or more third parties, and not the Agency or the Developer, and so depicted on the
Site Map, including the following Assessors Parcels: Acquisition Parcels within the Redevelopment
Project Area: 568-450-4300, 568-450-4600, 568-450-4700, and 568-450-4800, and Acquisition
Parcel located outside the Redevelopment Project Area: 568-450-4900.
The Agency Parcels, the Developer Parcels, and the Acquisition Parcels collectively
comprise the Site.
"Site Map" means the maps of the Site attached hereto as Attachment No. I and incorporated
herein by reference. The Site Map depicts (i) the location of the Agency Parcels, the Developer
Parcels, and the Acquisition Parcels, along with adjacent public rights-of-way, (ii) the Phase I
Parcels, the Phase II Parcels, and the Phase III Parcels, and (iii) generally depicts the footprint of the
development of the Project and each Phase thereof.
"State" means the State of California.
"Three Party Relocation Agreement" means that certain agreement certain agreement
entitled, "Three Party Agreement for Relocation/Consulting Services [Gateway Project]" dated
, 2000, entered into among Developer, the City, and Stadler, Schober & Klein.
"Title Company" means First American Title Insurance Company for the Phase I
Conveyance, the Phase II Conveyance, and the Phase III Conveyance.
"Title Policy" is defined in Section 204 herein.
"Town Centre Sign Policy, Town Centre Design Manual Sign Criteria" means the
Agency's and City's adopted policy regarding signage in the Town Centre I and Town Centre II
Redevelopment Project Areas, a true copy of which is attached hereto as Attachment No. 14 and
fully incorporated by this reference. The Entitlement for the Project, and each Phase thereof, will
require conformity with the Town Centre Sign Policy, Town Centre Design Manual Sign Criteria.
102, Representations and Warranties.
102.1 Agency Representations. The Agency represents and warrants to Developer
that the Agency is a public body, corporate and politic, existing pursuant to the Community
Redevelopment Law, which has been authorized to transact business pursuant to action of the
City Council of the City. Further, the Agency represents and warrants to the Developer the
execution, performance and delivery of this Agreement by Agency has been fully and duly
authorized by the Agency Board at a public meeting as set forth in the Resolutions of the Agency and
City Council, Attachment No. 13. The Agency shall advise the Developer in writing if there is any
change pertaining to any matters set forth or referenced herein.
102.2 Developer Representations. The Developer represents and warrants to the
Agency as follows:
(a) Authority. The Developer is a duly established limited liability
company in good standing under the laws of the State of California, authorized to transact business in
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the State of California, and has duly authorized, executed and delivered this Agreement and, any and
all other agreements and documents required to be executed and delivered by the Developer in order
to carry out, give effect to, and consummate the transactions contemplated by this Agreement.
(b) No Conflict. As of the Date of Agreement, the Developer does not
have any material contingent obligations or any material contractual agreements which could
materially or adversely affect the ability of the Developer to carry out its obligations as set forth in
this Agreement. To the extent any material contingent obligation or any material contractual
agreements which could materially or adversely affect the ability of the Developer to carry out its.
obligations hereunder occur, Developer shall promptly notify the Agency in writing.
(c) No Legal Proceedings. As of the Date of Agreement, there are no
material legal proceedings pending or, to the Developer's actual knowledge, there are no legal
proceedings threatened, to which the Developer, or any of the members of the Developer limited
liability company entity, is or may be made a party, or to which any of its property is or may become
subject which could materially or adversely affect the ability of the Developer to carry out its
obligations hereunder. To the extent there arises any material legal proceedings, real or threatened,
to which the Developer, or any member of the limited liability company, becomes, or may be made a
party, or to which any of its property is or may become subject, which could materially or adversely
affect the ability of the Developer to carry out its obligations hereunder, Developer shall promptly
notify the Agency in writing.
(d) No Developer Bankruptcy. There is no action, legal or
administrative proceeding, pending, or to the Developer's actual knowledge threatened, looking
toward the dissolution or liquidation of the Developer, any member of the Developer limited liability
company entity, or any legal entity which comprises the Developer Entity.
(e) Experience and Qualifications. The Developer represents to the
Agency that the Developer and/or the principals of the Members of the Developer entity have the
experience and qualifications necessary to perform as Developer pursuant to this Agreement.
(1) Hazardous Materials. Neither Developer or any member of the
limited liability company, nor, to Developer's actual knowledge, any previous owner, tenant,
occupant, or user of the Site used, generated, released, discharged, stored, or disposed of any
Hazardous Materials on, under, in, or about the Site, or transported any Hazardous Materials to or
from the Site in violation of applicable Environmental Law.
(g) Compliance with Environmental Law. To Developer's actual
knowledge, the Site and the present use of the Site is not in violation of any applicable
Environmental Law or Governmental Requirements, except as has been fully disclosed in a separate
writing to the Agency prior to the Date of this Agreement.
Each of the foregoing items (a) to (g), inclusive shall be deemed to be an ongoing
representation and warranty. The Developer shall advise the Agency in writing ifthere is any change
pertaining to any matters set forth or referenced in the foregoing items.
For purposes of subsections (c), (d), (1), and (g) above in this Section 102.2, the term
"Developer's actual knowledge" shall mean the to actual knowledge of James V. Pieri, Co-Managing
Member of the Developer entity and Jess Rae Booth, Co-Managing Member of the Developer entity.
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103. Prohibition Against Change in Ownership, Management and Control of
Developer. The qualifications and identities of the Members of the limited liability company
comprising the Developer entity are of particular concern to the City and the Agency. It is because
of those qualifications and identities that the Agency has entered into this Agreement with the
Developer. No voluntary or involuntary successor in interest of the Developer shall acquire any
rights or powers under this Agreement except as expressly set forth herein. The provisions and
restrictions of this Section 103 shall remain in full force and effect for the full term of financial
participation between the Agency and the Developer, i.e., until calculation of the Final Fifth
Installment Payment of Agency Participation, subject to and as more fully set forth in Section 103.6
hereinafter.
103.1 Agency Consent Required. Prior to the issuance of the Certificate of
Completion for the completion of all Phases of the Project, inclusive Phase I, Phase 11, and Phase Ill,
the Developer shall not assign all or any part of this Agreement, or the Site, or any portion thereof, or
interest therein, or any rights hereunder without the prior written approval of the Agency.
Assignments for financing purposes shall be approved by the Agency in accordance with the
requirements ofthis Agreement. The Developer covenants the financing(s), refinancing, and other
assignments for financing purposes shall be reasonably necessary in order to meet Project Costs
and/or legitimate operating expenses incurred by Developer in the construction, operation, and
maintenance of the Project and/or such financing, refinancing, or other assignment shall not
materially affect the flow of Net Property Tax Increment to the Agency and Sales Tax Revenues to
the City negatively, and other local revenues to the City and or the Agency.
(a) The Agency shall approve (or disapprove) any other requested
assignment within thirty (30) days after receipt of written request for approval from the Developer
and shall not unreasonably withhold, delay, or condition its approval of an assignment to a proposed
assignee who in the reasonable opinion of the Agency is financially capable and has the development
qualifications and experience to perform the duties and discharge the obligations it would be
expressly assuming under this Agreement. Prior to any assignment becoming effective which
requires Agency approval hereunder, the assignee shall be required to execute (or represent it is
ready and willing to execute) and deliver to the Agency a written assignment and assumption
agreement, in form reasonably satisfactory to the Agency's legal counsel, expressly assuming all
obligations of the Developer pursuant to this Agreement which arise after the effective date of the
assignment, and in which assignment and assumption agreement the assignee shall assume or
Developer shall expressly retain and continue to assume and remain responsible for all performance
of the Developer which arose prior to the effective date of the assignment.
(b) The written request for a proposed transfer by the Developer to the
Agency Executive Director required by this Section 103 shall include an informational statement that
contains: (1) the name and address of the proposed transferee(s) ("Transferee"); (2) current and
complete financial statements (in customary form) of the proposed Transferee certified as true,
complete, and correct by an officer, partner, or owner thereof, and any other information and
materials culled by the Developer (including without limitation, credit reports, business plans,
operating history, bank and character references) evidencing to the Agency Executive Director the
Transferee's financial responsibility, character, reputation, and experience with the ownership and/or
management of First Class, First Quality commercial office projects, which include office, retail, and
restaurant components, comparable to the Project; (3) evidence that the operation and management of
the Project will be in conformity with the covenant s herein; (4) a reasonable description of the nature
of such Transferee's business and proposed continued use, operation, and maintenance of the Project
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as a First Class, First Quality office project in conformity with the covenants of Section 1000, et seq.
herein; (5) a description of the proposed effective date of the transfer; and (6) two (2) true copies of
the proposed assignment or transfer agreement.
(c) The Developer covenants that it shall conduct reasonably adequate
informational due diligence of a proposed Transferee, so that Developer shall adequately evidence to
the Agency Executive Director that the Transferee shall conform to the covenants of Section 1000,
et seq., herein, for example that Transferee has an established track record for successful ownership,
operation, or management of comparable First Class, First Quality office projects of comparable size,
scope and use, or Transferee has provided reasonable and enforceable assurances to Developer that it
shall provide an experienced, first quality management team responsible for management of the
Project and so direct the management team to operate and manage the Project in conformity with
Section 1000, et seq.
(d) The Developer may consider a proposed Transferee who may be an
institutional investor, so long as the due diligence undertaken by the Developer evidences that the
ongoing management and operation of the Project by and the experience and qualifications of the
proposed Transferee shall and will conform with the requirements of this Agreement. The Proposed
Transferee shall have demonstrated to the Developer, as the seller of the Project, and thereby the
Developer shall have demonstrated to the Agency that the ongoing management and operation of the
Project shall continue to be undertaken by a qualified project/property manager of First Class, First
Quality office project properties of similar size and quality to the Project that also include retail
and/or restaurant components, such as the qualifications and experience of the Developer itself as a
first class property manager/operator, and the Transferee is financially capable and has the
qualifications and experience to perform the duties and discharge the obligations it would be
expressly assuming under this Agreement.
103.2 Permitted Assignments. Notwithstanding any other provision of this
Agreement to the contrary, Agency approval of an assignment of this Agreement or any interest
herein shall not be required in connection with any of the following:
(a) Any transfers among the co-managing members of the limited
liability company Developer entity, so long as Coast Pacific Properties, LLC (of which
James V. Pieri shall be and remain the managing member) retains a minimum of twenty-five percent
(25%) of the ownership or beneficial interest in the Developer entity and retains (or shares)
management control of the Developer entity;
an individual;
(b) Transfers resulting from the death or mental or physical incapacity of
(c) Transfers or assignments in trust for the benefit of a spouse, children,
grandchildren, or other family members;
(d) Transfers of security interest(s) in the Site through deed(s) of trust for
which an approved Lender or Lenders is/are the beneficiary(ies) in connection with financing (and
refinancing thereo1) of the acquisition of the Site, the construction through completion of the
Improvements, and/or the operation of each or any Phase of the Improvements, subject to such
financing having been approved pursuant to the terms of this Agreement.
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(e) A sale of the Site at foreclosure (or a conveyance thereof in lieu of a
foreclosure) pursuant to a foreclosure thereof by a lender approved by the Agency in accordance with
Section 1309 of this Agreement;
(1) A transfer of stock in a publicly held corporation or the transfer of the
beneficial interest in any publicly held partnership or real estate investment trust;
(g) The granting of temporary or permanent easements or permits to
governmental or quasi-governmental agencies to facilitate the development of the Site, or any Phase
thereof; or
(h) The leasing of any part or parts of a building or structure on the Site
for a term commencing upon completion or in the ordinary course of operation of the Project so long
as such lease(s) is not a financing or lease/purchase arrangement, and except to the extent the Agency
has the right to approve or disapprove tenants and uses on the Site pursuant to the provisions herein.
103.3 Effect of Non-Approved Assignment. In the event that the Developer does
assign this Agreement or any of the rights herein, or does sell, transfer, conveyor assign any part of
the Site or the improvements thereon prior to the calculation of the Final Fifth Installment Payment
(subject to and as more fully set forth in Section 103.6 hereinafter), in violation of the terms of this
Agreement ("Non-Approved Assignment or Transfer"), the Agency shall be entitled to cease
payment of any outstanding or further installment payments of the Agency Participation, and/or seek
any remedy available at law or equity for full repayment of previous installment payment(s) that
were paid prior to the Agency's knowledge of any Non-Approved Assignment or Transfer, but not
for any installment payment of Agency Participation that was made prior to any Non-Approved
Assignment or Transfer, by the amount that the consideration payable for such Non-Approved
Assignment or Transfer is in excess of installment payments made by the Agency to the Developer,
including carrying charges and costs related thereto. The consideration payable for such Non-
Approved Assignment or Transfer (to the extent it is in excess of an amount authorized) shall belong
to and be paid to the Agency and until so paid the Agency shall have a lien on the Site and any part
involved for such amount. Provided however, no remedy obtained by the Agency for a Non-
Approved Assignment or Transfer shall provide it more in repayment than an amount equal to the
cumulative amount of Agency Participation paid to date of the Non-Approved Assignment or
Transfer, in order to prevent the Agency from profiting from availing itself of any remedy available
at law or equity due to a Non-Approved Assignment or Transfer.
103.4 Permitted Successors Obligated. All of the terms, covenants and conditions
of this Agreement shall be binding upon and shall inure to the benefit of the Developer and the
permitted successors and assigns of the Developer. Whenever the term "Developer" is used in this
Agreement, such term shall include any other permitted successors and assigns as herein provided.
103.5 Notice to Agency Required. The Developer shall promptly notify the
Agency of any and all changes whatsoever in the identity of the parties in control of the Developer or
the degree thereof, of which it or any of its members have been notified or otherwise have knowledge
or information.
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103.6 Termination of Assignment Restrictions.
(a) As to Phase I Improvements and Phase II Improvements. The
restrictions of this Section 103 as such relate to the Phase I Improvements and the Phase II
Improvements shall terminate after payment by the Agency to the Developer of the Third Installment
Payment of Agency Participation.
(b) As to Phase III Improvements. The restrictions of this Section 103
as such relate to the Phase III Improvements shall terminate after the calculation of the Final Fifth
Installment Payment of the Agency Participation pursuant to the terms of Section 802.7 herein.
200. ASSEMBLY OF THE SITE.
The Agency and Developer agree that the Site shall be assembled in Phases, Phase I and/or
Phase 11, together or separately, and thereafter Phase III. For each Phase the Developer shall assign
to the Agency all interests in and all legal rights to acquire each of the Developer Parcels which are a
part of the applicable Phase. For each applicable Phase, the Agency shall accept such assignment of
rights and shall thereafter immediately on the same day re-assign all such rights back to the
Developer, with such re-assignment being subject to all terms, conditions, and covenants of this
Agreement. Further, at the time of the each applicable Conveyance for each Phase of the Project,
as to the applicable Agency Parcels and Acquisition Parcels (unless sooner agreed between the
parties), the Agency shall subject such conveyances to all terms, conditions, and covenants of this
Agreement. The Agency Participation shall be paid by the Agency to the Developer in consideration
for such assignments and conveyances for performance and completion of each Phase, as hereinafter
more fully described, and for the imposition of all terms, covenants, and conditions of this
Agreement as covenants running with the land for all applicable parcels as to each Phase. The
Agency Participation shall be paid by the Agency to the Developer in installment payments,
subject to the Conditions Precedent hereinafter set forth in Section 800, et seq. The cumulative
amount of Agency Participation was determined by an evaluation ofthe fair reuse value of the
assembled Site, assuming all Phases of development in full conformity with the Scope of
Development and Entitlement and long term operation thereof in conformity with the Agreement
Affecting Real Property.
201. Assembly of Phase I Portion of Development Site.
201.1 Phase I Agency Parcels and Certain Developer Parcels. The Phase I
development shall include that portion ofthe Site depicted on the Site Map as the Phase I Parcels,
including the designated Phase I Agency Parcels and certain Developer Parcels. The designated
Phase I Agency Parcels shall be conveyed by the Agency to the Developer, subject to the Escrow and
Conveyance requirements hereinafter set forth. The Phase I Developer Parcels shall be acquired and
assembled by the Developer, at no expense to the Agency. The Phase I Developer Parcels shall be
assembled with the designated Phase I Agency Parcels by the Developer and parcelized through the
Parcel Map process.
201.2 Phase I Assignment of Developer Parcels to Agency and Re-Assignment
to Developer in Connection with the Phase I Conveyance. For each and all of the Developer
Parcels owned by the Developer and that are a part of the Phase I Parcels and for each and all of the
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Developer Parcels within Phase I for which the Developer has legal rights to acquire fee title under
contract, including without limitation option(s) to acquire, pending acquisition(s) in escrow subject to
purchase and sale agreement(s), or right(s) of first refusal to purchase and at a time immediately prior
to and in conjunction with the Phase I Conveyance, the Developer shall fully assign all such rights to
the Agency. In connection with the Phase I Conveyance and at the time all Conditions Precedent to
the Phase I Conveyance have been met, the Agency shall accept such assignment of rights and shall
thereafter immediately the same day re-assign all such rights in the Phase I Developer Parcels back to
the Developer, subject to all terms, conditions, and covenants of this Agreement. Such
assignment/re-assignment(s) shall be pursuant to agreement(s) in a form reasonably acceptable to the
Agency Executive Director and its legal counsel. Thereafter, Developer shall complete acquisition
and assembly of the Phase I parcels through close of escrow for all outstanding Developer Parcels
included within the Phase I Parcels at no expense to the Agency.
202. Assembly of Phase II Portion of Development Site.
202.1 Phase II Agency Parcels and Certain Developer Parcels. The Phase"
development shall include that portion of the Site depicted on the Site Map as the Phase" Parcels,
including the Phase" Agency Parcels, the Phase" Acquisition Parcels, and certain Developer
Parcels. The Phase" Agency Parcels and the Phase" Acquisition Parcels shall be conveyed by the
Agency to the Developer, subject to the Escrow and Conveyance requirements hereinafter set forth.
The Phase" Developer Parcels shall be acquired and assembled by the Developer, at no expense to
the Agency. The Phase" Acquisition Parcels shall be acquired, if at all, pursuant to the terms of
Section 400, et seq., and Section 500, et seq. herein. The Phase" Developer Parcels shall be
assembled with the Phase" Agency Parcels and the Phase" Acquisition Parcels by the Developer
and parcelized through the Parcel Map process.
202.2 Phase II Assignment of Developer Parcels to Agency and Re-Assignment
to Developer. For each and all of the Developer Parcels owned by the Developer that are a part of
the Phase" Parcels and for each and all of the Developer Parcels within Phase" for which the
Developer has legal rights to acquire fee title under contract, including without limitation option(s) to
acquire, pending acquisition(s) in escrow subject to purchase and sale agreement(s), or right(s) of
first refusal to purchase and at a time immediately prior to and in conjunction with the Phase"
Conveyance, Developer shall fully assign all such rights to the Agency. In connection with the
Phase" Conveyance and at the time all Conditions Precedent to the Phase" Conveyance have been
met, the Agency shall accept such assignment of rights and shall thereafter immediately the same day
re-assign all such rights in the Phase" Developer Parcels back to the Developer, subject to all terms,
conditions, and covenants of this Agreement. Such assignment(s) shall be pursuant to agreement(s)
in a form reasonably acceptable to the Agency Executive Director and its legal counsel. Thereafter,
Developer shall complete acquisition and assembly of the Phase" parcels through close of escrow
for all outstanding Developer Parcels included within the Phase" Parcels at no expense to the
Agency.
203. Assembly of Phase III Portion of Development Site.
203.1 Phase III Acquisition Parcels and Certain Developer Parcels. The
Phase III development shall include that portion of the Site depicted on the Site Map as the Phase III
Parcels, including the Phase III Acquisition Parcels and certain Developer Parcels. The Developer at
no expense to the Agency shall acquire the Phase III Developer Parcels. The Phase III Acquisition
Parcels shall be assembled, if at all, pursuant to the terms of Section 600, et seq. and Section 700, et
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seq. herein. The Phase III Developer Parcels shall be assembled with the Phase III Acquisition
Parcels by the Developer and parcelized through the Parcel Map process.
203.2 Phase III Assignment of Developer Parcels to Agency and Re-Assignment
to Developer. For each and all of the Developer Parcels owned by the Developer that are a part of
the Phase III Parcels and for each and all of the Developer Parcels within Phase III for which the
Developer has legal rights to acquire fee title under contract, including without limitation option(s) to
acquire, pending acquisition(s) in escrow subject to purchase and sale agreement(s), or right(s) of
first refusal to purchase and at a time immediately prior to and in conjunction with the Phase III
Conveyance, Developer shall fully assign all such rights to the Agency. In connection with the
Phase III Conveyance and at the time all Conditions Precedent to the Phase III Conveyance have
been met, the Agency shall accept such assignment of rights and shall thereafter re-assign all such
rights in the Phase III Developer Parcels back to the Developer, subject to all terms, conditions, and
covenants of this Agreement. Such assignment(s) shall be pursuant to agreement(s) in a form
reasonably acceptable to the Agency Executive Director and its legal counsel. Thereafter, Developer
shall complete acquisition and assembly of the Phase III parcels through close of escrow for all
outstanding Developer Parcels included within the Phase III Parcels at no expense to the Agency, and
the disposition of the Phase III Acquisition Parcels by the Agency to the Developer as hereinafter
more fully described.
204. Title Condition; Preliminary Report for the Site. Within fifteen (15) days of the
Date of this Agreement, Developer shall cause First American Title Insurance Company to deliver to
Agency a preliminary report concerning title exceptions (the "Initial Preliminary Report") with
respect to the title to all of the Site, inclusive of the Phase I Parcels, the Phase" Parcels, and the
Phase III Parcels. Notwithstanding the foregoing, the Developer's obligation to deliver to the
Agency the Initial Preliminary Reports shall be contingent on the Title Company's willingness to
issue such reports. Within the time set forth in the Schedule of Performance Developer shall provide
the Agency with legible copies of the documents underlying the exceptions ("Exceptions") set forth
in said Initial Preliminary Report. The Agency shall have the right to reasonably approve or
disapprove the Exceptions.
204.1 Review of Preliminary Report.
(a) Within the time set forth in the Schedule of Performance, Agency
shall give written notice to Developer of Agency's approval or disapproval of any of such
Exceptions; provided, however, that the Agency shall not disapprove of the Approved Title
Exceptions set forth above in Section 204.2.
(i) If Agency notifies Developer of its disapproval of any
Exceptions in the Initial Preliminary Report, Developer shall have the right, but not the obligation, to
remove any disapproved Exceptions within thirty (30) days after receiving written notice of
Agency's disapproval or provide assurances satisfactory to Agency that such Exception(s) shall be
removed.
(b) The Agency's obligation to proceed with the Closing for each Phase
of the Project and to provide each installment of the Agency Participation is expressly conditioned on
the requirement that the condition oftitle be reasonably approved by the Agency Executive Director.
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(c) After the Agency has approved the Initial Preliminary Report in
accordance with the foregoing procedures, Agency shall have the right to approve or disapprove any
additional Exceptions subsequently reported by the Title Company which are not created by Agency.
Except as expressly permitted in this Agreement, Developer shall not voluntarily create any new
exceptions to title to the Site following the Date of Agreement without Agency's approval and
Developer shall provide Agency with an additional preliminary report (the "Additional Preliminary
Report") when and if such Additional Preliminary Report is reasonably requested by Agency and the
Agency shall have the same rights regarding the approval/disapproval of any Exceptions set forth in
such Additional Preliminary Report not previously approved by the Agency as set forth herein for the
Agency's review of the Exceptions set forth in the Initial Preliminary Report.
(d) With regard to review and curing of Exceptions to title, the Agency
agrees to cooperate with the Developer and the Developer agrees to cooperate with the Agency to
facilitate and with the objective to complete and correct all title matters.
204.2 Approved Title Exceptions. The following are exceptions to title that the
Agency preapproves.
(a) Existing easements of record which the Agency's Executive Director
reasonably determines shall be shown on and reserved in the Parcel Map; and
(b)
amendments thereto; and
Record notification of the Agency's Redevelopment Plan, and
(c) Any maintenance easement(s) reserved in favor of the Agency and/or
City, as the dominant tenement, and the Developer, as the servient tenement, for maintenance of any
adjacent public rights-of-way directly adjacent to the Site, or any Phases of parcels thereof, that are a
part of the architectural and design elements of the Project, as reasonably required by the City
Engineer; and
(d) The Title Company's standard printed exceptions to title for similar
transactions in Southern California; and
(e) Such other exceptions to title as may hereafter be expressly approved
by the Agency in its sole and absolute discretion.
Items (a) through (e), inclusive, of this Section 204.2 are collectively the "Approved Title
Exceptions."
205. Parcelization of the Site and Parcel Map Process for All Phases of Project. Prior
to each applicable Closing for each Phase and within the time set forth in the Schedule of
Performance, the Developer shall prepare or cause to be prepared at the Developer's sole cost and
expense and in compliance with the Subdivision Map Act, California Government Code Sections
66410, et seq., the City's Subdivision Ordinance, and any and all other applicable laws or regulations
a Parcel Map to subdivide the Site into the Phase I Parcels, the Phase II Parcels, and the Phase 1II
Parcels to ensure that all of such parcels are legally separate and distinct parcels ready for
development of each applicable Phase. The Parcel Map shall be prepared and processed in
conformity with all City requirements and policies, including without limitation all conditions of
approval imposed by the various City departments, the Planning Commission, and City Council.
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The Agency shall cooperate with the Developer and provide reasonable assistance in securing
the Parcel Map for each Phase; provided, however, that the Agency (and the City) shall not be
required to incur any out-of-pocket expense for such purpose and the Agency's obligation to provide
reasonable cooperation and assistance (and its obligation to cause the City's reasonable cooperation
and assistance) shall not be deemed as a representation or warranty or express or implied pre-
approval regarding actions as to which the City has reserved discretion pursuant to applicable law.
Subject to the Developer's right to reimbursement for Permit Fees, as provided herein, any and all
out-of-pocket expenses actually incurred by the Agency and/or the City in providing such assistance
shall be the sole financial responsibility of the Developer and shall be reimbursed by the Developer
prior to, and as a condition precedent to, each Closing for each Phase of the Project; provided
however out of pocket expenses shall not include the overhead of persons directly employed by and
considered exempt or non-exempt employees of the Agency or the City.
206. Right of Access. Prior to each applicable Closing for each Phase of the Project and
after the Date of this Agreement, the Developer shall execute such documents necessary to provide
easements, or other right of access agreements as may be reasonably required by the Agency, and as
are approved by Developer's and Agency's legal counsel, granting the Agency, the City, or any other
public entity access to or interests in the Site, and each Phase thereof, to timely facilitate the
commencement and construction of the Public Improvements thereon, in particular in connection
with the Phase I Improvements which include the Public Improvements. All third party and out of
pocket costs reasonably incurred by the Agency in the preparation of such agreement(s) and in
connection with the revision or review of such agreement(s) to provide such rights of access pursuant
to this section shall be the sole financial responsibility of the Developer; provided however the
foregoing shall not include the overhead of persons directly employed by and considered exempt or
non-exempt employees of the Agency or the City.
Any such documents shall obligate the Agency, the City, or any other public entity to comply
with all of the Developer's and the Developer's general contractor's safety rules, to not interfere with
the Developer's construction activities and/or the use or operation of the Project, and to indemnify,
defend, and hold the Developer harmless from and against any claims, losses, liabilities, and
damages arising out of the activities of the Agency, the City, or such other public entity in
constructing or installing such public improvements. In addition, any such documents shall provide
that in the event that the Agency, the City, or any other public entity causes any damage to any
portion of the Site while exercising its rights under the easement, encroachment permit, or other right
of access agreement then the Agency, the City, or any other public entity shall promptly restore the
subject property as nearly as possible to the physical condition existing immediately prior to said
entity's entry onto the property.
207. Environmental Condition of the Site.
207.1 Hazardous Materials. Developer shall not cause or permit the presence, use
generation, release, discharge, storage, or disposal of any Hazardous Materials on, under, in, or
about, or the transportation of any Hazardous Materials to or from, the Site, or any Phase of parcels,
or parts thereof, in violation of applicable Environmental Law.
207.2 Initial Environmental Report. As of the Date of this Agreement, the
Developer represents to the Agency that it has provided the Agency with a true copy of the following
report entitled: "Phase I Environmental Site Assessment, Gateway Chula Vista, Chula Vista,
California" prepared for Developer by Geocon Environmental Consultants, Inc., Project
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No. 08947-06-01 dated November 22, 1999, which document shall be referred to as the
"Initial Environmental Report." The Initial Environmental Report pertains to the environmental
condition of approximately 4.36-acres of the Site at the northwest intersection of Third Avenue and
H Street at 478, 482, 492, 494, and 496 Third Avenue, and 353, 341,337,335,331,329,327,323,
321, and 315 H Street, Assessors Parcel Nos. 568-450-34 through 568-450-49, Chula Vista,
California. The Initial Environmental Report presents the details of the environmental site
assessment and summarizes the findings relative to the potential presence, as of the dates of the latest
site visit/records review, of hazardous materials/wastes at the site at levels likely to warrant
mitigation action pursuant to current regulatory guidelines. The summary of findings in the Initial
Environment Report is set forth in Section 7 of such report. The Initial Environmental Report
concluded that "[b]ased on the findings outlined in this {Initial Environmental R]eport, with the
exception of property at 478 Third Avenue, the potential for the existing presence of impacts to the
site from hazardous materials/wastes on-site or on properties in the vicinity is considered 'low'.
Additional assessment, beginning with the complete access to the property at 478 Third Avenue,
would be necessary to provide an opinion regarding the potential for concerns associated with this
portion of the subject site."
207.3 Agency's Environmental Contingency. This Agreement and the Agency's
obligation to proceed with each Phase of the Project is expressly contingent upon the Developer
satisfying either of the following conditions (a) or (b) (inclusive of subparts) prior to and as a
condition to each Conveyance:
(a) evidence satisfactory to the Agency, in the form of an environmental
assessment report, from a licensed, qualified contractor who is acceptable to the Agency, who shall
be hired and paid by the Developer, which report, together with the Initial Environmental Report,
enables the Agency and its environmental consultant to reasonably conclude that there is no evidence
of the violation of any Environmental Law on the Site as a whole and no further remediation of any
Hazardous Materials is required Phase; or
(b)
and, as applicable, (iv):
providing the Agency with evidence of each of (i) to (iii) inclusive,
(i) a letter from San Diego County Department of Environmental
Health which indicates that, based upon the information then known, the San Diego County
Department of Environmental Health has no intention to take further action in connection with the
applicable Phase parcels, or has no intention to take further action in connection with the applicable
Phase parcels except on-going monitoring; and
1. if such letter provided pursuant to (i) above, indicates
a need for anyon-going monitoring such will be accomplished in accordance with subsection (iv).
(ii) a letter from the San Diego Regional Water Quality Control
Board stating that, based upon the information then known, the San Diego Regional Water Quality
Control Board has no intention to take further action in connection with the applicable Phase parcels
or has no intention to take further action in connection with the applicable Phase parcels except on-
going monitoring; and
1. if such letter indicates a need for anyon-going
monitoring such will be accomplished in accordance with subsection (iv).
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(iii) no other governmental authority with jurisdiction over the
applicable Phase parcels requires affirmative remedial action by the Developer to conform with
applicable Environmental.
(iv) In the event that the San Diego Regional Water Quality
Control Board, or any other governmental agency with jurisdiction over the applicable Phase parcels,
requires that any device(s), including without limitation monitoring well(s), be placed on any portion
of the applicable Phase parcels in order to allow the continued and on-going monitoring and/or
evaluation of the environmental condition of the applicable Phase parcels, at no expense and no
liability to Agency or the City, the Developer shall be financially and legally responsible for and
shall bear all costs related to such monitoring, including without limitation the maintenance of any
monitoring equipment. In addition, in the event such on-going monitoring of the environmental
condition of the applicable Phase parcels and any remediation resulting from such monitoring of the
environmental condition of the applicable Phase parcels is required, the Developer shall execute
documentation satisfactory to Agency's legal counsel and shall provide the Agency with adequate
insurance or security which together shall evidence the Developer's financial and legal
responsibilities with respect to such monitoring and/or remediation, as applicable. Developer shall
undertake or cause to be undertaken any and all remediation which may be required by any
applicable governmental agency as a result of such monitoring of the environmental condition of the
applicable Phase parcels.
(c) Nothing contained in this section regarding monitoring and/or
remediation shall obligate the City (or the Agency to cause the City) to proceed with any applicable
Conveyance or payment of the applicable installment(s) of the Agency Participation in the event that
there are any remediation requirements known to Developer at or prior to the time for Agency
performance of conveyance or payment obligations; provided however, the Agency shall be
obligated to proceed with the applicable Conveyance or applicable payment obligation if the
Developer is diligently proceeding with remediation of the Hazardous Materials condition or release
in conformity with Governmental Requirements in such a manner as to allow for the timely
development of the Project pursuant to the requirements of this Agreement. In the event such
remediation obligations are known to Developer at or prior to such time and Developer has not
commenced and is not diligently proceeding with such remediation in conformity with Governmental
Requirements and this Agreement, then Developer shall disclose such obligations to the Agency in
writing prior to the applicable Closing and upon the receipt of such notification the Agency may
terminate this Agreement as to future performance obligations as set forth in the next subsection of
this section.
(i) The Agency is entitled to conduct such further and other
examination(s) and testing as it or any other responsible governmental authority may require or
request to determine the nature, source, scope, and extent of any Hazardous Materials. If the
Developer becomes aware of and/or if the licensed contractor selected by the Agency determines that
there are Hazardous Materials in, on, under or about the Site, including without limitation in the
groundwater, in violation of applicable Environmental Law, then the Agency may elect to:
(i) proceed with the applicable Phase Conveyance; or (ii) require the Developer to remove the
Hazardous Materials to the extent necessary to cause the applicable Phase parcels to comply with
applicable Environmental Law prior to the Agency's disposition of the applicable property.
If Developer fails or refuses to remove the Hazardous Materials to the extent necessary to cause the
applicable Phase parcels to comply with applicable Environmental Law within a reasonable time
after Agency notifies Developer or Developer becomes aware of the problem, Agency shall further
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be entitled to terminate this Agreement upon delivery of thirty (30) days written notice to Developer.
Regardless of which option is selected by the Agency, in the event Hazardous Materials in violation
of applicable Environmental Law are found in, on or under the Site, or the applicable Phase parcels,
neither party waives or relinquishes any common law or statutory rights it or they may have against
third persons arising from or related to the cause or source of the Hazardous Materials, or for
contribution or indemnity as a result of site evaluation, remediation and clean-up costs and liability.
207.4 Environmental Indemnity. Developer agrees to and hereby does indemnify,
defend and hold the Agency and the City, and their respective officers, employees and agents,
harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability,
deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees)
(hereinafter collectively the "Claim"), resulting from, arising out of, or based upon (i) the presence,
release, use, generation, discharge, storage, or disposal of any Hazardous Materials on, under, in, or
about, or the transportation of any such materials to or from, the Site, or any Phase I Parcels, Phase"
Parcels, or Phase III Parcels, as applicable, in violation of applicable Environmental Law whether
discovered before or after the applicable Closing, or (ii) the violation, or alleged violation, of any
statute, ordinance, order, rule, regulation, permit, judgment, or license relating to the use, generation,
release, discharge, storage, disposal, or transportation of Hazardous Materials on, under, in, or about,
to or from, the Site, or any Phase I Parcels, Phase" Parcels, or Phase III Parcels, as applicable,
whether discovered before or after the Closing. This indemnity shall include, without limitation, any
Claim for personal injury including sickness, disease or death, tangible or intangible property
damage, compensation or lost wages, business income, profits or other economic loss, damage to the
natural resource or the environment, nuisance, pollution, contamination, leak, spill, release, or other
adverse effect on the environment. This indemnity shall not include any Claim to the extent directly
caused directly by the negligent or intentional activities of the Agency or the City, or any of their
officers, employees, or agents.
208. Occupants of the Site. All right(s) to possession of all portions of the Site, the
Phase I Parcels, the Phase II Parcels, and the Phase III Parcels, shall be cleared by and shall be the
sole financial responsibility of the Developer. All relocation of occupants, including provisions of
relocation assistance and benefits pursuant to the Relocation Laws, of the applicable Phase I Parcels,
Phase II Parcels, and Phase III Parcels shall be completed or cause to be completed by the Developer
at its sole cost and expense using a qualified relocation consultant selected by the Developer, and
approved by the Agency. (The parties hereby preapprove Stadler, Schober & Klein and/or
Pacific Relocation Consultants, Inc. as qualified relocation consultants.) The relocation shall be
completed prior to the time Developer is ready to commence development of the applicable Phase of
the Project and close the applicable Conveyance. Under applicable Relocation Laws, each occupant
of the Site may be entitled to receive certain financial and advisory assistance in connection with the
relinquishment of possession of the applicable parcel and the relocation of the occupant(s).
At the time of each applicable Conveyance for each Phase of the Project there shall be no
possessory rights of third parties, or possession by any third party, except as may be consistent with
the Approved Title Exceptions and as may otherwise be expressly agreed to by the Agency in
writing.
208.1 Relocation. All the costs and expenses incurred or to be incurred by the
Developer (and/or the Agency, including any and all third party expenses) to cause the relocation of
all occupants, businesses, and residents from each Phase of the Site (including, but not limited to,
relocation payments made to displaced persons and businesses, pre- or post-relocation rental
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payments, fees and actual expenses of attorneys, relocation consultants and other experts employed
to effect the relocation of occupants, and preparation of relocation plans, etc.) as reasonably
determined by the Agency, or its designated representative, or the Developer shall be the sole
financial responsibility of the Developer. Each occupant shall be fully advised of all rights, ifany,
for relocation benefits or assistance under applicable Relocation Laws, or of any other eligible
compensation in connection with the relinquishment by any business, resident, or occupant of its
possession and rights to possession of any part of the Site, any interests in personal and real property
in connection with the Site, and its vacation of any portion of the Site.
For each business, resident or occupant of the Site caused to be relocated by the Developer,
or its representative, or the Agency, the Developer shall obtain, with the technical assistance of the
relocation consultant, a written acknowledgement and/or agreement ("Settlement Agreement") from
each such occupant that he/she/it understands and agrees that any payment provided in a settlement
or relocation package represents an all-inclusive settlement and is full payment and just
compensation for the acquisition of all property interests, both real and personal property, involved,
if any, and satisfies any and all other legal obligations, assistance and payments that may be required
by Relocation Laws or other applicable laws arising out of or related in any manner to the
termination of any leasehold interest, displacement, and/or relocation. The Settlement Agreement
shall include appropriate release, waiver, and indemnity provisions protecting the Developer, the
Agency, and the City and their officers, employees, agents, and consultants. The form of the
Settlement Agreement shall have first been reviewed by and approved as to form by the Agency legal
counsel.
(a) Developer hereby covenants and agrees to indemnify, save, protect,
hold harmless, and defend Agency, the City, and their respective representatives, volunteers, officers,
employees, agents, and consultants (collectively, "Indemnitees") from and against any and all
liabilities, suits, actions, claims, demands, penalties, damages (including without limitation penalties,
fines, and monetary sanctions), losses, costs, or expenses, including without limitation consultants'
and attorneys' fees, or relocation benefits claimed or payable under the Relocation Laws
(collectively, "Liabilities") which may now or in the future be incurred or suffered by Indemnitees by
reason of, or resulting from, in full or in part, or in any respect whatsoever from the relocation of
businesses, residents, or other occupants of the Site pursuant to this Agreement.
(b) Except for the obligations of the Agency and City under this
Agreement, Developer, on behalf of itself and its affiliates, and any and all successors and assigns,
hereby fully and finally releases Agency, the City, and their respective past and present elective and
appointive boards, commissions, officials and employees, representatives and agents from any and all
manner of actions, causes of action, suits, obligations, liabilities, judgments, executions, debts,
claims and demands of every kind and nature whatsoever, known and unknown, which Developer
and any of its affiliates, successors or assigns may now have or hereafter obtain against the Agency
or the City or their respective past and present elective and appointive boards, commissions, officials
and employees, representatives and agents by reason of, arising out of, relating to, or resulting from
in full or in part, the election of Developer to proceed with the assembly of the applicable Phase
parcels and the Project pursuant to this Agreement (collectively, "Claims"), which release shall
include but not be limited to any Claims for relocation benefits under federal, state, or local laws.
The parties agree that, with respect to the release of Claims as set forth above, all rights under
Section 1542 of the California Civil Code and any similar law of any state or territory of the United
States are expressly waived. Section 1542 reads as follows:
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Civil Code Section] 542. Certain claims not affected by general release.
A general release does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release which if known by him must have
materially affected his settlement with the debtor.
208.2 Developer Obligation to Advance Additional Funds as Security for
Payment of Relocation Expenses. As and when the security deposit, Exhibit B to the Three Party
Relocation Agreement, has been fully expended and the Developer has failed to timely advance
and/or pay costs and expenses required of it under the Three Party Relocation Agreement, then the
Developer shall be required hereunder to advance all estimated relocation benefits, costs, and
expenses, as estimated by the Agency or its qualified relocation consultant, through cash or an
increase in the Developer Advance. Developer's failure to comply with the Three Party Relocation
Agreement or to advance funds required hereunder shall be a default hereunder.
209. Fine Arts Fee Waiver and Conditions Precedent Thereto. The Fine Arts Fee
Waiver is subject to the Developer's satisfaction of all of the following Conditions Precedent to the
Fine Arts Fee Waiver.
(a) The Basic Concept Drawings and the Schematic Drawings for the
Phase I Improvements and the Phase" Improvements and Phase III Improvements shall have been
reviewed and approved by the Agency, and such drawings shall depict the public art features, which
shall be publicly accessible, to be included in the Project, in particular the Phase I Improvements and
Phase" Improvements, in sufficient detail to enable the Agency and staff to evaluate whether the
public art features are of the quality and scope necessary for a waiver of the Fine Arts Fee under the
Agency's policy and program for the Town Centre I Project Area.
(b) The requirements of the adopted Fine Arts Fee program and policy
shall have been satisfied by the Developer and the Agency has taken affirmative action to effect such
waiver.
(c) The Developer shall not be in Default of this Agreement and all
representations and warranties of the Developer contained herein shall be true and correct in all
material respects.
(d) The insurance certificates conforming to Section 1304 of this
Agreement shall be up to date and in place.
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Fine Arts Fee Waiver.
210. Management and Operation of Existing Improvements to Phase II Parcels and
Phase III Parcels Pending Commencement of Construction of Applicable Phase. If the
Developer and Agency are successful in acquiring and assembling the Phase" Parcels and the
Phase III Parcels, if such occurs, then as each parcel vests with the Agency and/or the Developer the
day-to-day management and operation of the existing improvements of such properties shall be
undertaken by the Developer. As to each Phase" Developer Parcel and Phase III Developer Parcel
acquired, the Developer shall be and remain responsible for and shall exercise its best efforts to
manage and operate such properties consistent with good property management standards of
commercial properties in the City. As to each Phase" Agency Parcel the Phase" Acquisition
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Parcels and as to all Phase III Acquisition Parcels, as and if acquired, the Agency may (but shall not
be obligated to) delegate the property management responsibility to the Developer pursuant to the
terms of a property management agreement to be entered into between the Agency and the
Developer. If the Agency and Developer enter into such property management agreement then the
Developer shall be and remain responsible for and shall exercise its best efforts to manage and
operate such properties consistent with good property management standards of commercial
properties in the City. If the Agency elects to delegate property management to the Developer, then
the property management agreement shall include provisions, including (i) all rents and other
income derived from such property management shall be retained by the Developer in compensation
for such management, and (ii) Developer shall be responsible to undertake, maintain, and pay for all
ongoing maintenance, repair, security, leasing, and other upkeep of such properties, and (iii) the
Agency shall not be required to pay any additional property management fees to the Developer for
such management, operation and upkeep, other than Developer retention of all rents and income.
211. Demolition of Existing Improvements as to Each Applicable Phase of the
Project. Subject to the requirement that the Developer shall first demonstrate to the Agency's
reasonable satisfaction that certain parcels are immediately necessary and required for construction
of the applicable Phase Improvements or a staging area for the applicable Phase Improvements, the
Agency shall be the sole party to elect when any existing improvements to the Phase I Parcels, the
Phase II Parcels, and the Phase III Parcels shall be demolished and removed; provided however, the
Agency shall not unreasonably withhold, condition, or delay such election. When the Agency elects
to permit the demolition of each applicable Phase, then the Developer shall be solely responsible to
cause the undertaking and completion of the demolition in accordance with all applicable local, state,
and federal regulations and to pay all costs of such demolition. Subject to the City issuing a permit
for such work in a timely manner, the Developer shall be responsible for the demolition and removal
of all existing on-site buildings and structures, and sub-surface structures, pavements, walks, curbs,
gutters and other improvements and for preparing the Site, and each Phase thereof, for construction
of the applicable Phase Improvements.
Except as expressly set forth in Section 207, the Developer assumes all responsibility for
subsurface zone conditions and soils conditions with respect to the Site and each Phase thereof, and
for any demolition and rehabilitation necessary for the provision of each Phase of the Improvements;
and the Agency makes no other representations or warranties concerning the Site or any Phase
thereof, its suitability for the use intended by the Developer, or the surface or subsurface conditions
of the Site or any Phase thereof; and if the soil conditions and groundwater conditions of the Site, and
each Phase thereof, are not in all respects entirely suitable for the use or uses to which the applicable
Phase Improvements will be put, then it is the sole responsibility and obligation of Developer to take
such action as may be necessary to place the Site, and each applicable Phase thereof, in a condition
entirely suitable for the development of the applicable Phase Improvements. Nothing in this
Section 211 is intended to waive any claim or right the Developer may have against any person or
entity other than the Agency and the City and their officers, boards, employees and agents relating to
the physical condition of the Site and each of the parcels comprising each Phase thereof.
212. Right of Entry Agreement. The Agency and the Developer may enter into a
Right of Entry Agreement, Attachment No. 17, for the Agency to authorize the Developer to enter
upon and use the Phase II Agency Parcels for construction staging and coordination of the
construction of the Phase I Improvements. The form of such Right of Entry Agreement has been
preapproved by the parties prior to the Date of Agreement.
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300. DISPOSITION OF PHASE I PARCELS FOR PHASE I OF PROJECT.
301. Disposition of the Phase I Agency Parcels for the Phase I Development. The
Agency agrees, subject to the satisfaction of the Conditions Precedent to Phase I Conveyance, to sell
to the Developer, and the Developer agrees to buy from the Agency the Phase I Agency Parcels for
assembly with the Phase I Developer Parcels for the Phase I development.
302. Phase I Escrow for Phase I Conveyance. The Agency agrees to open an Escrow
with the Title Company (or with another mutually agreeable escrow company) (the "Escrow Agent"),
in San Diego County, California, by the time established therefor in the Schedule of Performance.
This Agreement constitutes the joint basic escrow instructions of the Agency and the Developer for
the Phase I Conveyance, and a duplicate original of this Agreement shall be delivered to the Escrow
Agent upon the opening of the Escrow. The Agency and the Developer shall provide such additional
escrow instructions as shall be necessary for and consistent with this Agreement. Further, the parties
will agree to standard, reasonable Escrow terms and conditions. In the event the Escrow Agent
requires the parties to execute standard form escrow instructions and there are any inconsistencies
between such instructions and this Agreement, the provisions of this Agreement shall control. The
Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent, upon
indicating within five (5) days after the opening of the Escrow its acceptance of the provisions of this
Section 302, in writing, delivered to the Agency and the Developer, shall carry out its duties as
Escrow Agent hereunder.
303. Delivery of Grant Deed for Phase I Agency Parcels. Upon delivery of the
Grant Deed for the Phase I Agency Parcels to the Escrow Agent by the Agency, the Escrow Agent
shall record the Phase I Agency Parcels Grant Deed when title can be vested in the Developer in
accordance with the terms and provisions of this Agreement subject to the satisfaction by the
Developer of the applicable Conditions Precedent hereunder. The Developer shall accept
conveyance of title of the Phase I Agency Parcels and the Phase I Developer Parcels in other pending
escrow(s) at or before the time established therefor in the Schedule of Performance subject to
satisfaction of each of the Conditions Precedent to the Phase I Conveyance. The Escrow Agent shall
pay any applicable transfer tax.
303.1 Fees, Charges and Costs for Phase I Conveyance. The Developer shall pay
in Escrow to the Escrow Agent the following fees, charges and costs for the Phase I Conveyance
promptly after the Escrow Agent has notified the Developer of the amount of such fees, charges and
costs, but not earlier than five (5) days prior to the scheduled date for closing the Phase I Escrow:
(a) Escrow fees for Phase I Escrow;
(b) Ad valorem taxes and property taxes, ifany, upon the Phase I Agency
Parcels for the current year prorated from the date of Conveyance forward only and the Phase I
Developer Parcels for any time prior to transfer of title;
(c) Any documentary transfer tax;
(d) Premiums for all title insurance policy(ies);
(e) Recording fees; and
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(1) Notary fees.
303.2 Execution and Delivery of Phase I Documents. The Agency shall execute,
acknowledge and deliver the Grant Deed for the Phase I Agency Parcels and the Agreement
Affecting Real Property, to be recorded against the Phase I Parcels. The Developer shall execute,
acknowledge, and deliver to the Escrow Agent the Grant Deed for the Phase I Agency Parcels (as the
grantee), the Agreement Affecting Real Property for the Phase I Parcels, and such other document(s)
required by Developer or Developer's Lender(s) so long as such documents are junior and
subordinate to this Agreement, the Grant Deed, and the Agreement Affecting Real Property. Finally,
the Developer shall deliver to the Escrow Agent the Parcel Map for the Phase I Parcels in a condition
ready for recordation at the close of Escrow.
304. Escrow Agent Authority. The Escrow Agent is authorized to:
(a) Pay and charge the Developer for any fees, charges and costs payable
under this Section 300, et seq. of this Agreement applicable to the Phase I Conveyance. Before such
payments or charges are made, the Escrow Agent shall notify the Agency and the Developer of the
fees, charges and costs necessary to clear title and close the Escrow for the Phase I Conveyance.
(b) Deliver the Grant Deed for the Phase I Agency Parcels and other
documents to the parties entitled thereto when the Agency and the Developer have fulfilled the
conditions of this Escrow.
(c) Record any instruments delivered through this Escrow, if necessary or
proper, to vest title to the Phase I Agency Parcels in the Developer in accordance with the terms and
provisions of this Agreement (inclusive of closing the escrows for the Phase I Developer Parcels).
Such instruments shall be recorded in the following order (or otherwise as the Agency and Developer
shall mutually instruct the Escrow Agent): (i) the Memorandum of Agreement, if not already
recorded, (ii) the Grant Deed for the Phase I Agency Parcels, (iii) the Agreement Affecting Real
Property, and (iv) such other document(s) required by Developer or Developer's Lender(s) so long as
such documents are junior and subordinate to this Agreement (through the Memorandum of
Agreement recorded referencing this Agreement), the Grant Deed, and the Agreement Affecting Real
Property
305. Additional Escrow Instructions. All funds received in the Phase I Escrow shall be
deposited by the Escrow Agent, with other escrow funds of the Escrow Agent, in an interest-earning
general escrow account or accounts with any state or national bank doing business in the State of
California. Such funds may be transferred to any other general escrow account or accounts. All
disbursements shall be made by check of the Escrow Agent. All adj ustments are to be made on the
basis of a thirty (30) day month.
If this Escrow is not in condition to close on or before the time for the Phase I Conveyance
established in this Agreement, either party who then shall have fully performed the acts to be
performed before the conveyance of title may, in writing, demand from the Escrow Agent the return
of its money, papers or documents deposited with the Escrow Agent. No demand for return shall be
recognized until ten (10) days after the Escrow Agent shall have mailed copies of such demand to the
other party or parties. Objections, if any, shall be raised by written notice to the Escrow Agent and to
the other party within the ten (10) day period, in which event the Escrow Agent is authorized to hold
all money, papers and documents with respect to the Agency Parcels until instructed by mutual
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agreement of the parties or by a court of competent jurisdiction. Ifno such objections are made, the
Escrow shall be closed as soon as possible.
The Escrow Agent shall not be obligated to return any such money, papers or documents
except upon the written instructions of both the Agency and the Developer or until the party entitled
thereto has been determined by a final decision of a court of competent jurisdiction.
Any amendment to these Escrow instructions shall be in writing and signed by both the
Agency and the Developer. At the time of any amendment, the Escrow Agent shall agree to carry
out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the Agency or the Developer shall be directed
to the addresses and in the manner established in Section 1101 of this Agreement for notices,
demands and communications between the Agency and the Developer.
Any amendment to these Escrow instructions for the Phase I Conveyance shall be in writing
and signed by both the Agency and the Developer. At the time of any amendment, the Escrow Agent
shall agree to carry out its duties as Escrow Agent under such communications from the Escrow
Agent to the Agency or the Developer shall be directed to the addresses and in the manner
established in this Agreement for notices, demands and communications between the Agency and the
amendment.
The liability of the Escrow Agent under this Agreement for the Phase I Conveyance is
limited to performance of the obligations imposed upon it under the terms and provisions of Sections
300, et seq. of this Agreement.
306. Conditions Precedent to the Phase I Conveyance. Prior to and as conditions to the
close of Escrow for the Phase I Conveyance, each of the following respective conditions shall be
satisfied by the respective times established therefor in the Schedule of Performance or, if no time is
specified, prior to the Phase I Conveyance:
306.1 Agency Conditions Precedent to Phase I Conveyance. The obligation of
the Agency to proceed with the Conveyance of the Phase I Agency Parcels (and later provide the
First Installment Payment of the Agency Assistance) is expressly subject to the fulfillment by
Developer of each and all of the conditions precedent to closing (a) through (k), inclusive, described
below ("Agency's Conditions Precedent to the Phase I Conveyance" or "Agency's Conditions
Precedent to Closing of the Phase I Escrow"), which are solely for the benefit of Agency, and which
shall be fulfilled by the time periods provided for herein.
(a) The Agency shall have completed its due diligence evaluation of each
of the members of the Developer entity limited liability company, based on submittals by the
Developer of information relating thereto, including but not limited to the LLC agreement, financial
information and references of each member, and information relating to the financial qualifications
and experience of each member to undertake and complete the Project.
(b) The Developer shall have caused to be prepared at its sole cost and
expense and shall have delivered the Parcel Map for the Phase I Parcels to the Escrow Agent in a
condition ready to be recorded in the Office of the Recorder of the County of San Diego all in
accordance with Section 205 hereof. Further, in connection with the completion and recording of the
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Parcel Map, the Developer shall have provided the Agency with separate legal descriptions of the
various parcels which comprise Phase I, which legal descriptions have been prepared or caused to
have been prepared by the Developer.
(c) The Developer has obtained the Entitlement and all requirements of
the CEQA shall have been met and completed for the Project by action of the City, Agency, and/or
City Planning Commission, as applicable, relating to the applicable Phase of the Project and
including the Agency's disposition of the Phase I Agency Parcels to the Developer. Further, a duly
noticed and held joint public hearing of the Agency and City Council and other legal requirements
and prerequisites to disposition of property pursuant to the Community Redevelopment Law have
been satisfied.
(d) The Developer shall have duly executed and delivered (i) the
Memorandum of Agreement, ifnot yet recorded, (ii) the Grant Deed for the Phase I Agency Parcels,
(iii) the Agreement Affecting Real Property to be recorded against the Phase I Parcels, and
(iv) all other documents which are necessary to ensure that the Agreement Affecting Real Property is
a lien against the Phase I Parcels prior, superior, and non-subordinate to other monetary
encumbrances (excluding non-delinquent taxes and assessments), and all non-monetary
encumbrances (except Approved Title Exceptions), and any other documents required by the Agency
hereunder for Phase I of the Project.
(i) Developer is solely responsible to obtain all necessary
subordination documents relating to existing exceptions to title, if any; provided however, any
necessary subordination document(s) shall be in a legal form reasonably acceptable to the Agency
Executive Director and legal counsel. Said covenants, restrictions, and obligations provided by the
Developer to and for the benefit of the Agency under the Agreement Affecting Real Property are a
substantive part of the consideration hereunder, and the Agency Participation would not be provided
but for such consideration provided by the Developer to the Agency.
(e) The Developer shall not be in Default of this Agreement and all
representations and warranties of the Developer contained herein shall be true and correct in all
material respects.
(1) The Developer shall have deposited into the Escrow for Phase I
Conveyance a sum of Two Hundred Thousand Dollars ($200,000.00) (equal to the fair market value
of the Phase I Agency Parcels) as the purchase price thereof in addition to the assignment and
re-assignment of the parcels hereinbefore described.
(g) The Developer shall provide the insurance certificates conforming to
Section 1304 of this Agreement in a form reasonably satisfactory to the Agency Executive Director
or his designee.
(h) The Developer provides evidence to the Agency Executive Director
and reasonably satisfactory to the Agency Counsel that Developer is the fee owner of the Developer
Parcels within Phase I, or that all pending escrow(s) for all Developer Parcels within Phase I shall be
ready to close concurrently with the Phase I Conveyance for the Phase I Agency Parcels.
(i) The Agency shall have approved the environmental condition of the
Phase I Parcels in accordance with Section 207 of this Agreement.
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(j) Developer shall have caused the relocation (or effected settlement
agreements for specific move/vacation of premises date for settlement of all relocation issues) of all
occupants from the Phase I Parcels in accordance with the requirements of Section 208, et seq.
(k) As more fully set forth in Section 1309, the Developer shall provide
proof reasonably satisfactory to the Agency that the Developer has obtained a binding commitment
for construction financing for the construction of the Phase I Improvement of the Project.
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Conveyance. The Agency further agrees to promptly execute and deliver to the
Escrow Agent such written verification of the fulfillment by Developer of such conditions, as may be
required by the Escrow Agent, if such be the case.
306.2 Developer Conditions Precedent to Phase I Conveyance. The obligation
of the Developer to proceed with the Conveyance of the Phase I Agency Parcels is expressly subject
to the fulfillment by Agency of each and all of the conditions precedent to closing (a) through (e),
inclusive, described below ("Developer's Conditions Precedent to the Phase I Conveyance" or
"Developer's Conditions Precedent to Closing of the Phase I Escrow"), which are solely for the
benefit of Developer, and which shall be fulfilled by the time periods provided for herein.
(a) Prior to the Closing, the Agency is not in Default in any of its
obligations under the terms of this Agreement and all representations and warranties of the Agency
contained herein shall be true and correct in all material respects.
(b) The Agency shall have duly executed the Grant Deed for the Phase I
Agency Parcels, the Memorandum of Agreement, the Agreement Affecting Real Property relating to
the Phase I Parcels, and any other documents required to be signed by the Agency under this
Agreement.
(c) The Developer shall have obtained the Entitlement.
(d) Developer shall be satisfied with the environmental clearances
regarding the Phase I Parcels, particularly the soils and groundwater, or completed remediation
thereof, as set forth in Section 207 et seq. of this Agreement.
(e) The Developer shall be satisfied that the Title Company is ready to,
upon payment of Title Company's regularly scheduled premium(s), issue to the Developer the Title
Policy (excepting only the Permitted Title Exceptions, the bargained for state of title) in accordance
with Section 311 herein.
(1) The Developer shall be satisfied it is ready to close its Construction
Financing for the Phase I Improvements (subject to the carve out of this condition as it relates to
Section 1202, et seq.)
307. Conveyance of Title and Delivery of Possession of Agency Parcels. Subject to any
extensions of time mutually agreed upon in advance between the Agency and the Developer, the
Phase I Conveyance shall be completed on or prior to the date specified therefor in the Schedule of
Performance. Possession shall be delivered to the Developer concurrently with the conveyance of
title.
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308. Condition of Title.
308.1 Phase 1 Agency Parcels. The Agency shall convey to the Developer title to
the Phase I Agency Parcels free and clear of any and all encumbrances, liens, leases, easements, and
other exceptions to or defects in title, excepting only the following: (i) the lien of any non-delinquent
property taxes and assessments (to be prorated at the close of Escrow); (ii) the conditions set forth in
the Grant Deed for the Phase I Agency Parcels, the Agreement Affecting Real Property relating to
the Phase I Parcels; (iii) property interests held by a public body or public bodies including without
limitation easements, franchises, licenses, or other property interests of said public body or public
bodies, except property interests held by the Agency, and/or the City, on the Phase I Parcels and/or
within the public rights-of-way adjacent to or at the perimeter of the Phase I Parcels;
(iv) the Approved Title Exceptions, and (v) such other exceptions to title as may hereafter be
mutually approved by the Agency and Developer.
308.2 Phase I Developer Parcels for Assignment and Reassignment. At the time
the Conditions Precedent to the Phase I Conveyance are satisfied, the Developer shall assign rights to
the Phase I Developer Parcels to the Agency free and clear of any and all encumbrances, liens,
leases, easements, and other exceptions to or defects in title, excepting only the following: (i) the
lien of any non-delinquent property taxes and assessments; (ii) the conditions set forth in the
Agreement Affecting Real Property relating to the Phase I Parcels to be recorded against said parcels;
(iii) property interests held by a public body or public bodies including without limitation easements,
franchises, licenses, or other property interests of said public body or public bodies, except property
interests held by the Agency, and/or the City, on the Phase I Parcels and/or within the public
rights-of-way adjacent to or at the perimeter of the Phase I Parcels; (iv) the Approved Title
Exceptions, and (v) such other exceptions to title as may hereafter be mutually approved by the
Agency and Developer, and immediately thereafter the Agency shall reassign back to the Developer
all such rights and title.
309. Time for and Place of Delivery of Deed. Subject to any mutually agreed-upon
extension of time, the Agency shall deposit the Grant Deed for the Phase I Agency Parcels with the
Escrow Agent on or before the date established for the date of the Phase I Conveyance pursuant to
the Schedule of Performance.
310. Recordation of Deed. The Escrow Agent shall file the Grant Deed for the Phase I
Agency Parcels for recordation among the land records in the Office of the County Recorder for the
County of San Diego, and shall deliver to the Developer the title insurance policy insuring title in
conformity with this Agreement.
311. Title Insurance. Concurrently with the recordation of the Grant Deed conveying
title to the Phase I Agency Parcels to the Developer, the Title Company, or such other title insurance
company as may be mutually approved by the Agency and Developer, shall provide, issue, and
deliver to the Developer an AL TA Survey and Owner's ALTA Extended Coverage policy of title
insurance with such endorsement(s) as reasonably required by the Developer or its Lender(s) insuring
that the title to the Agency Parcels are vested in the Developer in the condition required by this
Agreement, and that title to the Phase I Developer Parcels is satisfactory to the Developer to permit
development of the Phase I Improvements as provided herein. The Title Company shall provide the
Agency with a copy of the title insurance policy, inclusive of all endorsements. The title insurance
policy shall be in an amount as the Developer and its Lender(s) may require, including any additional
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amount required covering the estimated Project Costs of constructing the Phase I Improvements.
All costs incurred for or related to such title insurance shall be borne solely by the Developer.
312. Taxes and Assessments. Ad valorem taxes and property taxes and assessments, if
any, on the Phase I Agency Parcels, levied, assessed or imposed for any period commencing prior to
the Phase I Conveyance shall be prorated as of the date of the Conveyance with the Agency
responsible for any taxes for the period prior to the Conveyance and the Developer responsible for
any taxes for the period subsequent to the Conveyance and paid as provided in this Agreement, and
any of such taxes and assessments imposed after the Phase I Conveyance shall be borne by the
Developer.
313. Condition Subsequent; Reentry and Revesting of Title in the Agency of the
Agency Parcels After the Phase I Conveyance. Subject to any rights the Developer may have
relating to force majeure and enforced delay hereunder as set forth in Section 1103, the Agency shall
have the additional right, at its option, to reenter and take possession of the Phase I Agency Parcels
which are a part of the Phase I Parcels with all improvements thereon, and to terminate and revest in
the Agency the estate conveyed to the Developer if after Phase I Conveyance of title and prior to the
issuance of the Certificate of Completion for the Phase I Improvements, the Developer shall commit
a Default under this Agreement by:
(a) Failing to timely commence construction of the Phase I
Improvements (as evidenced by commencement of grading, completion of the footings for the first
office building and first phase of the parking structure and diligently acting on said construction) as
required by this Agreement, and failing to cure such Default within the applicable cure period
provided hereunder; or
(b) Abandoning or substantially suspending construction of the Phase I
Improvements for a period offorty-five (45) days and failing to cure such Default within the
applicable cure period; or
(c) Transferring or suffering any involuntary transfer of the Phase I
Parcels or any portion of the Site, or any part or parcels thereof, or an assignment of this Agreement,
in whole or in part, in violation of this Agreement, and failing to cure such Default within the
applicable cure period provided herein.
The Agency may, but shall not be obligated to, exercise its rights under this Section 313 and
revest itself with title to all of the Phase I Agency Parcels. The Agency shall have the independent
right to an option granted by the Developer to acquire the Phase I Developer Parcels as set forth in
Section 314, et seq. If the Agency elects to exercise its rights to reenter and revest under this
Section 313, and separately elects to exercise the option described in Section 314 hereinafter, then,
such conveyance(s) via the option shall close concurrently with the revesting of title to the Phase [
Agency Parcels in Agency, as provided herein.
Subject to the lender rights of Section 1310, such right to reenter, terminate, and revest shall
be subject to and be limited by and shall not defeat, render invalid, or limit:
I. Any mortgage or deed of trust permitted by this Agreement; or
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2. Any rights or interests provided in this Agreement for the protection
of the holders of such mortgages or deed of trust.
The Grant Deed for the Phase I Agency Parcels shall contain appropriate reference and
provision to give effect to this condition subsequent evidencing the Agency's right as set forth in this
Section 313, under specified circumstances prior to recordation of the Certificate of Completion for
the Phase I Improvements, to reenter and take possession of the Phase I Agency Parcels conveyed as
a part of the Phase I Conveyance, with all improvements thereon, and to terminate and revest in the
Agency the entire estate conveyed to the Developer.
Upon the revesting in the Agency of title to the Phase I Agency Parcels as provided in this
Section 313 and the exercise of the Phase I Developer Parcels Option relating to the Phase I
Developer Parcels (if such is exercised) as provided in Section 314, the Agency shall, pursuant to its
responsibilities under state law, use its commercially reasonable and good faith efforts to sell the
Phase I Parcels as soon and in such manner as the Agency shall find feasible and no later than
three hundred sixty (360) days after the revesting/vesting of the Phase I Agency Parcels in the
Agency. The Agency shall exercise reasonable diligence to obtain a fair reuse value for such parcels,
provided that the Agency shall have the right to condition such sale/resale consistent with the
objectives of the Redevelopment Plan, including without limitation, limiting such sale/resale, to a
qualified and responsible party or parties (as reasonably determined by the Agency) who will assume
the obligation or making or completing the Phase I Improvements, or such other improvements in
their stead as shall be reasonably satisfactory to the Agency and in accordance with the uses specified
for Phase I and the balance of the Site in the Redevelopment Plan. In this regard, the Agency agrees
to use reasonable efforts to obtain maximal value (within reasonable limits) for those Phase I Parcels
reacquired in terms of generation of tax increment and sales tax revenues and the reuse land value of
the such parcels upon sale/resale. Upon such sale/resale of the reacquired/reassembled Phase I
Parcels, the proceeds thereof shall be applied as follows:
(i) First, to reimburse the Agency, on its own behalf or on behalf
of the City, for (1) all costs and expenses incurred by the Agency (exclusive of overhead for in house
staf1) in connection with the recapture, management and resale of the Phase I Agency Parcels and
Phase I Developer Parcels (but less any income derived by the Agency from the Phase I Parcels in
connection with such management), (2) the value of the Phase I Agency Parcels ($200,000.00),
(3) all taxes, assessments and water and sewer charges with respect to the Phase I Parcels which the
Developer has not paid (or, in the event the Phase I Parcels are exempt from taxation or assessment
or such charges during the period of ownership thereof by the Agency, an amount, if paid, equal to
such taxes, assessments, or charges [as determined by the appropriate assessing official] as would
have been payable if the Phase I Parcels were not so exempt), (4) any payments made or necessary to
be made to discharge any encumbrances or liens existing on the Phase I Parcels at the time of
revesting or acquisition oftitle thereto in the Agency, or to discharge or prevent from attaching or
being made any subsequent encumbrances or liens due to obligations, defaults or acts of the
Developer, it successors or transferees, and (5) any expenditures made or obligations incurred with
respect to the making or completion of the improvements or any part thereof on the Phase I Parcels;
and
(ii) Second, to reimburse the Agency the cumulative amount,
ifany, disbursed as one or more of the installment payments of the Agency Participation; and
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(iii) Third, , to pay to the Developer the amount equal to the
"Phase I Developer Parcels Option Price" as the term is hereinafter defined in Section 314, for the
Phase I Developer Parcels, if such option is exercised; and
(iv) Fourth, to reimburse the Developer, its successor or
transferee, up to the amount equal to the sum of all direct and indirect costs incurred by the
Developer for the development of the Phase I Improvements, if any, at the time of the Agency's
reentry, repossession and/or acquisition (inclusive of non-reimbursed Permit Fees, Relocation costs,
and other out of pocket costs paid by the Developer), less any gains or income withdrawn or made by
the Developer from the Phase I Parcels or the improvements thereon.
Any balance remaining after such reimbursements shall be retained by the Agency as its sole
property; provided however, the Agency shall not retain any funds or cause itself to be reimbursed in
an amount that exceeds its full out-of-pocket expenses, including all third party costs, plus the full
value of the Phase I Agency Parcels, plus an amount equal to the cumulative disbursement(s) and
payment(s) of the Agency Participation then previously paid by the Agency to the Developer under
this Agreement.
All remaining funds, if any, after such repayment priorities set forth above shall be paid to
the Developer.
In the event the sale/resale proceeds are not sufficient to fully pay the amounts in clause
(iii) and/or (iv) above, the full-unpaid balance shall be deemed forgiven and discharged at such time.
The rights established in this Section 313 are to be interpreted in light of the fact that the
Agency will convey the Phase I Agency Parcels to the Developer for development, and not for
speculation in undeveloped land.
314. Developer Grants Option to Agency for Phase I Developer Parcels. The
Developer hereby gives the Agency an option (the "Phase I Developer Parcels Option") to purchase
the Phase I Developer Parcels in the event the Developer defaults under the terms of this Agreement
prior to or subsequent to the Phase I Conveyance of the Agency Parcels, and fails to cure such default
within the time set forth herein in order to exercise the rights regarding sale/resale of the Phase I
Parcels pursuant to Section 313 above. The Agency's option price (the "Phase I Developer Parcels
Option Price") for the Phase I Developer Parcels shall be equal to the sum of out of pocket costs
incurred and paid, as follows: (i) the purchase price for all Phase I Developer Parcels, as evidenced
by the purchase and sale agreement(s) and escrow closing statement(s) for such parcels,
plus (ii) interest (said interest shall be the actual and verified interest cost/carry to the Developer),
however, the verified annual interest cost/carry shall not exceed ten percent (10%) per annum
compounded annually on said acquisition price from the Developer's close of the Phase I
Conveyance through the date of Agency's acquisition/re-acquisition, (iii) actual, verified, and paid
taxes from the Developer's close of the Phase I Conveyance through the date of Agency's
acquisition/re-acquisition, (iv) incurred, verified, and paid Relocation costs as provided in
Section 208, et seq., and (v) the preferred return on equity owed by the Developer to its equity
funding partner (as verified to be due and the amount determined pursuant to the terms of the
Developer's limited liability company operating agreement). Notwithstanding the foregoing relating
to subsections (ii) and (v) above, there shall be no duplication of costs or double accounting of costs
between interest cost/carry and the payment of preferred return on equity, acknowledging however,
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that as of the Date of Agreement the Developer's business terms under the limited liability company
operating agreement may include both equity and interest components.
The Agency may, but shall not be obligated, to exercise the Phase I Developer Parcels Option
to purchase the Phase I Developer Parcels after the Phase I Conveyance if the Agency elects to
exercise its right under Section 313 and in such event the conveyance of the Phase I Developer
Parcels shall be concurrent with the revesting of the Phase I Agency Parcels pursuant to Section 313,
but the Phase I Developer Parcels Option Price shall be paid at the time of the Agency's receipt of
the proceeds of the sale/resale of the reacquired Phase I Parcels, pursuant to Section 313. This
Phase I Developer Parcels Option shall commence upon the date of this Agreement and terminate on
the date a Certificate of Completion is issued for all of the Phase 1 Improvements.
314.1 Option Assignable by Agency to Successor Developer. The Agency shall
have the right, but not the obligation, to assign the Phase I Developer Parcels Option to the
developer, if any, who will be proceeding with the Project, or such other approved project in its
stead, in order to cause the revested and reassembled Phase I Parcels to be ready for single
development.
400. ASSEMBL Y OF THE PHASE II PARCELS, INCLUSIVE OF THE PHASE II
ACQUISITION PARCELS.
401. Proceedings to Acquire the Phase II Acquisition Parcels.
401.1 Good Faith Negotiations to Acquire Phase II Acquisition Parcels. If after
good faith efforts and negotiations between the Developer and the property interest holder(s) of the
Phase" Acquisition Parcels, the Developer has not acquired such parcels, then the Developer may
request the Agency to initiate acquisition proceedings as to such parcels. After such request by the
Developer, if any, as to title or rights to acquire the Phase" Acquisition Parcels not previously
acquired or negotiated to be acquired by the Developer, within the time set forth in the Schedule of
Performance the Agency will initiate the process and proceedings set forth in Government Code
Section 7267, et seq. to seek to acquire such parcels through issuance of notice of intent to conduct
and causing to be prepared an appraisal of such parcel(s), providing a written offer(s) to acquire, and
negotiating in good faith toward acquisition of the Phase" Acquisition Parcels. The Agency's
presentation of the written offer(s) to acquire the Phase" Acquisition Parcels shall be made pursuant
to and in compliance with Code of Civil Procedure Section 1245.235 as a prerequisite to the
consideration of and action on a resolution of necessity to seek to acquire such owner's parcel
through the Agency's exercise of its power of eminent domain.
401.2 Consideration and Action on Resolution of Necessity to Acquire Phase II
Acquisition Parcels by Eminent Domain. In the event the Agency does not acquire the Phase"
Acquisition Parcels through assignment by the Developer and/or good faith negotiations to acquire
such Parcel as set forth above in Section 40 I, then within the time set forth in the Schedule of
Performance, the Agency will duly schedule, notice, and hold a public hearing at which it will
consider the adoption ofresolution(s) of necessity to consider the authorization to acquire the
Phase" Acquisition Parcels by eminent domain. In connection with and following such public
hearing the Agency will determine in good faith and within its sole, independent, and absolute
discretion whether or not to adopt the resolution(s) of necessity and to proceed with eminent domain
as to the Phase" Acquisition Parcels. In this regard, by this Agreement the Agency undertakes no
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obligation to the Developer hereunder to adopt any resolution of necessity, and does not prejudge or
commit, in any respect whatsoever, to the Developer, or any other person or entity, regarding the
findings and determinations to be made by the Agency with respect thereto.
(a) In the event the Agency does not elect to acquire the Phase II
Acquisition Parcels through exercise of its power of eminent domain as set forth in this
Section 401.2, neither the Developer nor the Agency shall be in default under this Agreement,
but shall each have the right to not proceed with Phase II of the Project and to terminate this
Agreement as to all obligations relating to Phase II pursuant to the provisions herein.
(b) If the Agency elects to exercise its power of eminent domain to
acquire the Phase II Acquisition Parcels, such election shall be made and the eminent domain action
shall be filed within the time set forth in the Schedule of Performance, and the Agency shall, subject
to delays outside the Agency's reasonable control, exercise its most reasonable efforts to diligently
prosecute such eminent domain action to completion and obtain title consistent with the requirements
of this Agreement as soon as possible after the commencement of such actions.
(c) In the event the Agency exercises its power of eminent domain to
acquire the Phase II Acquisition Parcels, the Agency shall prepare application(s) to the Superior
Court, County of San Diego, State of California, (i) to obtain judicial order(s) of prejudgment
possession (hereinafter collectively, "Order of Prejudgment Possession") authorizing the Agency to
take possession of the Phase II Acquisition Parcels prior to the final judgment(s) and order(s) of
condemnation and (ii) relocate or cause to be relocated and removed from the Phase II Acquisition
Parcels any occupants thereof (at the sole expense of the Developer pursuant to the Three Party
Relocation Agreement and Section 208, et seq.)
401.3 Effective Order of Prejudgment Possession Sufficient to Convey Title to
Any Phase II Acquisition Parcels. Notwithstanding any other provision of this Agreement to the
contrary, if at any time prior to the Agency's acquisition of title to the Phase II Acquisition Parcels in
the condition for conveyance required in this Section 400, et seq., the Agency provides to the
Developer a copy of the Order of Prejudgment Possession, and:
(a) there are no outstanding legal issues to legally effective possession
raised by party(ies) defendant to such eminent domain action(s); and
(b) the Agency delivers possession of the Phase 11 Acquisition Parcels;
and
(c) the Agency is diligently proceeding with the eminent domain action
seeking the rendering of a final judgment and order as to such parcel for which title has not yet been
so acquired, which judgment and order would authorize the taking; and
(d) the right of possession conveyed by the Agency to the Developer is
sufficient to enable the Developer to obtain a title insurance policy and to close its financing for the
construction of the Phase II Improvements on the Phase II Parcels;
then, subject to satisfaction of the Conditions Precedent to the Phase II Conveyance set forth herein,
the Agency shall convey and the Developer shall accept title to the parcel(s) if the Agency owns
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such, and possession of such parcel(s) ifnot yet owned, and the Developer shall proceed with the
development of the Phase 11 Improvements.
401.4 Indemnification Agreement between Agency and Title Company. Subject
to there being no outstanding legal issues to the right to effective possession of the Phase 11
Acquisition Parcels in the pending eminent domain action(s) raised by party(ies) defendant to such
action(s), upon the request of the Title Company, as that term is herein, the Agency shall execute an
indemnification agreement in form satisfactory to the Title Company and reasonably satisfactory to
the Agency by which the Agency shall agree to indemnify the Title Company for any losses,
damages, and expenses incurred by the Title Company in the event of the Agency's abandonment of
the eminent domain proceedings related to acquisition of the Phase 11 Acquisition Parcels. In this
regard, the Developer agrees in turn to indemnify, defend, and hold the Agency harmless if the
Agency's abandonment is justified because ofa default by the Developer hereunder. Nothing herein
shall be deemed to obligate the Agency to pay for any additional premium or other charge necessary
for the issuance of said title policy. In the event that the Title Company declines to issue a title
insurance policy under such circumstances the Phase" Conveyance shall not occur and, the
Developer's obligation to commence and complete the construction of the Phase" Improvements
shall not commence to run until the Agency has acquired title to the Phase" Acquisition Parcels and
title can be vested in the Developer in accordance with this Agreement.
401.5 Reports on Status of Assembly of Phase II Parcel. Upon the Developer's
written request, the Agency shall periodically (but no more frequently than quarterly) report to the
Developer in writing regarding the status of the Agency's eminent domain proceedings, if any, and
related efforts to acquire the Phase" Acquisition Parcels.
During the period prior to the conveyance of the Phase 11 Acquisition Parcels by the Agency
to the Developer, the Agency and Developer agree not to enter into any lease, sublease, restrictive
covenant, or other agreement with respect to the such parcels, nor to modify or amend any existing
agreement, which agreement, modification, or amendment could prevent, delay, or impair the parties'
mutual objective to acquire and maintain title to all parcels and portions thereof, consistent with the
approved title condition herein; provided, however, that nothing herein is intended to prevent the
Agency or Developer from entering into agreements with respect to Phase" consistent with the
purposes of this Agreement.
402. Phase II Developer Advance for Acquisition of Phase II Acquisition Parcels.
Within the time established therefor in the Schedule of Performance, the Developer shall deliver to
the Agency an unconditional irrevocable letter of credit in the amount of 125% of the appraised
and/or estimated value of the subject Acquisition Parcels, inclusive of land, improvements, furniture,
fixtures and equipment (FFE), leasehold bonus value, business goodwill, plus 110% of all other
budgeted acquisition costs (such as relocation costs, attorneys fees, appraisals, etc.) ("Letter of
Credit" or "Phase II Letter of Credit"). The foregoing amount is estimated to be sufficient to cover
all direct and indirect costs incurred and to be incurred for acquisition of the Phase 11 Acquisition
Parcels for the Phase" portion of the Site and disposition of the Phase" Acquisition Parcels by the
Agency to the Developer in the condition of title and without rights to possession by any third party.
The initial amount of the Letter of Credit has been determined by the parties based on the
information provided by the Developer to the Agency and based on the Agency's review and
evaluation of the estimated costs to acquire the Phase" Acquisition Parcels, if and when acquisition
proceeds. The Letter of Credit funds shall secure the Developer's obligation to advance all funds
which the Developer is obligated to advance to the Agency hereunder to finance the acquisition of
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the Phase II Acquisition Parcels and relocating occupants from all of the Phase II Parcels, as
provided herein. The Agency is authorized to require the Developer to increase the amount of the
Letter of Credit, as and when the balance is fully drawn in order to continue to fully advance and
fund all costs of acquisition of the Phase II Acquisition Parcels and assembly of the Phase" Parcels,
as further described herein.
402.1 Phase II Letter of Credit Requirements. The Letter of Credit evidencing
the amount of the Phase" Developer Advance shall be issued by a federally insured financial
institution reasonably acceptable to the Agency, (or a non-federally insured financial institution
which the Agency in its sole and absolute discretion may approve or disapprove), and the form of the
Letter of Credit shall be reasonably satisfactory to the Agency and its legal counsel.
(a) The Letter of Credit shall name the Agency as beneficiary and shall
include provisions that the beneficiary may draw funds therefrom by exhibiting to the issuer such
Letter of Credit and presenting to the issuer a sight draft and certification by beneficiary that such
draw(s) against the Letter of Credit is/are authorized under this Agreement.
(b) The Executive Director of the Agency, or Authorized Representative,
shall be authorized to make draws upon the Letter of Credit immediately subsequent to its issuance.
(c) The Agency shall not make demands for funds from the Phase II
Developer Advance until the Agency determines that such funds are needed by the Agency for any of
the purposes set forth in this Section 400, et seq.
(d) The Agency shall provide the Developer written notice of each draw
the Agency proposes to make on the Letter of Credit with a general statement as to the use of the
money. The Developer may elect to deliver, not more than five (5) business days after receipt of the
Agency's notice, a cashier's check to be used in place ofa draw on the Letter of Credit. In the event
the Developer delivers a cashier's check to the Agency, the Agency shall promptly provide written
notice to the issuer of the Letter of Credit that the face amount of the Letter of Credit should be
reduced by the amount offunds so delivered to the Agency.
(e) Upon the Developer's written request, the Agency further shall
provide Developer with periodic written reports (but no more frequently than quarterly) showing the
amount of each draw made on said Letter of Credit and the use of any funds expended (whether
obtained directly from the Developer or from the issuer of the Letter of Credit).
(1) The term of the Letter of Credit shall be at least one (I) year. If the
Agency has not expended nor obligated the balance of the Letter of Credit, if any, at least forty-five
(45) days prior to the expiration of the Letter of Credit, then the Agency shall have the right to draw
upon the remaining balance of the Letter of Credit and use the proceeds for the purposes set forth
herein unless the Developer renews or replaces it (with another Letter of Credit with a term of at least
one (I) year) within ten (10) days after written notice from the Agency that it intends to draw on the
remaining balance of the Letter of Credit. Each subsequent Letter of Credit placed by the Developer
in the amount of the funds not yet drawn by the Agency on the Phase II Developer Advance shall
have a term of at least one (1) year, unless otherwise approved in writing by the Agency. In the
event the Agency has drawn, or expects to draw, the full amount of the Letter of Credit, and
additional funds are required to continue with acquisition of the Phase" Acquisition Parcels and
complete the assembly of the Phase" Parcels, then the Agency shall notify the Developer in writing
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of the need for an increase in the Phase" Developer Advance and Letter of Credit. The written
notice shall include information regarding the amount of required additional funds and a summary
budget therefor. Within fifteen (15) days of such notice by the Agency to the Developer, the
Developer shall cause the Letter of Credit to be increased, or shall provide such additional funds in
cash via wire transfer to the Agency. In the event the Developer fails to timely increase the Phase"
Developer Advance, such inaction shall be a default hereunder and the provisions for resale of the
Phase" Parcels as assembled to the date of the notice, as more fully described hereinafter, shall
apply.
402.2 Expenditures from the Proceeds of the Letter of Credit. The Agency shall
be authorized to utilize the Phase II Developer Advance (including any draws on the Letter of Credit)
only for the following purposes:
(a) Actual Amounts Paid to Present Owners and Occupants of Phase
II Acquisition Parcels. The actual acquisition price paid to acquire all interests in the Phase"
Acquisition Parcels (including, but not limited to, amounts paid for the fee interest, land and
improvements, leasehold(s), bonus value(s), options, rights of first refusal, tenants' improvements,
furnishings, fixtures and equipment, loss of business goodwill, and any other lawfully compensable
interest) as reasonably determined by the Agency, its designated representative, its legal counsel, or
as may be determined by a court of competent jurisdiction pursuant to the exercise of the power of
eminent domain by the Agency, if such occurs, including all reasonable costs, attorney's fees,
appraiser or other expert witness fees which the Agency may expend and/or be compelled by the
court to pay to the owners, occupants, or other interest holders of the Phase" Acquisition Parcels.
(b) Expenses of Acquisition. The expenses of acquisition incurred by
the Agency with respect to the Phase" Acquisition Parcels shall consist of the following items to the
extent that such items are not otherwise included in subsection (a) above:
(i) Fees and actual expenses of acquisition of attorneys,
appraisers, engineers and other experts the employment of which is reasonably necessary to effect the
acquisition of the Phase" Acquisition Parcels;
domain, if approved;
(ii) Court costs and fees required to prosecute actions in eminent
(iii) Costs necessary to place the title to the property acquired in
the condition required herein, including any property taxes and assessments which are required to be
paid by the Agency in connection therewith;
(iv) The entire escrow fee for the property acquired;
(v) The cost of drawing the deed for the property acquired;
(vi) Recording fees, if any;
(vii) Notary fees and premiums for title insurance policies;
taxes; and
(viii) Any state, county or city documentary stamps or transfer
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(ix) Appraisal fees.
(c) Expenses of Relocation from the Phase II Parcels. To the extent
immediately available funds are not provided by the Developer pursuant to the Three Party
Relocation Agreement, all the costs and expenses incurred by the Agency (or the City or the
Developer) to relocate or cause relocation of any and all occupants any and all of the Phase 11 Parcels
(including, but not limited to, relocation payments made to displaced persons and businesses, pre- or
post-relocation rental payments, fees and actual expenses of attorneys, relocation consultants, and
other experts employed to effect the relocation of occupants, and preparation of relocation plans) as
reasonably determined by the Agency or its designated representative, and to the extent that such
costs are not otherwise included in subsections (a) and (b) above.
(d) Expenses of Administration. The expenses of administration
incurred by the Agency and/or the City with respect to properties within Phase II, which expenses
shall include but not be limited to the following items to the extent that such items are not otherwise
included in subsections (a), (b), and/or (c), above: out of pocket fees and actual expenses of outside
attomeys, financial consultants, engineers and other experts, the employment of which is reasonably
necessary to carry out and enforce this Agreement between the Agency and the Developer, provided
the foregoing shall not include the overhead or costs of persons directly employed by and considered
exempt or non-exempt employees of the Agency or the City.
403. Promissory Note and Deed of Trust as Security for the Phase II Developer
Advance. The following procedure shall be followed for securing the Phase" Developer Advance.
403.1 Phase II Developer Advance Note. At the time of the Agency's first receipt
offunds from the Phase" Developer Advance (whether such funds are obtained directly from the
Developer or from a draw upon the Letter of Credit), the Agency shall execute and tender to
Developer its promissory note payable to Developer (the "Phase" Developer Advance Note"). The
Phase" Developer Advance Note shall be in the full amount of the Phase" Developer Advance and
in substantially the form set forth in Attachment No. I 0 hereto, however, the beneficiary of the
Phase" Developer Advance Note shall be limited to repayment and collection of only that portion of
the Phase" Developer Advance actually drawn down and funds received by the Agency. Except as
provided in Section 403.2, the Phase" Developer Advance Note shall be non-assignable. The
Phase" Developer Advance Note shall bear no interest, unless this Agreement is terminated by the
Developer due to a material Default by the Agency, in which case the Phase" Developer Advance
Note shall accrue interest at the LAIF rate, for general City investments.
403.2 Inclusion in Deed of Trust as Phase II Acquisition Parcels Acquired. As
soon as the Agency closes escrow to acquire the Phase" Acquisition Parcels, or when the Agency
acquires title pursuant to court order as a result of eminent domain action(s), if any, the Agency shall
record against such parcel(s) and deliver to the Developer a deed of trust securing the Phase II
Developer Advance Note, Attachment No. 10. The Phase" Acquisition Parcels Deed of Trust shall
name the Developer, as the beneficiary, (or, at the Developer's request, the lender/bank or other
entity providing the Phase" Developer Advance or such party's designee) and the Title Company, as
the trustee, and shall be on the standard short form deed of trust and assignment of rents of the Title
Company. The deed of trust shall generally refer to the principal amount of the Phase II Developer
Advance Note. The Phase" Developer Advance Note shall include an endorsement of the
Developer referencing the amount drawn down on the Phase" Developer Advance as of the date of
each deed of trust.
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403.3 Lender Policy of Title Insurance. [frequested by the Developer, and at the
sole cost and expense of the Developer, at the time of delivery of the Phase" Acquisition Parcels
Deed of Trust, the Agency may be required to order and deliver to Developer (or, at the Developer's
request, to the bank or other entity providing the Phase" Developer Advance or such party's
designee) a standard form CL T A lender's policy of title insurance insuring the deed of trust in the
amount of the acquisition price of the Phase" Acquisition Parcels. The cost of recordation and title
insurance policy shall be borne by Developer.
403.4 Limited Liability for Repayment of Phase II Developer Advance Note.
The Phase" Developer Advance Note, as provided for herein, shall not in any event or circumstance
constitute a debt of the City ofChula Vista or any other public entity and the City shall have no
obligation whatsoever with respect to the Phase" Developer Advance Note. The Phase" Developer
Advance Note shall be a debt of the Agency only, but expressly limited by its terms and as to sources
of repayment. Further, the obligation of the Agency to repay the Phase" Developer Advance Note
shall be a special obligation of the Agency payable only from and limited by the availability offunds
from the sale/resale proceeds, as hereinafter described.
403.5 Cancellation or Payment of the Phase II Developer Advance Note.
(a) Concurrent with the Conveyance of the Phase II Parcels. In the
event the Agency is ready to conveyor conveys the Phase" Acquisition Parcels and the Phase"
Agency Parcels to the Developer, the Phase" Developer Advance Note shall be concurrently
deemed and considered repaid in full and the Deed of Trust shall be reconveyed by the Developer,
and cleared from title through the escrow for the conveyance of the Phase" Acquisition Parcels.
(b) Upon Termination ofthe Agreement Prior to the Phase II
Conveyance. In the event the Agency or the Developer terminates this Agreement relating to the
development of the Phase" Improvements prior to the Phase" Conveyance pursuant to terms
herein, the Agency shall be obligated, if at all, to repay the Phase" Developer Advance Note and
discharge its obligations with respect to the Phase II Developer Advance as follows:
(i) If the Agency has filed eminent domain proceedings to
acquire the Phase" Acquisition Parcels but has not obtained title or possession of such parcel prior
to the effective date of the termination and the owner(s) of such parcel and any property interest(s),
as applicable, have not withdrawn from the court any deposit of probable compensation previously
made by the Agency, the Agency in its reasonable discretion may elect (but in no respect is required)
to abandon such eminent domain proceeding.
1. Ifthe Agency elects to abandon the eminent domain
proceedings, the Agency shall exercise reasonable diligence to withdraw any amounts previously
deposited into court and repay such amounts to the Developer as rapidly as the release of said
amounts from the court can be effected, provided that the Agency shall be entitled to retain the
amount reasonably determined by the Agency required to pay the costs of abandonment of such
proceeding.
2. In the event the Agency does not elect to abandon
such eminent domain proceeding within thirty (30) days after the effective date of the termination of
the Agreement relating to the development of the Phase" Improvements, or ifthe Agency is not
entitled hereunder to abandon (i.e., if the Agency has already obtained orders of prejudgment
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possession or the owner(s) have withdrawn the deposit of probable compensation from the court),
then the Agency (1) shall be permitted to continue to receive payments on the Phase" Developer
Advance (including draws on, and increases to, the Letter of Credit); and (2) shall exercise
reasonable diligence to prosecute such eminent domain proceeding to completion as soon as possible,
and (3) shall pay to the Developer the proceeds from the resale of such Phase" Parcel(s) and
property interest(s), as applicable, in accordance with the applicable subparagraphs below to fully
discharge the Phase II Developer Advance Note.
3. If the Agency has received but not obligated portions
of the Phase II Developer Advance prior to the effective date of the termination, the Agency
(after withholding any amounts the Agency reasonably determines are required to perform the
Agency's obligations hereunder) shall return to the Developer the amount, if any, of any unobligated
funds.
403.6 Sale/Resale of Acquired Phase II Acquisition Parcels, Phase II Agency
Parcels, and Phase II Developer Parcels Prior to the Phase II Conveyance. With respect to the
Phase" Acquisition Parcels which have been acquired by the Agency prior to the effective date of
the termination of this Agreement prior to the Phase" Conveyance, the Agency shall diligently use
its reasonable efforts to sell or resell such parcel(s) in accordance with this subparagraph and shall
pay the proceeds of such sale or resale to the Agency for reimbursement of costs, as described
hereinafter, and to the Developer to discharge the Phase II Developer Advance Note.
(a) The proceeds of such sale/resale shall be credited in the following
order of priorities: (1) first, to repay the principal amount of the Phase" Developer Advance Note
(but in no event to exceed the proceeds expended and/or encumbered to date of sale/resale),
(2) second, if the termination is due to the Default of the Agency to repay the accrued interest, and
then, (3) the balance of such proceeds, if any, remaining after such payments shall be retained by the
Agency as its sole property; provided however, the Agency shall not retain any funds or cause itself
to be reimbursed in an amount that exceeds its full out of pocket expenses, including all third party
costs (but not in-house staff time), plus the full value of the Phase" Agency Parcels ($113,000), plus
an amount, if any, equal to the cumulative disbursement(s) of installment payment(s) of Agency
Participation then previously paid by the Agency to the Developer under this Agreement.
(b) The Agency shall complete such sale(s)/resale(s) as soon as the
Agency shall find feasible after the termination of this Agreement and no later than the later of:
(I) three hundred sixty (360) days after such termination, or (2) if the Agency elects to proceed with
the acquisition of the Phase II Acquisition Parcels after the termination pursuant to the subparagraph
above, within three hundred sixty (360) days after the Agency acquires title to said parcel(s) and
property interest(s) as applicable.
(c) The Agency shall further exercise reasonable diligence to obtain a fair
reuse value for each such parcel sold or resold, provided that if the Agency determines to sell/resell
such parcel(s) for redevelopment purposes, the Agency shall have the right to condition such
sale/resale consistent with the objectives of the Redevelopment Plan, including without limitation
limiting such sale/resale to a qualified and responsible party or parties (as reasonably determined by
the Agency) who will assume the obligation of making or completing the Phase" Improvements or
such other improvements in their stead as shall be reasonably satisfactory to the Agency in
accordance with the uses specified for the Phase" Parcels, or any part thereof, in the Redevelopment
Plan. In this regard, the Agency agrees to use reasonable efforts to obtain maximal value (within
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reasonable limits) for the parcel(s) in terms of generation oflocal revenues, in particular property tax
increment and sales tax revenues, and the reuse land value of the parcel(s) upon sale(s)/resale(s) shall
be subject to the Agency implementing the goals and objectives of the Redevelopment Plan as
determined by the Agency.
(d) Notwithstanding the event that the proceeds of sale/resale may not be
adequate to repay the full amount due on the Phase II Developer Advance Note, Developer agrees
that it shall execute and cause recordation and delivery ofa reconveyance of the deed of trust which
evidenced the security for the Phase II Developer Advance, and deposit said reconveyance into the
escrow for the sale or resale upon demand of the escrow agent in said sale or resale.
(e) In the event the Agency has not acted to sell/resell any of the
properties required to be sold/resold pursuant to this subsection within the time period(s) set forth
herein, the Developer, in addition to whatever other legal or equitable rights or remedies it may have,
if any, shall have the right to proceed against the land secured by the deeds of trust theretofore
provided by the Agency. Any purchaser of the secured properties, or any part thereof, in foreclosure
shall be required, and each deed of trust shall so provide, to comply with all of the provisions of the
Redevelopment Plan and the Agency shall have the same rights with respect to the subsequent
redevelopment and reuse of the secured properties that it would otherwise have under the
Redevelopment Plan and the Community Redevelopment Law. Said purchaser may, but is not
required to assume all of rights and the obligations of the Developer and perform under the terms of
this Agreement relating to the Phase" development, in which case the times for performance set
forth herein shall be tolled for a reasonable period oftime to account for the delay in such
purchaser's acquisition oftitle.
(1) Notwithstanding any other provision of this Agreement to the
contrary, if this Agreement is terminated for any reason other than the Default of the Agency, it is the
intent of the parties that the sale/resale or foreclosure proceeds received by the Agency and
Developer pursuant to subsection are the only security for repayment of the Developer Advance
Note, and any unpaid balance of said Phase" Developer Advance Note shall be cancelled and
voided concurrent with the sale/resale or foreclosure, and the deeds of trust shall be reconveyed by
the Developer.
500. AGENCY DISPOSITION OF PHASE II PARCELS FOR PHASE II OF PROJECT.
501. Sale and Purchase of the Phase II Agency Parcels and Phase II Acquisition
Parcels. If the Agency is successful with the acquisition of the Phase" Acquisition Parcels through
negotiated acquisition or initiation of eminent domain action(s), if such occurs, then the Agency
shall, subject to the satisfaction of the Conditions Precedent to the Phase II Conveyance, sell to the
Developer, and the Developer shall buy from the Agency the Phase II Agency Parcels for the
purchase price of One Hundred Thirteen Thousand Dollars ($113,000.00) and the Phase"
Acquisition Parcels (purchase price previously paid through draws on the Developer Advance), in
accordance with and subject to all of the terms, covenants and conditions of this Agreement.
501.1 Delay of Disposition of Phase II Parcels and Commencement of Grading
for Phase II Improvements Upon Certain Conditions. Subject to the covenant set forth in
Section 910 hereinafter, the time for proceeding with the Phase" Conveyance and thereafter
commencement of grading for the Phase" Improvements may be delayed and extended pursuant to
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the terms of this Section 501.1. If and to the extent the following extension(s) occur under this
Section 501.1, then the corresponding time(s) for performance under the Schedule of Performance
(inclusive of the time for completion of construction of the applicable Phase Improvements) shall
also be automatically extended for an equivalent period of time.
(a) First, the time for proceeding with the Phase" Conveyance and
thereafter commencement of grading for the Phase 11 Improvements may be delayed and extended at
the election of the Developer based on whether market conditions both locally and nationally are
appropriate to begin construction of the Phase" Improvements based on commercially reasonable
standards. The Developer may exercise this right for an extension period not to exceed six (6)
months from the date set forth in the Schedule of Performance for the Phase 11 Conveyance and
commencement of the construction of the Phase" Improvements by written notice by the Developer
to the Agency setting forth the term of the extension, the factual reasons and reasonably adequate
supporting evidence for election of such extension.
(b) Alternatively, if Developer desires an extension longer than six (6)
months but less than nine (9) months (inclusive of any period up to the initial extension(s) elected by
the Developer pursuant Section 50 1.1 (a) above), the Developer shall request such extension in
writing from the Agency Executive Director. The Agency Executive Director shall approve such
extension for a cumulative period of not more than nine (9) months, so long as the Developer's
request includes the factual reasons and reasonably adequate supporting evidence regarding the
market conditions both locally and nationally that prevent commencement of construction of the
Phase" Improvements based on commercially reasonable standards as the basis for the requested
extension.
(c) Alternatively, if Developer desires an extension longer than nine (9)
but less than twelve (12) months (inclusive of any period up to the initial extension(s) pursuant
Section 501.1 (a) and (b) above), the Developer shall request such extension in writing from the
Agency Board who has the discretion and right to grant or deny such requested extension.
The Developer's extension request shall be in writing and shall include the factual reasons and
reasonably adequate supporting evidence regarding the market conditions both locally and nationally
that prevent commencement of construction of the Phase II Improvements based on commercially
reasonable standards as the basis for the requested extension. The Agency shall grant or deny such
requested extension based on commercially reasonable standards and shall not unreasonably
withhold, delay, or condition such requested extension for a cumulative period not to exceed
twelve (12) months from the date set forth in the Schedule of Performance for the Phase II
Conveyance and commencement of the construction of the Phase 11 Improvements.
(d) Any Developer request for an extension to commence construction of
the Phase 11 Improvements beyond twelve (12) months from the date set forth in the Schedule of
Performance for the Phase II Conveyance and commencement of the construction of the Phase II
Improvements shall be in writing and may be granted or denied in the sole and absolute discretion of
the Agency. If the Agency desires to grant an extension beyond such twelve (12) month period, then
such grant may be conditioned upon the renegotiation of the amount of and timing of the Agency
Participation and/or the renegotiation of one or more terms and provisions of this Agreement. If the
Agency denies such requested extension, and if the Developer does not promptly commence
construction of the applicable Phase Improvements (assuming no outstanding basis(es) for non-
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performance under this Agreement), then the Developer shall be deemed in default of this Agreement
and the notice default described in Section 1201.1 shall be deemed to have been provided to
Developer by the Agency on the date of such Agency denial.
Nothing in the foregoing shall modify the obligation and covenant of the Developer to
construct the applicable Phase Improvements set forth in Section 910 hereinafter, it being understood
by the parties that if the Developer fails to commence construction of the applicable Phase
Improvements within the time frame permitted and required hereunder, then the Agency has full right
and authority to avail itself of all rights and remedies under this Agreement for Developer's failure to
perform.
502. Escrow for Disposition of Phase II Agency Parcels and Phase II Acquisition
Parcels for the Phase II Development. The Developer shall cause an Escrow for disposition of the
Phase" Agency Parcels and the Phase" Acquisition Parcels to be opened with the Escrow Agent in
San Diego County, California, by the time established therefor in the Schedule of Performance. This
Agreement constitutes supplementary escrow instructions of the Agency and the Developer for the
Phase" Conveyance, and a duplicate original of this Agreement shall be delivered to the Escrow
Agent concurrent with the opening the Escrow. Further, the parties will agree to standard, reasonable
Escrow terms and conditions for the Phase" Conveyance. The Agency and the Developer shall
provide such additional supplemental escrow instructions as shall be necessary for and consistent
with this Agreement. In the event the Escrow Agent for the Phase" Conveyance requires the
Developer to execute standard form escrow instructions and there are any inconsistencies between
such instructions and this Agreement, the provisions of this Agreement shall control. The Escrow
Agent for the Phase" Parcels is hereby empowered to act under this Agreement, and the Escrow
Agent, shall carry out its duties as Escrow Agent for the Phase" Conveyance.
503. Delivery of Grant Deed for Phase II Agency Parcels and Phase II Acquisition
Parcels. Upon delivery of the Grant Deed for the Phase" Agency Parcels and the Phase"
Acquisition Parcels to the Escrow Agent by the Agency, the Escrow Agent shall record the Phase"
Grant Deed when title can be vested in the Developer in accordance with the terms and provisions of
this Agreement. The Developer shall accept conveyance oftitle of the Phase" Agency Parcels and
the Phase" Acquisition Parcels (and the Phase" Developer Parcels in other pending escrow(s)) at or
before the time established therefor in the Schedule of Performance subject to satisfaction of each of
the Conditions Precedent to the Phase" Conveyance. The Escrow Agent shall pay any applicable
transfer tax.
503.1 Fees, Charges and Costs for Phase II Conveyance. The Developer shall
pay to the Escrow Agent for the Phase" Conveyance 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 five (5) days prior to the scheduled date for closing the Phase 11 Escrow:
(a) Escrow fees for Phase" Escrow;
(b) Ad valorem taxes and property taxes, if any, upon the Phase"
Developer Parcels for any time prior to transfer of title;
(c) Any documentary transfer tax;
(d) Premiums for all title insurance policy(ies);
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(e) Recording fees; and
(I) Notary fees.
503.2 Execution and Delivery of Phase II Documents. The Agency shall execute,
acknowledge and deliver the Grant Deed for the Phase" Agency Parcels and Phase" Acquisition
Parcels and the Agreement Affecting Real Property, to be recorded against the Phase 11 Parcels. The
Developer shall execute, acknowledge, and deliver to the Escrow Agent the Grant Deed for the
Phase" Agency Parcels (as the grantee), the Agreement Affecting Real Property for the Phase 11
Parcels, and such other document(s) required by Developer or Developer's Lender(s) so long as such
documents are junior and subordinate to this Agreement, the Grant Deed, and the Agreement
Affecting Real Property. Finally, the Developer shall deliver to the Escrow Agent the Parcel Map for
the Phase" Parcels in a condition ready for recordation at the close of Escrow.
504. Escrow Agent Authority. The Escrow Agent is authorized to:
(a) Pay, and charge the Developer for any fees, charges and costs payable
under this Section 500, et seq. of this Agreement. Before such payments or charges are made, the
Escrow Agent shall notify the Agency and the Developer of the fees, charges and costs necessary to
clear title and close the Escrow.
(b) Deliver the Grant Deed for the Phase" Agency Parcels and Phase"
Acquisition Parcels and other documents to the parties entitled thereto when the Agency and the
Developer have fulfilled the conditions of this Escrow.
(c) Record any instruments delivered through this Escrow, if necessary or
proper, to vest title to the Phase" Agency Parcels and Phase" Acquisition Parcels in the Developer
in accordance with the terms and provisions of this Agreement (inclusive of closing the escrows for
the Phase" Developer Parcels). Such instruments shall be recorded in the following order (or
otherwise as the Agency and Developer shall mutually instruct the Escrow Agent): (i) the
Memorandum of Agreement, ifnot already recorded, (ii) reconveyance(s) of the deed(s) of trust
recorded against any of the Phase" Parcels, (iii) the Grant Deed for the Phase" Agency Parcels and
Phase" Acquisition Parcels, (iv) the Agreement Affecting Real Property, and (v) such other
document(s) required by Developer or Developer's Lender(s) so long as such documents are junior
and subordinate to this Agreement (through the Memorandum of Agreement recorded referencing
this Agreement), the Grant Deed, and the Agreement Affecting Real Property.
505. Additional Escrow Instructions. All funds received in the Phase" Escrow(s) shall
be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent, in an
interest-earning general escrow account or accounts with any state or national bank doing business in
the State of California. Such funds may be transferred to any other general escrow account or
accounts. All disbursements shall be made by check of the Escrow Agent. All adjustments are to be
made on the basis of a thirty (30) day month.
If the Phase" Escrow is not in condition to close on or before the time for commencement of
grading for the Phase" Improvements established in this Agreement, either party who then shall
have fully performed the acts to be performed before the conveyance of title may, in writing, demand
from the Escrow Agent the return of its money, papers or documents deposited with the Escrow
Agent. No demand for return shall be recognized until ten (10) days after the Escrow Agent shall
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have mailed copies of such demand to the other party or parties. Objections, if any, shall be raised
by written notice to the Escrow Agent and to the other party within the ten (10) day period, in which
event the Escrow Agent is authorized to hold all money, papers and documents with respect to the
Phase" Agency Parcels and Phase II Acquisition Parcels until instructed by mutual agreement of the
parties or by a court of competent jurisdiction. Ifno such objections are made, the Escrow shall be
closed as soon as possible.
The Escrow Agent shall not be obligated to return any such money, papers or documents
except upon the written instructions of both the Agency and the Developer or until the party entitled
thereto has been determined by a final decision of a court of competent jurisdiction.
Any amendment to these Escrow instructions shall be in writing and signed by both the
Agency and the Developer. At the time of any amendment, the Escrow Agent shall agree to carry
out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the Agency or the Developer shall be directed
to the addresses and in the manner established in Section 1101 of this Agreement for notices,
demands and communications between the Agency and the Developer.
The liability of the Escrow Agent for the Phase" Conveyance under this Agreement is
limited to performance of the obligations imposed upon it under the terms and provisions of
Section 500, et seq. of this Agreement.
506. Conditions Precedent to the Phase II Conveyance. Prior to and as conditions to
the close of Escrow for the Phase" Conveyance, each of the following respective conditions shall be
satisfied by the respective times established therefor in the Schedule of Performance or, if no time is
specified, prior to the Phase" Conveyance:
506.1 Agency Conditions Precedent to Phase II Conveyance. The obligation of
the Agency to proceed with the Phase" Conveyance is expressly subject to the fulfillment by
Developer of each and all ofthe conditions precedent to closing (a) through 0), inclusive, described
below ("Agency's Conditions Precedent to the Phase" Conveyance" or "Agency's Conditions
Precedent to Closing of the Phase 11 Escrow"), which are solely for the benefit of Agency, and which
shall be fulfilled by the time periods provided for herein.
(a) The Developer shall be satisfied it is ready to close its Construction
Financing for the Phase" Improvements, or if the Developer is financing the Phase" Improvements
with Developer funds, such finds shall be evidenced to be available and committed exclusively to the
Phase" Improvements. Further, Developer shall provide proof reasonably satisfactory to the
Agency that the Developer has obtained a letter of intent for financing the construction of the Phase
" Improvements.
(b) The Developer shall have caused to be prepared at its sole cost and
expense and shall have delivered the Parcel Map for the Phase II Parcels to the Escrow Agent in a
condition ready to be recorded in the Office of the Recorder of the County of San Diego all in
accordance with Section 205 hereof. Further, in connection with the completion and recording of the
Parcel Map, the Developer shall have provided the Agency with separate legal descriptions of the
various parcels which comprise Phase II, which legal descriptions have been prepared or caused to
have been prepared by the Developer.
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(c) The Developer has obtained the Entitlement and all requirements of
the CEQA shall have been met and completed for the Project by action of the City, Agency, and/or
City Planning Commission, as applicable, relating to the applicable Phase of the Project and
including the Agency's disposition of the Phase" Agency Parcels to the Developer. Further, a duly
noticed and held joint public hearing of the Agency and City Council and other legal requirements
and prerequisites to disposition of property pursuant to the Community Redevelopment Law have
been satisfied.
(d) The Developer shall have duly executed and delivered (i) the
Memorandum of Agreement, if not yet recorded, against the Phase" Parcels, (ii) the Grant Deed for
the Phase" Agency Parcels and Phase II Acquisition Parcels, (iii) the Agreement Affecting Real
Property to be recorded against the Phase" Parcels, and (iv) all other documents which are necessary
to ensure that the Agreement Affecting Real Property is a lien against the Phase II Parcels prior,
superior, and non-subordinate to other monetary encumbrances (excluding non-delinquent taxes and
assessments), and any other documents required hereunder for Phase" of the Project.
(i) Developer is solely responsible to obtain all necessary
subordination documents relating to existing exceptions to title, if any; provided however, any
necessary subordination document(s) shall be in a legal form reasonably acceptable to the Agency
Executive Director and legal counsel. Said covenants, restrictions, and obligations provided by the
Developer to and for the benefit of the Agency under the Agreement Affecting Real Property are a
substantive part of the consideration hereunder, and the Agency Participation would not be provided
but for such consideration provided by the Developer to the Agency.
(e) The Developer shall not be in Default of this Agreement and all
representations and warranties of the Developer contained herein shall be true and correct in all
material respects.
(1) The Developer shall have deposited into the Escrow for Phase II
Conveyance a sum of One Hundred Thirteen Thousand Dollars ($113,000.00) (equal to the fair
market value of the Phase" Agency Parcels) as the purchase price thereof in addition to the
assignment and re-assignment of the parcels hereinbefore described.
(g) The Developer shall provide updated insurance certificates
conforming to Section 1304 of this Agreement in a form reasonably satisfactory to the Agency
Executive Director or his designee.
(h) The Developer provides evidence to the Agency Executive Director
and reasonably satisfactory to the Agency Counsel that Developer is the fee owner of the Phase"
Developer Parcels, or that all pending Escrow(s) for all Developer Parcels within Phase" shall be
ready to close.
(i) Developer shall have caused the relocation (or effected settlement
agreements for specific move/vacation of premises date for settlement of all relocation issues) of all
occupants from the Phase" Parcels in accordance with the requirements of Section 208, et seq.
(j) The Agency shall have approved the environmental condition of the
Phase" Parcels in accordance with Section 207 of this Agreement.
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The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Phase II Conveyance. The Agency further agrees to promptly execute and deliver to
the Escrow Agent such written verification of the fulfillment by Developer of such conditions, as
may be required by the Escrow Agent, if such be the case.
506.2 Developer Conditions Precedent to Phase II Conveyance. The obligation
of the Developer to proceed with the Phase II Conveyance is expressly subject to the fulfillment by
Agency of each and all of the conditions precedent to closing (a) through (1), inclusive, described
below ("Developer's Conditions Precedent to the Phase II Conveyance" or "Developer's Conditions
Precedent to Closing of the Phase II Escrow"), which are solely for the benefit of Developer, and
which shall be fulfilled by the time periods provided for herein.
(a) Prior to the Closing, the Agency is not in Default in any of its
obligations under the terms of this Agreement and all representations and warranties of the Agency
contained herein shall be true and correct in all material respects.
(b) The Agency shall have duly executed the Grant Deed for the Phase II
Agency Parcels and the Phase II Acquisition Parcels, the Memorandum of Agreement, the
Agreement Affecting Real Property relating to the Phase II Parcels, and any other documents
required to be signed by the Agency under this Agreement.
(c) The Developer shall have obtained the Entitlement.
(d) Developer shall be satisfied with the environmental clearances
regarding the Phase II Parcels, particularly the soils and groundwater, or completed remediation
thereof, as set forth in Section 207, et seq. of this Agreement.
(e) The Developer shall be satisfied that the Title Company is ready to,
upon payment of Title Company's regularly scheduled premium(s), issue to the Developer the Title
Policy (excepting only the Permitted Title Exceptions, the bargained for state oftitle.)
(1) The Developer shall be satisfied it is ready to close its Construction
Financing for the Phase" Improvements (subject to the carve out of this condition as it relates to
Section 1202, et seq.)
(g) Based on commercially reasonable standards, the Developer shall be
satisfied that market conditions both locally and nationally are appropriate to begin construction of
the Phase 11 Improvements based upon and subject to the timing and right to extension set forth in
Section 501.1; provided however if Developer seeks to assert this condition as a basis for
non-performance then the extension(s) set forth in Section 501.1 shall not have lapsed, and if such
time period(s) have lapsed then the Developer is in default of the Agreement for non-performance of
the covenant to construct the Phase 11 Improvements.
507. Conveyance of Title and Delivery of Possession. Subject to any extensions of time
mutually agreed upon in advance between the Agency and the Developer, the Phase II conveyance
shall be completed on or prior to the date specified therefor in the Schedule of Performance.
Possession shall be delivered to the Developer concurrently with the conveyance oftitle.
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508. Condition of Title.
508.1 Phase II Agency Parcels. The Agency shall convey to the Developer title to
the Phase II Agency Parcels free and clear of any and all encumbrances, liens, leases, easements, and
other exceptions to or defects in title, excepting only the following: (i) the lien of any non-delinquent
property taxes and assessments (to be prorated at the close of Escrow); (ii) the conditions set forth in
the Grant Deed for the Phase II Agency Parcels and the Phase II Acquisition Parcels, the Agreement
Affecting Real Property relating to the Phase II Parcels; (iii) property interests held by a public body
or public bodies including without limitation easements, franchises, licenses, or other property
interests of said public body or public bodies, except property interests held by the Agency, and/or
the City, on the Phase II Parcels and/or within the public rights-of-way adjacent to or at the perimeter
of the Phase II Parcels; (iv) the Approved Title Exceptions, and (v) such other exceptions to title as
may hereafter be mutually approved by the Agency and Developer.
508.2 Phase II Developer Parcels for Assignment and Reassignment. At the
time the Conditions Precedent to the Phase" Conveyance are satisfied, the Developer shall assign
rights to the Phase II Developer Parcels to the Agency free and clear of any and all encumbrances,
liens, leases, easements, and other exceptions to or defects in title, excepting only the following:
(i) the lien of any non-delinquent property taxes and assessments; (ii) the conditions set forth in the
Agreement Affecting Real Property relating to the Phase" Parcels to be recorded against said
parcels; (iii) property interests held by a public body or public bodies including without limitation
easements, franchises, licenses, or other property interests of said public body or public bodies,
except property interests held by the Agency, and/or the City, on the Phase" Parcels and/or within
the public rights-of-way adjacent to or at the perimeter of the Phase II Parcels; (iv) the Approved
Title Exceptions, and (v) such other exceptions to title as may hereafter be mutually approved by the
Agency and Developer, and immediately thereafter the Agency shall reassign back to the Developer
all such rights and title.
509. Time for and Place of Delivery of Grant Deed for Phase II Conveyance. Subject
to any mutually agreed-upon extension of time and subject to Section 501.1, the Agency shall deposit
the Grant Deed for the Phase 11 Agency Parcels and Phase II Acquisition Parcels with the Escrow
Agent on or before the date established for the date of the Phase II Conveyance pursuant to the
Schedule of Performance.
510. Recordation of Deed. The Escrow Agent shall file the Grant Deed for the Phase II
Conveyance for recordation among the land records in the Office of the County Recorder for the
County of San Diego, and shall deliver to the Developer the title insurance policy insuring title in
conformity with this Agreement.
511. Title Insurance. Concurrently with the recordation of the Grant Deed conveying
title to the Phase II Agency Parcels to the Developer, the Title Company, or such other title insurance
company as may be mutually approved by the Agency and Developer, shall provide, issue, and
deliver to the Developer an ALTA Survey and Owner's AL TA Extended Coverage policy of title
insurance with such endorsement(s) as reasonably required by the Developer or its Lender(s) insuring
that the title to the Agency Parcels is vested in the Developer in the condition required by this
Agreement, and that title to the Phase II Developer Parcels is satisfactory to the Developer to permit
development of the Phase II Improvements as provided herein. The Title Company shall provide the
Agency with a copy of the title insurance policy, inclusive of all endorsements. The title insurance
policy shall be in an amount as the Developer and its Lender(s) may require, including any additional
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amount required covering the estimated Project Costs of constructing the Phase II Improvements.
All costs incurred for or related to such title insurance shall be borne solely by the Developer.
512. Taxes and Assessments. Ad valorem taxes and property taxes and assessments, if
any, on the Phase II Agency Parcels, levied, assessed or imposed for any period commencing prior to
the Phase II Conveyance shall be prorated as of the date of the Conveyance with the Agency
responsible for any taxes for the period prior to the Conveyance and the Developer responsible for
any taxes for the period subsequent to the Conveyance and paid as provided in this Agreement, and
any of such taxes and assessments imposed after the Phase II Conveyance shall be borne by the
Developer.
513. Condition Subsequent; Reentry and Revesting of Title in the Agency of the
Phase II Agency Parcels and Phase II Acquisition Parcels After the Phase II Conveyance.
Subject to any rights the Developer may have relating to force majeure and enforced delay hereunder
as set forth in Section 1103, the Agency shall have the additional right, at its option, to reenter and
take possession of the Phase" Agency Parcels and the Phase II Acquisition Parcels with all
improvements thereon, and to terminate and revest in the Agency the estate conveyed to the
Developer if after Phase II Conveyance oftitle and prior to the issuance of the Certificate of
Completion for the Phase II Improvements, the Developer shall commit a Default under this
Agreement by:
(a) Failing to timely commence construction of the Phase"
Improvements (as evidenced by commencement of grading, completion of the footings for the
second office building and second phase of the parking structure and diligently acting on said
construction) as required by this Agreement, and failing to cure such Default within the applicable
cure period provided hereunder; or
(b) Abandoning or substantially suspending construction of the Phase II
Improvements required by this Agreement for a period offorty-five (45) days and failing to cure
such Default within the applicable cure period; or
(c) Transferring or suffering any involuntary transfer of the Phase II
Parcels, or any portion of the Site, or any part or parcels thereof, or an assignment of this Agreement,
in whole or in part, in violation of this Agreement, and failing to cure such Default within the
applicable cure period provided herein.
The Agency may, but shall not be obligated to, exercise its rights under this Section 513 and
revest itself with title to all of the Phase I Agency Parcels and the Phase" Acquisition Parcels
conveyed by the Agency to the Developer as a part ofthe Phase II Conveyance. The Agency shall
have the independent right to an option granted by the Developer to acquire the Phase II Developer
Parcels as set forth in Section 514, et seq. If the Agency elects to exercise its rights to reenter and
revest under this Section 513, and separately elects to exercise the option described in Section 514
hereinafter, then, such conveyance(s) via the option shall close concurrently with the revesting of
title to the Phase" Agency Parcels and Phase II Acquisition Parcels in Agency, as provided herein.
Subject to the lender rights of Section] 31 0, such right to reenter, terminate, and revest shall
be subject to and be limited by and shall not defeat, render invalid, or limit:
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]. Any mortgage or deed of trust permitted by this Agreement; or
2. Any rights or interests provided in this Agreement for the protection
of the holders of such mortgages or deed of trust.
The Grant Deed for the Phase II Agency Parcels and Phase II Acquisition Parcels shall
contain appropriate reference and provision to give effect to the Agency's right as set forth in this
Section 513, under specified circumstances prior to recordation of the Certificate of Completion for
the Phase II Improvements, to reenter and take possession of the Phase II Agency Parcels and
Phase II Acquisition Parcels, with all improvements thereon, and to terminate and revest in the
Agency the entire estate conveyed to the Developer.
Upon the revesting in the Agency of title to the Phase II Agency Parcels and Phase II
Acquisition Parcels as provided in this Section 513 and the exercise of the Phase II Developer
Parcels Option relating to the Phase II Developer Parcels, if such is exercised, as provided in Section
514, the Agency shall, pursuant to its responsibilities under state law, use its commercially
reasonable efforts to sell such Phase II Parcels as soon and in such manner as the Agency shall find
feasible and no later than three hundred sixty (360) days after the revesting/vesting of the Phase II
Agency Parcels and/or Phase II Acquisition Parcels in the Agency. The Agency shall exercise
reasonable diligence to obtain a fair reuse value for such parcels, provided that the Agency shall have
the right to condition such sale/resale consistent with the objectives of the Redevelopment Plan,
including without limitation, limiting such sale/resale, to a qualified and responsible party or parties
(as reasonably determined by the Agency) who will assume the obligation or making or completing
the Phase II Improvements, or such other improvements in their stead as shall be reasonably
satisfactory to the Agency and in accordance with the uses specified for Phase II and the balance of
the Site in the Redevelopment Plan. In this regard, the Agency agrees to use reasonable efforts to
obtain maximal value (within reasonable limits) for those Phase II Parcels reacquired in terms of
generation of tax increment and sales tax revenues and the reuse land value of the such parcels upon
sale/resale. Upon such sale/resale of the reacquired Phase II Parcels, the proceeds thereof shall be
applied:
(i) First, to reimburse the Agency, on its own behalf or on behalf
of the City, for (I) all costs and expenses incurred by the Agency (exclusive of overhead for in house
staf1) in connection with the recapture, management and resale of the Phase II Agency Parcels, the
Phase II Acquisition Parcels, and Phase II Developer Parcels (but less any income derived by the
Agency from the Phase II Parcels in connection with such management), (2) the value of the Phase II
Agency Parcels ($] 13,000.00), (3) all taxes, assessments and water and sewer charges with respect to
the Phase II Parcels which the Developer has not paid (or, in the event the Phase II Parcels are
exempt from taxation or assessment or such charges during the period of ownership thereof by the
Agency, an amount, if paid, equal to such taxes, assessments, or charges [as determined by the
appropriate assessing official] as would have been payable if the Phase I Parcels were not so
exempt), (4) any payments made or necessary to be made to discharge any encumbrances or liens
existing on the Phase II Parcels at the time of revesting or acquisition of title thereto in the Agency,
or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to
obligations, defaults or acts of the Developer, it successors or transferees, and (5) any expenditures
made or obligations incurred with respect to the making or completion of the improvements or any
part thereof on the Phase II Parcels; and
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(ii) Second, to reimburse the Agency the cumulative amount, if
any, disbursed as one or more of the installment payments of the Agency Participation; and
(iii) Third, to pay to the Developer the amount equal to the
"Phase II Developer Parcels Option Price" as the term is hereinafter defined in Section 514, for -the
Phase II Developer Parcels, if the option is exercised.
(iv) Fourth, to reimburse the Developer, its successor or
transferee, up to the amount equal to the sum of all direct and indirect costs incurred by the
Developer for the development of the Phase" Improvements, if any, at the time of the Agency's
reentry, repossession and/or acquisition (inclusive of non-reimbursed Permit Fees, Relocation costs,
and other out of pocket costs paid by the Developer), less any gains or income withdrawn or made by
the Developer from the Phase II Parcels or the improvements thereon.
Any balance remaining after such reimbursements shall be retained by the Agency as its sole
property; provided however, the Agency shall not retain any funds or cause itself to be reimbursed in
an amount that exceeds its full out of pocket expenses, including all third party costs, plus the full
value of the Phase II Agency Parcels and Phase II Acquisition Parcels, plus an amount equal to the
cumulative disbursement(s) and payment(s) then previously paid by the Agency to the Developer
under this Agreement.
Any remaining funds, if any, after such repayment priorities set forth above shall be paid to
the Developer.
In the event the sale/resale proceeds are not sufficient to fully pay the amounts in clause
(iii) and/or (iv) above, the full-unpaid balance shall be deemed forgiven and discharged at such time.
The rights established in this Section 513 are to be interpreted in light of the fact that the
Agency will convey the Phase II Agency Parcels and Phase II Acquisition Parcels to the Developer
for development, and not for speculation in undeveloped land.
514. Developer Grants Option to Agency for Phase II Developer Parcels. The
Developer hereby gives the Agency an option (the "Phase II Developer Parcels Option") to purchase
the Phase 11 Developer Parcels in the event the Developer defaults under the terms of this Agreement
prior to or subsequent to the Phase 11 Conveyance of the Agency Parcels, and fails to cure such
default within the time set forth herein in order to exercise the rights regarding sale/resale of the
Phase II Parcels pursuant to Section 513 above. The Agency's option price (the "Phase II Developer
Parcels Option Price") for the Phase II Developer Parcels shall be equal to the sum of out of pocket
costs incurred and paid, as follows: (i) the purchase price for all Phase II Developer Parcels,
as evidenced by the purchase and sale agreement(s) and escrow closing statement(s) for such parcels,
plus (ii) interest (said interest shall be the actual and verified interest cost/carry to the Developer),
however, the verified annual interest cost/carry shall not exceed ten percent (10%) per annum
compounded annually on said acquisition price from the Developer's close of the Phase 11
Conveyance through the date of Agency's acquisition/re-acquisition, (iii) actual, verified, and paid
taxes from the Developer's close of the Phase II Conveyance through the date of Agency's
acquisition/re-acquisition, (iv) incurred, verified, and paid Relocation costs as provided in Section
208, et seq., and (v) the preferred return on equity owed by the Developer to its equity funding
partner (as verified to be due and the amount determined pursuant to the terms of the Developer's
limited liability company operating agreement). Notwithstanding the foregoing relating to
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subsections (ii) and (v) above, there shall be no duplication of costs or double accounting of costs
between interest cost/carry and the payment of preferred return on equity, acknowledging however,
that as of the Date of Agreement the Developer's business terms under the limited liability company
operating agreement may include both equity and interest components.
The Agency may, but shall not be obligated to, exercise the Phase II Developer Parcels
Option to purchase the Phase II Developer Parcels after the Phase II Conveyance if the Agency elects
to exercise its right under Section 513 and in such event the conveyance of the Phase 11 Developer
Parcels shall be concurrent with the revesting of the Phase II Agency Parcels and Phase II
Acquisition Parcels pursuant to Section 513, but the Phase II Developer Parcels Option Price shall be
paid at the time of the Agency's receipt of the proceeds of the sale/resale of the reacquired Phase II
Parcels, pursuant to Section 513. This Phase II Developer Parcels Option shall commence upon the
date of this Agreement and terminate on the date a Certificate of Completion is issued for all of the
Phase II Improvements.
514.1 Option Assignable by Agency to Successor Developer. The Agency shall
have the right, but not the obligation, to assign the Phase II Developer Parcels Option to the
developer, if any, who will be proceeding with the Project, or such other approved project in its
stead, in order to cause the revested and reassembled Phase II Parcels to be ready for single
development.
600. ASSEMBLY OF THE PHASE III PARCELS, INCLUSIVE OF THE PHASE III
ACQUISITION PARCELS.
601. Proceedings to Acquire the Phase III Acquisition Parcels.
601.1 Good Faith Negotiations to Acquire Phase III Acquisition Parcels. If
after good faith efforts and negotiations between the Developer and the property interest holder(s) of
the Phase III Acquisition Parcels, the Developer has not acquired such parcels, then the Developer
may request the Agency to initiate acquisition proceedings as to such parcels. After such request by
the Developer, if any, as to title or rights to acquire the Phase III Acquisition Parcels not previously
acquired or negotiated to be acquired by the Developer, within the time set forth in the Schedule of
Performance the Agency will initiate the process and proceedings set forth in Government Code
Section 7267, et seq. to seek to acquire such parcels through issuance of notice of intent to conduct
and causing to be prepared an appraisal of such parcel(s), providing a written offer(s) to acquire, and
negotiating in good faith toward acquisition of the Phase III Acquisition Parcels. The Agency's
presentation of the written offer(s) to acquire the Phase III Acquisition Parcels shall be made
pursuant to and in compliance with Code of Civil Procedure Section 1245.235 as a prerequisite to the
consideration of and action on a resolution of necessity to seek to acquire such owner's parcel
through the Agency's exercise of its power of eminent domain.
601.2 Consideration and Action on Resolution(s) of Necessity to Acquire
Phase III Acquisition Parcels by Eminent Domain. In the event the Agency does not acquire each
Phase III Acquisition Parcel through assignment by the Developer and/or good faith negotiations to
acquire such parcels, then within the time set forth in the Schedule of Performance, the Agency will
duly schedule, notice, and hold a public hearing at which it will consider the adoption ofresolution(s)
of necessity to consider the authorization of acquisition of one or more of the Phase III Acquisition
Parcels by eminent domain. In connection with and following such public hearing the Agency will
determine in good faith and within its sole, independent, and absolute discretion whether or not to
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adopt the resolution(s) of necessity and to proceed with eminent domain as to the Phase III
Acquisition Parcels. In this regard, by this Agreement the Agency undertakes no obligation to the
Developer hereunder to adopt any resolution of necessity, and does not prejudge or commit, in any
respect whatsoever, to the Developer, or any other person or entity, regarding the findings and
determinations to be made by the Agency with respect thereto.
(a) In the event the Agency does not elect to acquire the Phase III
Acquisition Parcels through exercise of its power of eminent domain as set forth in this
Section 601.2, neither the Developer or the Agency shall be in default under this Agreement,
but shall each have the right to not proceed with Phase III of the Project and to terminate this
Agreement as to all obligations relating to Phase III pursuant to the provisions herein.
(b) If the Agency elects to exercise its power of eminent domain to
acquire the Phase III Acquisition Parcels, such election shall be made and the eminent domain
action(s) shall be filed within the times set forth in the Schedule of Performance, and the Agency
shall, subject to delays outside the Agency's reasonable control, exercise its most reasonable efforts
to diligently prosecute such eminent domain action(s) to completion and obtain title consistent with
the requirements of this Agreement as soon as possible after the commencement of such actions.
(c) In the event that the Agency exercises its power of eminent domain to
acquire the Phase III Acquisition Parcels, the Agency shall prepare application(s) to the Superior
Court, County of San Diego, State of California, (i) to obtain a judicial order or orders (hereinafter
"Order of Prejudgment Possession") authorizing the Agency to take possession of the Phase III
Acquisition Parcels prior to the final judgment(s) and order(s) of condemnation and (ii) relocate or
cause to be relocated and removed from the Phase III Acquisition Parcels any occupants thereof
(at the sole expense of the Developer pursuant to the Three Party Relocation Agreement and
Section 208, et seq.)
601.3 Effective Order of Prejudgment Possession Sufficient to Convey Title to
Any Phase III Acquisition Parcel. Notwithstanding any other provision of this Agreement to the
contrary, if at any time prior to the Agency's acquisition oftitle to all of the Phase III Acquisition
Parcels in the condition for conveyance required in this Section 600, et seq., the Agency provides to
the Developer a copy of the Order of Prejudgment Possession as to any parcel for which title has not
yet been so acquired, and:
(a) there are no outstanding legal issues to legally effective possession
raised by party(ies) defendant to such eminent domain action(s); and
(b) the Agency delivers possession of all of the Phase III Acquisition
Parcels; and
(c) the Agency is diligently proceeding with the eminent domain
action(s) seeking the rendering of a final judgment(s) and order(s) as to any parcel(s) for which title
has not yet been so acquired, which judgment(s) and order(s) would authorize the taking; and
(d) the right of possession conveyed by the Agency to the Developer is
sufficient to enable the Developer to obtain a title insurance policy and to close its financing for the
construction of the Phase III Improvements on the Phase III Parcels;
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then, subject to satisfaction of the Conditions Precedent to the Phase III Conveyance set forth herein,
the Agency shall convey and the Developer shall accept title to those parcels the Agency owns and
possession of the remaining parcels, and the Developer shall proceed with the development of the
Phase III Improvements, with the date of transfer of possession from the Agency to the Developer
treated the same as the date for close of the Escrow for the Phase III Conveyance for purposes of the
Developer's obligation to proceed with and complete construction of the Phase III Improvements.
601.4 Indemnification Agreement between Agency and Title Company. Subject
to there being no outstanding legal issues to the right to effective possession of the Phase"
Acquisition Parcels in the pending eminent domain action(s) raised by party(ies) defendant to such
action(s), upon the request ofthe Title Company, as that term is herein, the Agency shall execute an
indemnification agreement in form satisfactory to the Title Company and reasonably satisfactory to
the Agency by which the Agency shall agree to indemnify the Title Company for any losses,
damages, and expenses incurred by the Title Company in the event of the Agency's abandonment of
the eminent domain proceedings in the acquisition of the applicable Phase III Parcels. In this regard,
the Developer agrees in turn to indemnify, defend, and hold the Agency harmless if the Agency's
abandonment is justified because of a default by the Developer hereunder. Nothing herein shall be
deemed to obligate the Agency to pay for any additional premium or other charge necessary for the
issuance of said title policy. In the event that the Title Company declines to issue a title insurance
policy under such circumstances the Phase III Conveyance shall not occur and, the Developer's
obligation to commence and complete the construction of the Phase III Improvements shall not
commence to run until the Agency has acquired title to all of the Phase III Acquisition Parcels and
title can be vested in the Developer in accordance with this Agreement.
601.5 Reports on Status of Assembly of Phase III Parcels. Upon the Developer's
written request, the Agency shall periodically (but no more frequently than quarterly) report to the
Developer in writing regarding the status of the Agency's eminent domain proceedings, if any, and
related efforts to acquire the Phase III Acquisition Parcels.
During the period prior to the applicable Agency Conveyance, the Agency and Developer
agree not to enter into any lease, sublease, restrictive covenant, or other agreement with respect to the
Phase III Parcels, nor to modify or amend any existing agreement, which agreement, modification, or
amendment could prevent, delay, or impair the parties' mutual objective to acquire and maintain title
to the Phase III Parcels, and all parcels and portions of parcels thereof, consistent with the approved
title condition herein; provided, however, that nothing herein is intended to prevent the Agency or
Developer from entering into agreements with respect to Phase III consistent with the purposes of
this Agreement.
602. Phase III Developer Advance for Assembly of Phase III Acquisition Parcels.
Within the time established therefor in the Schedule of Performance, the Developer shall deliver to
the Agency an unconditional irrevocable letter of credit in the amount of 125% of the appraised
and/or estimated value of the subject Acquisition Parcels, inclusive of land, improvements, furniture,
fixtures and equipment (FFE), leasehold bonus value, business goodwill, plus 110% of all other
budgeted acquisition costs (such as relocation costs, attorneys fees, appraisals, etc.) ("Letter of
Credit" or "Phase III Letter of Credit"). The foregoing amount is estimated to be sufficient to cover
all direct and indirect costs incurred and to be incurred for acquisition of the Phase III Acquisition
Parcels for the Phase III portion of the Site and disposition of the Phase III Acquisition Parcels by the
Agency to the Developer in the condition oftitle and without rights to possession by any third party.
The initial amount ofthe Phase III Letter of Credit has been determined by the parties based on the
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information provided by the Developer to the Agency and based on the Agency's review and
evaluation of the estimated costs to acquire the Phase III Acquisition Parcels, if and when acquisition
proceeds. The Phase III Letter of Credit funds shall secure the Developer's obligation to advance all
funds which the Developer is obligated to advance to the Agency hereunder to finance the acquisition
of the Phase III Acquisition Parcels and relocating occupants from all of the Phase III Parcels, as
provided herein. The Agency is authorized to require the Developer to increase the amount of the
Letter of Credit, as and when the balance is fully drawn in order to continue to fully advance and
fund all costs of acquisition of the Phase III Acquisition Parcels and assembly of the Phase III
Parcels, as further described herein.
602.1 Phase III Letter of Credit Requirements. The Phase III Letter of Credit
evidencing the amount of the Phase III Developer Advance shall be issued by a federally insured
financial institution reasonably acceptable to the Agency, (or a non-federally insured financial
institution which the Agency in its sole and absolute discretion may approve or disapprove), and the
form of the Letter of Credit shall be reasonably satisfactory to the Agency and its legal counsel.
( a) The Letter of Credit shall name the Agency as beneficiary and shall
include provisions that the beneficiary may draw funds therefrom by exhibiting to the issuer such
Letter of Credit and presenting to the issuer a sight draft and certification by beneficiary that such
draw(s) against the Letter of Credit is/are authorized under this Agreement.
(b) The Executive Director of the Agency, or Authorized Representative,
shall be authorized to make draws upon the Letter of Credit subsequent to issuance.
(c) The Agency shall not make demands for funds from the Phase III
Developer Advance until the Agency determines that such funds are needed by the Agency for any of
the purposes set forth in this Section 600, et seq.
(d) The Agency shall provide the Developer written notice of each draw
the Agency proposes to make on the Letter of Credit with a general statement as to the use of the
money. The Developer may elect to deliver, not more than five (5) business days after receipt of the
Agency's notice, a cashier's check to be used in place of a draw on the Letter of Credit. In the event
the Developer delivers a cashier's check to the Agency, the Agency shall promptly provide written
notice to the issuer of the Letter of Credit that the face amount of the Letter of Credit should be
reduced by the amount of funds so delivered to the Agency.
(e) Upon the Developer's written request, the Agency further shall
provide Developer with periodic written reports (but no more frequently than quarterly) showing the
amount of each draw made on said Letter of Credit and the use of any funds expended (whether
obtained directly from the Developer or from the issuer of the Letter of Credit).
(1) The term of the Letter of Credit shall be at least one (I) year. If the
Agency has not expended nor obligated the balance of the Letter of Credit, if any, at least forty-five
(45) days prior to the expiration of the Letter of Credit, then the Agency shall have the right to draw
upon the remaining balance of the Letter of Credit and use the proceeds for the purposes set forth
herein unless the Developer renews or replaces it (with another Letter of Credit with a term of at least
one (1) year) within ten (10) days after written notice from the Agency that it intends to draw on the
remaining balance of the Letter of Credit. Each subsequent Letter of Credit placed by the Developer
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in the amount of the funds not yet drawn by the Agency on the Phase III Developer Advance shall
have a term of at least one (1) year, unless otherwise approved in writing by the Agency. In the
event the Agency has drawn, or expects to draw, the full amount of the Letter of Credit, and
additional funds are required to continue with and complete the assembly of the Phase III Parcels,
then the Agency shall notify the Developer in writing of the need for an increase in the Phase III
Developer Advance and Phase III Letter of Credit. The written notice shall include information
regarding the amount of required additional funds and a summary budget therefor. Within fifteen
(15) days of such notice by the Agency to the Developer, the Developer shall cause the Letter of
Credit to be increased, or shall provide such additional funds in cash via wire transfer to the Agency.
In the event the Developer fails to timely increase the Phase III Developer Advance, such inaction
shall be a default hereunder and the provisions for resale of the Phase III Parcels as assembled to the
date of the notice, as more fully described hereinafter shall apply.
602.2 Expenditures from the Proceeds of the Letter of Credit. The Agency shall
be authorized to utilize the Phase III Developer Advance (including any draws on the Phase III Letter
of Credit) for the following purposes:
(a) Actual Amounts Paid to Present Owners and Occupants. The
actual acquisition price paid to acquire all interests in the Phase III Acquisition Parcels (including,
but not limited to, amounts paid for the fee interest, land and improvements, leaseholds, bonus
values, options, rights of first refusal, tenants' improvements, furnishings, fixtures and equipment,
loss of business goodwill, and any other lawfully compensable interest) as reasonably determined by
the Agency, its designated representative, its legal counsel, or as may be determined by a court of
competent jurisdiction pursuant to the exercise of the power of eminent domain by the Agency, if
such occurs, including all reasonable costs, attorney's fees, appraiser or other expert witness fees
which the Agency may expend and/or be compelled by the court to pay to the owners, occupants, or
other interest holders of any of the Phase III Acquisition Parcels.
(b) Expenses of Acquisition. The expenses of acquisition incurred by
the Agency with respect to properties comprising the Phase III Acquisition Parcels shall consist of
the following items to the extent that such items are not otherwise included in subsection (a) above:
(i) Fees and actual expenses of acquisition of attorneys,
appraisers, engineers and other experts the employment of which is reasonably necessary to effect the
acquisition of the Phase III Acquisition Parcels;
(ii) Court costs and fees required to prosecute actions in eminent
domain, if approved;
(iii) Costs necessary to place the title to each property acquired in
the condition required herein, including any property taxes and assessments which are required to be
paid by the Agency in connection therewith;
(iv) The entire escrow fee for each property acquired;
(v) The cost of drawing the deed for each property acquired;
(vi) Recording fees, if any;
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(vii) Notary fees and premiums for title insurance policies;
taxes; and
(viii) Any state, county or city documentary stamps or transfer
(ix) Appraisal fees.
(c) Expenses of Relocation from the Phase III Parcels. To the extent
immediately available funds are not provided by the Developer pursuant to the Three Party
Relocation Agreement, all the costs and expenses incurred by the Agency (or the City or the
Developer) to relocate or cause relocation of any and all occupants from the Phase 1II Parcels
(including, but not limited to, relocation payments made to displaced persons and businesses, pre- or
post-relocation rental payments, fees and actual expenses of attorneys, relocation consultants, and
other experts employed to effect the relocation of occupants, and preparation of relocation plans) as
reasonably determined by the Agency or its designated representative, and to the extent that such
costs are not otherwise included in subsections (a) and (b) above.
(d) Expenses of Administration. The expenses of administration
incurred by the Agency and/or the City with respect to properties within the Phase 1II Acquisition
Parcels, which expenses shall include but not be limited to the following items to the extent that such
items are not otherwise included in subsections (a), (b), and/or (c), above: out of pocket fees and
actual expenses of outside attorneys, financial consultants, engineers and other experts, the
employment of which is reasonably necessary to carry out and enforce this Agreement between the
Agency and the Developer, provided the foregoing shall not include the overhead or costs of persons
directly employed by and considered exempt or non-exempt employees of the Agency or the City.
603. Promissory Note and Deed of Trust as Security for the Phase III Developer
Advance. The following procedure shall be followed for securing the Phase 1II Developer Advance.
603.1 Phase III Developer Advance Note. At the time of the Agency's first
receipt offunds from the Phase 1II Developer Advance (whether such funds are obtained directly
from the Developer or from a draw upon the Phase 1II Letter of Credit), the Agency shall execute and
tender to Developer its promissory note payable to Developer (the" Phase 1II Developer Advance
Note"). The Phase 1II Developer Advance Note shall be in the full amount of the Phase 1II
Developer Advance and substantially in the form of Attachment No.1 0 hereto, however, the
beneficiary of the Phase III Developer Advance Note shall be limited to repayment and collection of
only that portion of the Phase 1II Developer Advance actually drawn down and funds received by the
Agency. The Phase III Developer Advance Note shall be non-assignable. Except as provided in
Section 603.2, the Phase 1II Developer Advance Note shall bear no interest, unless this Agreement is
terminated by the Developer due to a material Default of the Agency in which case the Phase III
Developer Advance Note shall accrue interest at the LAIF rate, for general City investments.
603.2 Inclusion in Deed of Trust as Each Phase III Acquisition Parcel
Acquired. As soon as the Agency closes each individual escrow to acquire one of the parcels
comprising the Phase 1II Acquisition Parcels, or when the Agency acquires title pursuant to court
order(s) as a result of eminent domain, if any, the Agency shall record against such parcel and deliver
to the Developer deed(s) of trust securing the Phase III Developer Advance Note, Attachment
No. 10. Each deed of trust shall name the Developer, as the beneficiary, (or, at the Developer's
request, the lender/bank or other entity providing the Developer Advance or such party's designee)
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and the Title Company, as the trustee, and shall be on the standard short form deed of trust and
assignment of rents of the Title Company. Each deed of trust shall generally refer to the principal
amount of the Phase III Developer Advance Note. The Phase III Developer Advance Note shall
include an endorsement of the Developer referencing the amount drawn down on the Phase III
Developer Advance as of the date of each deed of trust.
603.3 Lender Policy of Title Insurance. If requested by the Developer and at the
sole cost and expense of the Developer, at the time of delivery of each deed of trust, the Agency may
be required to order and deliver to Developer (or, at the Developer's request, to the bank or other
entity providing the Phase III Developer Advance or such party's designee) a standard form CLTA
lender's policy of title insurance insuring the deed of trust in the amount of the acquisition price to
the Agency as to each individual parcel comprising the Phase III Acquisition Parcels. The cost of
each recordation and title insurance policy shall be borne by Developer.
603.4 Limited Liability for Repayment of Phase III Developer Advance Note.
The Phase III Developer Advance Note, as provided for herein, shall not constitute a debt of the City
of Chula Vista or any other public entity and the City shall have no obligation whatsoever with
respect to the Phase III Developer Advance Note. The Phase III Developer Advance Note shall be a
debt of the Agency only, but expressly limited by its terms and as to sources of repayment. And, the
obligation of the Agency to repay the Phase III Developer Advance Note shall be a special obligation
of the Agency payable only from and limited by the availability offunds from the sale/resale
proceeds, as hereinafter described.
603.5 Cancellation or Payment ofthe Phase III Developer Advance Note
(a) Concurrent with the Conveyance of the Phase III Parcels. In the
event the Agency is ready to conveyor conveys the Phase III Acquisition Parcels to the Developer,
the Phase III Developer Advance Note shall be concurrently deemed and considered repaid in full
and the Deeds of Trust shall be reconveyed by the Developer, and cleared from title through the
Escrow for the Phase III Conveyance.
(b) Upon Termination of the Agreement Prior to the Phase III
Conveyance. In the event the Agency or the Developer terminates this Agreement relating to the
development ofthe Phase III Improvements prior to the Phase III Conveyance pursuant to terms
herein, the Agency shall be obligated, if at all, to repay the Phase III Developer Advance Note and
discharge its obligations with respect to the Phase III Developer Advance as follows:
(i) If the Agency has filed eminent domain proceedings to
acquire the Phase III Acquisition Parcels but has not obtained title or possession of all of such parcels
and property interests prior to the effective date of the termination and the owner(s) of such parcel(s)
and property interest(s), as applicable, have not withdrawn from the court any deposit of probable
compensation previously made by the Agency, the Agency in its reasonable discretion may elect
(but in no respect is required) to abandon such eminent domain proceeding(s).
I. If the Agency elects to abandon the eminent domain
proceedings, the Agency shall exercise reasonable diligence to withdraw any amounts previously
deposited into court and repay such amounts to the Developer as rapidly as the release of said
amounts from the court can be effected, provided that the Agency shall be entitled to retain the
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amount reasonably determined by the Agency required to pay the costs of abandonment of such
proceeding(s).
2. In the event the Agency does not elect to abandon
such eminent domain proceeding(s) within thirty (30) days after the effective date of the termination
of the Agreement relating to the development of the Phase III Improvements, or if the Agency is not
entitled hereunder to abandon (i.e., if the Agency has already obtained orders of prejudgment
possession or the owner(s) have withdrawn the deposit of probable compensation from the court),
then the Agency (1) shall be permitted to continue to receive payments on the Phase III Developer
Advance (including draws on, and increases to, the Letter of Credit); and (2) shall exercise
reasonable diligence to prosecute such eminent domain proceeding(s) to completion as soon as
possible, and (3) shall pay to the Developer the proceeds from the resale of such Phase 1II Parcel(s)
and property interest(s), as applicable, in accordance with the applicable subparagraphs below to
fully discharge the Phase 1II Developer Advance Note.
3. If the Agency has received but not obligated portions
of the Phase III Developer Advance prior to the effective date of the termination, the Agency
(after withholding any amounts the Agency reasonably determines are required to perform the
Agency's obligations hereunder) shall return to the Developer the amount, if any, of any unobligated
funds.
603.6 SalelResale of Acquired Phase III Acquisition Parcels and Phase III
Developer Parcels Prior to the Phase III Conveyance. With respect to the Phase III Acquisition
Parcels Developer Parcels which have been acquired by the Agency prior to the effective date of the
termination of this Agreement prior to the Phase III Conveyance, and any of such parcels and
property interest(s), as applicable, which the Agency thereafter acquires pursuant hereto, the Agency
shall diligently use its best efforts to sell or resell such parcels and property interest(s), as applicable,
in accordance with this subparagraph and shall pay the proceeds of such sale( s) or resale( s) to the
Agency for reimbursement of costs, as described hereinafter, and to the Developer to discharge the
Phase 1II Developer Advance Note.
(a) The proceeds of such sale/resale shall be credited in the following
order of priorities: (1) first, to repay the principal amount of the Phase III Developer Advance Note
(but in no event to exceed the proceeds expended and/or encumbered to date of sale(s)/resale(s)),
(2) second, if the termination is due to the Default of the Agency to repay the accrued interest, and
then, (3) the balance of such proceeds, if any, remaining after such payments shall be retained by the
Agency as its sole property; provided however, the Agency shall not retain any funds or cause itself
to be reimbursed in an amount that exceeds its full out of pocket expenses, including all third party
costs (but not in-house staff time), plus the full value of the Phase III Acquisition Parcels, plus an
amount equal to the cumulative disbursement(s) of installment payment(s) of Agency Participation
then previously paid by the Agency to the Developer under this Agreement.
(b) The Agency shall complete such sale(s)/resale(s) as soon as the
Agency shall find feasible after the termination of this Agreement and no later than the later of:
(1) three hundred sixty (360) days after such termination, or (2) if the Agency elects to proceed with
the acquisition of the Phase III Acquisition Parcels after the termination pursuant to the subparagraph
above, within three hundred sixty (360) days after the Agency acquires title to said parcel(s) and
property interest(s) as applicable.
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(c) The Agency shall further exercise reasonable diligence to obtain a fair
reuse value for each such parcel sold or resold, provided that if the Agency determines to sell/resell
such parcel(s) for redevelopment purposes, the Agency shall have the right to condition such
sale/resale consistent with the objectives of the Redevelopment Plan, including without limitation
limiting such sale/resale to a qualified and responsible party or parties (as reasonably determined by
the Agency) who will assume the obligation of making or completing the Phase III Improvements or
such other improvements in their stead as shall be reasonably satisfactory to the Agency in
accordance with the uses specified for the Phase III Parcels, or any part thereof, in the
Redevelopment Plan. In this regard, the Agency agrees to use reasonable efforts to obtain maximal
value (within reasonable limits) for the parcel(s) in terms of generation of local revenues, in
particular property tax increment and sales tax revenues, and the reuse land value of the parcel(s)
upon sale(s)/resale(s) shall be subject to the Agency implementing the goals and objectives of the
Redevelopment Plan as determined by the Agency.
(d) Notwithstanding the event that the proceeds of sale/resale may not be
adequate to repay the full amount due on the Phase III Developer Advance Note, Developer agrees
that it shall execute reconveyances for all of the deeds of trust which evidenced the security for the
Phase III Developer Advance, and deposit said reconveyances into the escrow for the sale or resale
upon demand of the escrow agent in said sale or resale.
(e) In the event the Agency has not acted to sell/resell any of the
properties required to be sold/resold pursuant to this subsection within the time period(s) set forth
herein, the Developer, in addition to whatever other legal or equitable rights or remedies it may have,
if any, shall have the right to proceed against the land secured by the deeds of trust theretofore
provided by the Agency. Any purchaser of the secured properties, or any part thereof, in foreclosure
shall be required, and each deed of trust shall so provide, to comply with all of the provisions of the
Redevelopment Plan and the Agency shall have the same rights with respect to the subsequent
redevelopment and reuse of the secured properties that it would otherwise have under the
Redevelopment Plan and the Community Redevelopment Law. Said purchaser may, but is not
required to assume all of rights and the obligations of the Developer and perform under the terms of
this Agreement relating to the Phase III development, in which case the times for performance set
forth herein shall be tolled for a reasonable period oftime to account for the delay in such
purchaser's acquisition oftitle.
(1) Notwithstanding any other provision of this Agreement to the
contrary, if this Agreement is terminated for any reason other than the Default of the Agency, it is the
intent of the parties that the sale/resale or foreclosure proceeds received by the Agency and
Developer pursuant to subsection are the only security for repayment of the Phase III Developer
Advance Note, and any unpaid balance of said Phase III Developer Advance Note shall be cancelled
and voided concurrent with the sale/resale or foreclosure, and the deeds of trust shall be reconveyed
by the Developer.
700. AGENCY DISPOSITION OF PHASE III ACQUISITION PARCELS TO THE
DEVELOPER.
701. Sale and Purchase of the Phase III Acquisition Parcels. If the Agency is
successful with the acquisition of the Phase III Acquisition Parcels through negotiated acquisition or
initiation of eminent domain action(s), if such occurs, then the Agency shall, subject to the
satisfaction of the Conditions Precedent to the Phase III Conveyance, sell to the Developer, and the
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Developer shall buy from the Agency the Phase III Acquisition Parcels in accordance with and
subject to all of the terms, covenants and conditions of this Agreement. Pursuant to Section 600,
et seq., the Developer will have advanced the consideration for the Phase III Acquisition Parcels
through the Agency draws on the Letter of Credit, and, therefore, the Agency shall notify the Escrow
Agent of this fact upon opening the Escrow described herein.
701.1 Delay of Disposition of Phase III Parcels and Commencement of Grading
for Phase III Improvements Upon Certain Conditions. Subject to the covenant set forth in
Section 910 hereinafter, the time for proceeding with the Phase III Conveyance and thereafter
commencement of grading for the Phase III Improvements may be delayed and extended pursuant to
the terms of this Section 701.1. If and to the extent the following extension(s) occur under this
Section 701.1, then the corresponding time(s) for performance under the Schedule of Performance
(inclusive of the time for completion of construction of the applicable Phase Improvements) shall
also be automatically extended for an equivalent period of time.
(a) First, the time for proceeding with the Phase III Conveyance and
thereafter commencement of grading for the Phase III Improvements may be delayed and extended at
the election of the Developer based on whether market conditions both locally and nationally are
appropriate to begin construction of the Phase III Improvements based on commercially reasonable
standards. The Developer may exercise this right for an extension period not to exceed six (6)
months from the date set forth in the Schedule of Performance for the Phase III Conveyance and
commencement of the construction of the Phase III Improvements by written notice by the Developer
to the Agency setting forth the term of the extension, the factual reasons and reasonably adequate
supporting evidence for election of such extension.
(b) Alternatively, if Developer desires an extension longer than six (6)
months but less than nine (9) months (inclusive of any period up to the initial extension(s) elected by
the Developer pursuant Section 701.1(a) above), the Developer shall request such extension in
writing from the Agency Executive Director. The Agency Executive Director shall approve such
extension for a cumulative period of not more than nine (9) months, so long as the Developer's
request includes the factual reasons and reasonably adequate supporting evidence regarding the
market conditions both locally and nationally that prevent commencement of construction of the
Phase III Improvements based on commercially reasonable standards as the basis for the requested
extension.
(c) Alternatively, if Developer desires an extension longer than nine (9)
but less than fifteen (15) months (inclusive of any period up to the initial extension(s) pursuant
Section 70] .l(a) and (b) above), the Developer shall request such extension in writing from the
Agency Board who has the discretion and right to grant or deny such requested extension.
The Developer's extension request shall be in writing and shall include the factual reasons and
reasonably adequate supporting evidence regarding the market conditions both locally and nationally
that prevent commencement of construction of the Phase III Improvements based on commercially
reasonable standards as the basis for the requested extension. The Agency shall grant or deny such
requested extension based on commercially reasonable standards and shall not unreasonably
withhold, delay, or condition such requested extension for a cumulative period not to exceed
fifteen (15) months from the date set forth in the Schedule of Performance for the Phase III
Conveyance and commencement of the construction of the Phase III Improvements.
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(d) Any Developer request for an extension to commence construction of
the Phase III Improvements beyond fifteen (15) months from the date set forth in the Schedule of
Performance for the Phase III Conveyance and commencement of the construction of the Phase III
Improvements shall be in writing and may be granted or denied in the sole and absolute discretion of
the Agency. If the Agency desires to grant an extension beyond such fifteen (15) month period, then
such grant may be conditioned upon the renegotiation of the amount of and timing of the Agency
Participation and/or the renegotiation of one or more terms and provisions of this Agreement. If the
Agency denies such requested extension, and if the Developer does not promptly commence
construction of the applicable Phase Improvements (assuming no outstanding basis(es) for
non-performance under this Agreement), then the Developer shall be deemed in default of this
Agreement and the notice default described in Section 120 1.1 shall be deemed to have been provided
to Developer by the Agency on the date of such Agency denial.
Nothing in the foregoing shall modify the obligation and covenant of the Developer to
construct the applicable Phase Improvements set forth in Section 910 hereinafter, it being understood
by the parties that if the Developer fails to commence construction of the applicable Phase
Improvements within the time frame permitted and required hereunder, then the Agency has full right
and authority to avail itself of all rights and remedies under this Agreement for Developer's failure to
perform.
702. Escrow for Phase III Conveyance. The Agency agrees to open an Escrow with the
Escrow Agent in San Diego County, California, by the time established therefor in the Schedule of
Performance. This Agreement constitutes the joint basic escrow instructions of the Agency and the
Developer for the Phase III Conveyance, and a duplicate original of this Agreement shall be
delivered to the Escrow Agent upon the opening of the Escrow. The Agency and the Developer shall
provide such additional escrow instructions as shall be necessary for and consistent with this
Agreement. In the event the Escrow Agent requires the parties to execute standard form escrow
instructions and there are any inconsistencies between such instructions and this Agreement, the
provisions of this Agreement shall control. The Escrow Agent is hereby empowered to act under this
Agreement, and the Escrow Agent, upon indicating within five (5) days after the opening of the
Escrow its acceptance of the provisions of this Section 700, et seq., in writing, delivered to the
Agency and the Developer, shall carry out its duties as Escrow Agent hereunder.
703. Delivery of Phase III Acquisition Parcels Grant Deed. Upon delivery of the Grant
Deed for the Phase III Acquisition Parcels to the Escrow Agent by the Agency, the Escrow Agent
shall record the Phase III Acquisition Parcels Grant Deed when title can be vested in the Developer
in accordance with the terms and provisions of this Agreement. The Developer shall accept
conveyance oftitle of the Phase III Acquisition Parcels at or before the time established therefor in
the Schedule of Performance. The Escrow Agent shall pay any applicable transfer tax.
703.1 Fees, Charges and Costs for Phase III Conveyance. 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 earlierthan
five (5) days prior to the scheduled date for closing the Escrow for the Phase III Conveyance:
(a) The escrow fees;
(b) Ad valorem taxes and property taxes, if any, upon the Phase III
Acquisition Parcels for any time prior to transfer of title (which may be paid from the funds available
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in the Phase III Letter of Credit for the Phase III Developer Advance);
(c) Any State, County or City Documentary Stamps;
(d) Any transfer tax;
(e) The premium for the title insurance policy to be paid by the
Developer as set forth in this Agreement;
(1) Recording fees; and
(g) Notary fees.
(h) The Agency shall execute, acknowledge and deliver the Grant Deed
for the Phase III Acquisition Parcels.
703.2 Execution and Delivery of Phase III Documents. The Agency shall
execute, acknowledge and deliver the Grant Deed for the Phase III Acquisition Parcels and the
Agreement Affecting Real Property affecting the Phase III Parcels. The Developer shall execute,
acknowledge, and deliver to the Escrow Agent the Grant Deed for the Phase III Acquisition Parcels
(as the grantee), the Agreement Affecting Real Property for the Phase III Parcels, and such other
document(s) required by Developer or Developer's Lender(s) so long as such documents are junior
and subordinate to this Agreement, the Grant Deed, and the Agreement Affecting Real Property.
Finally, the Developer shall deliver to the Escrow Agent the Parcel Map for the Phase III Parcels in a
condition ready for recordation at the close of Escrow.
704. Escrow Agent Authority. The Escrow Agent is authorized to:
(a) Pay, and charge the Developer for any fees, charges and costs payable
under this Section 700, et seq. of this Agreement. Before such payments or charges are made, the
Escrow Agent shall notify the Agency and the Developer of the fees, charges and costs necessary to
clear title and close the Escrow.
(b) Deliver the Grant Deed for the Phase III Acquisition Parcels and other
documents to the parties entitled thereto when the conditions of this Escrow have been fulfilled by
the Agency and the Developer.
(c) Record any instruments delivered through this Escrow, if necessary or
proper, to vest title to the Phase III Acquisition Parcels in the Developer in accordance with the terms
and provisions of this Agreement (inclusive of closing the escrows for the Phase III Developer
Parcels.) Such instruments shall be recorded in the following order (or otherwise as the Agency and
Developer shall mutually instruct the Escrow Agent): (i) Memorandum of Agreement (if not already
recorded), (ii) reconveyance(s) of the deed(s) of trust recorded against any of the Phase III Parcels,
(iii) the Grant Deed for the Phase III Acquisition Parcels, (iv) the Agreement Affecting Real Property
relating to the Phase III Parcels, and (v) such other document(s) required by Developer or
Developer's Lender(s) so long as such documents are junior and subordinate to this Agreement
(through the Memorandum of Agreement recorded referencing this Agreement), the Grant Deed, and
the Agreement Affecting Real Property.
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705. Additional Escrow Instructions. All funds received in this Escrow for the Phase III
Conveyance shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent,
in an interest-earning general escrow account or accounts with any state or national bank doing
business in the State of California. Such funds may be transferred to any other general escrow
account or accounts. All disbursements shall be made by check of the Escrow Agent. All
adjustments are to be made on the basis of a thirty (30) day month.
If the Phase III Escrow is not in condition to close on or before the time for commencement
of grading for the Phase III Improvements established in this Agreement, either party who then shall
have fully performed the acts to be performed before the conveyance of title may, in writing, demand
from the Escrow Agent the return of its money, papers or documents deposited with the Escrow
Agent. No demand for return shall be recognized until ten (10) days after the Escrow Agent shall
have mailed copies of such demand to the other party or parties. Objections, if any, shall be raised
by written notice to the Escrow Agent and to the other party within the ten (10) day period, in which
event the Escrow Agent is authorized to hold all money, papers and documents with respect to the
Phase III Acquisition Parcels until instructed by mutual agreement of the parties or by a court of
competent jurisdiction. If no such objections are made, the Escrow shall be closed as soon as
possible.
The Escrow Agent shall not be obligated to return any such money, papers or documents
except upon the written instructions of both the Agency and the Developer or until the party entitled
thereto has been determined by a final decision of a court of competent jurisdiction.
Any amendment to these Escrow instructions shall be in writing and signed by both the
Agency and the Developer. At the time of any amendment, the Escrow Agent shall agree to carry
out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the Agency or the Developer shall be directed
to the addresses and in the manner established in Section 110 I of this Agreement for notices,
demands and communications between the Agency and the Developer.
The liability of the Escrow Agent under this Agreement is limited to performance of the
obligations imposed upon it under the terms and provisions of Sections 700, et seq. of this
Agreement.
706. Conditions Precedent to the Phase III Conveyance. Prior to and as conditions to
the close of Escrow for the Phase III Conveyance, each of the following respective conditions shall
be satisfied by the respective times established therefor in the Schedule of Performance or, if no time
is specified, prior to the Phase III Conveyance:
706.1 Agency Conditions Precedent to the Phase III Conveyance. The
obligation of the Agency to provide the portion of the Agency Assistance applicable to the Phase III
development and proceed with the Phase III Conveyance is expressly subject to the fulfillment by
Developer of each and all of the conditions precedent to closing (a) through 0), inclusive, described
below ("Agency's Conditions Precedent to the Phase III Conveyance" or "Agency's Conditions
Precedent to Phase III Closing"), which are solely for the benefit of Agency, and which shall be
fulfilled by the time periods provided for herein.
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(a) As more fully set forth in Section 1309 the Developer shall provide
proof reasonably satisfactory to the Agency that the Developer has obtained a binding loan
commitment for financing the construction of Phase III of the Project.
(b) The Developer shall have caused to be prepared at its sole cost and
expense and shall have delivered the Parcel Map for the Phase III Parcels to the Escrow Agent in a
condition ready to be recorded in the Office of the Recorder of the County of San Diego all in
accordance with Section 205 hereof. After completion of the Parcel Map, the Developer shall have
provided the Agency with separate legal descriptions of the various parcel(s) which comprise
Phase 1II, which legal descriptions have been prepared or caused to have been prepared by the
Developer.
(c) Ifnot already obtained as a part of the Entitlement approved for the
prior Phases of the Project, the Developer has obtained the Entitlement for the Phase III
Improvements by action of the City, Agency, and/or City Planning Commission, as applicable, or
other public entities with jurisdiction over the Phase 1II Improvements.
(d) The Developer shall have duly executed and delivered (i) the
Memorandum of Agreement, if not yet recorded, against the Phase 1II Parcels (ii) the Grant Deed for
the Phase 1II Acquisition Parcels, (iii) the Agreement Affecting Real Property relating to the
Phase 1II Parcels and development, and (iv) all other documents which are necessary to ensure that
the Agreement Affecting Real Property is a lien against the Phase 1II Parcels prior, superior, and
non-subordinate to other monetary encumbrances (excluding non-delinquent taxes and assessments),
including, without limitation, the lien for the Phase III Improvements Construction Financing, and
any other documents required hereunder for Phase 1II.
(i) Developer is solely responsible to obtain all necessary
subordination documents relating to existing exceptions to title, if any; provided however, any
necessary subordination document(s) shall be in a legal form reasonably acceptable to the Agency
Executive Director and legal counsel. Said covenants, restrictions, and obligations provided by the
Developer to and for the benefit of the Agency under the Agreement Affecting Real Property are a
substantive part of the consideration hereunder, and the Agency Participation would not be provided
but for such consideration provided by the Developer to the Agency.
(e) The Developer shall not be in Default of this Agreement and all
representations and warranties of the Developer contained herein shall be true and correct in all
material respects.
(1) The Developer shall have taken all steps necessary to obtain (subject
only to the payment of any and all applicable fees and posting of any and all applicable security,
including but not limited to the Permit Fees) from the City, Agency, and all other governmental
agencies with jurisdiction over the Phase III of the Project and the Phase 1II Parcels all development
and building approvals and permits required for the Developer to commence construction of
Phase 1II of the Project on the Phase 1II Parcels in accordance with the provisions of this Agreement.
(g) The Developer shall provide the insurance certificates conforming to
Section 1304 of this Agreement in a form reasonably satisfactory to the Agency Executive Director
or his designee.
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(h) Developer shall provide the Agency Executive Director a copy of the
contract between the Developer and one or more general contractors for the construction of the
Phase III Improvements, certified by the Developer to be a true and correct copy thereof, and a copy
of one or more general contractor's performance bond(s) for the completion of the work for such
Phase, and such bond(s) shall include the City and Agency named as beneficiaries and/or additional
insureds, as reviewed and approved by Agency legal counsel. All surety bonds shall be issued by a
surety company admitted in California and such company(ies) shall have an "A-V" or better rating.
(i) The Developer provides evidence to the Agency Executive Director
and reasonably satisfactory to the Agency Counsel that Developer is the fee owner of the Phase III
Developer Parcels, or that all pending escrow for all Developer Parcels within Phase III shall be
ready to close concurrently with the Phase III Conveyance for the Phase III Acquisition Parcels.
(j) The Agency shall have approved the environmental condition of the
Phase III Parcels in accordance with Section 207 of this Agreement.
(k) Developer shall have caused the relocation (or effected settlement
agreements for specific move/vacation of premises date for settlement of all relocation issues) of all
occupants from the Phase III Parcels in accordance with the requirements of Section 208, et seq.
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Phase III Conveyance. The Agency further agrees to promptly execute and deliver
to the Escrow Agent such written verification of the fulfillment by Developer of such conditions, as
may be required by the Escrow Agent, if such be the case.
706.2 Developer Conditions Precedent to Phase III Conveyance. The obligation
of the Developer to proceed with the Conveyance of the Phase III Parcels is expressly subject to the
fulfillment by Agency of each and all of the conditions precedent to closing (a) through (g),
inclusive, described below ("Developer's Conditions Precedent to the Phase III Conveyance" or
"Developer's Conditions Precedent to Closing of the Phase III Escrow"), which are solely for the
benefit of Developer, and which shall be fulfilled by the time periods provided for herein.
(a) Prior to the Closing, the Agency is not in Default in any of its
obligations under the terms of this Agreement and all representations and warranties of the Agency
contained herein shall be true and correct in all material respects.
(b) The Agency shall have duly executed the Grant Deed for the Phase III
Acquisition Parcels, the Memorandum of Agreement, the Agreement Affecting Real Property
relating to the Phase III Parcels, and any other documents required to be signed by the Agency under
this Agreement.
(c) The Phase III Acquisition Parcels shall have been assembled and/or
there shall remain no outstanding legal issues to the Agency's right to acquire fee title to each of the
Phase III Acquisition Parcels or any rights to occupy any portion of the Phase III Parcels by any third
party.
(d) To the extent the previously approved Entitlement requires any
modifications or amendments in order to commence and complete the Phase 111 Improvements, then
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the Entitlement for the Phase III Improvements shall be in place, inclusive of all governmental
agencies with jurisdiction over the construction through completion of the Phase III Improvements.
(e) The Developer shall have obtained, or be ready to have issued upon
payment of any and all applicable fees and posting of any and all applicable security, all development
and building permits required for the Developer to construct and operate the Phase III Improvements
in accordance with the Entitlement and the provisions of this Agreement.
(1) Developer shall be satisfied the environmental condition of the
Phase III Parcels, particularly the soils and groundwater, or completed remediation thereof, as set
forth in Section 207, et seq. of this Agreement.
(g) The Developer shall be satisfied that the Title Company is ready to,
upon payment of Title Company's regularly scheduled premium(s), issue to the Developer the Title
Policy (excepting only the Permitted Title Exceptions, the bargained for state of title.)
(h) The Developer shall be satisfied it is ready to close its Construction
Financing for the Phase III Improvements, or, if the Developer is financing the Phase III
Improvements with Developer funds, Developer such funds shall be evidenced to be available and
committed exclusively to Phase 1II of the Project (subject to the carve out of this condition as it
relates to Section 1202, et seq.)
(i) Based on commercially reasonable standards, the Developer shall be
satisfied that market conditions both locally and nationally are appropriate to begin construction of
the Phase III Improvements based upon and subject to the timing and right to extension set forth in
Section 701.1; provided however if Developer seeks to assert this condition as a basis for non-
performance then the extension(s) set forth in Section 701.1 shall not have lapsed, and if such time
period(s) have lapsed then the Developer is in default of the Agreement for non-performance of the
covenant to construct the Phase 1II Improvements.
707. Conveyance of Title and Delivery of Possession. Subject to any extensions of time
mutually agreed upon in advance between the Agency and the Developer, the Phase III Conveyance
shall be completed on or prior to the date specified therefor in the Schedule of Performance.
Possession shall be delivered to the Developer concurrently with the conveyance oftitle, except as
provided in Section 700, et seq. above.
708. Condition of Title.
708.1 Phase III Acquisition Parcels. The Agency shall convey to the Developer
title to the Phase 1II Acquisition Parcels free and clear of any and all encumbrances, liens, leases,
easements, and other exceptions to or defects in title, excepting only the following: (i) the lien of any
non-delinquent property taxes and assessments (to be prorated at the close of Escrow);
(ii) the conditions set forth in the Agreement Affecting Real Property relating to the Phase III
Parcels; (iii) property interests held by a public body or public bodies including without limitation
easements, franchises, licenses, or other property interests of said public body or public bodies,
except property interests held by the Agency, and/or the City, on the Phase III Parcels and/or within
the public rights-of-way adjacent to or at the perimeter of the Phase 1II Parcels; (iv) the Approved
Title Exceptions, and (v) such other exceptions to title as may hereafter be mutually approved by the
Agency and Developer.
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708.2 Phase III Developer Parcels for Assignment and Reassignment. At the
time the Conditions Precedent to the Phase III Conveyance are satisfied, the Developer shall assign
rights to the Phase'" Developer Parcels to the Agency free and clear of any and all encumbrances,
liens, leases, easements, and other exceptions to or defects in title, excepting only the following:
(i) the lien of any non-delinquent property taxes and assessments; (ii) the conditions set forth in the
Agreement Affecting Real Property relating to the Phase'" Parcels to be recorded against said
parcels; (iii) property interests held by a public body or public bodies including without limitation
easements, franchises, licenses, or other property interests of said public body or public bodies,
except property interests held by the Agency, and/or the City, on the Phase III Parcels and/or within
the public rights-of-way adjacent to or at the perimeter of the Phase III Parcels; (iv) the Approved
Title Exceptions, and (v) such other exceptions to title as may hereafter be mutually approved by the
Agency and Developer, and immediately thereafter the Agency shall reassign back to the Developer
all such rights and title.
709. Time for and Place of Delivery of Deed for the Phase III Conveyance. Subject to
any mutually agreed-upon extension oftime and subject to Section 701.1, the Agency shall deposit
the Grant Deed for the Phase III Acquisition Parcels with the Escrow Agent on or before the date
established for the date of the Phase III Conveyance pursuant to the Schedule of Performance.
710. Recordation of Deed for the Phase III Acquisition Parcels. The Escrow Agent
shall file the Grant Deed (or final order(s) of condemnation) for the Phase III Acquisition Parcels for
recordation among the land records in the Office of the County Recorder for the County of San
Diego, and shall deliver to the Developer the title insurance policy insuring title in conformity with
this Agreement.
711. Title Insurance. Concurrently with the recordation of the Grant Deed conveying
title to the Phase III Acquisition Parcels to the Developer, the Title Company, or such other title
insurance company as may be mutually approved by the Agency and Developer, shall provide, issue,
and deliver to the Developer an AL T A Survey and Owner's AL T A Extended Coverage policy oftitle
insurance with such endorsement(s) as reasonably required by the Developer or its Lender(s) insuring
that the title to the Phase III Acquisition Parcels is vested in the Developer in the condition required
by this Agreement, and that title to the Phase III Developer Parcels is satisfactory to the Developer to
permit development of the Phase III Improvements as provided herein. The Title Company shall
provide the Agency with a copy ofthe title insurance policy, inclusive of all endorsements. The title
insurance policy shall be in an amount as the Developer and its construction Lender(s) may require,
including any additional amount covering the estimate Project Costs of constructing the Developer
Phase III Improvements. All costs incurred for or related to such title insurance shall be borne solely
by the Developer.
712. Taxes and Assessments. As to the Phase III Acquisition Parcels, ad valorem taxes
and property taxes and assessments, if any, levied, assessed or imposed for any period commencing
prior to the effective date of possession under the Order(s) of Prejudgment Possession for such
parcels shall be prorated as of such date with the Agency financially responsible for taxes, if any, for
the period from and after the effective date of the Order(s) of Prejudgment Possession. Developer
responsible for any taxes for the period subsequent to the Phase III Conveyance and such shall be
paid as provided in this Agreement. Any of such taxes and assessments imposed after the Phase III
Conveyance of title to the Phase III Conveyance and taxes upon the Agreement shall be borne solely
by the Developer.
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713. Condition Subsequent; Right of Reentry and Revesting of Title in the Agency of
the Acquisition Parcels After the Phase III Conveyance. Subject to any rights the Developer may
have relating to force majeure and enforced delay hereunder as set forth in Section 1103, the Agency
shall have the additional right, at its option, to reenter and take possession of the Phase III
Acquisition Parcels with all improvements thereon, and to terminate and revest in the Agency the
estate conveyed to the Developer if after Phase III Conveyance oftitle and prior to the issuance of
the Certificate of Completion for the Phase III Improvements, the Developer shall commit a Default
under this Agreement by:
(a) Failing to timely commence construction of the Phase III
Improvements (as evidenced by commencement of grading, completion of the footings for the third
office building and diligently acting on said construction) as required by this Agreement, and failing
to cure such Default within the applicable cure period provided hereunder; or
(b) Abandoning or substantially suspending construction of the Phase III
Improvements required by this Agreement for a period offorty-five (45) days and failing to cure
such Default within the applicable cure period; or
(c) Transferring or suffering any involuntary transfer of the Phase III
Parcels, or any portion of the Site, or any part or parcels thereof, or an assignment of this Agreement,
in whole or in part, in violation of this Agreement, and failing to cure such Default within the
applicable cure period provided herein.
The Agency may but shall not be obligated to exercise its rights under this Section 713 and
revest itself with title to all of the Phase III Acquisition Parcels. The Agency shall have the
independent right for an option on the Phase III Developer Parcels as set forth in Section 714, et seq.
If the Agency elects to exercise its rights to reenter and revest under this Section 713, and separately
elects to exercise the option described in Section 714 hereinafter, then, such conveyance(s) via the
option shall close concurrently with the revesting oftitle to the Phase III Acquisition Parcels in
Agency, as provided herein.
Subject to the lender rights of Section 1310, such right to reenter, terminate, and revest shall
be subject to and be limited by and shall not defeat, render invalid, or limit:
I. Any mortgage or deed of trust permitted by this Agreement;
or
2. Any rights or interests provided in this Agreement for the
protection of the holders of such mortgages or deed of trust.
The Grant Deed (or final order(s) of condemnation) for the Phase III Acquisition Parcels
shall contain appropriate reference and provision to give effect to the Agency's right as set forth in
this Section 713, under specified circumstances prior to recordation of the Certificate of Completion
for the Phase III Improvements, to reenter and take possession of the Phase III Acquisition Parcels,
with all improvements thereon, and to terminate and revest in the Agency the entire estate conveyed
to the Developer.
Upon the revesting in the Agency of title to the Phase III Acquisition Parcels as provided in
this Section 713 and the exercise of the Phase III Developer Parcels Option relating to the Phase III
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Developer Parcels as provided in Section 714, if such is exercised, the Agency shall, pursuant to its
responsibilities under state law, use commercially reasonably efforts to sell the Phase III Parcels as
soon and in such manner as the Agency shall find feasible and no later than three hundred sixty (360)
days after the revesting/vesting of the Phase III Acquisition Parcels in the Agency. The Agency shall
exercise reasonable diligence to obtain a fair reuse value for such parcels, provided that the Agency
shall have the right to condition such sale/resale consistent with the objectives of the Redevelopment
Plan, including without limitation, limiting such sale/resale, to a qualified and responsible party or
parties (as reasonably determined by the Agency) who will assume the obligation or making or
completing the Phase III Improvements, or such other improvements in their stead as shall be
reasonably satisfactory to the Agency and in accordance with the uses specified for Phase III and the
balance of the redeveloped Site in the Redevelopment Plan. In this regard, the Agency agrees to use
reasonable efforts to obtain maximal value (within reasonable limits) for those Phase III Parcels
reacquired in terms of generation of tax increment and sales tax revenues and the reuse land value of
the such parcels upon sale/resale. Upon such sale/resale of the reacquired Phase III Parcels, the
proceeds thereof shall be applied:
(i) First, to reimburse the Agency, on its own behalf or on behalf
of the City, for (I) all costs and expenses incurred by the Agency (exclusive of overhead for in house
staf1) in connection with the recapture, management and resale of the Phase III Acquisition Parcels
and Phase III Developer Parcels (but less any income derived by the Agency from the Phase III
Parcels in connection with such management), (2) all taxes, assessments and water and sewer charges
with respect to the Phase III Parcels which the Developer has not paid (or, in the event the Phase III
Parcels are exempt from taxation or assessment or such charges during the period of ownership
thereof by the Agency, an amount, if paid, equal to such taxes, assessments, or charges [as
determined by the appropriate assessing official] as would have been payable if the Phase III Parcels
were not so exempt), (3) any payments made or necessary to be made to discharge any encumbrances
or liens existing on the Phase III Parcels at the time of revesting or acquisition of title thereto in the
Agency, or to discharge or prevent from attaching or being made any subsequent encumbrances or
liens due to obligations, defaults or acts of the Developer, it successors or transferees, and (4) any
expenditures made or obligations incurred with respect to the making or completion of the
improvements or any part thereof on the Phase III Parcels; and
(ii) Second, to reimburse the Agency the cumulative amount, if
any, disbursed as one or more of the installment payments of the Agency Participation; and
(iii) Third, to pay to the Developer the amount equal to the
"Phase III Developer Parcels Option Price" as the term is hereinafter defined in Section 714, for the
Phase III Developer Parcels, if such option was exercised.
(iv) Fourth to reimburse the Developer, its successor or transferee,
up to the amount equal to the sum of all direct and indirect costs incurred by the Developer for the
development of the Phase III Improvements, if any, at the time of the Agency's reentry, repossession
and/or acquisition (inclusive of non-reimbursed Permit Fees, Relocation costs, and other out of
pocket costs paid by the Developer), less any gains or income withdrawn or made by the Developer
from the Phase III Parcels or the improvements thereon.
Any balance remaining after such reimbursements shall be retained by the Agency as its sole
property; provided however, the Agency shall not retain any funds or cause itself to be reimbursed in
an amount that exceeds its full out of pocket expenses, including all third party costs, plus an amount
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equal to the cumulative disbursement(s) and payment(s) then previously paid by the Agency to the
Developer under this Agreement.
Any remaining funds, if any, after such repayment priorities set forth above shall be paid to
the Developer.
In the event the sale/resale proceeds are not sufficient to fully pay the amounts in clause
(iii) and/or (iv) above, the full-unpaid balance shall be deemed forgiven and discharged at such time.
The rights established in this Section 713 are to be interpreted in light of the fact that the
Agency will convey the Phase III Acquisition Parcels to the Developer for development, and not for
speculation in undeveloped land.
714. Developer Grants Option to Agency for Phase III Developer Parcels. The
Developer hereby gives the Agency an option (the "Phase III Developer Parcels Option") to purchase
the Phase III Developer Parcels in the event the Developer defaults under the terms of this
Agreement prior to or subsequent to the Phase III Conveyance, and fails to cure such default within
the time set forth herein in order to exercise the rights regarding sale/resale of the Phase III Parcels
pursuant to Section 713 above. The Agency's option price (the "Phase III Developer Parcels Option
Price") for the Phase III Developer Parcels shall be equal to the sum of out of pocket costs incurred
and paid, as follows: (i) the purchase price for all Phase III Developer Parcels, as evidenced by the
purchase and sale agreement(s) and escrow closing statement(s) for such parcels, plus (ii) interest
(said interest shall be the actual and verified interest cost/carry to the Developer), however, the
verified annual interest cost/carry shall not exceed ten percent (10%) per annum compounded
annually on said acquisition price from the Developer's close of the Phase III Conveyance through
the date of Agency's acquisition/re-acquisition, (iii) actual, verified, and paid taxes from the
Developer's close of the Phase III Conveyance through the date of Agency's
acquisition/re-acquisition, (iv) incurred, verified, and paid Relocation costs as provided in
Section 208, et seq., and (v) the preferred return on equity owed by the Developer to its equity
funding partner (as verified to be due and the amount determined pursuant to the terms of the
Developer's limited liability company operating agreement). Notwithstanding the foregoing relating
to subsections (ii) and (v) above, there shall be no duplication of costs or double accounting of costs
between interest (lost/carry and the payment of preferred return on equity, acknowledging however,
that as ofthe Date of Agreement the Developer's business terms under the limited liability company
operating agreement may include both equity and interest components.
The Agency may, but shall not be obligated, to exercise the Phase III Developer Parcels
Option to purchase the Phase III Developer Parcels after the Phase III Conveyance if the Agency
elects to exercise its right under Section 713 and in such event the conveyance of the Phase III
Developer Parcels shall be concurrent with the revesting of the Phase I Acquisition Parcels pursuant
to Section 713, but the Phase III Developer Parcels Option Price shall be paid at the time of the
Agency's receipt of the proceeds of the sale/resale of the reacquired Phase III Parcels, pursuant to
Section 713. This Phase III Developer Parcels Option shall commence upon the date of this
Agreement and terminate on the date a Certificate of Completion is issued for all ofthe Phase III
Improvements.
714.1 Option Assignable by Agency to Successor Developer. The Agency shall
have the right, but not the obligation, to assign the Phase III Developer Parcels Option to the
developer, if any, who will be proceeding with the Project, or such other approved project in its
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stead, in order to cause the revested and reassembled Phase III Parcels to be ready for single
development.
800. FINANCIAL PROVISIONS - AGENCY PARTICIPATION
801. Provision of Agency Participation. In consideration of the Developer undertaking,
completing, and operating the Project and the Developer's obligations hereunder, including without
limitation the following: (i) the Closing for each Phase of the Project; (ii) the construction of the
Improvements; (iii) the construction of the Public Improvements in accordance with the
Reimbursement Agreement; (iv) the use, operation and maintenance of the Project in accordance
with Sections 1000, et seq., hereof; and (v) the execution and recordation of the Agreement Affecting
Real Property, which shall be a non-subordinate lien on the Phase I Parcels, the Phase II Parcels, and
the Phase III Parcels prior and superior to the financing approved by the Agency pursuant to this
Agreement, the Agency hereby agrees to provide to the Developer the Agency Participation.
Subject to the Developer's fulfillment of the Conditions Precedent applicable to each
installment payment of the Agency Participation, the Agency shall cause the Agency Participation to
be provided to the Developer in the amounts and at the times hereinafter described in up to five (5)
installment payments. In no event shall the cumulative amount of Agency Participation exceed
$7,358,000.00. The parties acknowledge and agree as of the Date of Agreement, the foregoing
maximum cumulative Agency Participation was determined by the parties based on, and with
specific reliance and reference to, the Developer's submittals of its pro forma(s) for the Project, and
each Phase thereof, and thereafter the economic analysis undertaken by the Agency staff and the
Agency's economic advisor, including the written analysis and report by Keyser Marston Associates
dated March 2000.
802. Amount of and Conditions Precedent to Each Installment Payment of Agency
Participation. The Agency shall cause the disbursement of the Agency Participation in up to
five (5) installment payments, as hereinafter defined and described, subject to the Developer's
fulfillment of all applicable Conditions Precedent described below, which Conditions Precedent are
solely for the benefit of the Agency (and the City) and which shall be fulfilled by the time periods
provided for herein. This Section 802, et seq. is expressly subject to the conditions subsequent
set forth in certain definitions of Section 100, et seq. of this Agreement and all other terms and
conditions of this Agreement.
As stated in the definition of Agency Indebtedness and reiterated in this Section 802, et seq.,
as an independent condition subsequent under this Agreement, the parties expressly and knowingly
agree that the Agency shall have issued the DDA Financing, which DDA Financing generated
proceeds which become available to the Agency for the Project Area sufficient to satisfy the
Agency's financial obligations to the Developer hereunder as specified in such definition.
The Agency and Developer expressly and knowingly agree that the issuance of such DDA Financing
(whether pre- or post- Date of Agreement) is a necessary requirement for the Agency to meet its
financial obligations to the Developer to make payment of the First Installment Payment of Agency
Participation, the Second Installment Payment of Agency Participation, and the Third Installment
Payment of Agency Participation. In the event the Agency does not successfully issue such DDA
Financing, then the Agency may elect, in its sole and absolute discretion, to terminate this
Agreement. If the Agency elects to terminate this Agreement, then the Agreement shall be deemed
terminated as of the date of notice of election thereof is transmitted to the Developer, and thereafter,
there shall be no further rights, obligations, and/or remedies between the parties.
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802.1 Conditions Precedent to First Installment Payment of Agency
Participation. The First Installment Payment of the Agency Participation shall be paid by the
Agency to the Developer within thirty (30) days of the Developer's satisfaction of all of the
following Conditions Precedent to the First Installment Payment of Agency Participation.
(a) The Agency and/or the City shall have received sufficient proceeds
from the DDA Financing or other Agency Indebtedness necessary to meet the Agency's financial
obligations to the Developer hereunder for the First Installment Payment of Agency Participation, the
Second Installment Payment of Agency Participation, and the Third Installment Payment of
Agency Participation. The Agency and Developer expressly and knowingly agree that the issuance
of such DDA Financing or other Agency Indebtedness (whether pre- or post- Date of Agreement) is
necessary for the Agency to meet such financial obligations to the Developer hereunder, in particular
payment of the specified Agency Participation installment payments.
(b) The Phase I Conveyance shall have occurred as evidenced by the
close of Escrow for the Phase I Conveyance and Developer holding fee title to all Phase I Parcels.
(c) Developer has acquired, obtained fee title for, and closed escrow on
the Phase II Developer Parcels.
(d) The Developer shall have submitted to the Agency Executive Director
and for review by the Agency's economic consultant a true copy of the Developer's pro forma line
item Project Costs budget for the Phase I Improvements, inclusive of the Public Improvements (if the
Agency has so elected for the Developer to construct such improvements and inclusive of the scope
of such Public Improvements in Phase I, as approved by the City Engineer in his/her sole discretion)
as submitted to the Developer's approved lender for the Construction Financing for the Phase I
Improvements. The Developer represents to the Agency that such submittal shall and will be the
substantially comparable in amounts and categories of Project Costs as the Base Pro Forma for Phase
I as is on file and attached to this Agreement.
(e) True copies of the Base Pro Forma for Phase I and the Base Pro
Forma for Phase II are on file with the Agency Executive Director and appended to this Agreement.
(1) As more fully set forth in Section 1309, the Developer shall provide
proof reasonably satisfactory to the Agency that the Developer has closed the Construction Financing
for the construction of Phase I Improvements and such loan is ready to fund.
(g) Developer shall provide the Agency Executive Director a copy of the
contract between the Developer and one or more general contractors for the construction of the
Phase I Improvements, certified by the Developer to be a true and correct copy thereof, and a copy of
one or more general contractor's performance bond(s) for the completion of the work for such Phase,
and such bond(s) shall include the City and Agency named as beneficiaries and/or additional
insureds, as reviewed and approved by Agency legal counsel. All surety bonds shall be issued by a
surety company admitted in Califomia and such company(ies) shall have an "A-V" or better rating.
(h) The Parcel Map for the Phase I Parcels has been recorded in the
Office of the Recorder of the County of San Diego, subject to the provisions herein relating to
preparation and processing of the Parcel Map(s) for the applicable Phase(s) of the Project.
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(i) The Agreement Affecting Real Property has been recorded against the
Phase I Parcels in a position superior and non-subordinate to all monetary liens and other
encumbrances as required hereunder.
(j) The Developer shall not be in Default of this Agreement, including
but without limitation, compliance with applicable times for performance as set forth in the Schedule
of Performance, and all representations and warranties of the Developer contained herein shall be
true and correct in all material respects.
(k) All development and building approvals and permits for the Phase I
Improvements shall have been issued by the City, the Agency, and any other governmental agencies
with jurisdiction over the Phase I Improvements and Phase I Parcels required for the Developer to
commence construction of the Phase I Improvements on the Phase I Parcels. The Developer
acknowledges that completion of and City approval of grading improvements and lot certifications
are required by the City Engineer as a standard condition to issuance of a building permits for the
Phase I Improvements.
(I) The insurance certificates conforming to Section 1304 of this
Agreement shall be up to date and in place.
(m) The Developer shall have submitted evidence reasonably satisfactory
to the Agency that the Developer has obtained (i) executed leases to occupy cumulatively not less
than fifty percent (50%) of the gross leaseable area (inclusive of an up to 13% load factor) of the
Phase I Improvements office space, and (ii) written pre-leasing commitments or letters of interest for
an additional thirty-five percent (35%) of the gross leaseable area (inclusive of an up to 13% load
factor) of the Phase I Improvements office space, all with good credit tenants and meeting the tenant
qualifications set forth in Section 1000, et seq.
(n) Developer shall have provided evidence reasonable satisfactory to the
Agency Executive Director of pre-leasing letters of interest on not less than twenty-five percent
(25%) of the Phase II gross leaseable office space (inclusive of an up to 13% load factor) with
prospective good credit tenants and meeting the tenant qualifications set forth herein.
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the First Installment Payment of the Agency Participation.
802.2 Conditions Precedent to Second Installment Payment of Agency
Participation. Subject to the evaluation of estimated versus actual Project Costs of construction and
completion of the Phase I Improvements and the Phase II Improvements as set forth in Section 802.3
below, the Second Installment Payment of the Agency Participation shall be paid by the Agency to
the Developer within thirty (30) days after the later to occur of (i) calculation of the foregoing cash
amount pursuant to Section 802.3 below, and (ii) Developer's satisfaction of all of the following
Conditions Precedent to the Second Installment Payment of Agency Participation.
(a) The Developer shall have obtained from the City Building Official the
Certificate of Occupancy for all of the Phase I Improvements and all of the Phase" Improvements,
exclusive of interior tenant improvements.
(b) True copies of the Base Pro Forma for Phase I and the Base Pro
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Forma for Phase II and the Base Pro Forma for Phase III are on file with the Agency Executive
Director and appended to this Agreement.
(c) If the Phase I Improvements and the Phase" Improvements were
constructed as two separate developments, the Developer shall have submitted the Reviewed final
Project Costs accounting for the Phase I Improvements and a Reviewed accounting for Project Costs
to date for the Phase" Improvements (to 50% lease-up). This accounting shall facilitate the
Agency's review of the actual Project Costs of the Phase I Improvements and the Phase"
Improvements (to 50% lease-up) against the Base Pro Forma for Phase I and the Base Pro Forma for
Phase 11, Attachment No. ] 5, in order to complete the calculations required under Section 802.3
hereinafter.
(d) If the Phase I Improvements and the Phase" Improvements were
constructed together as one development, the Developer shall have submitted the Reviewed final
Project Costs accounting for the Phase I Improvements and the Reviewed final and/or Project Costs
to date accounting for the Phase" Improvements. This Reviewed accounting shall facilitate the
Agency's evaluation of the actual Project Costs of the Phase I Improvements and the Phase 11
Improvements against the Base Pro Forma for Phase I and the Base Pro Forma for Phase II,
Attachment No. 15, in order to complete the calculations required under Section 802.3 hereinafter.
(i) The Reviewed final accounting of Project Costs for the
Phase I Improvements (and the Phase" Improvements to date) shall have been prepared in
accordance with generally accepted accounting principles ("GAAP") by a certified public
accountant.
(e) (fthe Restaurant space of not less than 6000 square feet is not yet
leased and/or occupied by a First Class First Quality Restaurant tenant/proprietor reasonably
approved by the Agency Executive Director, then the Developer shall have submitted to the Agency
Executive Director a status report on the efforts toward and negotiations with qualified First Class
First Quality Restaurant proprietors for lease, occupancy, and business operations within the Phase"
Improvements of the Project. Such status report shall include letters of interest from potential
Restaurant tenants that meet the tenant qualifications of Section 1 000, et seq. of this Agreement.
(1) The Developer shall not be in Default of this Agreement, including
but without limitation, compliance with applicable times for performance as set forth in the Schedule
of Performance, and all representations and warranties of the Developer contained herein shall be
true and correct in all material respects.
(g) The insurance certificates conforming to Section 1304 of this
Agreement shall be up to date and in place, as such relate to the operation of Phases I and II.
(h) The Developer shall have submitted evidence reasonably satisfactory
to the Agency that the Developer has obtained (i) executed leases to occupy cumulatively not less
than fifty percent (50%) of the gross leaseable area (inclusive of an up to 13% load factor) of the
Phase" Improvements office space, and (ii) written pre-leasing commitments or letters of interest for
an additional thirty-five percent (35%) of the gross leaseable area (inclusive of an up to 13% load
factor) of the Phase II Improvements office space, all with good credit tenants and meeting the tenant
qualifications set forth in Section 1000, et seq.
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The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Second Installment Payment of the Agency Participation.
802.3 Evaluation of Estimated Versus Actual Construction Costs for Phase I
Improvements and Phase II Improvements in Relation to Amount of Cash Payment Due for
Second Installment Payment of Agency Participation. The cash payment of$I,713,000.00
described in Section 802.2 above, shall be adjusted and decreased, if at all, depending on the
Agency's evaluation of the actual Project Costs incurred for the completed Phase I Improvements
and Phase II Improvements.
(a) The Conditions Precedent to the Second Installment Payment in
Section 802.2 above include the requirement for Developer submittal of Reviewed final Project Costs
accounting for the Phase I Improvements and the Reviewed final and/or Project Costs to date
accounting for the Phase II Improvements. The Agency shall undertake an evaluation of the Base
Pro Forma for Phase I and the Base Pro Forma for Phase II, Attachment No. 15, in comparison to the
actual Reviewed final accounting for the Phase I Improvements and the Reviewed final and/or
Project Costs to date accounting for the Phase II Improvements in order to determine if a deduction
of the amount due for the Second Installment Payment of Agency Participation is required. The
actual Reviewed final accounting for the Phase I Improvements and the Phase II Improvements shall
have been prepared in accordance with generally accepted accounting principles ("GAAP") by a
certified public accountant and shall be in the form submitted to the Construction Lender and/or
members of the Developer entity.
(b) If the Developer constructed the Phase I Improvements and the
Phase II Improvements separately, each as stand alone developments, and Developer's final
Reviewed Project Costs accounting for the Phase I Improvements and the Reviewed Project Costs to
date accounting for the Phase II Improvements are ninety percent (90%) or more of the Base Pro
Forma for Phase I and Base Pro Forma for Phase II, then no deduction shall be made to amount due
for the Second Installment Payment of Agency Participation. On the other hand, if the Developer
constructed the Phase I Improvements and the Phase II Improvements separately, each as stand alone
developments, and Developer's Reviewed Project Costs finaL accounting for the Phase I
Improvements and the Reviewed Project Costs to date accounting for the Phase II Improvements are
less than ninety percent (90%) of the Base Pro Forma for Phase I and the Base Pro Forma for
Phase II (evidencing a significant cost savings in the development), then there shall be a
decrease/deduction in the amount of the Second Installment Payment of Agency Participation in an
amount equal to one-half (Yz) of the percentage difference between estimated Project Costs and actual
Project Costs to construct and complete the Phase I Improvements and Phase II Improvements.
(c) If the Developer constructed the Phase I Improvements and the
Phase II Improvements together as one development, and Developer's final Reviewed Project Costs
accounting for the Phase I Improvements and Reviewed Project Costs final and/or to date accounting
for the Phase II Improvements are eighty-five percent (85%) or more of the pro forma/estimated
Project Costs for such Phases, then no deduction shall be made to amount due for the
Second Installment Payment. On the other hand, if the Developer constructed the Phase I
Improvements and the Phase II Improvements together as one development, and Developer's
Reviewed Project Costs final accounting for the Phase I Improvements and Reviewed Project Costs
final and/or to date accounting for the Phase II Improvements are less than eighty-five percent (85%)
of the pro forma/estimated Project Costs (evidencing a significant cost savings in the development),
then there shall be a decrease/deduction in the amount of the Second Installment Payment of Agency
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Participation in an amount equal to one-half (Y>) of the percentage difference between estimated
Project Costs and actual Project Costs to construct and complete the Phase I Improvements and
Phase II Improvements.
(d) By way offurther definition and example (and assuming for purposes
of this example that the Agency has elected for the Developer to construct the Public Improvements,
whether constructed as a part of Phase I or Phase I and Phase II), if the Phase I Improvements and the
Phase II Improvements were developed as two (2) separate stand alone developments the Base Pro
Formas for the Phase I Improvements and the Phase II Improvements shall be assumed to be the
100% Project Costs benchmark. If the Reviewed Project Costs final accounting for the Phase I
Improvements (actuals) and the Reviewed Project Costs to date accounting of the Phase II
Improvements (then actuals) are 88% of the estimated pro forma budgeted Project Costs, then the
development's significant cost savings shall require a deduction from the Second Installment
Payment. Under this example, there is a 12% difference between estimated Project Costs (100%)
and actual Project Costs (88% of estimated). Then, one-half (y,) of such difference, i.e., in this
example Y> of 12% = 6%, shall be multiplied by the cumulative cash payments under the First
Installment Payment ($1,891,000) and the estimated Second Installment cash payment of $1 ,823,500
(total $3,714,500) to determine the amount to be deducted from the Second Installment of Agency
Participation. Thus in this example $1,891,000 + $1,823,500 (estimated Second Installment cash
payment) = $3,714,500. Then, $3,714,500 X 6% = $222,870, the total deduction from the Second
Installment cash payment, for a total cash payment of $1 ,600,630. ($1,823,500 - $222,870 =
$1,600,630).
(e) By way offurther definition and example (and assuming for purposes
of this example that the Agency has elected for the Developer to construct the Public Improvements,
whether constructed as a part of Phase I or Phase I and Phase II), if the Phase I Improvements and the
Phase II Improvements were developed together as one development the Base Pro Formas for the
Phase I Improvements and the Phase II Improvements shall be assumed to be the 100% Project Costs
benchmark. If the Reviewed Project Costs final accounting for the Phase I Improvements (actuals)
and the Reviewed Project Costs to date accounting of the Phase II Improvements (actuals) are 82%
of the estimated pro forma budgeted Project Costs, then the development increased cost savings shall
require a deduction from the Second Installment Payment. Under this example, there is an 18%
difference between estimated Project Costs (100%) and actual Project Costs (82% of estimated).
Then one half of such difference, i.e., in this example Y> of 18% = 9%, shall be multiplied by the
cumulative cash payments under the First Installment Payment ($1,891,000) and the estimated
Second Installment cash payment of $1 ,823,500 to determine the amount to be deducted from the
Second Installment of Agency Participation. Thus in this example $1,891,000 (First Installment cash
payment, inclusive of Permit Fees and Public Improvements costs) + $1,823,500 (estimated Second
Installment cash payment) = $3,714,500. Then, $3,714,500 X 9% = $334,305, the total deduction
from the Second Installment cash payment, for a total cash payment of$1 ,489,195 ($1,823,500 _
$334,305 = $1,489,195).
802.4 Conditions Precedent to Third Installment Payment of Agency
Participation. The Third Installment Payment of the Agency Participation shall be paid by the
Agency to the Developer within thirty (30) days of the fulfillment by Developer of all of the
following Conditions Precedent to the Third Installment Payment of Agency Participation.
The maximum cumulative payment of Agency Participation at this point is in an amount up to
$5,268,000.00, subject to the terms and conditions set forth hereinbefore and hereinafter.
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(a) The Developer shall not be in Default of this Agreement, including
but without limitation, compliance with applicable times for performance as set forth in the Schedule
of Performance, and all representations and warranties of the Developer contained herein shall be
true and correct in all material respects.
(b) The insurance certificates conforming to Section 1304 of this
Agreement shall be up to date and in place, as such relates to the operation of Phase I and Phase II.
(c) The Developer shall have submitted evidence reasonably satisfactory
to the Agency that the Developer has obtained executed leases of not less than seventy-five percent
(75%) and actual occupancy of not less than twenty-five percent (25%) of the gross leaseable area of
the Phase" office space (inclusive of an up to 13% load factor) with good credit tenants and meeting
the tenant qualifications set forth herein, as evidenced by executed leases between the Developer and
third parties not related to or affiliated with the Developer for use and occupancy of office and/or
retail space in the Phase" Improvements.
(d) The Reviewed Project Costs final accounting(s) and calculation of the
amount of cash payment due under Sections 802.2 and 802.3 shall have occurred and the
Second Installment Payment of the Agency Participation shall have been paid by the Agency.
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Third Installment Payment of the Agency Participation.
802.5 Conditions Precedent to Fourth Installment Payment of Agency
Participation. Subject to the evaluation of estimated versus actual Project Costs of construction and
completion of the Phase III Improvements as set forth hereinafter in Section 802.6 below, the Fourth
Installment Payment of the Agency Participation shall be paid after the Conditions Precedent to the
Fourth Installment Payment are satisfied and after completion of all Improvements which comprise
the Project (i.e., after completion of Phase 1II Improvements); provided however, the cumulative
amount of reimbursed Permit Fees for all Phases of the Project (as reimbursed and paid through
previous installment payments and this installment payment of the Agency Participation) shall in no
event exceed $600,000.00, and shall be paid by the Agency to the Developer within thirty (30) days
after the later to occur of (i) calculation of the cash amount due pursuant to Section 802.6 below, and
(ii) fulfillment by the Developer of all of the following Conditions Precedent to the Fourth
Installment Payment of Agency Participation.
(a) The Developer shall have obtained from the City Building Official the
Certificate of Occupancy for all of the Phase I Improvements, all of the Phase II Improvements, and
all of the Phase III Improvements, exclusive of interior tenant improvements.
(b) The Developer shall have submitted the Reviewed Project Costs final
and/or to date accounting for the Phase III Improvements. This accounting shall facilitate the
Agency's review of the cumulative actual Project Costs of the Phase I Improvements, the Phase"
Improvements, and the Phase III Improvements (to 50% lease-up). The Phase III Reviewed
accounting shall facilitate the Agency's evaluation of the actual Project Costs of the Phase 1II
Improvements (to 50% lease-up) against the Base Pro Formas, Attachment No. 15, in order to
calculate the amount of the cash payment due under this Section 802.5 pursuant to the provisions of
Section 802.6, and in connection with the determination of eligibility for the incentive payment set
forth in Section 802.7, the Final Fifth Installment Payment of Agency Participation. The actual
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Reviewed Project Costs final accounting for the Phase III Improvements shall have been prepared in
accordance with generally accepted accounting principles ("GAAP") by a certified public accountant
and shall be in the form submitted to the Construction Lender and/or members of the Developer
entity.
(c) The Developer shall not be in Default of this Agreement, including
but without limitation, compliance with applicable times for performance as set forth in the Schedule
of Performance, and all representations and warranties of the Developer contained herein shall be
true and correct in all material respects.
(d) The insurance certificates conforming to Section 1304 of this
Agreement shall be up to date and in place, as such relates to construction activities for Phase II and
operation of Phase I and Phase II.
(e) The Developer shall have submitted evidence reasonably satisfactory
to the Agency that the Developer has obtained (i) executed leases to occupy cumulatively not less
than fifty percent (50%) of the gross leaseable area (inclusive of an up to 13% load factor) of the
Phase III Improvements office space, and (ii) written pre-leasing commitments or letters of interest
for an additional thirty-five percent (35%) of the gross leaseable area (inclusive of an up to 13% load
factor) of the Phase III Improvements office space, and (iii) executed lease(s) for occupancy of the
Restaurant tenant in the Phase II Improvements, all with good credit tenants and meeting the tenant
qualifications set forth in Section 1000, et seq.
(1)
been made by the Agency.
The Third Installment Payment of the Agency Participation shall have
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Fourth Installment Payment of the Agency Participation.
802.6 Evaluation of Estimated Versus Actual Construction Costs for Phase III
Improvements and Total Project Costs in Relation to Amount of Cash Payment Due for Fourth
Installment Payment of Agency Participation. The cash payment of $700,000.00 described in
Section 802.5 above, shall be adjusted and increased, if at all, depending on the Agency's evaluation
of the actual Project Costs incurred for the completed Phase III Improvements, and in consideration
of the final Reviewed Project Costs accounting of the Phase I Improvements and the Phase II
Improvements to determine if amounts deducted from the Second Installment Payment of Agency
Participation should remain deducted or such amount is eligible to be added to the Fourth Installment
Payment.
(a) The Conditions Precedent to the Fourth Installment Payment in
Section 802.5 above include the requirement for Developer submittal of the Reviewed Project Costs
final and/or to date accounting for the Phase III Improvements. The Agency shall undertake an
evaluation of the Base Pro Formas, Attachment No. 15, in comparison to the final and/or to date
accounting for the Project Costs of the Phase III Improvements, and re-review the Reviewed final
Project Costs accounting(s) for the Phase I Improvements and Phase II Improvements, in order to
determine if a deduction or increase of the amount due for the Fourth Installment Payment of Agency
Participation is required.
(b) If the Developer's Reviewed Project Costs final and/or to date
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accounting for all of the Improvements to date, inclusive of the Phase I Improvements, the Phase II
Improvements, and the Phase III Improvements, are ninety percent (90%) or less of the total
Base Pro Formas, Attachment No. 15, for the entire Project, then no adjustment shall be made to
amount due for the Fourth Installment Payment of Agency Participation (due to significant Project
Costs savings). On the other hand, if after completion of the Project (inclusive of the Phase I
Improvements, the Phase II Improvements, and Phase III Improvements) Developer's Reviewed
Project Costs final accounting for the entire Project are greater than 90% of the total Base Pro
Formas, Attachment No. 15, (evidencing small to no Project Costs savings in the entire development
Project), then there shall be an increase in the amount of the Fourth Installment Payment of Agency
Participation in an amount equal to 100% of the deduction, if any, made pursuant to the provisions of
Section 802.3 relating to the Second Installment Payment.
(c) By way of further definition and example, the Base Pro Formas,
Attachment No. 15, for the Phase I Improvements, the Phase II Improvements, and the Phase III
Improvements shall be assumed to be the 100% Project Costs benchmark. If the final Reviewed
Project Costs accounting for the Phase I Improvements, final Reviewed Project Costs accounting for
the Phase" Improvements, and the Reviewed Project Costs to date accounting of the Phase III
Improvements (to 50% lease-up) are 92% of the total Base Pro Formas, then the undertaking and
completion of the Project did not evidence significant Project Costs savings from the original
submittals by the Developer to the Agency. Under this example, the amount deducted and not paid
in the Second Installment Payment shall be added to the $700,000.00 cash payment and that full sum
shall be payable as a part of the Fourth Installment Payment of Agency Participation (in addition to
the Permit Fees rebate due under Section 802.5.)
802.7 Amount of and Conditions Precedent to Final Fifth Installment Payment
of Agency Participation. The Final Fifth Installment Payment of the Agency Participation is a
contingent obligation of the Agency and incentive payment to the Developer and only shall be due if
certain conditions are met. The determination of whether a Final Fifth Installment Payment of
Agency Participation is due shall be made by the Agency within ninety (90) days after the second
(2"d) anniversary of the issuance of the Certificate of Occupancy by the City Building Official for the
Phase III Improvements. At such time, the Agency shall undertake a financial evaluation to calculate
and estimate the cumulative amount of the Net Property Tax Increment actually generated and
projected to be generated by the Improvements and the Site for the following period, from the date of
the issuance of the Certificate of Occupancy by the City building official for the Phase I
Improvements (exclusive of interior tenant improvements) through the last year in which the Agency
is lawfully authorized to receive property tax increment from the Site (which final year shall be the
year and financiallimitation(s) set forth in the Redevelopment Plan for the Town Centre I
Project Area and existing as of the Date of Agreement). Such financial evaluation and estimate shall
be based upon (i) the actual taxable value for the Improvements and the Site as determined by the
San Diego County Assessor for each year from the issuance of the Certificate of Occupancy for the
Phase I Improvements to the date of such financial evaluation, and (ii) for each year thereafter until
the last year in which the Agency is lawfully authorized to receive property tax increment from the
Improvements and the Site the projected taxable value for the Site assuming annual increases
not-to-exceed two percent (2%) per year thereafter (i.e., assuming no additional improvements except
the Improvements required hereunder and assuming no sale, transfer, or assignment of the Site and
Project by the original Developer entity). The present value of the projected annual Net Property Tax
Increment shall be calculated by application of a discount rate equivalent to the Bond Buyer twenty
(20) year bond rate for A-rated securities discounting the projected Net Property Tax Increment to
the year in which the Certificate of Occupancy is issued for the Phase I Improvements. If the
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discounted value of the Net Property Tax Increment exceeds $4.7 million, the Developer may be
eligible to receive the Final Fifth Installment Payment of Agency Participation, as hereinafter more
fully described.
The following are the Conditions Precedent to the final Fifth Installment Payment ofthe
Agency Participation.
(a) The Developer shall not be in Default of this Agreement, including
but without limitation, compliance with applicable times for performance as set forth in the Schedule
of Performance, and all representations and warranties of the Developer contained herein shall be
true and correct in all material respects.
(b) The insurance certificates conforming to Section 1304 of this
Agreement shall be up to date and in place.
(c) The Fourth Installment Payment of the Agency Participation shall
have been paid by the Agency.
(d) The Developer has provided to the Agency Executive Director a final
Reviewed accounting prepared by a certified public accountant of all Project Costs for the Phase I
Improvements, Phase II Improvements, and Phase III Improvements demonstrating that such actual
Project Costs total an amount at least equal to $57,238,000.00.
(e) Such final Reviewed accounting shall be accompanied with sufficient
documentation to allow the Agency and its economic and/or financial consultant and legal counsel to
reasonably review and verify the Project Costs.
(1) The Developer shall have submitted true copies of the Reviewed
annual financial statements for the Project and its operations for the entire Project, and each
applicable Phase, from the Date of Agreement through the end of the eighth (8th) year of operations
of the Project.
(g) The Agency shall have undertaken the financial evaluation described
and provided for in this Section 802.7 and the Ability to Pay criteria evaluation.
The Agency agrees to cooperate with the Developer in satisfying the Agency Conditions
Precedent to the Final Fifth Installment Payment of the Agency Participation.
All obligations under this Agreement and in particular this Section 802.7 shall be subject to
(i) satisfaction by Developer of all provisions of this Section 802.7 herein described, (ii) satisfaction
of all of the Conditions Precedent to the Final Fifth Installment Payment of Agency Participation set
forth above in subsections (a) to (1), inclusive, (iii) completion of the evaluation relating to the
Agency's "Ability to Pay" criteria hereinafter defined and described, and (iv) compliance with the
Agreement Affecting Real Property, in particular the requirement that the right to receive payment(s)
of Agency Participation shall run with the land and shall not be retained by predecessor(s) in interest
such that all Agency Participation payment obligations shall be eligible to be paid only to then fee
owner of the Site and Project by the Agency.
This financial review of Net Property Tax Increment described in this Section 802.7 shall be
undertaken or caused to undertaken by the Agency Executive Director, with assistance from the
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Agency's economic consultant and legal counsel, who, together, shall determine whether a
performance-based incentive payment is due to the Developer as the Fifth and Final Installment
Payment of the Agency Participation, and who shall determine the method and timing of such
payment, if at all due, in conformity with the provisions herein.
If a Final Fifth Installment Payment of Agency Participation is determined to be due the
following restrictions shall apply to the amount due: (i) the amount of the Final Fifth Installment
Payment of Agency Participation shall be equal to the lesser of (I) $7,358,000.00 less the sum of all
previous Agency Participation payments under this Section 802, or (2) the amount by which the
cumulative Net Property Tax Increment generated from the Site to date plus projected present value
of the Net Property Tax Increment from the Site exceeds $4.7 million; and (ii) in no event shall the
total cumulative amount of Agency Participation paid in the prior installments payments exceed
$7,358,000.00, nor shall any payment, if due under this Section 802.7, cause the cumulative amount
of Agency Participation paid by the Agency to the Developer to exceed $7,358,000.00 (exclusive of
interest, if any, if this Fifth and Final Installment Payment is paid in five (5) installment payments.)
The foregoing financial evaluation shall also take into consideration the financial condition of
the Agency and the Town Centre I Project Area. This aspect of the financial evaluation shall be
undertaken by the Agency Executive Director based on the following "Ability to Pay" criteria:
(i) the ability to meet all Agency debt service obligations on Agency Indebtedness (which Agency
Indebtedness payment obligations are and remain prior, superior, and non-subordinate to the
obligations of the Agency to the Developer hereunder, and (iv) the refinancing and/or refunding of
Agency Indebtedness described in (i) above, so long as, such refinancing and/or refunding 'does not
increase the principal amount due or owing under such Agency Indebtedness.
If after the foregoing evaluation and calculation has been completed a Final Fifth Installment
Payment of Agency Participation is determined not due or eligible to be paid, then the Agency shall
have no further payment obligations to the Developer relating in any respect to the Agency
Participation.
If after the foregoing evaluation and calculation has been completed and the Developer is
entitled to an incentive payment as the Final Fifth Installment Payment of Agency Participation, and
after the Agency evaluates its Ability to Pay based on the foregoing criteria and the determination is
that the Agency does have the financial "Ability to Pay," and such amount is less than $500,000.00,
then the amount due is and shall become a financial obligation of the Agency, and such amount shall
be paid in full from lawfully eligible Agency revenue source(s) by the Agency to the Developer
within sixty (60) days of the determination therefor.
If after the foregoing evaluation and calculation has been completed and the Developer is
entitled to an incentive payment as the Final Fifth Installment Payment of Agency Participation, and
after the Agency evaluates its Ability to Pay based on the foregoing criteria, and the determination is
that the Agency does have the financial "Ability to Pay" and the amount due exceeds $500,000.00,
then the amount due is and shall become a financial obligation of the Agency. In conjunction
therewith, the Agency shall elect, in its sole discretion, one of two payment options. The Agency
shall elect within sixty (60) days of completion of evaluation of the Ability to Pay criteria one (1) of
the following payment options: (I) the full amount calculated as the incentive payment, if any, shall
be payable in a single payment of the amount due within the next following thirty (30) days after
election of this single payment method from lawfully eligible Agency revenue source(s), or,
(2) the full amount calculated as the incentive payment, if any, shall be payable in up to five (5) equal
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annual installment payments from lawfully eligible Agency revenue source(s), plus simple interest at
an annual rate equal to the greater (subject to usury restrictions)of either: (i) eight percent (8%), or
(ii) the then City ofChula Vista pooled investment rate plus two percent (2%). Said equal
installment payments shall include principal and interest accrued to date of payment.
If the second payment option above, of five (5) equal installment payments is selected by the
Agency, then the first (1 st) installment payment shall be due within the next following thirty (30)
days, and the up to four (4) other equal installment payments shall be paid on the anniversary date of
such first installment payment. The Agency reserves the right to pre-pay in full, or in part, the
remaining balance prior to the date any of the up to four (4) remaining installment payments are due
with accrued interest to date of pre-payment.
For example, if after the foregoing evaluation and calculation has been completed and the
Final Fifth Installment Payment of Agency Participation is $750,000.00 and the Agency elects the
second payment option, then the first installment of at least $150,000.00 shall be paid within thirty
(30) days of calculation, and each of the next up to four installment payments of at least $150,000.00
plus accrued interest shall be paid on the succeeding four anniversaries of such first installment
payment.
900. PLANS AND DRAWINGS
901. Agency Review of Plans and Drawings. The provisions of this Section 900, et seq.
set forth a process for review and approval of the plans and drawings for each Phase of the
Improvements to be (or caused to be) designed, constructed, developed, and completed by the
Developer hereunder. The parties acknowledge and agree the Agency review process described in
this Section 900, et seq. is in addition to, and is not and shall not be, a substitute for, any process or
submittal required by the City (or any other governmental entity) relating in any respect to the
Entitlement and/or obtaining all building permits necessary to undertake and complete the
Improvements and each Phase thereof. The Agency acknowledges one or more submittals required
hereunder may be duplicative of submittals required by the City, and in such event a true duplicate
copy of a Developer submittal to the City may be provided to the Agency if the required submittal is
the same; provided however, the review and approval by the Agency, through its Community
Development Department, is independent, critical, and a material part of the consideration exchanged
hereunder in order for the Agency to ensure that the Improvements, as designed, constructed and
completed, meet all requirements of this Agreement, in particular the Scope of Development and the
First Class, First Quality features of the Improvements and each Phase thereof. The Agency agrees
Agency staff will cooperate with City staff (and the Agency will cause City staff to cooperate with
Developer) to prevent and/or lessen the number of multiple submittals of plans, drawings, and related
documents.
902. Basic Concept Drawings. Within the time set forth in the Schedule of Performance,
the Developer shall prepare and submit to the Agency for consideration and action Basic Concept
Drawings and related documents containing the overall plan for redevelopment and completion of the
Project, including all three Phases of the Improvements but excluding the Public Improvements.
The Developer and the Agency staff, after approval by the Agency, shall initial and date each page of
those drawings and documents. The Site, and each Phase, shall be redeveloped as established in the
approved Basic Concept Drawings (and the Basic Schematic Drawings as provided in Section 903)
and related documents, except for such changes which may be mutually agreed upon between the
Developer and the Agency. Any such changes shall be within the limitations established in the
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Scope of Development. The Basic Concept Drawings shall include a site plan and elevations,
renderings showing the exterior design, architectural style, and appearance of the development of
each Phase of the Project. The Basic Concept Drawings for each Phase shall be consistent with the
approved Entitlement for such applicable Phase and in the event of any inconsistency between the
Entitlement and the Basic Concept Drawings, the Entitlement shall govern; provided however, to the
extent the Entitlement does not include specificity relating to the First Class, First Quality
architecture and materials for the Improvements, the provisions of this Agreement relating to such
First Class, First Quality Improvements shall prevail.
903. Schematic Drawings. Within the time set forth in the Schedule of Performance, the
Developer shall prepare and submit to the Agency for consideration and action Schematic Drawings
and related documents containing the overall plan for redevelopment and completion of the Project,
including all three Phases of the Improvements and the Public Improvements. The Developer and
the Agency staff, after approval by the Agency, shall initial and date each page of those drawings and
documents. The Site, and each Phase, shall be redeveloped as established in the approved Basic
Concept Drawings, the Schematic Drawings, and related documents, except for such changes which
may be mutually agreed upon between the Developer and the Agency. Any such changes shall be
within the limitations established in the Scope of Development. The Schematic Drawings shall
include a site plan and elevations, renderings showing the exterior design, architectural style, interior
common areas (such as the building's main lobby and each upper floor's elevator lobby), and
appearance of the development of each Phase of the Project. The Schematic Drawings for each
Phase shall be consistent with the approved Entitlement for such applicable Phase and in the event of
any inconsistency between the Entitlement and the Schematic Drawings, the Entitlement shall
govern; provided however, to the extent the Entitlement does not include specificity relating to the
First Class, First Quality architecture and materials for the Improvements, the provisions of this
Agreement relating to such First Class, First Quality Improvements shall prevail.
904. Grading Plans. For each Phase of the Project the Developer shall prepare and
submit to the Agency Executive Director, or designee from the Community Development
Department, for review and approval, the preliminary and final grading. These plans shall be
prepared, submitted and approved within the times respectively established therefor in the Schedule
of Performance. The grading plans shall be prepared by a registered civil engineer, who may be the
same firm as the Developer's architect. Complete grading plans shall be submitted to the Agency
Executive Director, or designee in the Community Development Department, on or before the 50%
complete working drawings for the buildings, structures, and other improvements for each applicable
Phase of the Improvements. The grading plans for each Phase shall be consistent with the applicable
Entitlement for such Phase.
905. Landscaping Plans. For each Phase of the Project the Developer shall prepare and
submit to the Agency Executive Director, or designee from the Community Development
Department, for review and approval, the preliminary and final landscaping plans (for both hardscape
and softscape) with such plans depicting and evidencing the First Class, First Quality requirements
hereunder. The landscaping plans shall be prepared, submitted and approved within the times
respectively established therefor in the Schedule of Performance. The landscaping plans shall be
prepared by a licensed landscape architect, who may be the same firm as the Developer's architect.
Particular attention and detail shall be evidenced in the landscaping plans relating to the
Public Improvements, common areas, accessways, and exterior treatment of the parking structure(s),
and such submittal(s) shall identify materials to be used for hardscape and identification of all plant
materials. Complete plans and specifications for landscaping shall be submitted to the Agency
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Executive Director, or designee from the Community Development Department, on or before the
50% complete working drawings for the buildings, structures, and other improvements for each
applicable Phase of the Improvements. The landscaping plans for each Phase shall be consistent with
the applicable Entitlement for such Phase; provided however, to the extent the Entitlement does not
include specificity relating to the First Class, First Quality nature of the landscaping and materials
therefore, the provisions of this Agreement relating to such First Class, First Quality Improvements,
inclusive of all landscaping shall prevail.
906. Construction Drawings and Related Documents Relating to Specific
Improvements. The Developer shall prepare and submit to the Agency construction drawings and
related documents consistent with and evidencing the Scope of Development of the Project for the
redevelopment ofthe Site for review (including, but not limited to, architectural review) and written
approval as and at the times established in the Schedule of Performance; provided however, Agency
staff review of such construction drawings submittals shall be limited to confirmation that all exterior
improvements, and interior common area improvements (such as the common areas and lobby areas
of each floor of the office buildings), and landscaping, both hardscape and planting materials, meet
all requirements of this Agreement, and in particular the First Class, First Quality requirements for
exterior and interior architecture, design, materials, and landscaping as required hereunder. For each
Phase the construction drawings and related documents shall be submitted in three (3) stages:
(i) preliminary, (ii) 50% complete working drawings, and (iii) 100% complete final working
drawings, plans and specifications. Each such submittal shall include identification and detail
sufficient to review and verify that the proposed Improvements for the applicable Phase are and shall
be First Class, First Quality, in particular the architecture/design, building fa9ade, interior and
exterior common areas, and landscaping materials. Final drawings, plans, and specifications are
hereby defined as those in sufficient detail to obtain a building permit, and shall be consistent with
and conform to the Entitlement for the applicable Phase (the foregoing expressly excludes submittals
relating to tenant improvements, unless such improvements include construction or addition to
interior or exterior common area(s), exterior building treatment, or landscaping); provided however,
to the extent the Entitlement does not include sufficient specificity relating to the First Class,
First Quality architecture and materials for the Improvements for each applicable Phase as to be
completed, the provisions of this Agreement relating to such First Class, First Quality Improvements
shall prevail.
907. Progress Meetings. During the preparation of all drawings, plans, and submittals,
the Agency staff and the Developer shall hold regular progress meetings to coordinate the
preparation of, submission to, and review of construction plans and related documents by the Agency
as provided and limited above. The Agency staff and the Developer shall communicate and consult
informally as frequently as is reasonably necessary to insure that the formal submittal of any
documents to the Agency can receive prompt and speedy consideration.
908. Agency Approval of Plans, Drawings, and Related Documents. As set forth
above, the Agency shall have the right of review of all plans, drawings and related documents for the
redevelopment of the Site, and each Phase thereof, including any proposed changes therein for the
limited but specific purpose of confirming the conformity of such plans to the First Class First
Quality requirements hereunder and that the Improvements for each applicable Phase are as intended
between the parties as of the Date of Agreement and as set forth in the Scope of Development and
each stage of submittals required under this Section 900, et seq. as and when approved by the
Agency. The Agency shall approve or disapprove such plans, drawings, and related documents
(and any proposed changes therein) within the times established in the Schedule of Performance.
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The Agency's review is intended to insure that the plans, drawings and related documents are
consistent with the Scope of Development, the Basic Concept Drawings and the Schematic
Drawings, and the Entitlement for the applicable Phase, and to verify no changes to materials,
architecture/design, quality of construction, scope of improvements, etc., to ensure each Phase will
be designed, constructed, completed, operated and maintained to the required First Class, First
Quality condition(s) required hereunder. As set forth in Section 901 above, all submittals of plans
and drawings for review and approval by the Agency representative(s) are intended to be separate
from and not to duplicate the City's review of documents for compliance with applicable
development and building codes and requirements and/or the Entitlement for each applicable Phase.
908.1 Agency Approval or Disapproval of Developer Submittals. The Agency's
review and approval of submittals of plans, drawings and related documents shall not be
unreasonably withheld, delayed, or conditioned. Any disapproval of submittal(s) shall state in
writing the reason(s) for disapproval. The Developer upon receipt of a disapproval shall revise such
portions of the plans, drawings or related documents in a manner that satisfies the reasons for
disapproval (assuming that the disapproval was reasonable) and, shall resubmit such revised portions
to the Agency as soon as possible after receipt of the notice of disapproval. The Agency shall
approve or disapprove such revised portions in the same manner and within the same times for
approval or disapproval of plans, drawings, and related documents initially submitted to the Agency.
No matter once approved shall be subsequently disapproved; provided however, in no event shall any
submittal or portion thereof be deemed approved. Failure of the Agency to act shall in no event be
deemed approval of any submittal or portion thereof.
The Agency's approval is not intended to affect or negate or waive any City approvals
required to be obtained by the Developer in connection with the development of each Phase of the
Project. In the event of a conflict between this Agreement and any City approvals, codes,
regulations, or requirements, in each instance the more restrictive requirements of the Agency and/or
the City shall prevail and govern the development of the Project Improvements, and each Phase
thereof, and the Public Improvements.
909. Costs of Construction. The Developer, at the Developer's sole cost and expense,
shall construct and complete or cause the construction and completion of all Phases of the Project
and Improvements to be constructed by the Developer pursuant to the Scope of Development, the
Entitlement, and this Agreement, including any and all off-site and on-site improvements as may be
lawfully required consistent with the terms of this Agreement. In addition, if the maximum
reimbursement of $300,000.00 for the Public Improvements is not sufficient to fully reimburse for
the design, construction, and completion of the Public Improvements (assuming the parties proceed
with the Reimbursement Agreement,) Developer knowingly acknowledges and agrees any and all
excess or unpaid costs and expenses for 100% completion of the Public Improvements are the sole
financial responsibility of the Developer under the terms of the Reimbursement Agreement and this
Agreement.
910. Developer Covenants to Complete Construction of Each Phase of
Improvements. Contingent upon Developer's completion of grading for the Phase I Improvements
(as defined in Section 802.1 (k)), the Developer hereby covenants and agrees to continue and
thereafter diligently proceed to completion of construction of the Phase I Improvements, including
without limitation the construction of all of the Phase I Improvements and the completion of the
Public Improvements, in conformance with this Agreement, the Scope of Development, the
Entitlement, whichever is more restrictive and inclusive.
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Contingent upon Developer's completion of grading for the Phase II Improvements
(consistent with the description of completion of grading set forth in Section 802. I (k)) and subject to
any extension(s) provided pursuant to Section 501. I within the time set forth in the Schedule of
Performance, the Developer hereby covenants and agrees to commence construction and thereafter
diligently proceed through completion of construction the Phase II Improvements in conformance
with this Agreement, the Scope of Development, the Entitlement, whichever is more restrictive and
inclusive.
Contingent upon the completion of grading for the Phase III Improvements (consistent with
the description of completion of grading set forth in Section 802.1 (k)) and subject to any extension(s)
provided pursuant to Section 701.1 within the time set forth in the Schedule of Performance, the
Developer hereby covenants and agrees to promptly begin and thereafter diligently proceed to
completion the Phase III Improvements in conformance with this Agreement, the Scope of
Development, the Entitlement, whichever is more restrictive and contingent. Within the time set
forth in the Schedule of Performance, the Developer hereby covenants and agrees to promptly begin
and thereafter diligently proceed to completion the Phase III Improvements in conformance with this
Agreement, the Scope of Development, the Entitlement, whichever is more restrictive and inclusive.
910.1 Schedule of Performance for Completion of the Project. The Developer
shall begin and complete (and cause the commencement and completion) of each Phase of the Project
and all construction and development therefor and subject to any extension(s) provided pursuant to
Section 501.1 or Section 701.1, as applicable, within the times specified in the Schedule of
Performance, and as to the Public Improvements within the same schedule as the completion of the
Phase I Improvements.
911. City and Other Governmental Agency Permits. Before commencement of grading
for each applicable Phase of the Project, inclusive of the Public Improvements (if the Agency has so
elected for the Developer to construct such improvements), the Developer shall, at its own expense
(subject to reimbursement pursuant to the terms governing provision of the Agency Participation)
secure or cause to be secured any and all permits which may be lawfully required by the City or any
other governmental agency affected by such construction, including without limitation building
permits, and grading and encroachment permits. It is understood that the Developer is obligated to
pay all necessary fees and to timely submit to the City final drawings with final corrections to obtain
such permits; the staff of the Agency will, without obligation to incur liability or expense therefor
(subject to reimbursement of Permit Fees pursuant to the terms governing provision of the Agency
Participation), use its best efforts to expedite the City's issuance of building permits and certificates
of occupancy for construction that meet the requirements of the City Code, and all other applicable
laws and regulations.
1000. COVENANTS, CONDITIONS AND RESTRICTIONS
1001. Covenants of Project Completion, Opening, Use, and Tenant Qualifications. In
consideration for the Agency providing the Agency Participation, and all other consideration
provided by the Agency to the Developer hereunder, the Developer covenants and agrees for itself,
its successors, its assigns, and every successor in interest to each applicable Phase of the Project and
the Site, or any part thereof, to the following covenants of construction, completion, use, operation,
maintenance as follows in this Section 1001, et seq. for a period commencing from the Date of
Agreement until termination date of the effectiveness of the Redevelopment Plan, as it exists or as
hereafter amended (as of the Date of Agreement said termination of effectiveness date is
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July 6, 2016, but may after such Date of Agreement be extended in conformity with the CRL
("Covenants Term"). To the extent there is an inconsistency in a use, covenant, or obligation
described in this Section 1000, et seq. and the Entitlement, this Section 1000 et seq. shall prevail.
The right and authority of the Agency to enforce performance by the Developer and seek any
remedies available at law or equity hereunder relating to the Agreement, and in particular the
performance of the following covenants, is and shall remain in full force and effect, notwithstanding
the priority of recording of the Memorandum of Agreement for this Agreement or the Agreement
Affecting Real Property as to each applicable Phase of the Project. Further, the right and authority of
the Agency to enforce performance by the Developer and seek any remedies available at law or
equity hereunder relating to this Agreement, and in particular the performance of the following
covenants, is and shall remain in full force and effect, notwithstanding the terms and provisions of
any lease between the Developer and any tenant at the Project, or any Phase thereof, which lease
agreement( s) mayor may not conform to these covenants in all respects, despite an affirmative
Developer obligation to include conforming language in each lease agreement between Developer
and each tenant at the Project.
1001.1 Project Completion and Scope. Subject to the satisfaction of the applicable
Conditions Precedent herein, Developer covenants to cause the construction, completion, and
operation of each Phase of the Project, inclusive of the Phase I Improvements, the Phase II
Improvements, and the Phase 1II Improvements, and the Public Improvements which are a part of the
Phase I Improvements, in conformity with this Agreement.
1001.2 Use and Operating Covenants.
(a) Commercial Retail Space, Banks, and Restaurant. Developer
agrees to exercise reasonable diligence consistent with prudent business practice to devote not less
than 304,000 square feet of the gross leaseable building area in the Project [298,862 square feet of
leaseable space assuming a 13% load factor] for use and operation as a First Class, First Quality
commercial office project. The building areas of each Phase of the Improvements shall include not
less than 2 1,333 square feet in Phase I for commercial retail space (with not more than 10,000 square
feet of such 21,333 sq. ft. for banking space), 21,137 square feet in Phase" for commercial retail
space (with not more than 10,000 square feet of such 21,137 sq. ft. for banking space), and 20,350
square feet in Phase 1II for commercial retail space (with not more than 10,000 square feet of such
20,350 sq. ft. for banking space, provided however the aggregate retail space occupied by
banks/financial institutions shall in no event exceed 20,000 square feet for all three Phases). All such
commercial retail space within each Phase of the Project shall be for use, occupancy, and operation
of First Class, First Quality commercial retail in which the retail use is estimated to generate
significant taxable retail sales and thereby Sales Tax Revenues (except the Agency acknowledges
that banks occupying retail space as allowed above do not generate taxable sales.) Further, not less
than 6,000 square feet of the gross leaseable building area in the Phase I Improvements or the Phase
" Improvements in the Project shall be for use, occupancy, and operation the First Class,
First Quality Restaurant approved by the Agency Executive Director.
(b) First Class, First Quality Tenants. From date the first tenant
occupies leaseable space in the Phase I Improvements through the entire Covenants Term, the
Developer shall maintain, use, and operate (or cause the maintenance, use, and operation 01) each
Phase of the Site as a First Class, First Quality commercial office/retail center comparable to those in
operation in San Diego County, with the entire Project including approximately three hundred and
four thousand (304,000) square feet of gross leaseable building area (298,862 square feet of leaseable
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space assuming a 13% load factor). It is the intent of the parties that the foregoing covenant to
maintain, use and operate the Project, and each Phase thereof, as a First Class, First Quality
commercial office/retail center be construed so that the Developer enter into leases, operating
agreements, or other use agreements with office tenants, retail businesses, users, which are First
Class and First Quality in operation, tenant improvements, and maintenance, and retail tenants that
are First Class and First Quality in operation, tenant improvements, maintenance and reputation, are
nationally, regionally, or locally recognizable, and have an established background of generating
from their retail operation significant per square foot Sales Tax Revenues for the Covenants Term.
(c) Use Limitations. All building areas for each Phase of the Project
shall be devoted to the uses specified or permitted in this Agreement, in particular as specified in this
Section 1000 et seq., and in conformity with the limitations of the Redevelopment Plan, the
Agreement Affecting Real Property, and the Entitlement for the entire Covenants Term. No use(s)
other than those specified herein shall be permitted without the prior written approval of the Agency
(which approval the Agency may grant or deny in its sole discretion).
(d) Parking Spaces. Developer agrees that it shall maintain within the
parking structure not less than the portion of the overall one thousand and fourteen (1014) parking
spaces (broken down per the Entitlement requirements, and as of Date of Agreement as follows:
580 standard spaces of8.5' X 20', 4]0 compact spaces of8.5' X 15',24 disabled/handicapped
parking spaces of 9' X 20' with side aisles, for a total of 1014 spaces with 21' drive aisles, in the
parking garage that is developed and constructed on the respective Phase(s) of the Project, all in
accordance with and subject to all applicable provisions of law and the Entitlement for the Project.
The Developer may permit records storage for on-site tenants within the parking structure so long as
the required total number of 1014 parking spaces is not decreased by such storage use and such
storage is reasonably and aesthetically screened from public view.
(e) Permitted Uses in Office/Professional Space. All of the office
professional administrative space shall be used for professional offices, business offices, institutional
tenants, business service facilities, administrative offices for financial institutions (note: occupancy
by banks/financial institutions is included as a part of the commercial retail space subject to the
limitations of Section 1001.2(a) above), educational uses, including the following:
(i) Accountants, attorneys, consultants;
(ii) Insurance agencies;
(iii) Doctors, oculists, optometrists, chiropractors, and others
practicing the healing arts for human beings (massage businesses are expressly prohibited, unless
massage services are directly a part of a "day spa" business, which use is permitted only through the
Entitlement process, and in the case of day spa/massage business(es) the modification(s) to the
Entitlement shall be approved by the City Council);
(iv) Engineers, architects and planners;
(v) Credit bureaus and collection agencies;
(vi) Institutions of a philanthropic or eleemosynary/charitable
nature, except correctional and mental or alcohol and drug rehabilitation centers are expressly
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prohibited;
(vii) Public and private postal services;
(viii) Real estate offices;
(ix) Travel agencies;
(x) Full service laundry and dry cleaner business (with no on-site
cleaning equipment/facilities; drop-off and pick-up only);
(xi) Financial brokerage offices;
(xii) Child care facilities directly ancillary to an onsite office
tenants and retail commercial use(s), such as child care for office employees;
(xiii) Auto detailing, with such operations, if any, to be solely
located within the parking structure;
(xiv) Records storage for on-site tenants within the office buildings;
(xv) Educational or training facilities for tenants on-site, such as
training for bank employees, real estate classes for on-site real estate agency(ies) and broker(s), but
not greater than a total of 10,000 square feet, as permitted by and subject to the condition of Specific
Plan No. PCM-OO-II of the Entitlement; and
(xvi) Athletic clubs, gyms, sports facilities, or aerobics centers as
an adjunct use for on site tenants, but not greater than a total of 7500 square feet, as permitted by and
subject to the condition of Specific Plan No. PCM-OO-I 1 of the Entitlement.
(1) Prohibited Uses in OfficelProfessional Space. The following uses
shall be specifically prohibited in the office/professional space of the Improvements:
(i) Car washes, gasoline sales (except the auto detailing
permitted in subsection (e)(xiii) above);
(ii) Industrial uses;
(iii) Coin-operated laundromats, coin-operated dry cleaners,
laundry and/or dry cleaner plant operations;
(iv) Manufacturing uses;
(v) Warehousing or wholesaling uses (provided that this category
shall not include discount or off-price stores, which shall be classified as retail uses pursuant to
paragraph 5 above, and excepting the records storage permitted in subsection (e) (xiv) above);
(vi) Card rooms;
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(vii) Educational or training facilities, such as beauty schools,
barber colleges, modeling schools, places of instruction, or other operation catering primarily to
students or trainees rather than to retail customers (except as permitted in subsection (e)(xv) above);
(viii) Athletic clubs, gyms, sports facilities, or aerobics centers
(except as permitted in subsection (e)(xvi) above);
(ix) Auto parts and/or accessories sales, motor vehicle repair,
service, or installation of any auto and other vehicles related parts or accessories; and
(x) Arcades, virtual reality, laser tag, and related amusement
businesses.
1001.3 Minor Deviations of Tenant/User Restrictions. For the Covenants Term,
Developer covenants and agrees it shall use and operate, or cause to be used and operated, the total
gross leaseable building area of the Project, and each Phase thereof, in the manner set forth in Section
1001 hereinabove; provided, however, the Agency's Executive Director in his or her sole and
absolute discretion may approve minor deviations from the conditions which are requested by the
Developer in writing, and provided further that Developer complies with the Entitlement and any and
all applicable City requirements in connection with such deviation and provided the objectives of this
Agreement for Developer operation of a First Class, First Quality Project, and each Phase thereof, for
the Covenants Term is met. To the extent there is an inconsistency between the Entitlement and this
Agreement, the more restrictive conditions shall apply, so long as in conformity with applicable law.
1001.4 Developer Covenant to Cause Tenants and all Businesses to Conform
with Section 1000, et seq. Use, Operation, and Maintenance Covenants during the Term of
Their Applicable Leases. Developer covenants it shall obtain use, operating, and maintenance
covenants in the Project tenant leases or other use agreements between Developer and each tenant
and all other businesses at the Project so that occupancy, use, operation, and maintenance by each
tenant during the term of each applicable lease or use agreement is in substantial conformity with
and/or compatible and comparable to the standards and covenants of this Section 1000, et seq.
This Developer obligation shall remain in full force and effect for the Covenants Term in order to
cause each Phase of the Project to meet the construction, completion, use, operating, and
maintenance objectives ofthis Agreement for the term hereof.
To the extent any tenant or business within any applicable Phase of the Project does not
conform with the terms and conditions of the applicable lease or use agreement, Developer covenants
that it shall diligently and timely pursue any and all legal and equitable remedies it has against any
tenant or business to enforce compliance with the applicable agreement so as to cause the use,
operation, and maintenance of each Phase of the Project to meet the objectives of this Agreement for
the Covenants Term. Developer warrants and represents to the Agency that all terms, conditions,
covenants and provisions of this Agreement, and all related and referenced attachments and
agreements, shall be and remain in full force and effect and enforceable in accordance with the terms
hereof, and no lease with any tenant shall in no manner whatsoever, expressly or impliedly or
directly or indirectly, modify, amend, repeal, or otherwise affect the Agency's and Developer's rights
and obligations to each other hereunder.
1002. Maintenance. The Developer shall maintain the Phase I Improvements, the Phase 11
Improvements, and the Phase 111 Improvements from time to time in accordance with maintenance
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and operation standards customary for First Class, First Quality commercial office retail
developments of comparable size and quality in San Diego County and in conformity with the
Entitlement, the Agreement Affecting Real Property recorded for each Phase of the Project, and the
covenants, conditions, maintenance obligations and other restrictions therein, which shall remain in
effect for the Covenants Term. Issuance of a Release of Construction Covenants for each or any
Phase of the Project by the Agency shall not affect Developer's obligations under this Section 1002.
1003. Rights of Access. The Agency, for itself and for the City, at their sole risk and
expense, reserves the right to enter the common areas on each Phase of the Project at all reasonable
times for the purpose of construction, reconstruction, maintenance, repair or service of any public
improvements or public facilities located thereon. The Agency or such other public agency
exercising such right of entry shall take all reasonable measures to minimize interference with the
operation of business on the Site and shall promptly repair and restore any damage caused by such
entity to the Site, or portion thereof, or any of the Improvements thereon. Any such entry shall be
made only after reasonable notice to and consent of the Developer, and Agency shall indemnify,
defend, and hold Developer harmless from any costs, claims, damages or liabilities pertaining to any
entry. The Developer agrees to cooperate with the Agency in providing its consent and such access,
and acknowledges that the Agency may obtain an administrative inspection warrant or other
appropriate legal or equitable remedies to enforce its rights pursuant to this Section 1003. This
Section 1003 shall not be deemed to diminish any rights the Agency, the City, or any other public
agencies may have without reference to this Section 1003. The rights of access set forth in this
Section 1003 shall remain in effect until the expiration of the Redevelopment Plan, that is until
July 6, 2016.
1004. Nondiscrimination. The Developer covenants by and for itself and any successors
in interest that there shall be no discrimination against or segregation of any person or group of
persons on account ofrace, color, creed, religion, sex, marital status, physical or mental disability or
medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of each Phase of the Improvements, or any of the Phase I Parcels, Phase II
Parcels, or Phase III Parcels, nor shall the Developer itself or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of each Phase of the Improvements, or any of the Phase I Parcels, Phase II Parcels, or
Phase III Parcels. The foregoing covenants shall run with the land.
(a) All deeds, leases or contracts with respect to each Phase ofthe
Improvements, or any of the Phase I Parcels, Phase II Parcels, or Phase III Parcels shall contain or be
subject to substantially the following nondiscrimination or non segregation clauses:
(i) In deeds: 'The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person or group of
persons on account ofrace, color, creed, religion, sex, marital status, physical or mental disability or
medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any
person claiming under or through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy of
tenants, lessees, subtenants, sub lessees or vendees in the land herein conveyed. The foregoing
covenants shall run with the land."
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(ii) In leases: 'The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following conditions;
I. There shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex, marital
status, physical or mental disability or medical condition, ancestry or national origin in the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall
the lessee himself or herself, or any person claiming under or through him or her, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the
premises herein leased."
(iii) In contracts: "There shall be no discrimination against or
segregation of, any person, or group of persons on account ofrace, color, creed, religion, sex, marital
status, physical or mental disability or medical condition, handicap, ancestry or national origin, in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the
transferee himself or herself or any person claiming under or through him or her, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
premises."
(b) The covenants against discrimination set forth in this Section 1004
shall continue in effect in perpetuity.
1005. Effect of Violation of the Terms and Provisions of this Agreement. The
covenants established in this Agreement shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the Agency, its successors and assigns, as to
those covenants, which are for its benefit. The covenants contained in this Agreement shall remain
in effect for the periods specified herein.
The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of
the covenants running with the land, for and in its own rights and for the purposes of protecting the
interests of the community and other parties, public or private, in whose favor and for whose benefit
this Agreement and the covenants running with the land have been provided. The Agreement and the
covenants herein shall run in favor of the Agency, without regard to whether the Agency has been,
remains or is an owner of any land or interest therein of any of the Phase I Parcels, Phase II Parcels,
or Phase III Parcels or in the Redevelopment Project. The Agency shall have the right, if the
Agreement or the covenants, terms, and obligations herein are breached, to exercise all rights and
remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to
enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and
covenants may be entitled.
1100. GENERAL PROVISIONS
1101. Notices, Demands and Communications Among the Parties. Written notices,
demands and communications between the Agency and the Developer shall be sufficiently given if
delivered by hand (and a receipt therefor is obtained or is refused to be given), sent by telecopy or
overnight delivery service, or dispatched by registered or certified mail, postage prepaid, return
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receipt requested, to:
Agency:
Redevelopment Agency of the City ofChula Vista
276 Fourth A venue
Chula Vista, Califomia 91910
Attention: Executive Director
With a copy to :
Stradling, Y occa, Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Celeste Stahl Brady, Esq.
Developer:
Gateway Chula Vista, LLC
765 Third Avenue
Chula Vista, California 91910
Attention: James V. Pieri
With a copies to :
Geoffrey Payne Group
17100 Gillette Avenue
Irvine, California 92614
Attention: Geoffrey Payne, Esq.
Sheppard, Mullin, Richter & Hampton LLP
Nineteenth Floor
501 West Broadway
San Diego, California 92101
Attention: Christopher B. Neils, Esq.
Such written notices, demands and communications may be sent in the same manner to such
other addresses as either party may from time to time designate by mail as provided in this
Section 1001. Any written notice, demand or communication shall be effective upon receipt.
1102. Conflicts of Interest. No member, official or employee of the Agency or the City
shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official
or employee participate in any decision relating to the Agreement which affects his personal interests
or the interests of any corporation, partnership or association in which he is directly or indirectly
interested.
1103. Enforced Delay; Force Majeure; Extension of Times of Performance. In addition
to specific provisions of this Agreement relating to tolled periods and extensions oftime to perform,
performance by any party hereunder shall not be deemed to be in default, and all performance and
other dates specified in this Agreement shall be extended where delays or defaults are due to: war;
insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the
public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority; unusually severe weather; inability to secure necessary labor,
materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of any of the
other parties; acts or failures to act of any other public or governmental agency or entity (other than
the acts or failures to act of the Agency which shall not excuse performance by the Agency); or any
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other causes beyond the control or without the fault of the party claiming an extension oftime to
perform.
(a) Notwithstanding anything to the contrary in this Agreement, an
extension oftime for any such cause shall be for the period of the enforced delay and shall
commence to run from the time of the commencement of the cause, ifnotice by the party claiming
such extension is sent to the other party within thirty (30) days of the commencement of the cause.
Times of performance under this Agreement may also be extended in writing by the mutual
agreement of Agency and the Developer.
(b) Notwithstanding the foregoing provisions of this Section 1103, the
Developer is not entitled pursuant to this Section 1103 to an extension of time to perform because of
past, present or future difficulty in obtaining suitable construction or permanent financing for the
construction of any Phase of the Improvements or the operation of any Phase of the Project.
1104. Nonliability of Officials and Employees of the Agency. No member, official or
employee ofthe Agency or the City shall be personally liable to the Developer, or any successors in
interest, in the event of any default or breach by the Agency (or the City) or for any Default, or any
amount which may become due to the Developer or any successors, or on any obligations under the
terms of this Agreement.
1105. Commencement of Agency Review Period. The time periods set forth herein for
the Agency's approval of agreements, plans, drawings, or other information submitted to the Agency
by the Developer and for any other Agency consideration and approval hereunder which is
contingent upon documentation required to be submitted by the Developer, including without
limitation any requested approvals under Sections 103 and 1103 hereof, shall only apply and
commence upon the Developer's complete submittal of all the required information. In no event
shall an incomplete submittal by the Developer trigger any of the Agency's obligations of review
and/or approval hereunder; provided, however, that the Agency shall notify the Developer of an
incomplete submittal as soon as is practicable and in no event later than the applicable time set forth
for the Agency's action on the particular item in question.
11 06. Prohibition Against Real Estate Speculation. The purpose ofthe Agency in
entering into this Agreement is to facilitate the redevelopment of the Site, and each Phase thereof,
and it is not to assist in land assembly for purposes of resale or speculation. Section 33437 of the
Community Redevelopment Law prohibits real estate speculation, in particular as to the Agency
Parcels conveyed hereunder. Any speculation by the Developer is strictly prohibited and is a basis
for legal action hereunder. The Agreement Affecting Real Property is required hereunder to be
recorded and remain an exception to title prior, superior, and non-subordinate to other exceptions to
title, in part, in order to carry out the objectives of Section 33347 and other applicable provisions of
the Community Redevelopment Law.
1200. DEF AUL TS AND REMEDIES
1201. Defaults -- General. Subject to the permitted extensions oftime and tolled periods
set forth in this Agreement, failure or delay by any party to perform any term or provision of this
Agreement constitutes a "Default" under this Agreement. The party who so fails or delays must
immediately commence to cure, correct, or remedy such failure or delay, and shall complete such
cure, correction or remedy with diligence. Provided however and subject to the provisions of
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Section 1202 hereinafter, failure of a condition precedent hereunder is not a default, and such
non-satisfaction of a condition precedent by one party permits non-performance of the action related
to such condition precedent by the other party.
1201.1 Notice of Default. The injured party shall give written notice of default to
the party in Default, specifying the default complained of by the injured party. Except as required to
protect against further damages or urgent circumstances, the injured party may not institute legal
proceedings, whether at law or in equity, against the party in Default until thirty (30) days after
giving such notice or, provided that the party in Default is proceeding with diligence to cure, such
greater time as may be necessary to cure given the nature of the default. Failure or delay in giving
such notice shall not constitute a waiver of any Default, nor shall it change the time of Default.
1202. Failure of Developer to Commence Any Phase of the Improvements and
Liquidated Damages Therefor.
1202.1 Failure to Commence Construction of Phase I Improvements and
Liquidated Damages Therefor. In the event this Agreement terminates as a result of the
Developer's failure to complete grading and pull building permits for the Phase I Improvements
(as more fully described in Section 802. 1 (k)) on or before the date specified in the Schedule of
Performance (subject to force majeure, extensions thereof provided by the Agency Executive
Director or the Agency, and other extensions permitted hereunder,) due to the Default of the
Developer or the failure of the Condition Precedent in Section 306.2(1), the Developer hereby
expressly agrees as follows:
(a) Except as to payment of the liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Agency shall have no other remedy available at law
or equity for Developer's non-performance of the covenant to construct the Phase I Improvements set
forth in Section 910 herein, nor shall the Agency have any other or further performance obligation(s)
under this Agreement.
(b) Subject to the payment of liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Developer shall be relieved of the covenant to
construct the Phase I Improvements set forth in Section 910 herein.
(c) The Developer shall pay to the Agency One Hundred Thousand
Dollars ($100,000.00) within ten (10) business days of such termination as reimbursement for the
Agency's out of pocket expenses incurred in the negotiation and implementation of this Agreement.
In the event the Developer fails to pay the Agency within such time, the $100,000.00 shall
commence to accrue interest at ten percent (10%) per annum compounded quarterly until paid in full.
Further, in the event of such untimely payment or failure of payment, the Agency shall be entitled to
reimbursement of all out of pocket expenses, including but not limited to, legal fees expended to
obtain payment of the $100,000.00.
(d) The act or failure to act of any third party, including but not limited to
the fulfillment of obligations under the Developer's limited liability company member agreement or
to obtain title to any of the Developer Parcels shall not relieve Developer of its obligation to pay such
liquidated damages to the Agency.
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THE DEVELOPER AND THE AGENCY, BY THIS AGREEMENT, MUTUALLY AGREE
THAT IN THE EVENT THIS AGREEMENT IS TERMINATED PRIOR TO THE
COMPLETION OF GRADING AND PULLING OF BUILDING PERMITS FOR THE
PHASE I IMPROVEMENTS DUE TO THE DEVELOPER'S DEFAULT (AND FAILURE
TO CURE DURING ANY APPLICABLE CURE PERIOD) AND/OR FAILURE OF
CONDITION PRECEDENT SECTION 306.2(F) HEREUNDER, THE AGENCY WILL
SUSTAIN SUBSTANTIAL DAMAGES WHICH ARE IMPRACTICAL OR INFEASIBLE
TO ASCERTAIN, INCLUDING WITHOUT LIMITATION LOSS OF REDEVELOPMENT
AND LOCAL REVENUE OPPORTUNITIES ASSOCIATED WITH THE
REDEVELOPMENT OF AND CONSTRUCTION OF THE IMPROVEMENTS TO THE
SITE. THE PARTIES AGREE THAT THE SUM OF $100,000.00 REPRESENTS A
REASONABLE ESTIMATE OF THE DAMAGES WHICH THE AGENCY WOULD
SUFFER DUE TO DEVELOPER'S FAILURE TO COMPLETE GRADING AND
PULLING OF BUILDING PERMITS FOR THE PHASE I IMPROVEMENTS AND SUCH
IS A REASONABLE AMOUNT AS LIQUIDATED DAMAGES. THE AGENCY SHALL,
THEREFORE, BE ENTITLED TO THE FULL AMOUNT OF ONE HUNDRED
THOUSAND DOLLARS ($100,000.00), PLUS ACCRUED INTEREST, IF DUE, AS THE
AGENCY'S EXCLUSIVE REMEDY AND IN LIEU OF AN ACTION AT LAW FOR
MONEY DAMAGES FOR DEVELOPER'S FAILURE TO UNDERTAKE AND
COMPLETE THE PHASE I IMPROVEMENTS. SAID AMOUNT SHALL BE DUE TO
THE AGENCY AND SHALL BE THE AGENCY'S PROPERTY WITHOUT ANY
DEDUCTION, OFFSET, OR RECOUPMENT (OR ANY RIGHT THEREOF)
WHATSOEVER. BY INITIALING THE SPACES WHICH FOLLOW, THE AGENCY
AND THE DEVELOPER SPECIFICALLY AND EXPRESSLY AGREE TO ABIDE BY
THE TERMS AND PROVISIONS OF THIS PARAGRAPH OF SECTION 1202.1
CONCERNING LIQUIDATED DAMAGES IN THE EVENT THE DEVELOPER FAILS
TO COMPLETE GRADING AND PULL BUILDING PERMITS FOR THE PHASE I
IMPROVEMENTS AS SET FORTH IN THIS SECTION 1202.1 AND THIS
AGREEMENT.
DEVELOPER INITIAL HERE
AGENCY INITIAL HERE
Nothing in the foregoing provisions relating to payment of liquidated damages shall relieve
the Developer of its independent and ongoing obligations hereunder relating to payment of costs for
and completion of the legal action(s) for assembly of the Phase I Acquisition Parcels (and the
Phase" and/or Phase III Acquisition Parcels, if such has occurred), payment of and liability for
Relocation costs, maintenance of insurance policies, and performance under each and every
indemnification provision hereunder. The foregoing payment of liquidated damages by the
Developer to the Agency is intended by the parties to compensate the Agency solely for Developer's
failure to commence and complete the Phase I Improvements and not intended to relieve the
Developer of such outstanding or ongoing performance obligations and liabilities.
1202.2 Failure of Developer to Commence Construction of Phase II
Improvements and Liquidated Damages Therefor. In the event this Agreement terminates as a
result of the Developer's failure to complete grading and pull building permits for the Phase II
Improvements on or before the date specified in the Schedule of Performance (subject to force
majeure, extensions thereof provided by the Agency Executive Director or the Agency pursuant to
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Section 501.1, and other extensions provided hereunder,) due to the Default of the Developer or the
failure of the Condition Precedent in Section 506.2(f), the Developer hereby expressly agrees as
follows:
(a) Except as to payment of the liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Agency shall have no other remedy available at law
or equity for Developer's non-performance of the covenant to construct the Phase" Improvements
set forth in Section 910 herein, nor shall the Agency have any other or further performance
obligation(s) under this Agreement.
(b) Subject to the payment of liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Developer shall be relieved of the covenant to
construct the Phase" Improvements set forth in Section 910 herein.
(c) The Developer shall pay to the Agency Fifty Thousand Dollars
($50,000.00) within ten (10) business days of such termination as reimbursement for the Agency's
out of pocket expenses incurred in the negotiation and implementation of this Agreement. In the
event the Developer fails to pay the Agency within such time, the $50,000.00 shall commence to
accrue interest at ten percent (10%) per annum compounded quarterly until paid in full. Further, in
the event of such untimely payment or failure of payment, the Agency shall be entitled to
reimbursement of all out of pocket expenses, including but not limited to, legal fees expended to
obtain payment of the $50,000.00.
(d) The act or failure to act of any third party, including but not limited to
the fulfillment of obligations under the Developer's limited liability company member agreement or
to obtain title to any of the Developer Parcels shall not relieve Developer of its obligation to pay such
liquidated damages to the Agency.
THE DEVELOPER AND THE AGENCY, BY THIS AGREEMENT, MUTUALLY AGREE
THAT IN THE EVENT THIS AGREEMENT IS TERMINATED PRIOR TO THE
COMPLETION OF GRADING AND PULLING OF BUILDING PERMITS FOR THE
PHASE" IMPROVEMENTS DUE TO THE DEVELOPER'S DEF AUL T (AND FAILURE
TO CURE DURING ANY APPLICABLE CURE PERIOD) AND/OR FAILURE OF
CONDITION PRECEDENT SECTION 506.2(F) HEREUNDER, THE AGENCY WILL
SUSTAIN SUBSTANTIAL DAMAGES WHICH ARE IMPRACTICAL OR INFEASIBLE
TO ASCERTAIN, INCLUDING WITHOUT LIMITATION LOSS OF REDEVELOPMENT
AND LOCAL REVENUE OPPORTUNITIES ASSOCIATED WITH THE
REDEVELOPMENT OF AND CONSTRUCTION OF THE IMPROVEMENTS TO THE
SITE. THE PARTIES AGREE THAT THE SUM OF $50,000.00 REPRESENTS A
REASONABLE ESTIMATE OF THE DAMAGES WHICH THE AGENCY WOULD
SUFFER DUE TO DEVELOPER'S FAILURE TO COMPLETE GRADING AND
PULLING OF BUILDING PERMITS FOR THE PHASE" IMPROVEMENTS AND SUCH
IS A REASONABLE AMOUNT AS LIQUIDATED DAMAGES. THE AGENCY SHALL,
THEREFORE, BE ENTITLED TO THE FULL AMOUNT OF FIFTY THOUSAND
DOLLARS ($50,000.00), PLUS ACCRUED INTEREST, IF DUE, AS THE AGENCY'S
EXCLUSIVE REMEDY AND IN LIEU OF AN ACTION AT LAW FOR MONEY
DAMAGES FOR DEVELOPER'S FAILURE TO UNDERTAKE AND COMPLETE THE
PHASE II IMPROVEMENTS. SAID AMOUNT SHALL BE DUE TO THE AGENCY
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AND SHALL BE THE AGENCY'S PROPERTY WITHOUT ANY DEDUCTION,
OFFSET, OR RECOUPMENT (OR ANY RIGHT THEREOF) WHATSOEVER. BY
INITIALING THE SPACES WHICH FOLLOW, THE AGENCY AND THE DEVELOPER
SPECIFICALL Y AND EXPRESSLY AGREE TO ABIDE BY THE TERMS AND
PROVISIONS OF THIS PARAGRAPH OF SECTION 1202.2 CONCERNING
LIQUIDATED DAMAGES IN THE EVENT THE DEVELOPER FAILS TO COMPLETE
GRADING AND PULL BUILDING PERMITS FOR THE PHASE" IMPROVEMENTS
AS SET FORTH IN THIS SECTION 1202.2 AND THIS AGREEMENT.
DEVELOPER INITIAL HERE
AGENCY INITIAL HERE
Nothing in the foregoing provisions relating to payment of liquidated damages shall relieve
the Developer of its independent and ongoing obligations hereunder relating to payment of costs for
and completion of the legal action(s) for assembly of the Phase I and Phase II Acquisition Parcels
(and the Phase III Acquisition Parcels, if such has occurred), payment of and liability for Relocation
costs, maintenance of insurance policies, and performance under each and every indemnification
provision hereunder, and performance under the Agreement Affecting Real Property for the Phase I
Improvements. The foregoing payment of liquidated damages by the Developer to the Agency is
intended by the parties to compensate the Agency solely for Developer's failure to commence and
complete the Phase II Improvements and not intended to relieve the Developer of such outstanding or
ongoing performance obligations and liabilities.
1202.3 Failure of Developer to Commence Construction of Phase III
Improvements. In the event this Agreement terminates as a result of the Developer's failure to
complete grading and pull building permits for the Phase III Improvements on or before the date
specified in the Schedule of Performance (subject to force majeure, extensions thereof provided by
the Agency Executive Director or the Agency pursuant to Section 701.1, and other extensions
provided hereunder) due to the uncured Default of the Developer or the failure of the Condition
Precedent in Section 706.2(h), the parties agree that the Agency may, but is not obligated to, seek any
remedy at law for Developer's non-performance of the covenant to construct the Phase III
Improvements.
Nothing in the foregoing paragraph of this Section 1202.3 shall relieve the Developer of its
independent and ongoing obligations hereunder relating to payment of costs for and completion of
the legal action(s) for assembly of the Phase I, Phase II and/or Phase III Acquisition Parcels, payment
of and liability for Relocation costs, maintenance of insurance policies, and performance under each
and every indemnification provision hereunder, and performance under the Agreement Affecting
Real Property for the Phase I Improvements and the Agreement Affecting Real Property for the
Phase II Improvements. The Agency's foregoing waiver of remedies for Developer's
non-performance of the covenant to construct the Phase III Improvements is not intended to relieve
the Developer of such outstanding or ongoing performance obligations and liabilities.
1203. Legal Actions
1203.1 Institution of Legal Actions. In addition to any other rights or remedies and
subject to the restrictions in Sections 1201 and 1202, any party may institute legal action to cure,
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correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy,
available at law or in equity, consistent with the purposes of this Agreement in the Superior Court of
the County of San Diego, State of California, in an appropriate municipal court in that county, or in
the Federal District Court in the Southern District of California.
1203.2 Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
1203.3 Acceptance of Service of Process. In the event that any legal action is
commenced against the Agency, service of process on the Agency shall be made by personal service
upon the Agency Secretary/City Clerk or in such other manner as may be provided by law. In the
event any legal action is commenced against the Developer, service of process on the Developer shall
be made by personal service upon any member of the Developer entity and shall be valid whether
made within or outside the State of California or in such other manner as may be provided by law.
1203.4 Attorney's Fees. Except as otherwise expressly provided in this Agreement,
in the event any legal action is instituted between Agency and Developer or any member of the
Developer or its successor(s) and assign(s) in connection with this Agreement, then the prevailing
party shall be entitled to recover from the losing party all of its costs and expenses, including court
costs and reasonable attorneys' fees, and all fees, costs, and expenses incurred on any appeal or in
collection of any judgment.
1204. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of
one or more of such rights or remedies shall not preclude the exercise by it, at the same or different
times, of any other rights or remedies for the same Default or any other Default by any other party.
1205. Inaction Not a Waiver of Default. Any failures or delays by any party in asserting
any of their rights and remedies as to any Default shall not operate as a waiver of any Default or of
any such rights or remedies, or deprive such party of its right to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.
1300. SPECIAL PROVISIONS
1301. Indemnification of the Agency and City. The following indemnification provisions
relate to claims and issues arising from the Date of Agreement through the earlier to occur
of: (i) the date of payment of the Fifth Final Installment Payment of Agency Participation (including
the last installment payment thereo1), or (ii) the termination of this Agreement pursuant to the terms
hereof. The Developer agrees to protect, defend, indemnify, assume all responsibility for, hold
harmless, pay all costs, and provide a defense for Agency and the City and their elective and
appointive boards, officers, boards, agents, and employees in any action by a third party challenging
the validity, applicability, or interpretation of the provisions of this Agreement including, without
limitation, the ability of the Agency to provide the Agency Participation, or any installment thereof.
Further, the Developer shall protect, defend, indemnify, assume all responsibility for, pay all costs,
hold harmless, and provide a defense for the Agency and the City and their elective and appointive
boards, officers, boards, agents and employees, from any and all claims, suits, liabilities, expenses or
damages of any nature, and judgments for damages to property and injuries to persons, including
death (including attorneys' fees and litigation costs) and any other damages, including consequential
damages, which may be caused by any of the Developer's (or any of Developer's officers,
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employees, agents, contractors, subcontractors, invitees, patrons) activities under this Agreement or
related in any respect whatsoever to the preparation, design, construction through completion, and,
ongoing operation of the Project, or any Phase thereof, regardless of whether such actions or
inactions or performance thereof be by the Developer or anyone directly or indirectly employed or
contracted with by the Developer and regardless of whether such damage shall accrue or be
discovered before or after termination of this Agreement. The City and Agency shall have the right,
but not the obligation, to defend any such action. When Developer provides such defense, the
Agency and the City will not take action and will not fail to act so as to allow a default judgment to
be taken. In addition, City and Agency shall provide reasonable assistance to Developer in defending
any such action at no expense to City or Agency. Such assistance shall include (i) making available
upon reasonable notice, City and/or Agency officials and employees who are or may be witnesses in
such action, and (ii) provision to Developer of other information within the custody or control of City
or Agency that is relevant to the subject matter ofthe action.
(a) The Developer shall have the obligation to defend any such action;
provided, however, that this obligation to defend shall not be effective if and to the extent that
Developer determines in its reasonable discretion that the interests of the parties justify a
compromise or a settlement of such action, in which case Developer shall compromise or settle such
action in a way that, in the reasonable judgment of the Developer, fully protects Agency and City
from any liability or obligation. Developer's obligation and right to defend shall include the right to
hire (subject to reasonable approval by the Agency or City) attorneys and experts necessary to
defend, the right to process and settle reasonable claims, the right to enter into reasonable settlement
agreements and pay amounts as required by the terms of such settlement, and the right to pay any
judgments assessed against Developer, Agency or City. If Developer defends any such action, as set
forth in this Section 1301, it shall indemnify and hold harmless Agency and City and their officers,
employees, representatives and agents from and against any claims, losses, liabilities, or damages
assessed or awarded against any of them by way of judgment, settlement, or stipulation.
(b) The Developer further agrees to protect, defend, indemnify, hold
harmless, pay all costs, and provide a defense for City and Agency and their officers, employees and
boards in any action by a third party for personal injury, including death, property damage or other
damages arising out of or related to the preparation, design, construction through completion, and/or
operation of the Project, or any Phase thereof, such as for example, and without limitation, a slip and
fall of a patron, guest, or customer of a retail establishment or present at the Project. The term of
such foregoing indemnification shall be for the entire Covenants Term.
1301.2 Indemnity for Professional Liability. When the law establishes a
professional standard of care for contractor's services, to the fullest extent permitted by law,
Contractor shall indemnify, protect, defend and hold harmless the City and the Agency, and any and
all of their boards, officials, employees and agents from and against any and all losses, claims,
liabilities, damages, judgments, civil fines and penalties, costs and expenses, including attorney's
fees to the extent same are caused in whole or in part by any negligent or wrongful act, error or
omission of Contractor, its officers, agents, employees or Subcontractors (or any entity or individual
that Contractor shall bear the legal liability thereo1) in the performance of professional services under
this agreement.
1301.3 Indemnity for Liability Other Than Professional Liability. Other than in
the performance of professional services and to the full extent permitted by law, Contractor shall
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indemnify, defend and hold harmless the City and the Agency, and any and all of their employees,
officials and agents from and against any liability (including liability for claims, suits, actions,
arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or cost
of any kind, whether actual, alleged or threatened, actual attorneys fees incurred by City and/or
Agency, court costs, interest or defense costs, including expert witness fees), where the same arise
out of, are a consequence of, or are in any respect attributable to, in whole or in part, the performance
of this Agreement by Contractor or by any individual or entity that Contractor shall bear the legal
liability thereof including but not limited to officers, agents, employees or subcontractors of
Contractor.
1301.4 Other General Indemnity Provisions. Without affecting the rights of
Agency under any provision of this Agreement, Contractor shall not be required to indemnify and
hold harmless the Agency and the City for liability attributable to the active misconduct of Agency
and/or City, provided such active misconduct is determined by agreement between the parties or by
the findings of a court of competent jurisdiction. In instances where there is shown active
misconduct by the Agency and/or City and where Agency's or City's misconduct accounts for only a
percentage of the liability involved, the obligation of Contractor will be for that entire portion or
percentage of liability not attributable to the misconduct of Agency and/or City.
Contractor agrees to obtain executed indemnity agreements with provisions identical to those
set forth here in this section from each and every subcontractor or any other person or entity involved
by, for, with or on behalf of Contractor in the performance of this agreement. In the event Contractor
fails to obtain such indemnity obligations from others as required here, Contractor agrees to be fully
responsible according to the terms of this section.
Failure of Agency to monitor compliance with these requirements imposes no additional
obligations on Agency and will in no way act as a waiver of any rights hereunder. This obligation to
indemnify and defend Agency and/or City as set forth here is binding on the successors, assigns or
heirs of Contractor and shall survive the termination of this agreement or this section.
1302. Real Estate Commissions. The Developer represents to the Agency that it has not
engaged the services of any finder or broker and that it is not liable for any real estate commissions,
broker's fees, or finder's fees which may accrue relating to the Project, or any Phase thereof, and
agrees to hold harmless the Agency from any commissions or fees as are alleged to be due from the
party making such representations, except the Developer shall make a one-time payment of a
real estate commission in the amount of One Hundred Fifty Thousand Dollars ($150,000.00) to
Jack D VanderWoude, dba The Tahiti Group. Reciprocally, the Agency represents to the Developer
that it has not engaged the services of any finder or broker and that it is not liable for any real estate
commissions, broker's fees, or finder's fees which may accrue relating to the Project, or any Phase
thereof, and agrees to hold harmless the Developer from such commissions or fees as are alleged to
be due from the party making such representations. The parties acknowledge that real estate
commissions will be paid to a variety of real estate brokers over the life of the Project in conjunction
with the normal course ofleasing of the office, retail, and restaurant space in the three buildings.
These real estate commissions shall be paid at market rates and may be paid to one or more affiliate
of the Developer.
1303. Successors In Interest. The terms, covenants, conditions and restrictions of this
Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the Developer.
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1304. Developer Insurance Requirements. In addition to the separate and severable
indemnification covenants and provisions provided by the Developer to the Agency and the City
herein, the Developer shall provide insurance according to the requirements set forth herein. Developer
shall maintain the following coverages on behalf of the City and the Agency, and any and all of their
boards, officials, employees and agents for all claims, damages to property and injuries to persons,
including death (including attorneys' fees and litigation costs), which may be caused by any of the
Developer's activities under this Agreement or related in any respect whatsoever to each Phase of the
Project, regardless of whether such activities or performance thereof be by the Developer or anyone
directly or indirectly employed or contracted with by the Developer and regardless of whether such
damage shall accrue or be discovered before or after termination of this Agreement. Developer
further covenants to evidence to the Agency Executive Director that it has obtained and maintains all
risk property coverage for the full replacement value of the Improvements, so that the entire Site and
Project, as each Phase is completed, are covered by insurance providing full property coverage. Such
insurance programs shall also include earthquake and flood coverage in amounts acceptable to
Agency. Such evidence of insurance coverage for each Phase of the Project shall be submitted
annually (within ten (10) days of renewal by the Developer or its parent company) to the Agency
Executive Director until the payment (or determination of non-payment) of the Final Fifth
Installment Payment of Agency Participation. The Construction Insurance Requirements for the
Project are set forth in Attachment No.8 to this Agreement. Developer shall cause all requirements
of Attachment No.8, Construction Insurance Requirements, for such construction insurance to be
obtained and maintained until issuance of the Certificate of Completion is issued and recordation of
the Release of Construction Covenants occurs for each Phase of the Project.
1304.1 Categories of Coverage. The following insurance categories shall be caused
to be provided by the Developer for each Phase ofthe Project.
(a) Commercial General Liability Insurance. Commercial General
Liability Insurance shall be provided on Insurance Services Office-CGL form No. CG 00 01 11 85
or CG 00 01 II 88. Policy limits shall be no less than Five Million Dollars ($5,000,000.00)
per occurrence for all coverages and general aggregate. There shall be no cross liability exclusion.
Coverage shall apply on a primary non-contributing basis in relation to any other insurance or self-
insurance (primary or excess) available to City, Agency, and any and all of their boards, officials,
employees or agents. City, Agency, and any and all of their boards, officials, employees and agents
shall be added as additional insureds using Insurance Services Office additional insured endorsement
form CG 20101185.
(b) Business Auto Coverage. Business Auto Coverage shall be written
on Insurance Services Office Business Auto Coverage form CA 00 0 I 06 92 including owned, non-
owned and hired autos. Limits shall be no less than Five Million Dollars ($5,000,000.00) per
accident. If Developer owns no autos, a non-owned auto endorsement to the General Liability policy
described above is acceptable.
(c) Workers' Compensation/Employer's Liability. Workers'
Compensation/Employer's Liability insurance shall be written on a policy form providing workers'
compensation statutory benefits as required by law. Employer's liability limits shall be no less than
One Million Dollars ($1,000,000.00) per accident or disease. Unless otherwise agreed, this policy
shall be endorsed to waive any right of subrogation as respects City, Agency, and any and all of their
boards, officials, employees or agents.
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(d) Garagekeeper's Legal Liability Insurance. Garagekeeper's Legal
Liability Insurance shall be provided, but only in the event that any "Valet" parking is instituted at
the parking structures or jfDeveloper or Developer's agents take care, custody or control of vehicles
belonging to third parties.
(e) General Conditions Pertaining to Provision ofInsurance
Coverage by Developer. Developer agrees to the following provisions regarding insurance provided
by Developer for each Phase of the Project:
(i) Developer agrees to provide insurance in accordance with the
requirements set forth herein. If Developer uses existing coverage to comply with these requirements
and that coverage does not meet the requirements set forth herein, Developer agrees to amend,
supplement or endorse the existing coverage to do so. In the event any policy of insurance required
under this Agreement does not comply with these requirements or is canceled and not replaced,
Agency has the right but not the duty to obtain the insurance it deems necessary and any premium
paid by Agency will be promptly reimbursed by Developer.
(ii) The coverage required here will be renewed annually by
Developer as long as Developer continues to provide any services under this or any other contract or
agreement with the Agency. Developer agrees to maintain liability coverage after the term of this
Agreement so long as such coverage is reasonably available.
(iii) No liability insurance coverage provided to comply with this
Agreement shall prohibit Developer, or Developer's employees, or agents, from waiving the right of
subrogation prior to a loss. Developer waives its right of subrogation against Agency.
(iv) The provisions of any workers' compensation or similar act
will not limit the obligations of Developer under this agreement. Developer expressly agrees not to
use any statutory immunity defenses under such laws with respect to Agency, its employees, officials
and agents.
(v) No liability policy shall contain any provision or definition
that would serve to eliminate so-called "third party action over" claims, including any exclusion for
bodily injury to an employee of the insured.
(vi) All insurance coverage and limits provided by Developer and
available or applicable to this agreement are intended to apply to the full extent ofthe policies.
Nothing contained in this Agreement or any other agreement relating to the Agency or its operations
limits the application of such insurance coverage.
(vii) Unless otherwise approved by Agency, insurance provided
pursuant to these requirements shall be written by insurers authorized to do business in the State of
California and with a minimum "Best's" Insurance Guide rating of A:VI!. Self-insurance will not be
considered to comply with these insurance specifications.
(viii) Any "self-insured retention" must be declared and approved
by Agency. Agency reserves the right to require the self-insured retention to be eliminated or
replaced by a deductible. Self-funding, policy fronting or other mechanisms to avoid risk transfer are
not acceptable. If Developer has such a program, Developer must fully disclose such program to
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Agency.
(ix) Developer shall provide proof that policies of insurance
required herein expiring during the term of this Agreement have been renewed or replaced with other
policies providing at least the same coverage. Proof that such coverage has been ordered shall be
submitted prior to expiration. A coverage binder or letter from Developer's insurance agent to this
effect is acceptable. A certificate of insurance and/or additional insured endorsement as required in
these specifications applicable to the renewing or new coverage must be provided to Agency within
five (5) days of the expiration of the coverages.
(x) Developer agrees to provide evidence of the insurance
required herein, satisfactory to Agency, consisting of: certificate(s) of insurance evidencing all of the
coverages required and, an additional insured endorsement to Developer's general liability policy
using Insurance Services Office form CO 20 10 II 85. Developer agrees, upon request by Agency to
provide complete, certified copies of any policies required by this section, within ten (10) days of
such request. Any actual or alleged failure on the part of Agency or any other additional insured
under these requirements to obtain proof of insurance required under this Agreement in no way
waives any right or remedy of Agency or any additional insured, in this or any other regard.
(xi) Certificate(s) are to reflect that the insurer will provide
thirty (30) days notice to Agency of any cancellation of coverage. Developer agrees to require its
insurer to modify such certificates to delete any exculpatory wording stating that failure of the insurer
to mail written notice of cancellation imposes no obligation, or that any party will "endeavor"
(as opposed to being required) to comply with the requirements of the certificate.
(xii) Developer agrees to require all Contractors, subcontractors, or
other parties hired for this Project to provide workers' compensation, general liability and automobile
liability insurance, unless otherwise agreed to by Agency with minimum liability limits of One
Million Dollars ($1,000,000.00). The Contractor's general liability insurance shall add as additional
insureds all parties to this Agreement using Insurance Services Office form CO 20 10 11 85.
Developer agrees to obtain certificates evidencing such coverage and make reasonable efforts to
ensure that such coverage is provided as required here.
(xiii) Developer agrees that upon request, all agreements with
Contractors or others with whom Developer enters into contracts with on behalf of Agency, will be
submitted to Agency for review. Failure of Agency to request copies of such agreements will not
impose any liability on Agency or its employees.
(xiv) Requirements of specific coverage features or limits contained
in this section are not intended as a limitation on coverage, limits or other requirements, or a waiver
of any coverage normally provided by any insurance. Specific reference to a given coverage feature
is for purposes of clarification only as it pertains to a given issue and is not intended by any party or
insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type.
(xv) Developer agrees to provide immediate notice to Agency of
any claim or loss against Developer that includes Agency or City as a defendant and of any claim or
loss arising out of the work performed under this agreement in which the demand or probable
ultimate cost exceeds $20,000. Agency assumes no obligation or liability by such notice, but has the
right (but not the duty) to monitor the handling of any such claim or claims if they are likely to
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involve Agency.
(xvi) The insurance requirements set forth in this section are
intended to be separate and distinct from any other provision in this Agreement and are intended to
be interpreted as such.
The requirements in this section supersede all other sections and provisions of this
Agreement to the extent that any other section or provision conflicts with or impairs the provisions of
this section.
1304.2 Commencement of Coverage. For purposes of insurance coverage only, this
Agreement will be deemed to have been executed immediately upon any party hereto taking any
steps that can be deemed to be in furtherance of or towards performance of this Agreement.
1305. Rights of Access. For the purpose of assuring compliance with this Agreement,
representatives of the Agency and the City shall have the right of access to each Phase of the Site and
improvements thereon, without charges or fees, at normal construction hours during the period of
construction for the purposes of this Agreement, including, but not limited to, the inspection of the
work being performed in constructing the Improvements, provided that they comply with all of the
Developer's and the Developer's general contractor's safety rules. The Agency shall indemnify,
defend, and hold the Developer harmless from any claims, losses, liabilities, and damages arising out
of the negligent activities of the Agency and City as set forth in this Section 1305.
1306. Local, State and Federal Laws. The Developer and its agents, employees and
contractors shall carry out the construction of each Phase of the Improvements and the Public
Improvements (including any required on-site improvements and off-site improvements), in
conformity with all applicable local, state and federal laws, including all applicable federal and state
labor standards and applicable prevailing wage laws and standards.
1307. Nondiscrimination During Construction. The Developer, for itself and its
successors and assigns, agrees that in the construction of each Phase of the Improvements provided
for in this Agreement, the Developer shall not discriminate against any employee or applicant for
employment because of race, color, creed, religion, age, sex, marital status, physical or mental
disability or medical condition, national origin or ancestry.
1308. Encumbrances, Liens and Assessments. The Developer shall not place or allow to
be placed on the Site, or any part thereof, any mortgage, trust deed, encumbrance or lien other than as
expressly allowed by this Agreement. The Developer shall remove or have removed any levy or
attachment made on the Site, or any part thereof, or assure the satisfaction thereof within a
reasonable time but in any event prior to a sale thereunder. Nothing herein contained shall be
deemed to prohibit the Developer from contesting the validity or amount of any tax assessment,
encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto.
1308.1 Taxation of Site. The Developer agrees it will not participate in the
disposition of any portion of the Site to any person or entity which will result in such property
becoming exempt from taxation because of public ownership or use or otherwise (except property
dedicated for public right-of-way and except property planned for public ownership or by any
redevelopment plan for the Redevelopment Project Area in effect on the Date of Agreement) so that
such disposition shall, when taken together with other such dispositions of the Site, ifany, in the
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Redevelopment Project Area aggregate more than ten percent (10%) of the land area of the Site
unless such disposition is permitted as provided in this Agreement.
1309. Financing of the Project and Each Phase Thereof. Within the times provided
herein, the Developer shall obtain and be ready to close Construction Financing for each Phase of the
Project necessary to undertake the design, construction, development, and completion of each Phase
of the Project in accordance with this Agreement. The Developer shall close said financing
concurrently with the close of each applicable Phase Conveyance, except for the Phase II
Conveyance. The Agency Executive Director and the Agency financial consultant hereby retain
reasonable discretion to evaluate any and each submittal and to undertake due diligence necessary on
all equity and debt sources to fully evaluate the components and conditions of financing for each
Phase of the Project in order to ensure capacity to perform, and the undertaking and completion of
each Phase of the Project.
1309.1 Election for Developer Financing. In the event Developer requires or
desires other or alternative or substitute construction financing, at the Developer's election instead of
securing conventional construction financing from an institutional lender for the applicable Phase of
the Project, Developer may provide its own financing of the applicable Phase ofthe Project. In such
event and election, Developer shall submit to the Agency written evidence, in a form reasonably
acceptable to the Agency Executive Director, that the Developer has obtained sufficient equity
capital and has committed unrestricted and available funds necessary for the completion of
construction and development of the applicable Phase of the Project, including all of the
Improvements and the Public Improvements.
(a) Evidence of equity capital shall be acceptable if the Developer
submits financial statements certified by the Chief Financial Officer of Gateway Chula Vista, LLC,
which demonstrate liquid assets (equity in real estate is not considered a liquid asset) of the
Developer which together with debt, described immediately below, is sufficient, in the reasonable
judgment of the Agency Executive Director and Agency economic consultant, to finance the
construction and completion of the applicable Phase of the Project. Evidence of debt shall be
acceptable if the Developer submits the following:
(i) Paid performance bonds and an executed completion guaranty
from Developer for the applicable Phase of the Project in a form and by a surety acceptable to the
Executive Director and Agency legal counsel, in their sole but reasonable discretion, and such
bond(s) shall include the City and Agency named as beneficiaries and/or additional insureds; or
(ii) At all times prior to the issuance of the final Certificate of
Completion for all of the Improvements of the applicable Phase of the Project the Developer shall
maintain and shall be able to provide to the Executive Director sufficient evidence that Developer
entity has not less than twenty percent (20%) of Project Costs for the applicable Phase of unused,
unsecured revolving credit available from commercial banks (domestic or foreign with domestic
offices) having a credit rating of not less than "A" as ranked by Moody's and Standard and Poor's
rating services. If the Developer credit falls below this 20% minimum at any time prior to the
issuance of the Certificate of Completion for the applicable Phase of the Project, then the Developer
shall immediately obtain, pay for, and maintain performance bonds for the construction and
completion of the applicable Phase of the Project in a form and by a surety reasonably acceptable to
the Executive Director and such bond(s) shall include the City and Agency named as beneficiaries
and/or additional insureds, as reviewed and approved by Agency legal counsel. The Developer shall
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evidence to the Executive Director that Developer meets and continues to meet the financial
requirements set forth herein by delivery of a true copy of its annual and current financial statement
which shall include a balance sheet, an income statement, and a statement of financial changes.
(b) The Agency's Executive Director, after review by the Agency's
economic consultant and legal counsel, shall approve or disapprove such evidence of Developer
supplemental or other financing or available funding. Approval shall not be unreasonably withheld
or conditioned. If the Agency's Executive Director shall reasonably disapprove any such financing,
the Executive Director shall do so by written notice to the Developer stating the reasons for such
disapproval and the Developer shall exercise reasonable diligence in an effort to promptly obtain and
submit to the Agency new evidence of financing. The Agency's Executive Director shall approve or
disapprove such new evidence of financing in the same manner and within the same times
established in this section for the approval or disapproval of the evidence of financing as initially
submitted to the Agency.
1309.2 Form of Evidence of Construction Loan Financing for Each Phase of
Project. In the event the Developer does not elect Developer Financing as set forth in this section
for the applicable Phase financing and elects to seek and obtain conventional Construction Financing,
such evidence of financing shall include both of the following:
(a) A copy of the firm and binding commitment for Construction
Financing obtained by the Developer for the mortgage loan or loans for financing to fund the
construction through completion of the applicable Phase of the Project. The term of Construction
Financing shall be for not less than two (2) years.
(i) The commitment for construction financing shall be in such
form and content acceptable to the Agency's economic consultant and legal counsel as reasonably
evidences a legally binding, firm and enforceable commitment subject to the construction lender's
reasonable, customary and normal conditions and terms.
(b) For a period commencing after the completion of construction of the
Improvements for the applicable Phase of the Project, and when elected by the Developer, a copy of
the firm and binding commitment for take-out or perrnanent financing for the mortgage loan or loans
for long term financing and operation of the applicable Phase of the Project.
(i) The commitment for permanent financing shall be in such
form and content acceptable to the Agency's economic consultant and legal counsel as reasonably
evidences a legally binding, firm and enforceable commitment subject to the permanent lender's
reasonable, customary and normal conditions and terms.
(ii) The commitment(s) for construction and/or permanent
financing shall evidence the proposed lender acknowledges and agrees this Agreement and the
Agreement Affecting Real Property (when recorded) affecting the applicable Phase shall be and
remain encumbrances prior and superior to all financing for the applicable Phase of the Project.
1309.3 Consideration of Submittals. The Agency's Executive Director, after
review by the Agency's economic consultant and legal counsel, shall approve or disapprove such
evidence of Developer financing commitments or available funding within a reasonable time after
each complete submittal by the Developer and not later than the time established in the Schedule of
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Performance (Attachment No.3). Approval shall not be unreasonably withheld, delayed, or
conditioned. If the Agency's Executive Director shall reasonably disapprove any such financing, the
Executive Director shall do so by written notice to the Developer stating the reasons for such
disapproval and the Developer shall exercise reasonable diligence in an effort to promptly obtain and
submit to the Agency new evidence of financing. The Agency's Executive Director shall approve or
disapprove such new evidence of financing in the same manner and within the same times
established in this Section 1309 for the approval or disapproval of the evidence of financing as
initially submitted to the Agency.
1309.4 Phase III Evidence of Financing; Sources of Funds. The Base Pro Forma
for Phase 1II of the Project identifies as a source offunding for the construction of the Phase 1II
Improvements approximately $2 million dollars from operating income of the Phase I Improvements
and the Phase II Improvements. At the time for submittal of the evidence of financing for the
Phase 1IIlmprovements, Developer shall submit information and back-up documents, reasonably
satisfactory to the Agency (through its Agency Economic Consultant and legal counsel,) to evidence
that the operating income from Phase I and Phase II is adequate to meet this $2 million dollars
funding requirement. To the extent the Agency review reasonably determines that such operating
income is not sufficient to meet the $2 million dollars in funding necessary for the Phase 1II
Improvements, then the shortfall amount of the difference between $2 million dollars and such
operating income amount, reasonably determined by the Agency to be available for such funding,
shall be evidenced to have been secured and obtained from another funding source, such as the
institutional lender, equity contribution, or other source of financing, reasonably acceptable to the
Agency and within reasonable and customary institutional financing lending standards.
1310. Mortgage, Deed of Trust, Sale and Lease-Back Financing; Rights of Holders
1310.1 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-
Back for Development. Mortgages, deeds oftrust and sales and lease-back are permitted before
completion of the construction of the Improvements, but only for the purpose of securing loans of
funds to be used for financing the direct and indirect costs of fee ownership of the of the applicable
Phase of the Project (including refinancing the existing loan(s)) to be secured by the of the applicable
Phase of the Project, the construction of the applicable Phase Improvements, and all other Project
Costs relating to the of the applicable Phase of the Project (including, for example, offsite
improvements, development and building fees, architectural engineering and legal fees, financing
costs, and tenant improvements), and operation of the applicable Phase of the Improvements after
completion. The Developer shall not enter into any such conveyance for financing without the prior
written approval of the Agency's Executive Director. The requirements of this section shall remain
in effect until the deterrnination of payment relating to the final fifth Installment Payment of Agency
Participation occurs, and shall terrninate and be null and void at such time. The Developer shall
notify the Agency in advance of any mortgage, deed of trust or sale and lease-back financing, if the
Developer proposes to enter into the same before completion of the construction of each applicable
Phase of the Project. The words "mortgage" and "deeds oftrust" as used hereinafter shall include
sale and lease-back.
1310.2 Holder Not Obligated to Construct Improvements. The holder of any
mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of
this Agreement to construct or complete the of the applicable Phase of the Project Improvements or
to guarantee such construction or completion. Nothing in this Agreement shall be deemed to or be
construed to permit or authorize any such holder to devote the Site, or any Phase thereof, to any uses
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or to construct any improvements thereon other than those uses or improvements provided for or
authorized by this Agreement.
1310.3 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure.
With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the
Agency shall deliver any notice or demand to Developer with respect to any breach or default by the
Developer hereunder, the Agency shall at the same time deliver to each holder of record of any
mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. No notice
of default shall be effective as to the holder unless such notice is given. Each such holder shall
(insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days
after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and
to add the cost thereof to the mortgage debt and the lien of its mortgage. In the event possession of
the of the applicable Phase parcels of the Project (or portion thereol) is required to effectuate such
cure or remedy, the holder shall be deemed to have timely cured or remedied if it commences the
proceedings necessary to obtain possession thereof within sixty (60) days, diligently pursues such
proceedings to completion, and, after obtaining possession, diligently completes such cure or
remedy. Any such holder properly completing such Improvements shall be entitled, upon
compliance with the requirements of this Agreement, to a Release of Construction Covenants in
conformity with the terms hereof.
1310.4 Failure of Holder to Complete Developer Improvements. In any case
where, one hundred and twenty (120) days after default by the Developer in completion of
construction of any of the applicable Phase(s) of the Project under this Agreement, the holder of any
mortgage or deed of trust creating a lien or encumbrance upon the Site, or any Phase or part thereof,
has not exercised the option to construct, or if it has exercised the option and has not proceeded
diligently with construction, the Agency may purchase the mortgage or deed oftrust by payment to
the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest
and all other sums secured by the mortgage or deed oftrust. If the ownership of the Site, or any
Phase or part thereof, has vested in the holder, the Agency, if it so desires, shall be entitled to a
conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum
of the following:
(a) The unpaid mortgage or deed of trust debt at the time title became
vested in the holder (less all appropriate credits, including those resulting from collection and
application of rentals and other income received during foreclosure proceedings);
(b)
reasonable attorneys' fees;
All expenses actually incurred with respect to foreclosure, including
(c) The net expense, ifany (exclusive of general overhead), incurred by
the holder as a direct result of the subsequent management of the Site, or applicable Phase or part
thereof;
(d) The actual costs of any improvements made by such holder; and
(e) An amount equivalent to the interest that would have accrued on the
aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt
and such debt had continued in existence to the date of payment by the Agency.
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1310.5 Right of the Agency to Cure Mortgage or Deed of Trust Default. In the
event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the
construction of the Developer Improvements on the Site or any part thereof and the failure of the
holder of any mortgage or deed of trust to exercise its option to construct, the Agency may cure the
default. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs
and expenses incurred by the Agency in curing such default. The Agency shall also be entitled to a
lien upon the Site to the extent of such costs and disbursements. Any such lien shall be subordinate
to the construction financing mortgages or deeds of trust.
1310.6 Right of the Agency to Satisfy Other Liens on the Site After Title Passes.
After the Conveyance and prior to the completion of construction, and after the Developer has had a
reasonable time to challenge, cure or satisfy any liens or encumbrances on the Site, the Agency shall
have the right to satisfy any such liens or encumbrances, provided, however, that nothing in this
Agreement shall require the Developer to payor make provision for the payment of any tax,
assessment, lien or charge, so long as the Developer in good faith shall contest the validity or amount
thereof, and so long as such delay in payment shall not subject the Site to forfeiture or sale.
1311. Release of Construction Covenants. Promptly after completion of construction of
each applicable Phase of the Project, inclusive of all of the Phase I Improvements, Phase II
Improvements, or Phase 1IIlmprovements, as applicable, required by this Agreement to be
completed by the Developer upon the applicable Phase of the Site (which shall exclude interior
tenant improvements, landscaping and any exterior signage), the Agency shall furnish the Developer
with a Release of Construction Covenants for such Phase upon written request therefor by the
Developer. The Agency shall not unreasonably withhold or delay issuance of such Release of
Construction Covenants for each Phase. Such Release of Construction Covenants shall be a
conclusive determination of satisfactory completion of the construction required by this Agreement,
and the Release of Construction Covenants shall so state. After recordation of such Release of
Construction Covenants any party then owning or thereafter purchasing, leasing or otherwise
acquiring any interest in the applicable Phase of the Site shall not (because of such ownership,
purchase, lease or acquisition) incur any obligation or liability under this Agreement relating to the
obligation to construct and develop the applicable Phase Improvements. However, such party shall
be bound by the Agreement Affecting Real Property, and any other instrument or transfer, or other
documents establishing covenants on each Phase of the Project and Site in accordance with the
provisions of this Agreement.
(a) The Release of Construction Covenants shall be in such form as to
permit it to be recorded in the Recorder's Office of San Diego County.
(b) If the Agency refuses or fails to furnish a Release of Construction
Covenants for the applicable Phase of the Improvements after written request from the Developer,
the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a
written statement of the reasons the Agency refused or failed to furnish a Release of Construction
Covenants. The statement shall also contain the Agency's opinion ofthe actions the Developer must
take to obtain a Release of Construction Covenants.
(i) If the reason for Agency's refusal to furnish a Release of
Construction Covenants is confined to the immediate availability of specific items or materials for
the completion of minor finish items to the landscaping, or other minor and typical "punchlist" items
that do not present health or safety concerns, the Agency shall issue its Release of Construction
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Covenants upon the Developer's posting with the Agency of a bond, or other security reasonably
satisfactory to the Agency, in an amount representing the fair value of the work not yet completed. If
the Agency shall have failed to provide the Release of Construction Covenants or a written statement
of the reasons for refusing or failing to provide such document within said thirty (30) day period, the
Developer shall be conclusively deemed entitled to such Release of Construction Covenants.
(c) Such Release of Construction Covenants shall not constitute evidence
of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage,
or any insurer of a mortgage securing money lent to finance the applicable Phase Improvements, or
any part thereof. Such Release of Construction Covenants is not a notice of completion as referred to
in the California Civil Code, Section 3093.
1312. Consideration of Subordination Documentation and Estoppel Certificates
1312.1 Consideration by Agency. The Agency agrees to incur the costs associated
with the consideration of one set of estoppel certificates submitted to the Agency and its legal
counsel by the Developer, and/or a lender approved by the Agency pursuant to the provisions hereof.
The Agency, at the Developer's sole cost, further agrees to consider and approve reasonable
subordination documents for any other mortgage or deed oftrust which Developer may propose to
record against the applicable Phase ofthe Site, or portiones) thereof; provided, however, that nothing
in the foregoing shall affect or modify the requirement that the Agreement Affecting Real Property is
and shall remain in first priority and superior lien position in title as to the applicable Phase of the
Site. The reasonable costs incurred by the Agency for the review, negotiation, or consideration of
any additional documentation (other than the one set described above) shall be paid to the Agency in
cash by the Developer prior to the Agency's execution of such documentation. The Agency further
agrees that it shall act reasonably in consideration, review, and execution of such subordination and
estoppel documents generally in connection with any refinancings.
1312.2 Consideration by Developer. Developer agrees to incur the costs associated
with the consideration of one set of reasonable documentation, including for example, estoppel
certificates, submitted to the Developer and its legal counsel by the Agency. The Developer, at the
Agency's sole cost, further agrees to consider and approve additional reasonable requests for
documentation, including for example, estoppel certificates. Any and all reasonable costs incurred
by the Developer in connection with such additional documentation, including for example, estoppel
certificates, shall be paid to the Developer in cash by the Agency prior to the Developer's execution
of such documentation. The Developer further agrees that it shall act reasonably in consideration,
review, and execution of such documents generally.
1313. Annual Financial Statements. Developer agrees to prepare, maintain, and keep
complete, proper, and accurate books, accounts, and records of all revenue and other income from all
operations at the Project so that net income, gross revenues, operational expenses, and other Project
Costs (for each Phase) can be accurately determined until payment of the Final Fifth Installment
Payment of the Agency Participation. Not less than once each year, the Developer shall provide to
the Agency Executive Director a true copy of its annual Reviewed financial statement for the Project
prepared by an independent certified public accountant, or applicable Phase or Phases) and its
operations ("Annual Financial Statement"). All books, accounts, and records of Developer as to the
Project and all income statements and tax returns relating to the Project shall be maintained at
Developer's offices or at the Project for the period any Agency Participation is due hereunder and
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shall be subject to reasonable review, inspection, and examination by the Agency and its financial
advisor and legal counsel.
In the event of Default under this Agreement, upon written request by the Agency or its legal
counsel the Developer shall make available and provide the Agency's Executive Director within ten
(10) days of such request, the following: (i) Annual Financial Statements of the Project as owned
and operated by the Developer, or its successor(s) and assign(s), (ii) when and as prepared all
Reviewed (and audited, if prepared) financial statements for the Project, which statements shall be
caused by Developer to be prepared not less than annually, and (iii) such other documents and
records and back-up materials to such statements as reasonably maintained in the ordinary course of
business. All financial reports required hereunder and all Annual Financial Statements shall be
prepared in accordance with generally accepted accounting principles ("GAAP"), shall be Reviewed,
and prepared by an independent certified public accountant. Each Annual Financial Statement shall
reflect the profit and loss statements for the operation of the Project the applicable year during the
term of this Agreement.
1314. Developer Reimbursement of Agency's Third Party Costs. Subject to the
provisions of Section 1312 above, under which the Agency agrees to incur the cost of one (I) set of
estoppel certificate or similar documentation in connection with this transaction. As to all other
requests for estoppel certificates or other documentation requested by the Developer or its lender
relating to this Agreement or perforrnance hereunder, the Developer shall reimburse the Agency for
all reasonable out-of-pocket costs, fees, and expenses incurred by the Agency (but not in house staff
time) for appraisers, engineers, attorneys, economic consultants, and other professional services
incurred by the Agency arising from and/or related to the implementation of this Agreement or the
Project (separate and exclusive of any monies advanced under the applicable Developer Advance
Note), from the period of time commencing upon the date of the Phase I Conveyance and ending
after the determination of the Final Fifth Installment Payment of Agency Participation (the "Third
Party Costs"). The Third Party Costs include expenses incurred, for example, in the review,
consideration, negotiation, and action on assignment and assumption documents, transfer documents,
estoppel certificates, refinancings, subordinate debt approval, etc., with such costs, fees, and
expenses generally limited to those out-of-pocket actually incurred by the Agency and/or its
representatives with such expenses in amount to be reasonable and customary in private real estate
transactions and institutional commercial lending practices in Southern California.
1315. Amendments to this Agreement. The Developer and the Agency agree to mutually
consider reasonable requests for amendments to this Agreement which may be made by bond
counsel, lending institutions, Agency's counsel, Developer's counsel, or financial consultant,
provided such requests are consistent with this Agreement and would not substantially alter the basic
business terms included herein. The Agency's Executive Director shall have the authority to issue
interpretations, waive provisions and enter into amendments of this Agreement on behalf of the
Agency so long as such actions do not substantially change the uses permitted on any Phase of the
Project or the financial provisions of this Agreement as specified herein and as agreed to by the
Agency Board. All other waivers or amendments shall require the consideration and written consent
of the Agency Board.
1316. Entire Agreement. This Agreement is executed in three (3) duplicate originals, each
of which is deemed to be an original. This Agreement includes pages I through _, inclusive, and
Attachment Nos. I through _, inclusive, which constitute the entire understanding and agreement
of the parties.
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1316.1 Counterparts. This Disposition and Development Agreement may be
executed in counterparts and may be delivered by facsimile or otherwise.
1316.2 Integration. This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements
between the parties or their predecessors in interest with respect to all or any part of the subject
matter hereof.
1317. Waivers. All waivers of the provisions of this Agreement must be in writing by and
executed the appropriate authorities of the Agency and the Developer and all amendments hereto
must be in writing and executed by the appropriate authorities of the Agency and the Developer.
1318. Reasonableness of Actions. In any circumstance where under this Agreement any
party is required to approve or disapprove any matter, approval shall not be unreasonably withheld,
conditioned, or delayed.
1319. Affirmative Covenants of Agency and Developer to Use Good Faith in
Performance under the Agreement. Each party affirrnatively covenants to and for the benefit of
the other party to exercise good faith and to use commercially reasonable efforts to perform and
carry out all obligations and satisfy all conditions under this Agreement for the benefit of the party
entitled to performance of each obligation and action required hereunder.
1320. Execution of Agreement. This Agreement, after being approved and authorized by
the Agency must be executed by Developer within seven (7) working days of such Date of
Agreement and delivered to the Agency. When executed by the Developer and delivered to the
Agency, this Agreement must be executed and delivered by the Agency on or before seven (7)
working days after signing and delivery of this Agreement by Developer or this Agreement shall be
void, except to the extent that the Developer shall consent in writing to a further extension of time for
the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the
date when it shall have been approved by action of the Agency.
IN WITNESS WHEREOF, the Redevelopment Agency of the City ofChula Vista, as
Agency, and Gateway Chula Vista, LLC, as Developer, have signed this Disposition and
Development Agreement, and the Date of Agreement is the date the Agency Board approved this
Agreement.
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Chairman or Authorized Designee
"AGENCY"
ATTEST:
Agency Secretary
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APPROVED AS TO FORM:
Stradling Yocca Carlson & Rauth
Agency Special Counsel
APPROVED AS TO FORM:
City Attorney and Agency General Counsel
[Signature block continued on next page.]
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[Signature block continued from previous page.)
GATEWAY CHULA VISTA, LLC, a California
limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
"DEVELOPER"
APPROVED AS TO FORM:
Counsel to the Developer
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Attachment No. I
Attachment No.2
Attachment NO.3
Attachment No.4
Attachment No.5
Attachment No.6
Attachment No.7
Attachment No.8
Attachment No.9
Attachment No. 10
Attachment No. II
Attachment No. 12
Attachment No. 13
Attachment No. 14
Attachment No. 15
Attachment No. 16
Attachment No. 17
DOCSOC\662345v 16\24212.0002
ATTACHMENTS
Site Map
Site Description for Recording
Schedule of Performance
Scope of Development
Release of Construction Covenants
Agreement Affecting Real Property
Memorandum of Disposition and Development Agreement
Construction Insurance Requirements
Grant Deed
Developer Advance Note (Secured by Deed of Trust)
Net Property Tax Increment Base Amounts for All Parcels
Comprising the Site
Schedule of Estimated Permit Fees
Resolutions of Agency and City Council Approving Agreement
Town Centre Sign Policy, Town Centre Design Manual Sign Criteria
Summary Base Pro Formas for Each Phase of Project
Reimbursement Agreement
Right of Entry Agreement
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ATTACHMENT NO.1
SITE MAP
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ATTACHMENT NO.2
DESCRIPTION OF THE SITE
FOR RECORDING
THE LAND REFERRED TO HEREIN IS SITUATED IN THE CITY OF CHULA VISTA,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA:
A TT ACHMENT NO.2
Page 1 of1
DOCSOC\662779v 14\24212.0002
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EXHIBIT "A"
Parcell:
Lolli and a portion of Lots 9. 10 and 12 of PRAY'S ORANGE VILLA TRACT,
according to Map thereof No. 1718, in the City ofChula Vista, County of San Diego,
Slate of California, recorded in the Officc of the County Recorder of San Diego County
April 22, 1921, described as follows:
Bcginning at a point on the Northerly line of~aid Map 1718 which i~ South 70"58'34"
West 461.88 feet lTorn the Northeasterly corner of Lot 6 of said Map; thence South
19"0 I '26" East 131.58 feet; thence North 70"58'34" East 52.08 feet; thence South
19"01 '2(i" East 159.19 feet to the Southerly line of Lot 9 of said Map 1718; thence South
70"59'42" West along the Northerly line ofH Street 259.49 feet to a point which is 47.00
feet Easterly of the Southwesterly comer of Lot 12 of said Map 1718; thence North
19002'34" West parallel with the Westerly line of said Lot 12 a distance of290.69 feet to
the Northerly line of said Map No. 1718; thence North 70058'34" East 207.33 feet to the
Point of Beginning.
Parcel 2:
Lot 8 and a portion of Lots 7,9, and 10 ofPRA Y'S ORANGE VILLA TRACT,
according to Map thereof No. 1718, in the City ofChula Vista, County of San Diego,
State of California, recorded in the Office of the County Recorder of San Diego County
April 22, 1921, described as follows:
Beginning at a point on the Northerly line of said Ivlap which is South 70"58'34" \Vest
233.88 fl'et from the Northeasterly corner of Lot 6 of said Map 17] 8; thence Soulh
1900 I '26" East] 31.58 feet; thence North 70058 '34" East 40.60 feet; thence South
19"0 I '26" East 159.26 feet to the Southerly line of Lot 7 of said Map 1718; thence South
70"59'42" West along the Northerly line of"H" Street 216.52 feet; thence N011h
19001 '26" West 159.19 feet; thenoe South 70"58'34" West 52..08 feet; thence North
19001 '26" West 131.58 feet to the Northerly line of Map No. 17]8; thence North
70058'34" East 228.00 feet to the Point of Beginning.
Parcel 3:
Lots I through 6 and a portion of Lot 7 ofPR.A. Y'S ORANGE VILLA TRACT,
according to Map thereof No. 1718, in the City ofChula Vista, County of San Diego,
State of California, recorded in the Office of the County Rccorder of San Diego County
April 22, In I, described as follows:
Beginning at the Northeasterly comer of Lot 6 of said Map No. 17] 8; thence South
19"03'33" East 290.9] feet to the Southeasterly corner of Lot I of said Map No. 17]8;
thence South 70"59'42" West along the Northerly line of"]-]" Street 193.28 feet; thence
A TT ACHMENT NO.2
Page 2 of 4
North 19001 '26" West 159.26 fcet; thence South 70"58'34" West 40.60 feet; thence
North 19"01 '26" West 13 1.58 feet to the Northerly line of Lot 7 of said Map No. 1718;
thence North 70058'34" East 233.88 feet to the Point of Beginning.
This legal description was prepared by me or' under my direction.
Herman W. Bateman. P.L.S. 4605
May 12,2000
ATTACHMENT NO.2
Page 3 of 4
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DOCSOC\662779v 13\24212.0002
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ATTACHMENT NO.1
SITE MAP
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ATTACHMENT NO.2
DESCRIPTION OF THE SITE
FOR RECORDING
THE LAND REFERRED TO HEREIN IS SITUATED IN THE CITY OF CHULA VISTA,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA:
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.2
Page 1 of4
L - /50
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EXHIBIT "A"
Parcell:
Lot 11 and a portion of Lots 9,10 and 12 ofPRA Y'S ORANGE VILLA TRACT,
according to Map thcreofNo. 1718, in the City ofChula Vista, County of San Diego,
State of California, recorded in thc Officc of the County Recorder of San Diego County
April 22, 1921, dcscribcd as follows:
Bcginning at a point on the Northerly line oCsaiJ Map 1718 which is South 70"58'34"
W cst 461.88 ketii-om the Northeasterly corner of Lot 6 of said Map; thence South
1900 I '26" East 131.58 fcct; thcnce North 70058'34" East 52.08 fect; thencc South
19"01 '2(i" East 159.19 feet to the Southerly line of Lot 9 of said Map 1718; thence South
70"59'42" West along thc Northerly line of H Street 259.49 fect to a point which is 47.00
feet Easterly of the Southwesterly comer of Lot 12 of said Map 1718; thence North
19"02'34" West parallel with the Westerly linc of said Lot 12 a distance of290.69 feet to
thc Northerly linc of said Map No. 1718; thence North 70058'34" East 207.33 feet to the
Point of Beginning.
Parccl2:
Lot 8 and a portion of Lots 7, 9, and 10 ofPRA Y'S ORANGE VILLA TRACT,
according to Map thereof No. 1718, in the City ofChula Vista, County of San Dicgo,
State of California, rccorded in the Officc of the County Rccorder of San Diego County
April 22, 1921, described as follows:
Beginning at a point on the Northerly line of said Map which is South 70058'34" West
233.88 fC'et from the Northcasterly corner of Lot 6 of said Map 1718; thence South
19001 '26" East 131.58 feet; thence North 70058'34" East 40.60 feet; thence South
19"0 I '26" East 159.26 feet to the Southerly line of Lot 7 of said Map 1718; thence South
70"59'42" West along the Northerly linc of"H" Street 216.52 feet; thence NOt1h
19"0 I '26" West 159.19 feet; thenoe South 70"58'34" Wcst 52:08 feet; thence North
19001 '26" West 131.58 feet to the Northerly line of Map No. 1718; thence North
70"58'34" East 228.00 feet to the Point of Beginning.
Parcel 3:
Lots 1 through 6 and a portion of Lot 7 ofPR.A. Y'S ORANGE ViLLA TRACT,
according to lvlap thcreofNo. 1718, in the City ofChula Vista, County of San Diego,
State of California, recorded in the Office of the County Rccorder of San Diego County
April 22, lnl, dcscribed as follows:
Bcginning at thc Northcastcrly comer of Lot 6 of said Map No. 1718; thence South
19003'33" East 290.91 feet to the Southeasterly corner of Lot 1 of said Map No. 1718;
thenec South 70"59'42" West along the Northerly line of "1-1" Street 193.28 feet; thence
ATTACHMENT NO.2
Page 2 of 4
L-/S/
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North 19"01 '26" West 159.26 feet; thence South 70"58'34" West 40.60 teet; thence
North 19"01 '26" Wesl13 1.58 feet to the Northerly line of Lot 7 of said Map No. 1718;
Ihence North 70058'34" East 233.88 feet to the Point of Beginning.
This legal description was prcpared by me or under my direction.
Herman W. Bateman. P.L.S. 4605
May 12,2000
A TT ACHMENT NO.2
Page 3 of 4
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ATTACHMENT NO.3
SCHEDULE OF PERFORMANCE
1.
Submittal of Agreement. Agreement
is submitted to the Agency for public
hearing, consideration, and action.
2.
Execution of Agreement by
Developer. Developer shall execute
the Agreement and deliver three (3)
executed copies of the Agreement to
the Agency.
3.
Execution of Agreement bv Agency.
Agency shall execute the Agreement
and deliver one (I) copy of this
Agreement to the Developer.
4.
Delivery of the Developer's Advance
for Phase II Acquisition Parcels. The
Developer shall deliver to the Agency
an unconditional irrevocable Letter of
Credit for the assembly of the Phase II
Acquisition Parcels in the amount
required by the Agreement, plus
estimated relocation costs, if such
costs have not been advanced pursuant
to the Three Party Relocation
Agreement.
5.
Agencv Executes and Delivers
Phase II Developer Advance Note.
Agency executes Phase II Developer
Advance Note and delivers said Note
to the Developer.
6.
Agency Considers Eminent Domain
Proceedings for Phase II Acquisition
Parcels. Agency shall notice and hold
a public hearing at which it will accept
testimony and adopt (or disapprove)
resolution of necessity to acquire
Phase II Acquisition Parcels.
Fourteen (14) days prior to the joint public
hearing of the City Council and Agency Board
on the Agreement.
Within seven (7) working days of the Agency
approval of the Agreement, if approved.
After approval of the Agreement by the
Agency and within seven (7) working days of
receipt of executed copies of the Agreement
by Developer.
Within thirty (30) days after the Agency's
demand therefor to assemble the Phase II
Acquisition Parcels. The Agency shall not
expend said Developer Advance until it has
taken affirmative action to initiate acquisition
proceedings to acquire and assemble the Phase
II Acquisition Parcels.
Prior to the first payment of funds by
Developer or draw by the Agency under the
Advance.
Not later than sixty (60) days after the
Developer demonstrates to the Agency it has
been unable to acquire any Phase II
Acquisition Parcels through negotiated
purchase after good faith efforts to do so.
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.3
Page 1 of 10
c'-153
.. "
7.
Agf':nry InitiMf':l::. Artlnn,= to nht~in
Titlf> ~n(Vor Pn'-''-'f>,-,,-,inn nfthf> Ph~'-'f> II
Arqni,-,itinn P~r('f>I,-, (~'-''-'llming ~nrl if
A gf':nry ~rrrnvp,-, R p,-,ollltinn( ,-,) nf
Npcp"ity) Agency shall initiate
actions to obtain title and/or
possession of the Phase II Acquisition
Parcels and obtain orders of
Prejudgment Possession and
commence the proceedings to relocate
occupants.
8.
Agpnry rnmrlPtpl::. Pminpnt nnm~in
Prn(,pf>rling'-' fnr Ph~,-,p' H Arrpll,-,itinn
P"rcp k T f A rrrovp,1 The Agency
shall use good faith reasonable efforts
to complete such acquisition
proceedings as soon as practicable.
9.
Rplor~tinn of Arrll('~hlf': Ph~l::.p.
OCCllr"nt' Agency and Developer
cause relocation of the applicable
Phase occupants as expeditiously as
reasonable and in accordance with
Relocation Laws and the Three Party
Relocation Agreement.
10.
np.liVf>ry nfthp npvplnrpr''-' Ac1v~n(,f>
for Ph~,-,p' HI AC'CJlli,-,ition P~rrp:I,-,. The
Developer shall deliver to the Agency
an unconditional irrevocable Letter of
Credit in the amount in the amount
required by the Agreement, pIus
estimated relocation costs, if such
costs have not been advanced pursuant
to the Three Party Relocation
Agreement..
11.
A gpnry PVPC':lItf':'= ~nc1 nf':livpr'-'
Ph~l::.p HI npvplorpr Ac1\!~nrp Nntp
Agency executes Phase III Developer
Advance Note and delivers said Note
to the Developer.
Within 30 days after Agency action on the
Resolution of Necessity, if such are approved.
As soon as reasonably practicable.
As to each applicable Phase, to be completed
not less than fifteen (15) days prior to the date
set forth herein for the applicable Phase
Conveyance.
Within thirty (30) days after the Agency's
demand therefor to assemble the Phase III
Acquisition Parcels. The Agency shall not
expend said Phase III Developer Advance
until it has taken affirmative action to initiate
acquisition proceedings to acquire and
assemble the Phase III Acquisition Parcels.
Prior to the first payment of funds by
Developer or draw by the Agency under the
Advance.
DOCSOC\662779v 13\24212. 0002
ATTACHMENT NO.3
Page 2 of 10
L,'-15'l
..
"
12.
Agf'nry rnn~iclf'N Fminpnt nnm~in
Prnrpprling,=: fnr Ph~~p nT Arf}lIiQitinn
PHTCpk Agency shall notice and hold
a public hearing at which it will accept
testimony and adopt (or disapprove)
resolutions of necessity to acquire
Phase III Acquisition Parcels.
13.
Agf':nry Tniti~tp.l;: Artie,,",=: tn ()ht~in
TitlE' ~nclfnr Pn,=:,=:p.,=:~inn nfthE' Ph~,=:p
Tn ArC]lIi~ition P~rrpk (~~~Ilming ~ncl
if Agpnry ~rrrovp~ Rp~nll1tinn(l;:) nf
Npcp"ity) Agency shall initiate
actions to obtain title and/or
possession of the Phase III Acquisition
Parcels and obtain orders of
Prejudgment Possession and
commence the proceedings to relocate
occupants.
14.
Agpnry (nmr)ptpl;: Fminpnt nnm~in
Prnrppcling,=: fClr Ph~~p Tn ArqllidtiCln
PHTCP).> If ApprnvPli The Agency
shall use good faith reasonable efforts
to complete such acquisition
proceedings as soon as practicable.
15.
npVf>olClrpr PrClviclp~ nClrllmpntMion of
Fxcpptinn. tn Titlp. Developer shall
provide the Agency with legible
copies of the documents underlying
the Exceptions to Title set forth in the
Initial Preliminary Report for the
entire Site.
16.
A gf'nry A rrrnv~ Ifni ~~rrrClv~) Clf
Fxcpptinn. Agency shall provide
Developer with written notification of
Agency's approval or disapproval of
the Exception(s) set forth in the Initial
Preliminary Report for the Site.
Not later than sixty (60) days after the
Developer demonstrates to the Agency it has
been unable to acquire any Phase III
Acquisition Parcels through negotiated
purchase after good faith efforts to do so.
Within 30 days after Agency action on the
Resolutions of Necessity, if such are
approved.
As soon as reasonably practicable.
Within thirty (30) days of the Date of this
Agreement.
Within sixty (60) days after Agency's receipt
of legible copies of the documents underlying
the Exceptions referred to in the preceding
section. *
DOCSOC\662779v I 3\24212.0002
ATTACHMENT NO.3
Page 3 of 10
T.
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17.
18.
19.
20.
np.vplnrPT Rp:m()vp:~ ni~~rrrnvprl
Fyccr';"n,. If Agency provides
Developer with written notification of
Agency's disapproval of Exception(s)
set forth in the Initial Preliminary
Report. Developer may cause such
disapproved Exception(s) to be
removed or provide assurances
satisfactory to the Agency such
Exception(s) will be removed on or
before the applicable Closing, i.e., for
the Phase I Conveyance, Phase II
Conveyance, or Phase III Conveyance.
Agp:nry Flprtinn to Pro('ppn or
Tcrm;nMc. If Developer cannot or
does not elect to remove any
disapproved Exception(s) within the
time set forth above, Agency shall
either give Developer written notice
that Agency elects to proceed with the
applicable Conveyance and the
Closing subject to the disapproved
Exception(s) or that the Agency elects
to terrninate this Agreement as to the
applicable Phase Conveyance and
development. The parties agree to
reasonably negotiate toward potential
alternative resolution(s) of title issues.
~llhmi~~lnn ()fR~~i(': rnnrprt
Or"w;ng'. The Developer shall
prepare and submit to the Agency
Basic Concept Drawings for the all
Phases of the Project as more fully set
forth in Section 902 of the Agreement.
Arprnv!=ll _ R!=l<:;:ir: rnnrprt Or!=luling"-.
The Agency shall approve or
disapprove the Basic Concept
Drawings.
Within thirty (30) days after receiving written
notice of Agency's disapproval.
Within ten (10) business days after the
expiration of the thirty (30) day period set
forth in the preceding section above.
Prior to or concurrent with Date of this
Agreement.
Concurrent with Date of Agreement.'
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.3
Page 4 of]O
.. "
L -150
21.
22.
23.
24.
25.
26.
"llhmi<;:<;:lnn of "rhpmMiC': nr::\ulingc::..
The Developer shall prepare and
subm it to the Agency Schematic
Drawings for the all Phases of the
Project as more fully set forth in
Section 903 of the Agreement.
Arrrrnr::ll - ~('hpm~tl(, H~~i(': rnnrprt
nr"wing<. The Agency shall approve
or disapprove the Schematic
Drawings.
Orpning nfP..:.:rrnw for F~(':h
Arrli('~hlp. Ph::l<;:f> r(mvpy~:m("P The
Agency shall open an Escrow for each
applicable Phase Conveyance.
rnnrJitinn<;: PrpC'f'npnt For P!=tC'h
Arr1iC':!=thlf" Ph!=tc::.p ('nnvf>ytlnrp
Developer satisfies all of the
Conditions Precedent to the applicable
Phase Conveyance.
rln<;;.ing of Po;:rrnw f{)r P~('h
Arrlirtlhlf> Ph~<;:p rnnvPytlnrp The
Agency shall cause the conveyance
and assignment/reassignment of the
applicable Phase Parcels to the
Developer.
"lIhm;<;:<;:jnn Prp.limin~ry rnndrllrtinn
Or!=twing<;: tlnn Grtlrling ~nr1
, tlnri<;:("tlping Phm", f{)r thp Phtl<;:f> T
Tmrrovpmpnl< The Developer shall
prepare and submit to the Agency and
City Preliminary Construction
Drawings and Grading and
Landscaping Plans for the Phase I
Improvements.
Within 270 days of Date of Agreement.
Within 45 days of receipt by the Agency of
complete submittal of Schematic Drawings.
At least forty-five (45) days prior to the date
set for the applicable Phase Conveyance.
Prior to close of Escrow for each applicable
Phase Conveyance.
Within five (5) days after the later date of
(i) the date the Developer satisfies all of the
applicable Phase Conditions Precedent to
Conveyance, and (ii) the date the Agency
acquires title and/or possession of all parcels
necessary to proceed with the applicable Phase
Conveyance in the condition set forth and
required in the Agreement, but in no event
later than: (I) for Phase I Conveyance, June
30, 200 I, (2) for Phase II Conveyance, June
30, 2003, and (3) for Phase III Conveyance,
December 31, 2006.
Within sixty (60) days after the Agency
approves Schematic Drawings.
DOCSOC\662779v I 3\24212.0002
ATTACHMENT NO.3
Page 5 of 10
Y"'.'
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27.
28.
29.
30.
~lIhmi~l;;:l{)n Prplimin:1ry rnn"trllrtinn
nr~n.;vingl;: :1nn Gr:1r1ing :1n.l
r ::tnrl"-C'::1ring Pbn... fnr thE>: Ph::t,,"p If
Impmvpmpnfo. The Developer shall
prepare and submit to the Agency and
City Preliminary Construction
Drawings and Grading and
Landscaping Plans for the Phase II
Improvements.
Snhmi"''''lnn Prplimin::try rnnc;:frllC'tinn
Or:1wing<;: ::Inn Gr::trling ::Inn
I llnrh:.rllring PI::!.".;;:. for thE>: Ph::!,,-€' III
Impmvpmpnfo. The Developer shall
prepare and submit to the Agency and
City Preliminary Construction
Drawings and Grading and
Landscaping Plans for the Phase III
Improvements.
Arrrnv::.1 - Prplimin:lry nr:luring'" ::Inn
Gr:lr1ing :lnrl T :lnrh:r:lring Pl:m... for thp
Arr1iC'::lhlp Ph::.(;,;p SlIhmitt:ll. The
Agency shall approve (or disapprove)
and exercise reasonable efforts to
cause City to approve (or disapprove)
the Preliminary Construction
Drawings and Grading and
Landscaping Plans for the applicable
Phase submittal.
SlIhmi"'l::lnn _ .::;;no/'" rnmr!pfp J:=imd
rnn",trJlrtlnn nr:lwing'" :lnn 1 nno/n
rnmr!pfp T :lnr1"-f':lring PIll"'" ::Inn
1 000/... rnmr!pfp nr:lning Pbno;;: [('IT thp
Appli~.hlp Ph.op Developer shall
prepare and submit to the Agency and
City 50% Complete Final
Construction Drawings and 100%
Complete Landscaping Plans and
100% Complete Grading Plans for the
applicable Phase Improvements.
Within thirty (30) days prior to the Phase II
Conveyance.
Within thirty (30) days prior to the Phase III
Conveyance.
Within forty-five (45) days after receipt by the
Agency and City.*
Within sixty (60) days after the Agency and
City approve the Preliminary Plans for the
applicable Phase Improvements.
DOCSOC\662779v 13\242 I 2.0002
ATTACHMENT NO.3
Page 6 of 10
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C - 1'::,-:>/
31.
32.
33.
34.
A rrrov::I1 - ""Oo/n romr1Ptp. Fin::ll
rono:.:trllrtlon nr::lwingo:.: ::Inn Pbno:.: fnr
thp Arr1iC':::Ihlp Ph::lo:.:p lmprnvpmpnto:.:.
The Agency shall (approve or
disapprove) and exercise reasonable
efforts to cause City to approve (or
disapprove) the 50% Complete Final
Construction Drawings and 100%
Complete Landscaping Plans and
100% Complete Grading Plans for the
applicable Phase Improvements.
"lIhmio:.:o:.:inn _ 1 00%, romr1ptp Fin~1
rnno:.:trl1/"'tion nr::lwingo:.: fnr thp
ArrliC'::.lhlp Ph::lo:.:p Tmrrnvpmpnto:.:. The
Developer shall prepare and submit to
the Agency and City 100% Complete
Final Construction Drawings for the
applicable Phase Improvements.
A rrrnv~ I _ 1 OOo/n romrlPtP Fin::ll
rnn""trnrtion nr~wing"" ~nn Pbno:.: for
thp Arr1iC:::Ihlp Ph::lo:.:p Tmrrnvpmpnto:.:.
The Agency shall approve (or
disapprove) and exercise good faith
reasonable efforts to cause City to
approve (or disapprove) the 100%
Complete Final Construction
Drawings for the applicable Phase
Improvements.
"nhmi""""inn ("If Initi::ll Proof ("If
In<lIroncp. Developer shall provide
the Agency with the evidence of
insurance and required endorsement(s)
required pursuant to the Agreement.
Within thirty (30) days after receipt by the
Agency and City.*
Within sixty (60) days after the Agency and
the City approve the 50% Complete Final
Construction Drawings for the applicable
Phase Improvements.
Within thirty (30) days after receipt by the
Agency and City.*
Prior to or concurrent with the Phase I
Conveyance Closing Date.
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.3
Page 7 of 10
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c - /5-9
35.
FYPC':lltion of Right of Arrp<;:<;:
Agrppmpnt<;: ~ncl Pnrro~('hmpnt f()r thp
Arrl-i('~hlp Ph~<;:p Tmrro"pmpnt<;:. As
reasonably required and requested by
the Agency, the Developer shall
provide easements and encroachment
perrnits or other agreements to allow
the Agency or other approved persons
or entities access to the Phase I
Parcels, or any other Phase parcels, as
applicable, in connection with the
construction of the Public
Improvements.
36.
P::lrC':pli7~ti()n ofthp Arrllr~hlp Ph~<::.p
P~rrpk ::Incl T 1":8::11 np<::.rrirtl()n<::.
Thprpfor The Developer shall prepare
(or cause to be prepared) and submit to
the City and Agency Parcel Map(s) for
the Phase I Parcels, Phase II Parcels,
and Phase III Parcels, as applicable,
to assemble and re-subdivide the Site
and shall provide the Agency with
legal descriptions of each of said
parcels.
37.
Pn"ironmpnt~1 A <;:<;:llr::lnrp<;: f()r
Arrlir::lhlp Ph~,,1": P~rl'pl<::.. The
Developer shall have submitted to the
Agency the environmental reports and
met the requirements of the
Agreement relating to the
environmental condition of the
applicable Phase parcels.
38.
A gf"nry r()nclitlon<;: PrpC':pcfpnt tn
rlo<;:ing thp Arrlir~hlp Ph::l<;:p
ronvpy"ncp. Developer satisfies all
of the Agency's Conditions Precedent
to Closing the applicable Phase
Conveyance.
39.
npvpl"rpr rnncfitinn<::. Prpl'pclpnt to
rlo<;:ing thp Arrlir~hlp Ph~<;:p
ronvpy"ncp, Agency satisfies all of
Developer's Conditions Precedent to
Closing the applicable Phase
Conveyance.
As applicable, prior to the Phase I Conveyance
and not later than thirty (30) days after
Developer's receipt of written request from
the Agency.
Prior to the Closing Date for the applicable
Phase Conveyance.
Prior to the applicable Phase Conveyance.
Prior to the Closing of the Escrow for the
applicable Phase Conveyance.
Prior to the Closing of the Escrow for the
applicable Phase Conveyance.
DOCSOC\662779v I 3\242 I 2.0002
ATTACHMENT NO.3
Page 8 of 10
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40.
41.
42.
43.
44.
45.
46.
rnmmpnr.p.mpnt nf('nnc;:trl1r:tion ~n~
np"\lp!nrmpnt nfthp Arrl1{'~hlp. Ph~c::.p:
T mrrnvpmpnfc;:. Developer shall
commence construction of the
applicable Phase Improvements.
('nmrlptinn nf('nnc;:frllC'tinn ()fPh~<;:p T
nf!mrrovement< Developer shall
have completed 100% of the Phase I
Improvements.
rnmrJpticm nf('nnc;:trllC'ticm ('If
Ph::.c::.p TT nf Tmrrnvpmpnt<:. ~ncl
S.M;c;:f~rti()n nf rnncfitinnc;: Prpc:pclpnt
to Thircl Tnc::.t~lImp:nt P~ymp:nt nf
A Benoy P"rtirir"tinn Developer shall
have completed 100% of the Phase II
Improvements of the Project and
satisfied the Conditions Precedent to
the Third Installment Payment of
Agency Participation.
rnmr!Ptinn of rnnc;:trl1rtinn nf Ph::lC;:f>
lIT nf Imrrovement< Developer shall
have completed 100% of the Phase III
Improvements of the Project.
Fin~n(':ing ('nmmitmpnfc;: for P~{'h
Ph"<e nfthe Project The Developer
shall submit to the Agency evidence of
Construction Financing to fund the
construction and completion of the
applicable Phase Improvements.
Arrrnv!=ll - J7in!=lnr:ing rnmmitmp:ntl::
fnr F!=lC'h Ph!-lC;:p nfthp PrnjpC':t The
Agency's Executive Director shall
approve or disapprove the evidence of
financing commitments for the
Construction Financing for each Phase
of the Project.
rnnc;:trllc:tinn Pin!-lnC'ing rlnl;:ing O!-ltP:
The Construction Financing obtained
by the Developer in order to construct
the applicable Phase Improvements
shall Close.
Within forty-five (45) days after the Closing
Date for the applicable Phase Conveyance.
On or before June 30, 2002.
On or before three (3) years from the issuance
of the DDA Financing and the lawful
availability of the net proceeds thereof to the
to the Agency for the Project Area.
On or before December 3 I , 2007.
On or before sixty (60) days prior to each
applicable Phase Conveyance.
Within thirty (30) days of complete submittal
and prior to the applicable Phase Conveyance.
Prior to or concurrent with the applicable
Phase Conveyance Closing.
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.3
Page 9 of 10
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It is understood the foregoing Schedule of Performance is subject to all of the terms and conditions
set forth in the text of this Agreement. The summary of the items of performance in this Schedule of
Performance is not intended to supersede or modify the more complete description in the text; in the
event of any inconsistency between this Schedule of Performance and the text of this Agreement, the
text shall govern.
* The time periods set forth herein for the Agency's approval of plans and drawings, and other
submittals, submitted to the Agency by the Developer shall only apply and commence upon the
Developer's complete submittal of all the required information. In no event shall an incomplete
submittal by the Developer trigger any of the Agency's obligations of review and/or approval
hereunder; provided, however, that the Agency shall notify the Developer of an incomplete submittal
as soon as is practicable and in no event later than the applicable time set forth for the Agency's
action on the particular item in question.
ATTACHMENT NO.3
Page 10 of 10
OOCSOC\662779v 13\24212.0002
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ATTACHMENT NO.4
SCOPE OF DEVELOPMENT
I. GENERAL
This document presents general requirements for construction of all Phases of the
Improvements on the Site. Detailed requirements will be addressed in approval of specific
construction plans and documents, and the development of the Project shall comply with such
approvals including, without limitation, the requirements of the Entitlement and any and all
subsequent approvals or modifications thereto. In addition to the Entitlement, the Public
Improvements shall comply with the Reimbursement Agreement or other contract entered
into by the Agency (or the City) for the design, construction, and completion of the Public
Improvements. Subject to Developer compliance with the review proceedings of Section
900, et seq., in the event of any inconsistency between this Scope of Development and the
approved Basic Concept Drawings and the Schematic Drawings and the subsequently
approved drawings, plans, or building permits, the approved plans or perrnits shall govern.
Subject to Developer compliance with the review proceedings of Section 900, et seq., in the
event of any inconsistency between this Scope of Development and the Entitlement, the more
restrictive document shall govern.
The proposed development, including the architectural design concepts, landscape features
and off-site improvements, shall be subject to design review by the Agency in accordance
with the adopted procedures and Section 900, et seq. of the Agreement. The Developer shall
conforrn to the Redevelopment Plan for the Town Centre I Redevelopment Project Area and
the specific development criteria to be included in the Entitlement for the Project.
The Developer and the Agency will cooperate with and direct their consultants, architects and
engineers to cooperate among each other so as to ensure the continuity and coordination
necessary for the proper and timely completion of the Project and each Phase thereof.
A. Design
The Project shall be designed and developed as a First Class, First Quality
commercial office/retail project with approximately 304,000 square feet of gross
leaseable, building area to be constructed in up to three (3) Phases. The three office
buildings shall be Class "A" office space and improvements with appurtenant
structured parking. The first office building in the Phase I Improvements and the
third office building in the Phase III Improvements are mirror images. The Phase I
and Phase 1II office buildings are five (5) stories, Type II-I rated, fully sprinklered
and approximately 93,000 to 94,000 square feet each. The Phase II office building is
a six-story Type 11- I rated, fully sprinkle red building of approximately 117,000
square feet. Total density of the Improvements is 304,000 square feet of building
including 47,000 square feet of Restaurant and retail tenant use. There shall be not
less than one thousand fourteen (1014) parking spaces in the adjacent and appurtenant
parking structure on the Site.
ATTACHMENT NO.4
Page I of 13
DOCSOC\662779v 13\24212.0002
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Particular attention shall be paid to massing, scale, color and materials. The
architecture is expected to complement the architectural theme of the Project.
The Project shall have a distinct and unique identity that sets the standard for new
development and a grand gateway into the Town Centre area. The design shall
present a cohesive, integrated architectural style that complements the surrounding
area and cornerstone nature of this First Class, First Quality office, retail
development.
The architecture of the development shall establish a First Class, First Quality design.
Building facades shall be varied both horizontally and vertically to create visual
interest. Cornices, parapets, terraces or other forrns of sculptured rooftops are
encouraged. Siting of the development, to the extent possible, shall consider the
impact of sun, shadow and wind on adjoining areas.
Building materials, including masonry, stone and glass shall be used (as contrasted to
large areas of glazing and reflective surfaces.)
A materials board which illustrates the location, color, quality and texture of
proposed exterior materials shall be submitted as part of the Entitlement submittal
process.
Colors should reflect the high quality ofthe building and integrate well with the
desired character for the area.
The buildings are a lower scale along Third A venue, H Street, and the Project
entrance drive. Indiana Red Granite walls define the exterior lower floors and create
a stone base for the buildings. Metal storefronts are individual designs with an
overall integration into the building.
The lower office floors are Mirabella limestone, a light colored stone, covered walls
with green tinted glass windows and metal window frames. The upper floors are
lighter colored, tinted glass, and metal columns creating a penthouse effect.
The Phase II office building is one (I) story/floor taller with a mechanical penthouse
in the center creating a central focal point and identity of the project along "H" Street.
The corner of Third and "H" is set back from the intersection of the street and
recessed with a low scale entrance creating both a Gateway to the project and to the
Third A venue corridor.
Buildings shall be sited to enhance pedestrian access and to provide functionally
integrated courtyard open space elements. The signature Restaurant is designed with
its own architectural image that relates to the street and courtyard. The Project shall
be oriented toward the street and shall provide front and side street fa9ade interest
such as doors, windows, wall offsets, varied materials, textures, colors, or any
combination thereof.
ATTACHMENT NO.4
Page 2 of 13
DOCSOC\662779v 13\242120002
L-J0Y
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B. First Floor Uses
Phase 11 office building and Phase III office building contain retail along "H" Street.
The first floor of Phase I office building includes retail space with frontage along
Third A venue and tied into the pedestrian core. The retail storefronts are oriented to
cater to community needs. Scattered throughout the first floor level are retail uses
servicing the Project, nearby businesses, and the courthouse. Examples of these retail
uses are delicatessen, copy store, and a bank. Service retail is located along the
western first floor with frontage along the Project entry.
A signature Restaurant is to be located on the first floor of Phase II office building.
The Restaurant is designed to have its own architectural identity. It also faces and
activates the outdoor plaza with exterior dining, as permitted pursuant to the
Entitlement or conditional use permit for such restaurant use. The Restaurant is First
Class First Quality, with Class "A" level of service and catering to both community
and regional needs.
Common Arels
C.
The Gateway Project is divided into three phases for financing and leasing. As a
result of this, two (2) courtyards are created between the buildings. The courtyards
become the heart of Gateway and pedestrian places. The image of the courtyards is
multi-cultural creating an art destination in Chula Vista.
Between the Phase I and Phase 11 office buildings the courtyard shall be articulated to
enhance outdoor community gathering uses with outdoor sculpture displays and
seating areas. Benches and street furniture are scattered throughout these pedestrian
common areas.
The Developer shall provide a pedestrian-scale connection between the Project and
the Downtown village along Third A venue. Pedestrian access to the development
shall be provided from each of the adjoining streets or from an interior courtyard.
Entrances shall be no higher than five feet (5') above the sidewalk. Stoops, stairs and
pedestrian entrances shall not encroach into the sidewalk area.
Street level windows may be clear glass or may be lightly tinted. Blank facades shall
not exceed 30 feet in width and shall be enhanced by architectural detailing, artwork,
landscaping or other similar features which have visual interest.
Architectural features such as recessed storefronts, colorful awnings, stairways, or
other design features which add human scale to the streetscape, are encouraged where
they are consistent with the design theme of the structure.
ATTACHMENT NO.4
Page 3 of 13
DOCSOC\662779v I 3\24212.0002
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Lighting shall be incorporated into the landscape design. Light standards and fixtures
shall complement the overall design theme of the Project..
The design and features of the courtyards and common areas are intended to
encourage pedestrian and patron use through outdoor dining areas and pedestrian
links from the parking garage to "H" Street. The courtyards shall be landscaped with
mature tall trees, water features, and enriched paving.
Third A venue is an urban street and shall be upgraded with enriched paving and street
trees. Signage shall be pedestrian scale and rich in design.
Publicly accessible art shall be a prominent feature of the outdoor areas. Cast bronze
sculptures will punctuate the courtyards with the main sculpture at the corner of Third
A venue and H Street. The planned main sculpture shall be symbolic of Gateway's
multi-cultural imagery and Chula Vista's role in the area of commerce, art, and
livability.
D. Office Uses
Each office building in the Project is comprised of floor levels/plates in the 20,000 square
foot range. This size floor/plate is highly conducive to both large single floor users and
may also be broken into multi-tenant floors ranging from 2,500 square feet to 10,000
square feet office spaces.
Each floor level shall contain a central core of four elevators, restrooms, and service
rooms consistent with the First Class, First Quality design of the other interior common
areas.
Floors four, five and six (in Phase II) in each office building have panoramic views of
Downtown San Diego, the bay, the Pacific Ocean, Coronado Islands, Tijuana hillside
lights, and East San Diego County back country.
E. Parking Structures
The parking structure will be designed and constructed with one (I) level below grade,
one (I) level at street grade and two (2) levels above grade with spaces for not less than
1,014 vehicles. This provides one space for every 300 square feet of building area.
Urban Land Institute (ULI) shared parking standards anticipate the highest hourly
demand for parking of 952 spaces.
Automobile traffic will enter at the main entrance on "H" Street and also from
Third Avenue. The parking structure shall have high ceiling adjacent to the first floor to
be inviting to retail traffic.
ATTACHMENT NO.4
Page 4 of 13
OOCSOC\662779v 13\24212.0002
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The parking is divided into everyday office users on the upper levels, executive parking
in the lower level, and free-flowing retail users along the first level.
Construction shall be Type-I concrete, open parking structure with decorative concrete
spandrels.
All parking and pedestrian areas shall incorporate adequate I ighting as determined by the
Chula Vista Police Department, for the security and safety of tenants, customers, and
pedestrians, and for aesthetics. There shall be adequate directional and informational
signage to assist users and patrons.
II. PRIVATE DEVELOPMENT AND IMPROVEMENTS
The following requirements shall be the sole financial responsibility of the Developer, unless
specifically noted otherwise.
A. Project
The Developer shall construct all Phases of the private Improvements of the Project and the
Public Improvements (if elected by the Agency.). The Developer shall be responsible for
filing and processing the Entitlement applications and obtaining all permits necessary for
each Phase of the Project. The Agency shall cooperate with and provide reasonable
assistance to the Developer to obtain permits from other governmental agencies consistent
with this Agreement, provided that nothing in this Section II.A is intended to increase the
Agency's financial obligations hereunder.
I. Preparation for the Redevelopment of the Project
The Developer shall be responsible for the entire Project from Site preparation, design,
construction, through completion and operation of all Phases of the Project Improvements.
The Reimbursement Agreement, in addition to the applicable requirements of the Agreement,
shall govern the construction and development of the Public Improvements, if elected by the
Agency.
2. Parcel Map
The Developer shall prepare and record or cause to be prepared and recorded one or more
parcel map(s) which assemble and re-subdivide the Phase I Parcels, the Phase II Parcels, and
the Phase III Parcels, and identify easements encumbering the Site, dedications, and
realigned streets. The Developer shall pay for all costs incurred as a result of or connected
with the preparation, review, through recordation of the Parcel Map(s).
3. Easements
The Developer shall grant and permit all necessary and appropriate easements and rights for
the development of all Phases of the Project which the Developer reasonably determines are
ATTACHMENT NO.4
Page 5 of 13
DOCSOC\662779v 13124212. 0002
C -(&, 7
T' 1'T
consistent with the development of each applicable Phase, and the Project as a whole,
including but not limited to easements and rights of vehicular access, pedestrian access,
parking, sanitary sewers, storm drains, water, electrical power, telephone, natural gas, cable
TV, etc. The Developer shall be responsible for the removal, relocation and reinstallation, if
any, of the existing utilities easements, franchises and rights of use on all Phases of the Site.
The Agency shall cooperate with Developer in causing the relocation of existing utilities by
the applicable utility company(ies); provided, however, that the Agency shall incur no
expense in connection with such relocation and provided, further that the Agency does not
hereby waive any rights of the Agency under any applicable law which the Agency may have
to separately cause the relocation of such utilities by the applicable utility company(ies).
4. Parking and Access
The parking structure(s) on the Site shall contain adequate parking facilities, including
access, circulation, number of parking spaces, and ramp slopes, according to applicable laws,
the Entitlement. All parking and pedestrian areas shall incorporate adequate lighting, both
for security, as determined by the Police Department, and for the safety and security needs of
the pedestrian.
Appropriate vehicular access to the Site shall be provided and located to the satisfaction of
the recommendation of the City Engineer.
Curb cuts shall be perpendicular to the street and shall not exceed 32' in width for two-way
access, 12' for one-way access.
To the extent required by the City or Agency during the design review process, doors shall be
provided for all vehicular and service entryways. Such doors shall conceal views of
unfinished construction, shall be of a high quality and shall be designed as attractive
architectural features of the proposed development.
Utility/service areas housing trash storage or other utility services shall be located in the
parking garage or otherwise concealed from view of the public right-of-way.
As set forth in the Agreement, at the Agency's election, Developer shall provide Public
Improvements to "H" Street and Third A venue pursuant to a public improvement plan
approved by the City Engineer.
5. Landscaping
Landscaping for all Phases of the Project Improvements to the Site shall be First Class and
First Quality and shall be consistent with other comparable First Class, First Quality office
commercial projects in San Diego. Landscaping shall incorporate aesthetic plant materials
and low water usage irrigation. The Developer shall maintain all landscaping and related
features on all Phases of the Project and to the curbline adjacent to the Site in a healthy
condition at Developer's cost and expense, as set forth in the Agreement Affecting Real
Property, Attachment No.6.
ATTACHMENT NO.4
Page 6 of 13
OOCSOC\662779v 13\24212.0002
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A detailed landscape/irrigation plan shall be approved by the City within the time set forth in
the Schedule of Performance for each applicable Phase of the Project. Said plan shall
include, but not be limited to: type, size and location of all plants and trees; type of ground
cover; sprinklers; drainage, all walls, fences or barriers; trash enclosures; driveways; parking
lots and security lighting; and type, location, and assignment of street/suite/store
numbers/addresses on the Site. Landscaping shall be installed in accordance with the
approved plan prior to release of utilities. Design of trash enclosure(s) shall conform with
City standards. All landscaped areas shall be separated from paved vehicular areas by 6-inch
high continuous Portland Cement Concrete Curbing.
The on-site landscaping plan shall establish a high quality of design and be sensitive to
landscape materials and design for the adjoining public right-of-way.
Street furniture and lighting shall be incorporated into the landscape design for the exterior
and interior of the Project. Light standards and fixtures shall complement the overall design
theme of the Project.
The Entitlement for the Project shall include adequate provisions for public enjoyment of
courtyards and other open space in the Project. Project amenities shall include a high quality
of materials, landscape and waterscape features, and provision of publicly accessible artwork.
6. Signs
A comprehensive sign plan prepared in accordance with the Entitlement, including the
Specific Plan and the Town Centre I signage guidelines shall be submitted in conjunction
with submittal of Preliminary Construction Drawings.
The Developer shall apply for and obtain approval for all signs to be erected on the Site in
accordance with all applicable City codes and regulations and the Town Centre I signage
guidelines. Sign design, color selection, letter style and placement shall be compatible with
the architectural theme of the Project and the Town Centre I signage guidelines.
7. Engineering/Public Improvements
The Developer shall submit a grading plan and hydrology calculations to the City's
Engineering Department. The Developer shall fulfill all fee and dedication requirements
prior to the issuance of building perrnits. Developer shall be responsible for the design and
construction of all improvements in the public right-of-way to the curb lines abutting the Site
and Project, and each Phase thereof. Such Public Improvements shall include, but not be
limited to the all sidewalks, street trees, pedestrian lighting, landscaping, and architectural
elements identifying the Project. All Public Improvements planning, design, bidding,
construction, and completion, are and shall be subject to the approval of the Public Works
Department and the Reimbursement Agreement, as applicable.
Paving within any setback area on private property shall complement the design and quality
of the paving within the public right-of-way.
ATTACHMENT NO.4
Page 7 ofl3
DOCSOC\662779v I 3\24212.0002
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~. ., ,.,.
All items of improvement shall be performed in accordance with the technical specifications,
standards and practices of the City ofChula Vista Planning, Engineering, and Building
Divisions, and shall be subject to their review. Improvements shall meet all applicable local,
state, and federal requirements.
Public Improvements and off-site improvements drawings, including dimensional plans for
all street frontages which illustrate proposed paving, street trees and lighting fixtures, shall be
submitted during the Entitlement process. Such off-site plans shall be coordinated to
complement and be comparable in quality to the adjoining on-site and off-site development,
open space, and sidewalk materials.
Special upgraded sidewalks, utilizing brick, exposed aggregate or other decorative material
may be required through the design review process of the Agency. Paving type shall be as
specified by the City Engineer.
Street landscaping shall be provided, including trees planted in the ground and protected by
decorative grates which conform with the requirements of Title 24 of the California State
Law and as required by the Entitlement.
An automatic irrigation system shall be provided to all street trees in the public right-of-way
and shall be connected to private water service, at no expense to the City or Agency.
Ornamental street lighting, street furnishings and accessories, such as kiosks, signs, benches,
and trash receptacles shall be provided by the Developer as specified in the Entitlement. All
street trees shall be at least 24 inch (24") box in size at the time of planting.
The Developer shall agree to maintain the street trees and grates within the public right-of-
way adjacent to the Site in accordance with the Agreement Affecting Real Property.
An 18-month warranty period for all new street tree plantings shall be required.
8. Utilities
The Developer shall provide for the installation of such sewer, drain, water, gas, electric,
cable, and other utility distribution lines, installations, and facilities as are necessary to be
installed on, adjacent to, or in connection with the each Phase of the Project. The Developer
shall be responsible for all necessary connections to existing or new utilities.
Subject to the approval of utility company(ies), on-site utilities shall be installed
underground. If approved by the Planning Department, said facilities may be installed
underground in a vault having an approved traffic lid. All such facilities located above-
ground shall meet with the approval of the Planning Department and the serving utility.
Installation of all utility meters shall be performed in a manner so as to obscure said
installation from view from any place on or off the Site.
ATTACHMENT NO.4
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DOCSOC\662779v 13\24212.0002
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Said installation shall be in a manner acceptable to the public entity and shall be in the form
of a vault, wall cabinet or wall box, and shall be installed in accordance with standard plans
and specifications ofthe City of Chula Vista.
The Developer shall be required to construct all additional and necessary sewer laterals to
serve this Project, and each Phase thereof, and/or pay any necessary fees. The Developer is
hereby advised that all utilities such as gas meters, electrical meters, telephone
pedestal-mounted terrninal boxes, surface-mounted electrical transformers, fire hydrants, or
any other potential obstructions, shall not be located within the approved parking and/or
turn-radius areas.
Utility facilities and related equipment which are to remain as agreed to by the Agency and
the Developer shall be protected by the Developer or the public utility which operates and
maintains such facilities and related equipment.
The Developer shall upgrade all utilities if required by the Sweetwater Authority, the City of
Chula Vista, or San Diego Gas and Electric Company. The Developer shall be responsible
for the connection of all on-site sewer, water and storm drain systems from the Development
to the utilities located in the public right-of-way.
Sewer, water and roof drain laterals shall be connected to the appropriate utility mains within
the street and beneath the sidewalk. Developer may use existing laterals if acceptable to the
utility. If not, Developer shall cut and plug existing laterals at such places and in the manner
required by the utility and install new laterals.
All roof drainage and sump drainage shall be connected to the storm drain system in the
public street at the approval of the Public Works Department.
Fire hydrants shall be provided pursuant to the requirements of the Fire Department and
Sweetwater Authority.
Curb and gutters with catch basins adequate to meet anticipated drainage requirements shall
be provided as required by the City Engineer.
The Developer shall submit a plan which illustrates installation or relocation of sewers,
drains, water, gas, and electrical distribution lines, within the project as well as the
connection of these utilities to public and/or franchised infrastructure adjoining the Site at the
Preliminary Construction Drawings stage.
9. Fire
All structures shall be provided with automatic fire sprinklers, as required by the City. All
vehicular ways with sufficient clearance to allow access for fire trucks, shall be capable of
supporting a fire truck, as required by the Fire Department. All required on-site hydrants
shall be attached to the underground mains of the fire sprinkler systems, installed to the
standards of the local Water District, and shall be dedicated along with repair easements to
that agency. All required fire hydrants shall be located as indicated on plans reviewed by the
Fire Department. All hydrants shall be installed and operable prior to the installation of
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combustible construction materials and water improvement plans shall be approved by the
FireDepartment. Water mains shall be adequate size, as specified by the Fire Department.
Access consisting of a minimum of 20 feet roadway capable of supporting fire apparatus
shall be maintained to all fire hydrants from the time that the hydrants are placed in service
under the direction of the Fire Department. Special consideration shall be given to
maintaining the integrity of such roadway(s) during periods of inclement weather.
10. Police
During construction and thereafter in the continued operation of each Phase of the Project, an
internal private security service shall be retained for routine routing patrol and security
purposes and to provide easy access to police or fire units responding to the Project.
II. Environmental Requirements
The Developer shall fulfill all required mitigation measures identified in the environmental
documentation prepared in conformity with the California Environmental Quality Act
(CEQA) and the Entitlement for this Project.
12. Rooftops
Roofs shall be articulated or flat. Mechanical equipment, tanks, ducts, trash collection areas,
elevator enclosures, cooling towers, mechanical ventilators and similar equipment and
appurtenances shall be completed enclosed as integral parts of buildings or have an
appearance similar to the main buildings. Mechanical equipment, vents or other roof top
appurtenances must be grouped and completely architecturally screened or enclosed from
view of surrounding buildings. The mechanical system in the office buildings is a central
plant system with mechanical equipment screened and on the roof.
A rooftop equipment and appurtenance location and screening plan shall be prepared and
submitted with the Preliminary and 100% complete Construction Drawings.
Flat roof areas shall be architecturally treated with surface materials or landscaping.
Ventilation devices shall conform to requirements set forth in the Uniforrn Building Code
and Uniform Mechanical Code. In no case shall vents be located closer than 20 feet of an
adjoining property line. The venting shall be sited with sensitivity to the location of any
nearby residential units.
13. Lighting
The Developer must submit a lighting program acceptable to the Redevelopment Agency.
All light sources shall be shielded in such a manner that the light is directed away from
streets, adjoining properties, and the sky. Illuminators should be integrated within the
architecture of the building. The intensity oflight at the boundary of the project shall not
exceed seventy-five (75) foot lamberts from a source ofretlected light.
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14. Noise Control
All mechanical equipment, including but not limited to, air conditioning, heating and exhaust
systems, shall comply with the California Noise Insulation Standards as set forth in Title 24
of the California Code of Regulations. The exhaust system for mechanically ventilated
structures shall be located to mitigate noise and exhaust impacts on adjoining development,
particularly residential.
Compliance with the Noise Insulation Standards shall also extend to parking facilities,
utilitarian service areas, loading docks, and similar operations. Developer shall provide
evidence of compliance with the Noise Ordinance at 100 percent Construction Drawings.
15. Energy Conservation
Buildings shall be situated on the Site to provide adjacent buildings adequate sunlight for
solar access when practical. The design of the Improvements shall include, where feasible,
energy conservation construction techniques and design for active and passive solar energy
design. The Developer shall be required to demonstrate consideration of such energy
features during the review of the Preliminary Construction Drawings.
16. Site Preparation
The Developer, at its sole cost and expense, shall prepare the Site for development. Such
Site preparation, including demolition and equipment siting, shall include the following:
(a) Complete demolition and removal to the surface elevation of the
adjoining ground of all existing buildings, other structures, any
materials, and improvements, including the debris and rubbish
resulting from such demolition. Demolition will take place according
to the phased development as set forth in the Agreement.
(b) Complete removal of all subsurface improvements, foundations,
walls, slabs, basements, tanks and abandoned utilities as necessary to
construct the development.
(c) Disconnection, capping and removal of utility lines, installations,
facilities and related equipment within or on the Site.
(d) Removal of all paving within or on the Site and within the adjacent
public right-of-way to the back edge of the curb.
(e) Removal of all Hazardous Materials pursuant to Governmental
Requirements and Section 207, et seq. of the Agreement.
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17. Environmental Impact Mitigation Related to Archaeological Protection
The Developer shall cause to be conducted archaeological monitoring of the Site prior to and
during demolition and grading of existing improvements.
The Developer shall implement all mitigation measures and/or mitigation monitoring
requirements as identified in the environmental document for the Entitlement.
18. Construction Fence
Developer shall install a construction fence pursuant to the specifications of the Agency
Executive Director. The fence shall be maintained free of litter and in good repair for the
duration of its installation.
19. Graffiti Removal
Developer shall cause any graffiti on the site to be removed within three working days of it
being sighted.
20. Development Identification Signs
Prior to commencement of construction on the Site, the Developer shall prepare and install, at
its cost and expense, two (2) signs on the barricades around each Phase of the development
which identify the development, with such signs to be kept and maintained in place
throughout the construction period. Each sign shall be at least four feet by six feet (4ft. X
6ft.) and be visible to passing pedestrians and vehicular traffic. The design of all
development identification signs as well as their proposed locations shall be submitted to the
Agency for approval prior to installation.
All such signs at a minimum shall include:
I. Color rendering of the development
2. Development Name
3. Developer
4. The phrase: "A project of the City ofChula Vista
Redevelopment Agency"
5. A listing of the Members of the Redevelopment Agency:
(The Developer shall obtain a current roster of Agency members
before signs are manufactured.)
ATTACHMENT NO.4
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. Mayor Shirley Horton
. Mary Salas
. Patty Davis
. Steve Padilla
. John Moot
6. Completion Date
7. For Information, Call Gateway Chula Vista, LLC at (619) 426-6388
or (949) 622-8194.
21. Applicable City Codes and Ordinances
Notwithstanding the approval of this Scope of Development by the Agency, the Project must
meet all requirements of the Uniform Building Code and Uniform Fire Code and all
applicable City codes and ordinances.
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ATTACHMENT NO.5
RELEASE OF CONSTRUCTION COVENANTS
Recording Requested By and
When Recorded Mail To:
Gateway Chula Vista LLC
17100 Gillette Avenue
Irvine, California 92614
This document is exempt from the payment of a
recording fee pursuant to Government Code
Section 6) 03.
RELEASE OF CONSTRUCTION COVENANTS
This RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body corporate
and politic (the "Agency"), in favor of GA TEW A Y CHULA VISTA, LLC, a California limited
liability company (the "Developer"), as of the date set forth below.
RECITALS
A. The Agency and the Developer have entered into that certain Disposition and
Development Agreement (the "Agreement") dated , 2000 concerning the
development of three-Phase commercial office/retail project situated on certain real property in the
City of Chula Vista, California. This Release relates to Phase _ of the project, and all real property
which comprises Phase _ is legally described on Exhibit "A" attached hereto and made a part
hereof. Capitalized terms used herein are defined in the Agreement, unless separately defined in this
Release.
B. As referenced the Agreement, the Agency is required to furnish the Developer or its
successors with a Release of Construction Covenants upon completion of construction of each Phase
of the Improvements, which Release is required to be in such form as to permit it to be recorded in
the Recorder's Office of San Diego County. This Release is conclusive determination of satisfactory
completion of the construction and development of the applicable Phase of the Improvements
required by the Agreement.
C. The Agency has conclusively determined that such construction and development of
the [Phase I Improvements, Phase II Improvements, Phase III Improvements, as applicable)
has been satisfactorily completed.
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NOW, THEREFORE, the Agency hereby certifies as follows:
I. The [Phase I Improvements, Phase II Improvements, Phase III
Improvements, as applicable] to be constructed by the Developer have been fully and satisfactorily
completed in conforrnance with the Agreement. Any and all operating requirements, indemnification
clauses, and all use, maintenance, and nondiscrimination covenants and other outstanding obligations
of the Developer and the Agency contained in the Agreement shall remain in effect and shall be
enforceable according to the Agreement Affecting Real Property by and between the Developer and
the Agency dated and recorded with the San Diego County Recorder on
, 20_ as Document No.
2. This Release affects only the obligations relating to the [Phase I
Improvements, Phase II Improvements, Phase III Improvements, as applicable] and all other
terms and provisions, in particular terms and provisions relating to [Phase II Improvements, Phase
III Improvements, as applicable] shall remain in full force and effect until a similar release has
been issued by the Agency for such applicable subsequent Phase ofthe Project.
3. Nothing contained in this instrument shall modify in any other way any other
provisions of the Agreement.
IN WITNESS WHEREOF, the Agency has executed this Release of Construction
Covenants for the [Phase I Improvements, Phase II Improvements, Phase III Improvements, as
applicable] this day of , 200_.
AGENCY
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Its:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency General Counsel/City Attorney
[Signature block continued on next page.]
ATTACHMENT NO.5
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The Developer hereby consents to and approves the foregoing and consents to the recordation of this
Release:
DEVELOPER
GATEWAY CHULA VISTA, LLC,
a California limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
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EXHIBIT "A" TO ATTACHMENT NO.5
LEGAL DESCRIPTION OF SITE
THE LAND REFERRED TO HEREIN IS SITUATED IN THE CITY OF CHULA VISTA,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA.
(to be inserted)
EXHIBIT "A" TO ATTACHMENT NO.5
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ATTACHMENT NO.6
AGREEMENT AFFECTING REAL PROPERTY
Recording Requested By and
When Recorded Mail To:
Redevelopment Agency ofthe City of Chula
Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Agency Secretary
This document is exempt from the payment of a
recording fee pursuant to Government Code
Section 6103.
AGREEMENT AFFECTING REAL PROPERTY
[total of three -- each to be revised prior to recordation to conform to applicable Phase
requirements]
This AGREEMENT AFFECTING REAL PROPERTY(this "Covenants Agreement"),
dated for identification purposes as of , 200_ is entered into by and between
the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body,
corporate and politic (the "Agency") (and the City ofChula Vista, a California municipal corporation
("City") shall be an intended third party beneficiary of this Agreement), on the one hand, and
GATEWAY CHULA VISTA, LLC, a California limited liability company (the "Developer") on
the other hand, with reference to the following recitals which are deemed to be a substantive part
hereof:
A. The Agency and the Developer have entered into a Disposition and Development
Agreement dated , 2000 (the "Agreement") concerning the construction,
development, use and operation of a commercial office/retail/restaurant project ("Project") on a
acre site generally located at Third Avenue and H Streets, Chula Vista, California ("Site"),
which Agreement is available for public inspection at the Agency's offices located in City Hall at
276 Fourth Avenue, Chula Vista, California 91910.
B. The Developer is the fee owner of the Site. The Site has been subdivided into
three (3) groups of parcels referred to as the Phase I Parcels, Phase II Parcels, and Phase III Parcels.
This Covenants Agreement affects the Phase _ Parcels (herein the "Phase _") [Phase I Parcels,
Phase II Parcels, Phase III Parcels, as applicable]. The legal description attached hereto as
Exhibit "A" and fully incorporated by this reference includes the Phase _ Parcels.
C. The Site is within the Redevelopment Project Area in the City and is subject to the
provisions of the Redevelopment Plan.
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D. [Additional recitals to be added re specific phase of Project, Phase I
Improvements, the Phase II Improvements, or Phase III Improvements, as applicable.]
E. Developer has agreed with Agency to execute and record this Covenants Agreement
in order to bind itself and future owners of the Site, including the Phase I Parcels, the Phase II
Parcels, and the Phase III Parcels, to certain obligations regarding the on-going use, operation and
maintenance, and certain other covenants, all as more particularly set forth herein.
F. An Agreement Affecting Real Property will be recorded against each Phase of the
Project at the time of the applicable Conveyance, as more fully set forth in the Agreement, in order to
cause the entire Site to be subject to the applicable covenants and obligations regarding the
development and on-going use, operation and maintenance of the Project.
G. The enforcement of the covenants and requirements set forth herein will ensure the
proper implementation of the Redevelopment Plan and will, therefore, benefit the Developer, the
City of Chula Vista, the Agency, and the properties located within the Chula Vista Town Center I
Redevelopment Project.
H. The capitalized terms herein shall have the following meanings unless the context in
which they are used clearly requires otherwise:
"Acquisition Parcels" mean those parcels of real property currently owned by one or more
third parties, and not the Agency, nor the Developer, nor subject to rights to acquire by the
Developer, and so depicted on the Site Map. One or more Acquisition Parcels are located
within the Phase II Parcels and one or more Acquisition Parcels are located within the Phase
III Parcels. One or more of the Acquisition Parcels may become a Developer Parcel when
under contract for acquisition by the Developer from one or more of the third party owner(s)
of such parcels.
"Agency" means the Redevelopment Agency of the City ofChula Vista, a public body,
corporate and politic, exercising governmental functions and powers and organized and
existing under Chapter 2 of the Community Redevelopment Law, and any assignee of or
successor to its rights, powers and any assignee of or successor to its rights, powers and
responsibilities.
"Agency Indebtedness" shall mean any and all indebtedness incurred by the Agency for any
bonds, notes, interim certificates, debentures, certificates of participation, pledges, contracts
to pay, or other financial obligations incurred, issued, or otherwise entered into by the
Agency as it deems necessary or appropriate in implementation and for the furtherance of the
Redevelopment Plan and all other redevelopment project areas of the Agency in the City
pursuant to Article 5 (commencing with Section 33640) of Chapter 6, Part I of the
Community Redevelopment Law, and all contracts of the Agency which qualify as
indebtedness and are listed on the Agency statement of indebtedness most recently filed with
the County of San Diego by the Agency, including the refunding, refinancing, and/or
renegotiation thereof, so long as the original principal amount of such debt is not increased,
and which indebtedness was incurred by the Agency prior to the Date of Agreement;
provided however, the parties acknowledge and agree that any and all indebtedness incurred
by the Agency, all or a portion of the proceeds of which are necessary and/or will be used to
meet the financial obligations of the Agency to the Developer under the Agreement whether
A TT ACHMENT NO.6
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incurred before or after the Date of Agreement, is/are expressly and intentionally included
within this definition of Agency Indebtedness. This definition is to be construed broadly and
in favor of the Agency's authority and ability to meet all financial obligations of the Agency
incurred prior to the Date of Agreement and for the Agency to incur new debt sufficient and
adequate to meet its financial obligations under the Agreement, and that all such obligations
are, and shall remain, prior and/or superior to the financial obligations of the Agency to the
Developer under the Agreement.
"Agency Parcels" are those parcels of real property currently owned in fee by the Agency
and so depicted on the Site Map. One or more Agency Parcels are located within the Phase I
Parcels and one or more Agency Parcels are located within the Phase II Parcels.
"Agency Participation" shall mean the cumulative financial assistance to be provided by the
Agency to the Developer, subject to the Developer satisfying the Conditions Precedent to
Disbursement, as more fully defined in Section 800, et seq. of the Agreement. The Agency
Participation shall be paid in up to five (5) installment payments in a cumulative amount not
to exceed $7,358,000.00 for construction, development and operation of all three Phases of
the Project, and subject to satisfaction of all applicable Conditions Precedent set forth in the
Agreement. The five (5) installments of the Agency Participation shall include: (i) the First
Installment Payment of Agency Participation, (ii) the Second Installment Payment of Agency
Participation, (iii) the Third Installment Payment of Agency Participation, (iv) the Fourth
Installment Payment of Agency Participation, and (v) the Final Fifth Installment Payment of
Agency Participation (all as defined hereinafter in this definition of Agency Participation and
as recited from the Agreement); provided however, in no event shall the cumulative amount
of total Agency Participation exceed $7,358,000.00, inclusive of all monetary payments,
and/or Permit Fees reimbursements. The Fine Arts Fee Waiver is in addition to the Agency
Participation in the amount of$7,358,000.00. All installment payments of the Agency
Participation are more fully described in Section 800, et seq. of the Agreement.
(i) "First Installment Payment of Agency Participation" means the first (I st)
installment payment of the Agency Participation in an amount up to
One Million Five Hundred Thousand Dollars ($1,500,000.00), inclusive of
$200,000.00 as repayment for the Phase I Agency Parcels, which amount is
the fair market value of the Phase I Agency Parcels included in the Phase I
development, plus reimbursement for the costs of the Public Improvements
pursuant to the terms of the Reimbursement Agreement in an amount not to
exceed $300,000.00 (assuming the Agency elects to proceed with design,
construction and completion of the Public Improvements via the
Reimbursement Agreement and assuming such Public Improvements are
completed as a part of Phase I), plus reimbursement for fifty percent (50%) of
the Phase I Permit Fees (estimated at Date of Agreement to be $91,000.00),
the total of which shall be paid after the Conditions Precedent to Conveyance
of the Agency Parcels and the Conditions Precedent to the First Installment
Payment are satisfied.
(ii) "Second Installment Payment of Agency Participation" means the second
(2nd) installment payment of the Agency Participation in an amount up to
One Million Seven Hundred Thirteen Thousand Dollars ($1,713,000.00)
(assuming all Public Improvements were developed as a part of Phase I
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Improvements; provided however that if a portion of Public Improvements
are approved by the City Engineer as a part of the Entitlement process to be
completed as a part of Phase II as herein described and permitted, then the
shortfall difference between $300,000 and the amount reimbursed to the
Developer as a part of the First Installment Payment attributable to the Public
Improvements shall be added to this Second Installment Payment, but in no
event shall the cumulative reimbursement for Public Improvements
constructed or caused to be constructed by the Developer as a part of Phase I
and/or Phase I and Phase II exceed $300,000.00), inclusive of $113,000.00
as repayment for the Phase II Agency Parcels, which amount is the fair
market value of the Phase II Agency Parcels included in the Phase II
development, less the amount, if any, calculated and deducted due to
"reconciliation of costs" pursuant to Section 802.3 of the Agreement, plus
reimbursement for fifty percent (50%) of the Phase II Permit Fees (estimated
at Date of Agreement to be $110,500.00), the total of which shall be paid
after the Conditions Precedent to the Second Installment Payment are
satisfied.
(iii) "Third Installment Payment of Agency Participation" means the third (3rd)
installment payment of the Agency Participation in the amount of One
Million Three Hundred Fifty-Two Thousand Dollars ($1,352,000.00) plus
reimbursement for the balance [remaining 50%] of the Permit Fees for the
Phase I Improvements and the Phase II Improvements (estimated at Date of
Agreement to be $201,500 [cumulatively, 100% of Phase I and Phase II
Permit Fees is estimated to be $403,000] and provided however, in no event
shall the cumulative amount of reimbursed Phase I and Phase II Permit Fees
exceed $403,000, the total of which shall be paid after the Conditions
Precedent to the Third Installment Payment are satisfied.
(iv) "Fourth Installment Payment of Agency Participation" means the
fourth (4th) installment payment of the Agency Participation in an amount up
to $700,000.00, to be paid after the issuance of the Certificate of Occupancy
for the Phase 1II1mprovements by the City's building official (exclusive of
interior tenant improvements), and I".. nr ['ilH the amount, if any, calculated
and deducted due to "reconciliation of costs" pursuant to Section 802.6, plus
one hundred percent (100%) of the Phase III Permit Fees (estimated at Date
of Agreement to be $197,000.00), the total of which shall be paid after the
Conditions Precedent to the Fourth Installment Payment are satisfied and
after completion of all Improvements which comprise the Project (i.e., after
completion of Phase III Improvements); provided however, the cumulative
amount of reimbursed Permit Fees for all Phases of the Project (as reimbursed
and paid through previous installment payments and this installment payment
of the Agency Participation) shall in no event exceed $600,000.00.
(v) "Fifth and Final Installment Payment" means the fifth (5th) and final
installment payment, which is and shall be a contingent obligation of the
Agency and incentive payment to the Developer subject to the criteria and
provisions of Section 802.7 et seq., and if eligible for payment such amount
shall in no event exceed $7,358,000.00 less the cumulative amount offunds
ATTACHMENT NO.6
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paid by the Agency to the Developer toward and as Agency Participation
from the First Installment Payment through and inclusive of the
Fourth Installment Payment.
"Agreement" means the Disposition and Development Agreement dated
, 2000 entered into by and between the Agency and the Developer.
"Agreement Affecting Real Property" means this Covenants Agreement which sets forth the
use, operating, maintenance covenants, and conditions, obligations and other restrictions
affecting the Site and to be recorded against each Phase of the Project, the Phase I Parcels,
the Phase II Parcels, and the Phase III Parcels, and which shall be a lien on each Phase of the
Site (recorded at each Phase of development) prior, superior, and non-subordinate to any and
all monetary liens and all non-monetary encumbrances (other than non-delinquent taxes and
assessments), including without limitation the lien(s) of the Construction Financing and any
permitted and approved permanent financing. This Covenants Agreement is provided by the
Developer to and for the benefit of the Agency (and the City as a third party beneficiary) and
is a substantive part of the consideration under the Agreement, and the Agency Participation
would not be provided but for such consideration provided by the Developer to the Agency.
"Annual Financial Statements" is defined in Section 1313 of the Agreement.
"Authorized Representative" means: (a) with respect to the Agency, its Executive Director,
Secretary or Treasurer, or any other person designated as an Authorized Representative of the
Agency by a Written Certificate of the Agency signed by its Executive Director, and filed
with the City; and (b) with respect to the City, its City Manager, or any other person
designated as an Authorized Representative of the City by a Written Certificate of the City
signed by its City Manager and filed with the Agency.
"Base Pro Forma for Phase I" means the pro forma line item budget of the Project Costs for
the Phase I Improvements which budget is substantially comparable in categories, amounts,
and total Project Costs as the budget was submitted by the Developer to the Agency's
economic consultant and to the Agency legal counsel prior to the Date of Agreement in
connection with the Agency's (and its economic consultant's) evaluation and determination
of the amount of Agency Participation to be provided under the Agreement. The parties
acknowledge that this full pro forma line item budget is proprietary in nature and the work
product of Developer. Further, to the extent permitted by law such full budget shall be and
remain confidential and not a public document until the applicable Phase Improvements are
completed. A summary statement of this complete Base Pro Forma for Phase I is attached to
the Agreement as a part of Attachment No. 15. The Developer represents to the Agency the
full budget is the Developer's best estimate of all line item Project Costs for the Phase I
Improvements. Further, Developer represents that the budget submitted to its Construction
Lender for the Phase I Improvements is substantially comparable to the submitted budget.
The parties acknowledge and agree such Base Pro Forma of the Project Costs for Phase I
shall be used by the Agency (through its consultants and stafl) in connection with the
Project Costs reconciliation related to certain installment payment(s) of the Agency
Participation.
[insert definition for "Base Pro Forma for Phase II" and "Base Pro Forma for Phase
III" in the later Phase versions of this Covenants Agreement.]
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"Board" means the Board of Directors of the Agency.
"Business Day" means a day (other than a Saturday or a Sunday) on which banks located
within the City are not required or authorized to remain closed.
"CEQA" means the California Environmental Quality Act, California Public Resources Code
Section 21000, et seq. and the implementing regulations thereto in California Code of
Regulations, Title 14, Chapter 3, Section 15000, et seq.
"City" means the City of Chula Vista, a California municipal corporation and charter city
organized and existing under the laws of the State.
"Community Redevelopment Law" means the California Community Redevelopment Law,
Health and Safety Code Sections 33000, et seq., as the same now exists or may hereafter be
amended.
"Conditions Precedent" shall mean those conditions precedent to the disposition of the
Phase I Parcels, Phase II Parcels, and Phase III Parcels and the conditions precedent to the
disbursement of the Agency Participation, as applicable to each installment payment and
each Phase of the Project, as more fully set forth in the Agreement. There shall be up to three
(3) dispositions for the various parcels comprising the Site and there shall be up to five (5)
installment payments of the Agency Participation and there are and shall be a separate set of
conditions precedent to each installment payment made by the Agency to the Developer from
and during the construction, development, and operation of the Project, including: (i)
Conditions Precedent to the Phase I Conveyance (Conveyance of the Agency Parcels), (ii)
Conditions Precedent to the Phase II Conveyance, (iii) Conditions Precedent to the Phase III
Conveyance, (iv) Conditions Precedent to First Installment Payment of Agency Participation,
(v) Conditions Precedent to Second Installment Payment of Agency Participation, (vi)
Conditions Precedent to Third Installment Payment of Agency Participation, (vii) Conditions
Precedent to Fourth Installment Payment of Agency Participation, and (viii) Conditions
Precedent to Final Fifth Final Fifth Installment Payment of Agency Participation, all as more
fully defined and set forth in Section 800, et seq. of the Agreement.
"Construction Financing" means the financing to be obtained by the Developer from the
Construction Lender(s) for the construction and completion of the applicable Phase of the
Project, , as obtained for each Phase, multiple Phases, or for all Phases, subject to the terms,
provisions, and conditions set forth in Section 1309, et seq. of the Agreement.
"County" shall mean the County of San Diego, State of California.
"Date of Agreement" means the date the Agency Board considered and approved the
Agreement at a public meeting of the Agency and after a duly noticed public hearing relating
thereto, which date is , 2000.
"DDA Financing" is defined and described in the definition of Agency Indebtedness in the
Agreement.
"Default" means the failure of a party to perforrn any action or covenant required by the
Agreement within the time periods provided herein following notice and opportunity to cure,
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as set forth in Section 1200, et seq. of the Agreement; provided however, one party's failure
to satisfy a condition (or conditions) under the Agreement is not a default, but shall be a basis
for the other party's non-performance of an obligation that is subject to such condition(s),
except as provided in Section 1200, et seq. of the Agreement.
"Description of Site for Recording" means the legal description of the Site for recording of
the Memorandum of Disposition and Development Agreement, including the Agency
Parcels, the Developer Parcels, and the Acquisition Parcels, and the Phase I Parcels, the
Phase II Parcels, and the Phase III Parcels, which is attached as Attachment No.2 to the
Agreement.
"Developer" shall mean and include Gateway Chula Vista, LLC, a California limited liability
company, and any assignee or successor to the Developer, permitted and, to the extent
approval is required, approved pursuant to the terms of the Agreement. The Developer
entity, limited liability company, as of the Date of Agreement includes the following
members: (i) Coast Pacific Properties, LLC, as co-managing member, with James V. Pieri, as
manager of Coast Pacific Properties, LLC, and (ii) Chula Vista Asset Management, LLC, as
co-managing member, with Jess Rae Booth, as manager ofChula Vista Asset Management,
LLC.
"Developer Parcels" shall mean that certain real property either owned by the Developer in
fee, or to which the Developer has legal rights to acquire fee title to such property, and which
parcels are a part of the Project and located in the City of Chula Vista and either within, or
directly adjacent to, the boundaries of the Redevelopment Project Area. The Developer
Parcels are delineated on the Site Map. There are Developer Parcels within each Phase of the
proposed development Site. The acquisition by the Developer of fee title to the Phase I
Developer Parcels and the Phase II Developer Parcels is a necessary precondition to the
Agency's obligation to convey the Phase I Agency Parcels and the Phase II Agency Parcels
under the Agreement. The acquisition by the Developer of fee title to the Phase III
Developer Parcels is a necessary precondition to the Agency's obligation to convey the Phase
III Acquisition Parcels.
"Entitlement" is defined to include each application and discretionary action of the City, its
Planning Commission, the Agency, the Town Centre Project Area Committee (TCPAC), the
Resource Conservation Committee (RCC), and the Design Review Committee (DRC) for
each Phase of the Project, inclusive of the Phase I Improvements, the Phase II Improvements,
the Phase III Improvements, the Public Improvements, and the Agreement, including without
limitation each discretionary action and any and all conditions of approval related thereto,
and any amendments, supplements, modifications to such Entitlement.
"Environmental Law" means any state or local law, statute, ordinance or regulation
pertaining to environmental regulation, contamination or cleanup of any Hazardous
Materials, including, without limitation: (i) Sections 25115, 25117, 25122.7 or 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control
Law), (ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) Section 2550 I of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory), (iv) Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Article 9 or
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Article II of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi)
Section 311 of the Clean Water Act (33 U.S.c. Section 1317), (vii) Section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq. (42 U.S.C.
Section 6903), (viii)Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.c. Sections 9601 et seq., or (ix) any state or federal
lien or "superlien" law, any environmental cleanup statute or regulation, or any permit,
approval, authorization, license, variance or permission required by any governmental
authority having jurisdiction.
"Fine Arts Fee Waiver" means the waiver and/or deemed satisfaction of the Agency's fine
arts development fee to be imposed for the Project pursuant to "City of Chula Vista, Design
Review Committee Policy, Special Fine Arts Criteria and Requirements" a fine arts
development fee program, which fee (i) will be waived by the Agency if the Developer meets
the specific criteria for fine arts improvements in the Project, including without limitation,
publicly accessible art features and/or sculpture(s), that are constructed, developed and
completed as a part of the Phase I Improvements and depicted in the Basic Concept and
Schematic Drawings for the Phase II Improvements and Phase III Improvements, as
reasonably determined by the Agency in its reasonable discretion pursuant to and in
conformity with all applicable provisions of the aforementioned fine arts fee policy, or (ii)
shall be paid by the Developer if Developer fails to meet the policy criteria. The Fine Arts
Fee Waiver is a part of the Entitlement for the Project. By the Agreement, the Agency does
not (and it shall not be construed to) predetermine the Developer's eligibility for waiver of
the Fine Arts Fee Waiver. The Agency agrees to process the Developer's application for the
Fine Arts Fee Waiver and to cause the Agency staff to reasonably cooperate with the
Developer in such application.
"First Class and First Quality" shall mean and refer to the class and quality of:
architecture/design, construction and development, materials (both exterior and interior),
furnishings, fixtures, and equipment, and ongoing operation and maintenance of the Project,
and each Phase thereof, being superior to all office developments and office/retail
developments located in the City to ensure that as designed, constructed, developed,
operated, tenanted, and maintained the Project, and each Phase thereof, shall be and remain at
a level of excellence that is equal and/or comparable to other Class "A" first class, superior
office properties in Downtown San Diego and in the Golden Triangle area of San Diego,
including the following properties/developments which are examples of the type and quality
ofImprovements bargained for by the Agency and to be completed and operated by the
Developer: (i) Cornerstone Corporate Center located at 1903 Wright Place, San Diego;
(ii) The Plaza at La Jolla Village located at 4350 La Jolla Village Drive, San Diego; and
(iii) Insurance Company of the West located at 11455 El Camino Real, San Diego.
"Fiscal Year" means any twelve-month period extending from July I in one calendar year to
June 30 of the next succeeding calendar year, both dates inclusive, or any other twelve-month
period selected and designated by the Agency or the City, as applicable, as its official fiscal
year.
"Governmental Requirements" means all valid and enforceable laws, ordinances, statutes,
codes, rules, regulations, orders and decrees of the United States, the State, the County, the
City or any other political subdivision in which the Site (or applicable Phase thereol) is
located, and of any other political subdivision, agency or instrumentality exercising
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jurisdiction over the Agency, the Developer, the private Improvements, or the Public
Improvements.
"Hazardous Materials" means any substance, material or waste which is or becomes prior to
the Closing regulated by any local governmental authority, the State of California or the
United States Government, including, but not limited to, any material or substance which is
(i) defined as a "hazardous waste, "extremely hazardous waste" or "restricted hazardous
waste" under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control
Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health
and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance
Account Act), (iii) defined as a "hazardous material" "hazardous substance, or "hazardous
waste" under Section 2550 I of the California Health and Safety Code, Division 20, Chapter
6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum,
(vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined
as "hazardous" or "extremely hazardous" pursuant to Article II of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substance"
pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a
hazardous substances", "hazardous waste" pursuant to Section I 004 of the Resource
Conservation and Recovery Act, 42 U.S.e. Sections 6901 et seq. (42 U.s.e. Section 6903) or
(xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, (CERCLA) 42 U.S.C.
Sections 960 I , et seq.
"Improvements" shall mean all of the private improvements to be constructed and completed
by Developer for the Project, and each Phase thereof, as more particularly described in the
Scope of Development, Attachment No.4 to the Agreement, the Basic Concept and
Schematic Drawings, when and if approved, the Entitlement, and the construction drawings
described in Section 900, et seq., when and if approved. The Improvements to the Site shall
include: development of a 304,000 square feet First Class, First Quality Class "A" office and
retail center with structured parking for at least one thousand fourteen (1014) vehicles, with
associated landscaping and appurtenances. The Improvements may be referred to in Phases,
including the Phase I Improvements, the Phase II Improvements, and the Phase III
Improvements.
The architectural scheme, design, and completed construction and appearance of the Project
shall be First Class and First Quality. The Project shall be an upscale office and retail
development with stone fayade elements, non-reflective glass, strong articulation among
elements, pedestrian orientation and internal circulation providing for easy access to Third
A venue and H Street, all as more particularly described in the Scope of Development and the
Entitlement, if and when approved.
"Member" is an entity or person owning a membership interest in the limited liability
company, Gateway Chula Vista, LLC, the original Developer entity, or a person or entity
owning a membership interest of an approved successor-in-interest to the original Developer
entity which is also formed as a limited liability company.
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"Net Property Tax Increment Base Amount" means $3,717,889.00, which amount was
derived from the assessed valuation of the Site by the County of San Diego for the 1999-2000
fiscal year for all parcels which comprise the Site. The base amount of each of the
sixteen (16) parcels which comprise the Site are set forth in Attachment No. II to the
Agreement.
"Net Property Tax Increment Revenues" or "Net Property Tax Increment" shall mean all
taxes annually allocated, paid to, and received by the Agency pursuant to Article 6 of Chapter
6 (commencing with Section 33670) of the Community Redevelopment Law, as said statute
may be amended from time to time, and Section 16 of Article XVI of the Constitution of the
State of California and as provided in the Redevelopment Plan, attributable to the assessed
value of the Site, and each Phase thereof, exceeding the Net Property Tax Increment Base
Amount following the Date of Agreement, including all payments, subventions, and
reimbursements, if any, to the Agency specifically attributable to ad valorem taxes and
property taxes lost by reason of tax exemptions and tax rate limitations. These revenues are
Site specific and shall in no event be construed to include, or calculated to include, any
revenues outside the boundaries of the Site.
The term and definition of Net Property Tax Increment Revenues shall expressly and
specifically exclude the following:
(i) the portion of tax increment revenues from the Site attributable to charges for
County administrative charges, fees, or costs; and
(ii) the portion of tax increment revenues from the Site attributable to any special
taxes or assessments or voter-approved indebtedness approved on or after
January I, 1989 in conformity with section 33670( e) of the Community
Redevelopment Law; and
(iii) the portion of tax increment revenues from the Site deposited into the
Agency's Low and Moderate Income Housing Fund to meet the Agency's
obligations pursuant to Section 33334.3 of the Community Redevelopment
Law (including any amendments or successor statutes thereto), but in no
event less than the percentage of the gross amount of such taxes required to
be set aside and deposited into the Agency's Low and Moderate Income
Housing Fund generally for redevelopment project area(s); the parties
acknowledge that as of the Date of Agreement the statutory housing set aside
obligation is twenty percent (20%) of the gross amount of such taxes; and
(iv) the portion of tax increment revenues from the Site which are attributable and
payable to public entities other than the Agency pursuant to the Community
Redevelopment Law, if any, or which in lieu of payment to such taxing
entities the Agency otherwise pledges to the payment of bonded indebtedness,
the DDA Financing, or other Agency Indebtedness (or a joint powers
authority of which the Agency is a member, or pledges or pays to the City for
bonded indebtedness for which Agency revenues are pledged);
(v) the portion of tax increment revenues from the Site attributable to any and all
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state-mandated payments or deductions to property tax increment required by
the Community Redevelopment Law, the California Revenue and Taxation
Code, or other or additional legislation or statutory requirements applicable to
the Agency, whether now existing or as amended or added by the legislature
after the Date of Agreement; and
(vi) any payment or debt service on Agency Indebtedness existing on the Date of
Agreement (including any refunding or refinancing thereol) plus the
DDA Financing or other Agency Indebtedness incurred after the Date of
Agreement so long as such debt was incurred so that all or a portion of the
proceeds thereof were necessary and/or used to meet the specified financial
obligations of the Agency to the Developer under the Agreement. It is
expressly understood by the parties hereto that, this definition of Net Property
Tax Increment Revenues and for purposes of this Covenants Agreement, any
rights of Developer under the Agreement as to timing of the receipt the Final
Fifth Installment Payment of the Agency Participation calculated by an
evaluation of Net Property Tax Increment Revenues, and all obligations of
the Agency to make payment(s) of Agency Participation to Developer under
the Agreement are and will be unsecured, with no lien or claim of
encumbrance against tax increment revenues or other revenues of the Agency.
The parties hereto expressly agree that any rights of the Developer under the
Agreement as to the timing to receive the Final Fifth Installment Payment of
the Agency Participation attributable to Net Property Tax Increment are and
will be subject to any Agency Indebtedness (including, without limitation the
DDA Financing) and shall be payable only to the extent such amount exists
after payment of Agency Indebtedness and as permitted under the Agreement.
F or all purposes and for purposes of such Agency Indebtedness, the
obligation to pay any installment of the Agency Participation due to
Developer under the Agreement, which may be attributable to Net Property
Tax Increment, are not and shall not be construed as a "pledge" of property
tax increment revenues by the Agency for purposes of Section 33671.5 ofthe
Community Redevelopment Law, or a pledge of any other revenues of the
Agency or the City.
"Permit Fees" means the monetary fees assessed by the City or the Agency pursuant to
Section 66000, et seq. of the California Government Code and any fees for development
imposed by the City of Chula Vista in the consideration and approval of the various
discretionary actions that are a part of the Entitlement for the Project, and each Phase thereof,
but expressly excluding any fees assessed or imposed by any other public or governmental
agency, and such City fees shall be actually incurred and paid by the Developer for any
improvement or work for each Phase of the Project from the commencement of grading
through completion of construction of each applicable Phase. The Agency and Developer
acknowledge and agree that the estimated Permit Fees for the Project and each Phase thereof
are set forth in Attachment No. 12 to the Agreement. The categories of types and estimated
amounts of Permit Fees eligible for reimbursement are included on Attachment No. 12, but
the term Perrnit Fees shall expressly exclude any fee imposed by a public agency other than
the City. In no event shall the Agency's obligation to reimburse the Permit Fees for all
Phases of the Project cumulatively exceed $600,000.00 through payment of the Fourth
Installment Payment of Agency Participation.
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"Person" means any natural person, corporation, firm, association, government,
governmental agency, or any other entity, whether acting in an individual, fiduciary, or other
capacity.
"Phase" means any of the three (3) phases of the Project, and may refer to each separate
phase of the Project.
"Phase I" means the first phase ofthe Project, and includes the first five (5) story office
building and all common area improvements, including the first phase of the Project parking
structure, and the Public Improvements.
"Phase II" means the second phase of the Project, and includes the second building, a six (6)
story office building and appurtenant improvements.
"Phase III" means the third and final phase of the Project, and includes the third building, a
five (5) story office building and appurtenant improvements.
"Phase I Parcels" means the Phase I Agency Parcels and those certain Developer Parcels
depicted and denoted on the Site Map as included in Phase I ofthe Project.
"Phase II Parcels" means the Phase II Agency Parcels, the Phase II Acquisition Parcels, and
those certain Developer Parcels depicted and denoted on the Site Map as included in Phase II
of the Project.
"Phase III Parcels" means the Phase III Acquisition Parcels and those certain Developer
Parcels depicted and denoted on the Site Map as included in Phase III of the Project.
"Phases" means collectively all phases of the Project, and including Phase I, Phase II, and
Phase Ill.
"Project" shall mean the construction, redevelopment, and improvement of the Site with all
of the Improvements, and the operation thereof, pursuant to the Agreement, and shall include
the Public Improvements, all completed in the three (3) Phases, Phase I, Phase II, and Phase
III. The Site and Project are inclusive ofthe following assessor's parcel numbers, and any
successor assessor's parcel numbers thereto:
Agency Parcels: ASP 568-450-3900, 568-450-4100, 568-450-4200, and 568-450-
4500;
Developer Parcels: ASP 568-450-3400, 568-450-3500, 568-450-3600, 568-450-
3700, 568-450-3800, 568-450-4000, and 568-450-4400;
Acquisition Parcels within the Redevelopment Project Area: ASP 568-450-4300,
568-450-4600,568-450-4700, and 568-450-4800; and
Acquisition Parcel located outside the Redevelopment Project Area: ASP 568-450-
4900.
"Project Costs" shall mean and include all of the following and shall be applicable in the
Project Costs reconciliation of Section 802, et seq. of the Agreement:
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(i) All Developer incurred costs to assemble and acquire all parcels for
each Phase of the Site, including land payments, relocation costs paid
pursuant to Relocation Laws, and typical and customary third party
closing costs.
(ii) Developer costs incurred through construction contracts with
third party general contractor( s) pertaining to construction through
completion of the Phase I Improvements, the Phase II Improvements,
and the Phase III Improvements, and the Public Improvements.
(iii) CEQA mitigation costs.
(iv) All Perrnit Fees paid by Developer.
(v) A predevelopment fee not to exceed $260,000.00 paid to Developer.
(vi) Reasonable and customary indirect costs incurred by the Developer
including:
(I) design fees,
(2) a developer fee not-to-exceed five percent (5%) of the total of
all off-Site and on-Site construction costs [with such
construction costs agreed between the parties as of the Date of
Agreement to be $33,500,000.00, of which 5% of that number
is an amount not to exceed $1,675,000.00] (inclusive of an
administrative and overhead fee, but excluding the
pre-development fee described in subsection (v) above not to
exceed $260,000.00),
(3) capitalized third party leasing commissions for the initial
lease-up of each Phase of the Improvements,
(4) reasonable legal and accounting fees,
(5) real estate taxes and insurance during the construction period,
and
(6) third party marketing costs.
(vii) Financial costs and fees, including bank fees, loan administration
fees, appraisal fees, third party brokerage fees for securing debt and
equity, actual interest charges on institutional construction financing
loan(s), interest on equity or non-institutional financing at the actual
pay rate, but not-to-exceed the Wells Fargo Bank prime rate plus 200
basis points.
(viii) Project Costs shall be reduced by reimbursements received by the
Developer from third parties, including reimbursement by tenants for
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tenant improvements constructed and completed, or caused to be
constructed and completed, by the Developer.
The Project Costs shall be initially estimated and evidenced in the Base Pro Forma for
Phase I, the Base Pro Forma for Phase II, and the Base Pro Forrna for Phase III, set forth in
Attachment No. 15 to the Agreement, and, thereafter finally determined and evidenced in the
Reviewed final accounting of Project Costs for each Phase of the Project and for the
completed final Project, as approved by the Agency's economic consultant. The final
Reviewed costs accounting for Phase I and Phase II shall be used in connection with the
reconciliation of costs pursuant to Section 802.3 and 802.6 of the Agreement. The Reviewed
costs accounting for Phase Ill, and therefore inclusive of the completed Project, shall be used
in connection with the evaluation and determination of eligibility for payment of the
Final Fifth Installment Payment of the Agency Participation pursuant to Section 802.7 of the
Agreement.
The parties acknowledge and agree that as of the Date of Agreement the Base Pro Formas
submitted by the Developer evidence estimated gross project costs for the Project, and all
Phases thereof, to be $57,542,000, but that the total dollar number of $57,238,000.00 is
agreed by the parties to be the estimated gross total Project Costs. The parties agree and
acknowledge the initial gross number has been adjusted and reduced by the parties to
evidence only the allowed amount of a developer fee to be an eligible Project Cost, which
amount shall not-to-exceed five percent (5%) of the total of all off-Site and on-Site
construction costs as defined and described above in subparagraph (vi)(2) above. Therefore,
the parties agree and acknowledge that as of the Date of Agreement the estimated gross total
Project Costs are $57,238,000.00, which number will be used in the reconciliation of costs
pursuant to Sections 802.3 and 802.6 of the Agreement.
"Public Improvements" means all of the public improvements to the Project, including the
value of the land for and the cost of the installation and construction of all public
improvements to the Site and appurtenant public right-of-way adjacent to the Site, including
without limitation: sidewalks, curbs, gutters, landscaping, lane reconfiguration, traffic signal
reconfiguration and/or installation, sewer lateral reconfiguration and/or installation, all as
more particularly described in the Scope of Development and the Reimbursement
Agreement. The Public Improvements shall be constructed as a part of the Phase I
Improvements, whether elected by the Agency to be designed, constructed, and completed by
the Developer or the City, as described in the Agreement, unless such Public Improvements
are approved to be constructed as a part of Phase I and Phase II in the sole discretion of the
City Engineer as set forth in the Agreement. The Public Improvements may be caused to be
constructed and completed in one oftwo alternative ways, as elected in the sole discretion of
the Agency, either (i) design, construction, and completion by the Developer with
reimbursement by the Agency pursuant to the terms of the Reimbursement Agreement, or
(ii) design, construction, and completion by the Agency (or the City) through a public works
contract, as further described in the Agreement.
"Redevelopment Plan" means the Redevelopment Plan for the Town Centre I
Redevelopment Project approved and adopted by the City Council of the City by Ordinance
No. 1691 on July 6, 1976, and amended by Ordinance No. 1872 on July 17, 1979, by
Ordinance No. 2146 on April 22, 1986, by Ordinance No. 2585 on January 4, 1994, and by
Ordinance No. 2735 on June 23, 1998.
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"Redevelopment Project Area" shall mean the Town Centre I Redevelopment Project Area,
and the boundaries thereof, of which were adopted by the City Council pursuant to and as a
part of the Redevelopment Plan.
"Reimbursement Agreement" means a contract substantially in the form of Attachment
No. 16 to the Agreement. The Reimbursement Agreement will be entered into between the
Agency (and/or the City, as the Agency and City mutually determine) and the Developer (or
an approved affiliate of a Member of the Developer entity) forthe design, construction,
construction management and administration, and completion of all the Public Improvements
as a part of the Phase I Improvements of the Project, if the Agency elects to allow the
Developer to proceed with the design, construction and completion of the Public
Improvements.
"Release of Construction Covenants" means the document which evidences to the Agency
Developer's satisfactory completion of the construction of each Phase of the Improvements
and the Public Improvements to the Project, as set forth in Section 1311, et seq. of the
Agreement.
"Relocation Laws" means all applicable state and local relocation laws, including without
limitation, the California Relocation Assistance Law ("CRAL"), Government Code Section
7260, et seq and the implementing regulations thereto in California Code of Regulations,
Title 24, Section 6000, et seq. and the local implementing regulations thereto, and all
applicable federal relocation laws, including without limitation, the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 CURA"), 42 U.S.C. 4201-
4655, and 49 CFR part 24, and any other applicable federal, state or local enactment,
regulation or practice providing for relocation assistance or compensation for property
(including without limitation goodwill and furnishings, fixtures and equipment, and moving
expenses).
"Restaurant" shall mean and refer to a First Class and First Quality sit down, full service
restaurant tenant constructed and completed, or caused to constructed and completed, by the
Developer as a part of the Phase I Improvements or the Phase II Improvements, which
restaurant shall be not less than six thousand (6000) gross leaseable square feet. The
architecture/design, construction and development, materials (both exterior and interior),
furnishings, fixtures, and equipment, and ongoing operations of the restaurant tenant shall be
and remain at a level of excellence that is equal and/or comparable to other restaurants
located at or adjacent to first class, superior office properties in Downtown San Diego, the
Gaslamp District, and in the Golden Triangle area of San Diego, including the following
restaurants, which are examples of the type and quality of Restaurant bargained for by the
Agency under the Agreement and to be completed and caused to tenanted by the Developer:
(i) Donovans; (ii) Tutte Mare; (iii) Flemings; (iv) Houston's; and (v) II Fornaio.
"Reviewed" shall mean and refer to a technical term used in generally accepted accounting
principles (GAAP) by certified public accountants. At the Date of Agreement the parties
agree a Reviewed accounting shall mean the following. A Reviewed accounting is review
work completed by a certified public accountant (CPA) on unaudited financial statements
consisting primarily of inquiry and analytical review procedures by the CPA. The
information gained thereby is similar to audit evidence, but the recommended limitation on
procedures, as hereinafter listed, does not suggest performance of typical auditing procedures
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of evaluating internal control, conducting physical observation of tangible assets, sending
confirmations or examining documentary details of transactions. In a Reviewed accounting
the CPA will: (i) obtain knowledge of the client's business; (ii) know the accounting
principles of the client's industry; (iii) understand the client's organization and operations;
(iv) inquire about the accounting system and bookkeeping procedures; (v) perform analytical
review procedures to identify relationships and individual items that appear to be unusual;
(vi) inquire about actions taken at meetings of stockholders, directors and other important
executive committees; (vii) read/study the financial statements for indications that they
conform with generally accepted accounting procedures; (viii) obtain reports from other
accountants who audit or review significant components, subsidiaries or other investees;
(ix) inquire of officers and directors about: (I) conformity with generally accepted
accounting principles; (2) consistent application of accounting principles; (3) changes in the
client's business or accounting practices; (4) matters about which questions have arisen as a
result of applying; (5) other procedures (as listed above); and (6) events subsequent to the
date of the financial statements; (x) perform any other procedures considered necessary if the
financial statements appear to be incorrect, incomplete or otherwise unsatisfactory;
(xi) prepare working papers showing the matters covered by the inquiry and analytical review
procedures, especially the resolution of unusual problems and questions; (xii) obtain a written
representation letter from the owner, manager or chief executive officer, and from the chief
financial officer.
A Review service does not provide a basis for expressing an opinion on financial statements.
Each page of the financial statements should be marked "See Accountant's Review Report."
The report on a completed services engagement for a Reviewed accounting should include
the following: (i) statement that a review service was performed in accordance with
standards established by the AICP A; (ii) statement that all information included in the
financial statements is the representation of the management or owners of the business;
(iii) statement that a review consists primarily of inquiries of company personnel and
analytical procedures applied to financial data; (iv) statement that a review service is
substantially less in scope than an audit; (v) an opinion of financial statements is not
expressed; and (vi) statement that the CPA is not aware of any material modifications that
should be made or, if aware, a disclosure of departure(s) from generally accepted accounting
principles.
"Sales Tax Revenues" means that portion of taxes (not to exceed one percent (I %)) derived
and received by the City from the imposition of the Bradley-Burns Uniform Local Sales and
Use Tax Law commencing with Section 7200, et seq. of the California Revenue and Taxation
Code, as amended, or its successor statute, arising from all businesses and activities
conducted at the Project in accordance herewith which are subject to such Sales and Use
Tax.
"Schedule of Performance" means that certain Schedule of Performance as Attachment
No.3 to the Agreement, which schedule, subject to the provisions of the Agreement, sets out
the dates and/or time periods by which certain obligations set forth in the Agreement must be
accomplished. The Schedule of Performance is subject to revision from time to time as
mutually agreed upon in writing between the Developer and the Agency's Executive Director
based on extension(s) necessary due to changes in circumstances or other factors not known
by the parties as of the Date of Agreement. Each request for an extension of an item or items
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in the Schedule of Performance shall be in writing stating the requested extension period, the
reasons for such extension, the facts and circumstances related to the need for such extension,
and other information reasonably necessary for the Agency staff, and the Agency Board, as
and if required, (or the Developer, if the requested extension is for an Agency perforrnance
item) to understand the basis for such request and the circumstances that did not exist as of
the Date of Agreement that necessitate such requested extension. The Agency's Executive
Director is authorized on behalf of the Agency to agree to make such revisions as he or she
deems reasonably necessary based on changes in circumstances or other factors not known as
of the Date of Agreement; provided however, in the event any proposed extension(s) to the
Schedule of Performance being considered between the Agency Executive Director and the
Developer may cause the completion of construction date of any Phase of the Improvements
to be extended beyond six (6) months from the original date agreed between the parties for
date of completion of any Phase as such date is set forth in the Schedule of Performance as of
the Date of Agreement, then such extension(s) to the Schedule of Performance shall require
the consideration and approval by the Agency Board of an amendment to the Agreement.
It is understood that the Schedule of Performance is subject to all of the terms and conditions
set forth in the text of the Agreement. The summary of the items of performance in the
Schedule of Performance is not intended to supersede or modify the more complete
description in the text; in the event of any inconsistency between the Schedule of
Performance and the text of the Agreement, the text shall govern.
"Scope of Development means that certain Scope of Development attached as
Attachment No.4 to the Agreement, which describes the scope, amount, and quality of
development of each Phase of the Project and the Improvements to be constructed by the
Developer pursuant to the terms and conditions of this Agreement and the Entitlement, and
also includes a description of the Public Improvements. In addition to the narrative
description set forth in the Scope of Development, said attachment includes copies of the
elevations, plans, and description of the materials for the Improvements (such as exterior skin
of office buildings, exterior common area improvements, type and materials for landscaping),
which shall evidence and depict the First Class, First Quality architecture, design, and
construction of the Improvements to be constructed pursuant to this Agreement. The final
content of the Scope of Development shall be as determined through and by the Entitlement
process. All conditions of approval imposed and made a part of the Entitlement shall be
deemed a part of the Scope of Development.
"Site" means and includes the 4.39 acres of real property upon which the Project will be
developed and operated.
The Site is designated on the Site Map (Attachment No. I) and described in the Description
of the Site for Recording, (Attachment No.2).
The Site consists of the following:
I. The "Agency Parcels" are those parcels of real property currently owned by
the Agency and so depicted on the Site Map, including Assessors Parcels Nos.
568-450-3900, 568-450-4100, 568-450-4200, and 568-450-4500; and
2. The "Developer Parcels" are those parcels of real property currently owned
by the Developer, or for which the Developer has legal rights to acquire fee title to
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such parcels, and so depicted on the Site Map, including Assessors Parcels Nos.
568-450-3400,568-450-3500,568-450-3600, 568-450-3700, 568-450-3800,
568-450-4000, and 568-450-4400; and
3. The "Acquisition Parcels" include those parcels of real property currently
owned by one or more third parties, and not the Agency or the Developer, and so
depicted on the Site Map, including the following Assessors Parcels: Acquisition
Parcels within the Redevelopment Project Area: 568-450-4300, 568-450-4600,
568-450-4700, and 568-450-4800, and Acquisition Parcel located outside the
Redevelopment Project Area: 568-450-4900.
The Agency Parcels, the Developer Parcels, and the Acquisition Parcels collectively
comprise the Site.
"State" means the State of California.
"Three Party Relocation Agreement" means that certain agreement certain agreement
entitled, "Three Party Agreement for Relocation/Consulting Services [Gateway Project]"
dated ,2000, entered into among Developer, the City,
and Stadler, Schober & Klein.
"Town Centre Sign Policy, Town Centre Design Manual Sign Criteria" means the
Agency's and City's adopted policy regarding signage in the Town Centre I and Town
Centre II Redevelopment Project Areas, a true copy of which is attached as Attachment
No. 14 to the Agreement.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto,
and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Developer, on behalf of itself and its successors, assigns and each successor in interest to the
Phase _ Parcels (and the Site) or any part thereof, and the Agency hereby covenant and agree as
follows:
1. USE, OPERATING, AND NON-DISCRIMINATION COVENANTS.
A. Covenants of Project Completion, Opening, Use, and Tenant Qualifications.
In consideration for the Agency providing the Agency Participation, and all other
consideration provided by the Agency to the Developer hereunder, the Developer
covenants and agrees for itself, its successors, its assigns, and every successor in
interest to each applicable Phase of the Project and the Site, or any part thereof, to the
following covenants of construction, completion, use, operation, maintenance as
follows in this Section I, et seq. for a period commencing from the Date of
Agreement until termination date of the effectiveness of the Redevelopment Plan, as
it exists or as hereafter amended (as of the Date of Agreement said termination of
effectiveness date is July 6, 2016, but may after such Date of Agreement be extended
in conforrnity with the CRL ("Covenants Term"). To the extent there is an
inconsistency in a use, covenant, or obligation described in this Section I, et seq. and
the Entitlement, this Section I et seq. shall prevail. The right and authority of the
Agency to enforce performance by the Developer and seek any remedies available at
law or equity hereunder relating to the Agreement or this Covenants Agreement, and
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in particular the perforrnance of the following covenants, is and shall remain in full
force and effect, notwithstanding the priority of recording of the Memorandum of
Agreement for the Agreement or this Covenants Agreement (as to each applicable
Phase of the Project.) Further, the right and authority of the Agency to enforce
performance by the Developer and seek any remedies available at law or equity
hereunder relating to this Covenants Agreement, and in particular the performance of
the following covenants, is and shall remain in full force and effect, notwithstanding
the terms and provisions of any lease between the Developer and any tenant at the
Project, or any Phase thereof, which lease agreement(s) mayor may not conform to
these covenants in all respects, despite an affirmative Developer obligation to include
conforming language in each lease agreement between Developer and each tenant at
the Project.
B. Project Completion and Scope. Subject to the satisfaction of the applicable
Conditions Precedent in the Agreement, Developer covenants to cause the
construction, completion, and operation of each Phase of the Project, inclusive of the
Phase I Improvements, the Phase II Improvements, and the Phase III Improvements,
and the Public Improvements which are a part of the Phase I Improvements, in
conformity with the Agreement and this Covenants Agreement.
C. Use and Operating Covenants.
I. Commercial Retail Space, Banks, and Restaurant. Developer agrees to
exercise reasonable diligence consistent with prudent business practice to
devote not less than 304,000 square feet of the gross leaseable building area
in the Project [298,862 square feet of leaseable space assuming a 13% load
factor] for use and operation as a First Class, First Quality commercial office
project. The building areas of each Phase of the Improvements shall include
not less than 21,333 square feet in Phase I for commercial retail space (with
not more than 10,000 square feet of such 21,333 sq. ft. for banking space),
21,137 square feet in Phase II for commercial retail space (with not more than
10,000 square feet of such 21,137 sq. ft. for banking space), and 20,350
square feet in Phase III for commercial retail space (with not more than
10,000 square feet of such 20,350 sq. ft. for banking space, provided however
the aggregate retail space occupied by banks/financial institutions shall in no
event exceed 20,000 square feet for all three Phases). All such commercial
retail space within each Phase of the Project shall be for use, occupancy, and
operation of First Class, First Quality commercial retail in which the retail use
is estimated to generate significant taxable retail sales and thereby Sales Tax
Revenues (except the Agency acknowledges that banks occupying retail
space as allowed above do not generate taxable sales.) Further, not less than
6,000 square feet of the gross leaseable building area in the Phase I
Improvements or the Phase II Improvements in the Project shall be for use,
occupancy, and operation the First Class, First Quality Restaurant approved
by the Agency Executive Director.
2. First Class, First Quality Tenants. From date the first tenant occupies
leaseable space in the Phase I Improvements through the entire Covenants
Terrn, the Developer shall maintain, use, and operate (or cause the
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maintenance, use, and operation 01) each Phase of the Site as a First Class,
First Quality commercial office/retail center comparable to those in operation
in San Diego County, with the entire Project including approximately three
hundred and four thousand (304,000) square feet of gross leaseable building
area (298,862 square feet ofleaseable space assuming a 13% load factor). It
is the intent of the parties that the foregoing covenant to maintain, use and
operate the Project, and each Phase thereof, as a First Class, First Quality
commercial office/retail center be construed so that the Developer enter into
leases, operating agreements, or other use agreements with office tenants,
retail businesses, users, which are First Class and First Quality in operation,
tenant improvements, and maintenance, and retail tenants that are First Class
and First Quality in operation, tenant improvements, maintenance and
reputation, are nationally, regionally, or locally recognizable, and have an
established background of generating from their retail operation significant
per square foot Sales Tax Revenues for the Covenants Terrn.
3. Use Limitations. All building areas for each Phase of the Project shall be
devoted to the uses specified or permitted in this Agreement, in particular as
specified in this Section I et seq., and in conformity with the limitations of
the Redevelopment Plan, the Agreement, and the Entitlement for the entire
Covenants Terrn. No use(s) other than those specified herein shall be
permitted without the prior written approval of the Agency (which approval
the Agency may grant or deny in its sole discretion).
4. Parking Spaces. Developer agrees that it shall maintain within the parking
structure not less than the portion of the overall one thousand and fourteen
(1014) parking spaces (broken down per the Entitlement requirements, and as
of Date of Agreement as follows: 580 standard spaces of 8.5' X 20',410
compact spaces of8.5' XIS', 24 disabled/handicapped parking spaces of9'
X 20' with side aisles, for a total of 1014 spaces with 21' drive aisles, in the
parking garage that is developed and constructed on the respective Phase(s) of
the Project, all in accordance with and subject to all applicable provisions of
law and the Entitlement for the Project. The Developer may perrnit records
storage for on-site tenants within the parking structure so long as the required
total number of 10 14 parking spaces is not decreased by such storage use and
such storage is reasonably and aesthetically screened from public view.
5. Permitted Uses in Office/Professional Space. All of the office professional
administrative space shall be used for professional offices, business offices,
institutional tenants, business service facilities, administrative offices for
financial institutions (note: occupancy by banks/financial institutions is
included as a part of the commercial retail space subject to the limitations
above, educational uses, including the following:
(a) Accountants, attorneys, consultants;
(b) Insurance agencies;
(c) Doctors, oculists, optometrists, chiropractors, and others practicing
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the healing arts for human beings (massage businesses are expressly
prohibited, unless massage services are directly a part of a "day spa"
business, which use is permitted only through the Entitlement
process, and in the case of day spa/massage business(es) the
modification(s) to the Entitlement shall be approved by the City
Council);
(d) Engineers, architects and planners;
(e) Credit bureaus and collection agencies;
(I) Institutions of a philanthropic or eleemosynary/charitable nature,
except correctional and mental or alcohol and drug rehabilitation
centers are expressly prohibited;
(g) Public and private postal services;
(h) Real estate offices;
(i) Travel agencies;
(j) Full service laundry and dry cleaner business (with no on-site
cleaning equipment/facilities; drop-off and pick-up only);
(k) Financial brokerage offices;
(I) Child care facilities directly ancillary to an onsite office tenants and
retail commercial use(s), such as child care for office employees;
(m) Auto detailing, with such operations, if any, to be solely located
within the parking structure;
(n) Records storage for on-site tenants within the office buildings;
(0) Educational or training facilities for tenants on-site, such as training
for bank employees, real estate classes for on-site real estate
agency(ies) and broker(s), but not greater than a total of 10,000
square feet, as permitted by and subject to the condition of Specific
Plan No. PCM-OO-II of the Entitlement; and
(p) Athletic clubs, gyms, sports facilities, or aerobics centers as an
adjunct use for on site tenants, but not greater than a total of 7500
square feet, as permitted by and subject to the condition of Specific
Plan No. PCM-OO-II of the Entitlement.
6. Prohibited Uses in Office/Professional Space. The following uses shall be
specifically prohibited in the office/professional space of the Improvements:
(a) Car washes, gasoline sales (except the auto detailing permitted in
subsection (5)(xiii) above);
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(b) Industrial uses;
(c) Coin-operated laundromats, coin-operated dry cleaners, laundry
and/or dry cleaner plant operations;
(d) Manufacturing uses;
(e) Warehousing or wholesaling uses (provided that this category shall
not include discount or off-price stores, which shall be classified as
retail uses pursuant to paragraph 5 above, and excepting the records
storage permitted in subsection (5) (xvi) above);
(I) Card rooms;
(g) Educational or training facilities, such as beauty schools, barber
colleges, modeling schools, places of instruction, or other operation
catering primarily to students or trainees rather than to retail
customers (except as permitted in subsection (5)(xiv) above);
(h) Athletic clubs, gyms, sports facilities, or aerobics centers (except as
permitted in subsection (5)(xvi) above);
(i) Auto parts and/or accessories sales, motor vehicle repair, service, or
installation of any auto and other vehicles related parts or accessories;
and
(j) Arcades, virtual reality, laser tag, and related amusement businesses.
D. Minor Deviations of Tenant/User Restrictions. For the Covenants Term,
Developer covenants and agrees it shall use and operate, or cause to be used and
operated, the total gross leaseable building area of the Project, and each Phase
thereof, in the manner set forth in Section 1 hereinabove; provided, however, the
Agency's Executive Director in his or her sole and absolute discretion may approve
minor deviations from the conditions which are requested by the Developer in
writing, and provided further that Developer complies with the Entitlement and any
and all applicable City requirements in connection with such deviation and provided
the objectives of the Agreement for Developer operation of a First Class, First
Quality Project, and each Phase thereof, for the Covenants Term is met. To the
extent there is an inconsistency between the Entitlement and this Agreement, the
more restrictive conditions shall apply, so long as in conformity with applicable law.
E. Developer Covenant to Cause Tenants and all Businesses to Conform with
Section 1, et seq. Use, Operation, and Maintenance Covenants during the Term
of Their Applicable Leases. Developer covenants it shall obtain use, operating, and
maintenance covenants in the Project tenant leases or other use agreements between
Developer and each tenant and all other businesses at the Project so that occupancy,
use, operation, and maintenance by each tenant during the terrn of each applicable
lease or use agreement is in substantial conformity with and/or compatible and
comparable to the standards and covenants of this Section I, et seq. This Developer
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obligation shall remain in full force and effect for the Covenants Term in order to
cause each Phase of the Project to meet the construction, completion, use, operating,
and maintenance objectives of the Agreement and this Covenants Agreement for the
term.
F. Maintenance. The Developer shall maintain the Phase I Improvements, the Phase II
Improvements, and the Phase III Improvements from time to time in accordance with
maintenance and operation standards customary for First Class, First Quality
commercial office retail developments of comparable size and quality in San Diego
County and in conformity with the Entitlement, the Agreement Affecting Real
Property recorded for each Phase of the Project, and the covenants, conditions,
maintenance obligations and other restrictions therein, which shall remain in effect
for the Covenants Terrn. Issuance of a Release of Construction Covenants for each or
any Phase of the Project by the Agency shall not affect Developer's obligations under
this Section 1 (G).
G. Rights of Access. The Agency, for itself and for the City and other public agencies,
at their sole risk and expense, reserves the right to enter the common areas on each
Phase of the Project at all reasonable times for the purpose of construction,
reconstruction, maintenance, repair or service of any public improvements or public
facilities located thereon. The Agency or such other public agency exercising such
right of entry shall take all reasonable measures to minimize interference with the
operation of business on the Site and shall promptly repair and restore any damage
caused by such entity to the Site, or portion thereof, or any of the Improvements
thereon. Any such entry shall be made only after reasonable notice to and consent of
the Developer, and Agency shall indemnify, defend, and hold Developer harmless
from any costs, claims, damages or liabilities pertaining to any entry. The Developer
agrees to cooperate with the Agency in providing its consent and such access, and
acknowledges that the Agency may obtain an administrative inspection warrant or
other appropriate legal or equitable remedies to enforce its rights pursuant to this
Section I.G.. This Section I.G. shall not be deemed to diminish any rights the
Agency, the City, or any other public agencies may have without reference to this
Section I.G.. The rights of access set forth in this Section I.G. shall remain in effect
until the expiration of the Redevelopment Plan.
H. Nondiscrimination. The Developer covenants by and for itself and any successors
in interest that there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, marital status,
physical or mental disability or medical condition, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of each Phase of
the Improvements, or any of the Phase I Parcels, Phase II Parcels, or Phase III
Parcels, nor shall the Developer itself or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sub lessees or vendees of each Phase of the Improvements, or any
of the Phase I Parcels, Phase II Parcels, or Phase III Parcels. The foregoing
covenants shall run with the land.
I. All deeds, leases or contracts with respect to each Phase of the Improvements,
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or any of the Phase I Parcels, Phase II Parcels, or Phase III Parcels shall
contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all
persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of
persons on account of race, color, creed, religion, sex, marital status,
physical or mental disability or medical condition, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the land herein conveyed, nor shall the grantee
himself or herself or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sub lessees or vendees in the
land herein conveyed. The foregoing covenants shall run with the
land."
2. In leases: "The lessee herein covenants by and for himself or herself, his or
her heirs, executors, administrators and assigns, and all persons claiming
under or through him or her, and this lease is made and accepted upon and
subject to the following conditions:
(a) There shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex,
marital status, physical or mental disability or medical condition,
ancestry or national origin in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the premises herein leased nor
shall the lessee himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices
of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, sublessees,
subtenants or vendees in the premises herein leased."
3. In contracts: "There shall be no discrimination against or segregation of, any
person, or group of persons on account of race, color, creed, religion, sex,
marital status, physical or mental disability or medical condition, handicap,
ancestry or national origin, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the premises, nor shall the transferee
himself or herself or any person claiming under or through him or her,
establish or perrnit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees of the
premises. "
The covenants against discrimination, set forth in this Section I.H. shall continue in effect in
perpetuity.
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2. Effect of Violation ofthe Terms and Provisions of this Agreement. The covenants
established in this Covenants Agreement shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the Agency, its successors and assigns,
as to those covenants which are for its benefit. The covenants contained in this Covenants
Agreement shall remain in effect for the periods specified herein.
A. The Agency is deemed the beneficiary of the terms and provisions of this Agreement
and of the covenants running with the land, for and in its own rights and for the
purposes of protecting the interests of the community and other parties, public or
private, in whose favor and for whose benefit this Agreement and the covenants
running with the land have been provided. The Agreement and the covenants herein
shall run in favor of the Agency, without regard to whether the Agency has been,
remains or is an owner of any land or interest therein of any of the Phase I Parcels,
Phase II Parcels, or Phase III Parcels or in the Redevelopment Project. The Agency
shall have the right, if the Agreement or the covenants, terms, and obligations herein
are breached, to exercise all rights and remedies, and to maintain any actions or suits
at law or in equity or other proper proceedings to enforce the curing of such breaches
to which it or any other beneficiaries of this Agreement and covenants may be
entitled.
3. AGENCY PARTICIPATION INSTALLMENT PAYMENTS. The Agency Participation
shall be paid in up to five (5) installment payments in a cumulative amount not to exceed
$7,358,000.00 for construction, development and operation of all three Phases of the Project,
and subject to satisfaction of all applicable Conditions Precedent set forth in Section 800
et seq. ofthe Agreement. The five (5) installments of the Agency Participation shall include:
(i) the First Installment Payment of Agency Participation, (ii) the Second Installment
Payment of Agency Participation, (iii) the Third Installment Payment of Agency
Participation, (iv) the Fourth Installment Payment of Agency Participation, and (v) the Final
Fifth Installment Payment of Agency Participation (all as defined hereinafter in this
definition of Agency Participation); provided however, in no event shall the cumulative
amount of total Agency Participation exceed $7,358,000.00, inclusive of all monetary
payments, and/or Permit Fees reimbursements. The Fine Arts Fee Waiver is in addition to
the Agency Participation in the amount of $7,358,000.00. All installment payments of the
Agency Participation are more fully described in Section 800, et seq. of the Agreement.
A. "First Installment Payment of Agency Participation" means the first (I st)
installment payment of the Agency Participation in an amount up to One Million Five
Hundred Thousand Dollars ($1,500,000.00), inclusive of $200,000.00 as repayment
for the Phase I Agency Parcels, which amount is the fair market value of the Phase I
Agency Parcels included in the Phase I development, plus reimbursement for the
costs of the Public Improvements pursuant to the terms of the Reimbursement
Agreement in an amount not to exceed $300,000.00 (assuming the Agency elects to
proceed with design, construction and completion of the Public Improvements via the
Reimbursement Agreement), plus reimbursement for fifty percent (50%) of the
Phase I Perrnit Fees (estimated at Date of Agreement to be $91,000.00), the total of
which shall be paid after the Conditions Precedent to Conveyance of the Agency
Parcels and the Conditions Precedent to the First Installment Payment are satisfied.
B. "Second Installment Payment of Agency Participation" means the second (2nd)
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installment payment of the Agency Participation in an amount up to One Million
Seven Hundred Thirteen Thousand Dollars ($\,713,000.00), inclusive of$\ 13,000.00
as repayment for the Phase II Agency Parcels, which amount is the fair market value
of the Phase II Agency Parcels included in the Phase II development, less the amount,
if any, calculated and deducted due to "reconciliation of costs" pursuant to Section
802.3 of the Agreement, plus reimbursement for fifty percent (50%) of the Phase II
Permit Fees (estimated at Date of Agreement to be $110,500.00), the total of which
shall be paid after the Conditions Precedent to the Second Installment Payment are
satisfied.
C. "Third Installment Payment of Agency Participation" means the third (3rd)
installment payment of the Agency Participation in the amount of One Million Three
Hundred Fifty-Two Thousand Dollars ($1,352,000.00) plus reimbursement for the
balance [remaining 50%] of the Permit Fees for the Phase I Improvements and the
Phase II Improvements (estimated at Date of Agreement to be $201,500
[cumulatively, 100% of Phase I and Phase II Permit Fees is estimated to be $403,000]
and provided however, in no event shall the cumulative amount ofreimbursed
Phase I and Phase II Permit Fees exceed $403,000, the total of which shall be paid
after the Conditions Precedent to the Third Installment Payment are satisfied.
D. "Fourth Installment Payment of Agency Participation" means the fourth (4th)
installment payment of the Agency Participation in an amount up to $700,000.00, to
be paid after the issuance of the Certificate of Occupancy for the Phase III
Improvements by the City's building official, and /,,<< nr .n/n. the amount, if any,
calculated and deducted due to "reconciliation of costs" pursuant to Section 802.6 of
the Agreement, plus one hundred percent (100%) of the Phase III Permit Fees
(estimated at Date of Agreement to be $197,000.00), the total of which shall be paid
after the Conditions Precedent to the Fourth Installment Payment are satisfied and
after completion of all Improvements which comprise the Project (i.e., after
completion of Phase III Improvements); provided however, the cumulative amount of
reimbursed Perrnit Fees for all Phases of the Project (as reimbursed and paid through
previous installment payments and this installment payment of the Agency
Participation) shall in no event exceed $600,000.00.
E. "Fifth and Final Installment Payment" means the fifth (5th) and final installment
payment, which is and shall be a contingent obligation of the Agency and incentive
payment to the Developer subject to the criteria and provisions of Section 802.7
et seq. of the Agreement, and if eligible for payment such amount shall in no event
exceed $7,358,000.00 less the cumulative amount of funds paid by the Agency to the
Developer toward and as Agency Participation from the First Installment Payment
through and inclusive of the Fourth Installment Payment.
4. ANNUAL FINANCIAL STATEMENTS. Developer agrees to prepare, maintain, and keep
complete, proper, and accurate books, accounts, and records of all revenue and other income
from all operations at the Project so that net income, gross revenues, operational expenses,
and other Project Costs (for each Phase) can be accurately determined until payment of the
Final Fifth Installment Payment of the Agency Participation. Not less than once each year,
the Developer shall provide to the Agency Executive Director a true copy of its annual
Reviewed financial statement for the Project prepared by an independent certified public
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accountant, or applicable Phase or Phases) and its operations ("Annual Financial Statement").
All books, accounts, and records of Developer as to the Project and all income statements and
tax returns relating to the Project shall be maintained at Developer's offices or at the Project
for the period any Agency Participation is due hereunder and shall be subject to reasonable
review, inspection, and examination by the Agency and its financial advisor and legal
counsel.
In the event of Default under this Covenants Agreement or the Agreement, upon written
request by the Agency or its legal counsel the Developer shall make available and provide the
Agency's Executive Director within ten (10) days of such request, the following:
(i) Annual Financial Statements of the Project as owned and operated by the Developer, or its
successor(s) and assign(s), (ii) when and as prepared all Reviewed (and audited, if prepared)
financial statements for the Project, which statements shall be caused by Developer to be
prepared not less than annually, and (iii) such other documents and records and back-up
materials to such statements as reasonably maintained in the ordinary course of business. All
financial reports required hereunder and all Annual Financial Statements shall be prepared in
accordance with generally accepted accounting principles ("GAAP"), shall be Reviewed, and
prepared by an independent certified public accountant. Each Annual Financial Statement
shall reflect the profit and loss statements for the operation of the Project the applicable year
during the term of the Agreement.
5. MAINTENANCE
A. Performance of Maintenance. Developer shall maintain in accordance with
City Standards, as hereinafter defined, the Improvements and landscaping on the Site,
and the public improvements on, adjacent, and abutting the Site to the curbline
adjacent to the Site, including, but not be limited to, buildings, sidewalks, pedestrian
and on-site private lighting, landscaping, irrigation of landscaping, architectural
elements identifying the Site and any and all other improvements on the Site
(collectively the "Development" or the "Project".)
(I) To accomplish the maintenance, Developer shall either staff or contract with
and hire licensed and qualified personnel to perforrn the maintenance work,
including the provision of labor, equipment, materials, support facilities, and
any and all other items necessary to comply with the requirements of this
Agreement.
B. City Standards. The following standards ("City Standards") shall be complied with
by Developer and its maintenance staff, contractors or subcontractors:
(I) Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and
shrub pruning; trimming and shaping of trees and shrubs to maintain a
healthy, natural appearance and safe road conditions and visibility, and
optimum irrigation coverage; replacement, as needed, of all plant materials;
control of weeds in all planters, shrubs, lawns, ground covers, or other
planted areas; and staking for support of trees.
(2) Clean-up maintenance shall include, but not be limited to: maintenance of all
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sidewalks, paths and other paved areas in clean and weed-free condition;
maintenance of all such areas clear of dirt, mud, trash, debris or other matter
which is unsafe or unsightly; removal of all trash, litter and other debris from
improvements and landscaping prior to mowing; clearance and cleaning of all
areas maintained prior to the end of the day on which the maintenance
operations are perforrned to ensure that all cuttings, weeds, leaves and other
debris are properly disposed of by maintenance workers.
(3) All maintenance work shall conform to all applicable federal and state
Occupation Safety and Health Act standards and regulations for the
performance of maintenance.
(4) Any and all chemicals, unhealthful substances, and pesticides used in and
during maintenance shall be applied only by persons possessing valid
California applicators licenses, and in strict accordance with all governing
regulations. Precautionary measures shall be employed recognizing that all
areas are open to public access.
(5) Subject to casualty losses and events of force majeure, the Development shall
be maintained in conformance and in compliance with the approved Site
construction and architectural plans and design scheme, as the same may be
amended from time to time with the approval of the City (and Agency, if such
approval is required) and reasonable commercial development maintenance
standards including but not limited to: painting and cleaning of all exterior
surfaces and other exterior facades.
(6) Subject to casualty losses and events of force majeure, the Improvements and
the Development shall be maintained as required by this section in good
condition and in accordance with the custom and practice generally
applicable to comparable First Class, First Quality commercial office projects
located within San Diego County, such as: (i) Cornerstone Corporate Center
located at J 903 Wright Place, San Diego; (ii) The Plaza at La Jolla Village
located at 4350 La Jolla Village Drive, San Diego; and
(iii) Insurance Company of the West located at 11455 EI Camino Real,
San Diego.
C. Failure to Maintain Improvements. In the event Developer does not maintain the
Development in the manner set forth herein and in accordance with City Standards,
Agency and/or City shall have the right to maintain the Development, or to contract
for the correction of such deficiencies, after written notice to Developer. However,
prior to taking any such action, Agency agrees to notify Developer in writing if the
conditions of the Development do not meet with City's Standards and to specify the
deficiencies and the actions required to be taken by Developer to cure the
deficiencies. Upon notification of any maintenance deficiency, Developer shall have
thirty (30) days within which to correct, remedy or cure the deficiency. If the written
notification states the problem is urgent relating to public health and safety, then
Developer shall have forty-eight (48) hours to rectify the problem. The Developer
shall not, however, have the obligation to rebuild the Improvements if the same are
destroyed and if the insurance proceeds are insufficient or unavailable; provided the
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Developer shall be obligated to continue to maintain adequate property insurance in
the event that the Developer does not rebuild the Improvements as provided herein;
but, nothing in the foregoing clause is intended to allow Developer to establish that
its lack of adequate insurance is justification for non-perforrnance or in any respect
abrogates its obligation to lawfully demolish and clear the Development to a safe
condition. The Developer shall place the Improvements in a safe condition as may be
reasonably determined by the Agency or the official in the City's Building
Department with authority over such determinations.
(I) In the event Developer fails to correct, remedy, or cure or has not commenced
correcting, remedying or curing such maintenance deficiency after
notification and after the period of correction has lapsed, then Agency shall
have the right to enter onto the Site to effect such correction, remedy, or cure
and Developer agrees to pay Agency such reasonable charges and costs
incurred by the Agency and/or the City in connection with such maintenance.
Until so paid, the Agency shall have a lien on the Site for the amount of such
charges or costs, which lien shall be perfected by the recordation of a "Notice
of Claim of Lien" against the Site. Upon recordation of a Notice of a Claim
of Lien against the Site, such lien shall constitute a lien on the fee estate in
and to the Site prior and superior to all other monetary liens except: (a) all
taxes, bonds, assessments, and other levies which, by law, would be superior
thereto; (b) the lien or charge of any mortgage, deed of trust, or other security
interest then of record made in good faith and for value, it being understood
that the priority of any such lien for costs incurred to comply with this
Agreement shall date from the date of the recordation of the Notice of Claim
of Lien. Any such lien shall be subject and subordinate to any lease or
sublease of the interest of Developer in the Site or any portion thereof and to
any easement affecting the Site or any portion thereof entered into at any time
(either before or after) the date of recordation of such a Notice. Any lien in
favor of the Agency created or claimed hereunder is expressly made subject
and subordinate to any mortgage or deed oftrust made in good faith and for
value, recorded as of the date of the recordation of the Notice of Claim of
Lien describing such lien as aforesaid, and no such lien shall in any way
defeat, invalidate, or impair the obligation or priority of any such mortgage or
deed of trust, unless the mortgage or beneficiary thereunder expressly
subordinates his interest, ofrecord, to such lien. No lien in favor of the
Agency created or claimed hereunder shall in any way defeat, invalidate, or
impair the obligation or priority of any lease, sublease or easement unless
such instrument is expressly subordinated to such lien. Upon foreclosure of
any mortgage or deed oftrust made in good faith and for value and recorded
prior to the recordation of any unsatisfied Notice of Claim of Lien, the
foreclosure-purchaser shall take title to the Site free of any lien imposed by
the Agency that has accrued up to the time of the foreclosure sale, and upon
taking title to the Site, such foreclosure-purchaser shall only be obligated to
pay costs associated with this Agreement accruing after the
foreclosure-purchaser acquires title to the Site. If the Site is ever legally
divided with the written approval of the Agency and fee title to various
portions of the Site is held under separate ownerships, then the burdens of the
maintenance obligations set forth herein and in this Agreement and the
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charges levied by the Agency to reimburse the Agency for the cost of
undertaking such maintenance obligations of Developer and its successors
and the lien for such charges shall be apportioned among the fee owners of
the various portions of the Site under different ownerships according to the
square footage of the land contained in the respective portions of the Site
owned by them. Upon apportionment, no separate owner of a portion of the
Site shall have any liability for the apportioned liabilities of any other
separate owner of another portion of the Site, and the lien shall be similarly
apportioned and shall only constitute a lien against the portion of the Site
owned in fee by the owner who is liable for the apportioned charges levied by
the Agency and secured by the apportioned lien and against no other portion
of the Site. Developer acknowledges and agrees that City and Agency may
also pursue any and all other remedies available in law or equity. Developer
shall be liable for any and all attorneys' fees, and other legal costs or fees
incurred in collecting said maintenance costs.
6. INDEMNIFICATION. In addition to the separate and severable insurance covenants and
provisions provided by the Developer to the Agency and City under the Agreement and
Section 7 hereinafter, the Developer agrees to protect, defend, indemnify, assume all
responsibility for, hold harmless, pay all costs, and provide a defense for Agency and the City
and their elective and appointive boards, officers, boards, agents, and employees pursuant to
and as required by the Agreement for the Covenants Term.
7. DEVELOPER INSURANCE REQUIREMENTS. In addition to the separate and
severable indemnification covenants and provisions provided by the Developer to the Agency
and the City under the Agreement and Section 6 hereinabove, the Developer shall provide
insurance pursuant to and as required by the Agreement for the Covenants Terrn.
8. HAZARDOUS MATERIALS. Developer shall not cause or permit the presence, use
generation, release, discharge, storage, or disposal of any Hazardous Materials on, under, in,
or about, or the transportation of any Hazardous Materials to or from, the Site in violation of
applicable Environmental Law.
A. Environmental Indemnity. Developer agrees to and hereby does indemnify, defend
and hold Agency and the City and their respective officers, employees and agents
harmless from and against any claim, action, suit, proceeding, loss, cost, damage,
liability, deficiency, fine, penalty, punitive damage, or expense (including, without
limitation, attorneys' fees) (hereinafter collectively the "Claim"), resulting from,
arising out of, or based upon (i) the presence, release, use, generation, discharge,
storage, or disposal of any Hazardous Materials on, under, in, or about, or the
transportation of any such materials to or from, the Site in violation of applicable
Environmental Law, prior to the applicable Closing and with respect to the Site,
before and after the Closing, whether discovered before or after the applicable
Closing or (ii) the violation, or alleged violation, of any statute, ordinance, order,
rule, regulation, permit, judgment, or license relating to the use, generation, release,
discharge, storage, disposal, or transportation of Hazardous Materials on, under, in, or
about, to or from, the Site prior to the applicable Closing and with respect to the Site,
before and after the applicable Closing, whether discovered before or after the
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applicable Closing. This indemnity shall include, without limitation, any Claim for
personal injury including sickness, disease or death, tangible or intangible property
damage, compensation or lost wages, business income, profits or other economic
loss, damage to the natural resource or the environment, nuisance, pollution,
contamination, leak, spill, release, or other adverse effect on the environment. This
indemnity shall not include any Claim directly resulting from, arising out of, or based
upon the negligent or intentional activities of Agency or the City, or any of their
officers, employees, or agents.
9. PROHIBITION AGAINST CHANGE IN OWNERSHIP, MANAGEMENT AND
CONTROL OF DEVELOPER. The qualifications and identities of the Developer are of
particular concern to the City and the Agency. It is because of those qualifications and
identities that the Agency has entered into this Agreement with the Developer. No voluntary
or involuntary successor in interest of the Developer shall acquire any interest in Phase _,
the Site, or the Project nor any rights or powers under the Agreement or this Covenants
Agreement except as expressly set forth in the Agreement.
10. TAXES, ASSESSMENTS, ENCUMBRANCES AND LIENS. The Developer shall pay
when due all real estate taxes and assessments on the Site. The Developer shall remove or
have removed any levy or attachment made on the Phase _ Parcels, the Site, or any part
thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a
sale thereunder. Nothing herein contained shall be deemed to prohibit the Developer from
contesting the validity or amount of any tax assessment, encumbrance or lien, nor to limit the
remedies available to the Developer in respect thereto.
11. INDEMNIFICATION OF THE AGENCY FOR THIRD PARTY CHALLENGE
RELATING TO PERFORMANCE OF THIS COVENANTS AGREEMENT. The
Developer agrees to protect, defend, indemnify, hold harmless, pay all costs, and provide a
defense for City and/or Agency and their officers, boards and employees in any action by a
third party challenging the validity, applicability, or interpretation of the Agreement or this
Covenants Agreement including, without limitation, an action challenging the ability of the
Agency to provide the Developer with the Agency Participation. The City and Agency shall
have the right, but not the obligation, to defend any such action. When Developer provides
such defense the Agency will not take action or will not fail to act so as to allow a default
judgment to be taken. In addition, City and Agency shall provide reasonable assistance to
Developer in defending any such action at no expense to City or Agency. Such assistance
shall include (i) making available upon reasonable notice, City and/or Agency officials and
employees who are or may be witnesses in such action, and (ii) provision to Developer of
other inforrnation within the custody or control of City or Agency that is relevant to the
subject matter of the action.
The Developer shall have the obligation to defend any such action; provided, however, that
this obligation to defend shall not be effective if and to the extent that Developer determines
in its reasonable discretion that the interests ofthe parties justify a compromise or a
settlement of such action, in which case Developer shall compromise or settle such action in
a way that fully protects Agency and City from any liability or obligation. Developer's
obligation and right to defend shall include the right to hire (subject to written approval by
the Agency and City) attorneys and experts necessary to defend, the right to process and
settle reasonable claims, the right to enter into reasonable settlement agreements and pay
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amounts as required by the terms of such settlement, and the right to pay any judgments
assessed against Developer, Agency or City. If Developer defends any such action, as set
forth in this section, it shall indemnify and hold harmless Agency and City and their officers,
employees, representatives and agents from and against any claims, losses, liabilities, or
damages assessed or awarded against either of them by way of judgment, settlement, or
stipulation.
12. COVENANTS RUN WITH THE LAND. The covenants, restrictions and obligations
established in this Covenants Agreement shall, without regard to technical classification or
designation, be binding on the Developer, its successors and assigns and any successor in
interest to the Phase _ Parcels, the Site, or any part thereof, for the benefit of and in favor
of the Agency and the City, and their successors and assigns. Therefore, whenever the word
"Developer" is used herein, it shall include the owner as of date of execution of this
Agreement, and any and all successive owners or assigns of the Phase _ Parcels and/or the
Site, and the provisions hereof are expressly binding upon all such successive owners or
assigns, and the parties agree all such provisions shall run with the land. Agency shall cause
a fully executed copy of this Agreement to be recorded in the Office of the San Diego County
Recorder. Notwithstanding the foregoing, in the event Developer or its successors or assigns,
shall convey its fee interest in all or any portion of the Phase _ Parcels or the Site, the
conveying owner shall be free from and after the date of recording such conveyance of all
liabilities, respecting the performance of the restrictions, covenants or conditions contained in
this Agreement thereafter to be performed with respect to the Phase _ Parcels or the Site,
or any part thereof, it being intended that the restrictions, covenants and conditions shall be
binding upon the record owners of the Phase _ Parcels or the Site only during such time
as they own the same, provided that the conveying owner shall remain liable for any actions
prior to the date of the conveyance.
13. COMMENCEMENT OF AGENCY REVIEW PERIOD. The time periods set forth
herein for the Agency's approval of agreements, plans, drawings, or other information
submitted to the Agency by the Developer and for any other Agency consideration and
approval hereunder which is contingent upon documentation required to be submitted by the
Developer, including, without limitation, any requested approvals hereunder, shall only apply
and commence upon the Developer's complete submittal of all the required information. In
no event shall an incomplete submittal by the Developer trigger any of the Agency's
obligations of review and/or approval hereunder; provided, however, that the Agency shall
notify the Developer of an incomplete submittal as soon as is practicable and in no event later
than the applicable time set forth for the Agency's action on the particular item in question.
14. REPRESENTATIVES OF THE PARTIES AND SERVICES OF NOTICES. The
representatives of the respective parties who are authorized to administer this Agreement and
to whom formal notices, demands and communications shall be given are as follows:
Agency:
Redevelopment Agency
of the City ofChula Vista
276 Fourth Avenue
Chula Vista, California
Attention: Executive Director
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With a copy to :
Stradling, Y occa, Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Celeste Stahl Brady, Esq.
Developer:
Gateway Chula Vista, LLC
765 Third Avenue
Chula Vista, California 91910
Attention: James V. Pieri
With copies to :
Geoffrey Payne Group
17100 Gillette Avenue
Irvine, California 92614
Attention: Geoffrey Payne, Esq.
Sheppard, Mullin, Richter & Hampton LLP
Nineteenth Floor
501 West Broadway
San Diego, California 92101
Attention: Christopher B. Neils, Esq.
Formal notices, demands and communications to be given hereunder by any party shall be made in
writing and may be effected by personal delivery, telecopy, overnight delivery service or by
registered or certified mail, postage prepaid, return receipt requested. Any written notice, demand or
communication is effective upon receipt.
If the name of the person designated to receive the notices, demands or communications or the
address is changed, written notice shall be given, in accord with this section, within five (5) working
days of said change.
15. DEFAULTS AND REMEDIES
A. Defaults -- General. Subject to the permitted extensions of time and tolled periods
set forth in the Agreement and this Covenants Agreement, failure or delay by any
party to perform any term or provision of this Agreement constitutes a "Default"
under the Agreement and this Covenants Agreement. The party who so fails or
delays must immediately commence to cure, correct, or remedy such failure or delay,
and shall complete such cure, correction or remedy with diligence. Provided however
and subject to the provisions of Section 1202 of the Agreement, failure of a condition
precedent hereunder is not a default, and such non-satisfaction of a condition
precedent by one party permits non-performance of the action related to such
condition precedent by the other party.
(I) Notice of Default. The injured party shall give written notice of default to
the party in Default, specifying the default complained of by the injured
party. Except as required to protect against further damages or urgent
circumstances, the injured party may not institute legal proceedings, whether
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at law or in equity, against the party in Default until thirty (30) days after
giving such notice or, provided that the party in Default is proceeding with
diligence to cure, such greater time as may be necessary to cure given the
nature of the default. Failure or delay in giving such notice shall not
constitute a waiver of any Default, nor shall it change the time of Default.
B. Failure of Developer to Commence Any Phase of the Improvements and
Liquidated Damages Therefor.
(I) Failure to Commence Construction of Phase I Improvements and
Liquidated Damages Therefor. In the event the Agreement terminates as a
result of the Developer's failure to complete grading and pull building
permits for the Phase I Improvements (as more fully described in Section
802.l(k) of the Agreement) on or before the date specified in the Schedule of
Performance (subject to force majeure, extensions thereof provided by the
Agency Executive Director or the Agency, and other extensions permitted
thereunder,) due to the Default of the Developer or the failure of the
Condition Precedent in Section 306.2(1) of the Agreement, the Developer
hereby expressly agrees as follows:
(a) Except as to payment of the liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Agency shall have no
other remedy available at law or equity for Developer's
non-performance of the covenant to construct the Phase I
Improvements set forth in Section 910 of the Agreement, nor shall the
Agency have any other or further performance obligation(s) under the
Agreement.
(b) Subject to the payment of liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Developer shall be
relieved of the covenant to construct the Phase I Improvements set
forth in Section 910 of the Agreement.
(c) The Developer shall pay to the Agency One Hundred Thousand
Dollars ($100,000.00) within ten (10) business days of such
termination as reimbursement for the Agency's out of pocket
expenses incurred in the negotiation and implementation of the
Agreement. In the event the Developer fails to pay the Agency within
such time, the $100,000.00 shall commence to accrue interest at ten
percent (10%) per annum compounded quarterly until paid in full.
Further, in the event of such untimely payment or failure of payment,
the Agency shall be entitled to reimbursement of all out of pocket
expenses, including but not limited to, legal fees expended to obtain
payment of the $100,000.00.
(d) The act or failure to act of any third party, including but not limited to
the fulfillment of obligations under the Developer's limited liability
company member agreement or to obtain title to any of the Developer
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Parcels shall not relieve Developer of its obligation to pay such
liquidated damages to the Agency.
THE DEVELOPER AND THE AGENCY, BY THE AGREEMENT, MUTUALLY
AGR~~ THAT IN TH~ ~V~NT THE AGREEMENT IS TERMINATED PRIOR
TO THE COMPLETION OF GRADING AND PULLING OF BUILDING
PERMITS FOR THE PHASE I IMPROVEMENTS DUE TO THE DEVELOPER'S
DEFAULT (AND FAILURE TO CURE DURING ANY APPLICABLE CURE
PERIOD) AND/OR FAILURE OF CONDITION PRECEDENT SECTION 306.2(F)
HEREUNDER, THE AGENCY WILL SUSTAIN SUBSTANTIAL DAMAGES
WHICH ARE IMPRACTICAL OR INFEASIBLE TO ASCERTAIN, INCLUDING
WITHOUT LIMITATION LOSS OF REDEVELOPMENT AND LOCAL
REVENUE OPPORTUNITIES ASSOCIATED WITH THE REDEVELOPMENT
OF AND CONSTRUCTION OF THE IMPROVEMENTS TO THE SITE. THE
PARTIES AGREE THAT THE SUM OF $100,000.00 REPRESENTS A
REASONABLE ESTIMATE OF THE DAMAGES WHICH THE AGENCY
WOULD SUFFER DUE TO DEVELOPER'S FAILURE TO COMPLETE
GRADING AND PULLING OF BUILDING PERMITS FOR THE PHASE I
IMPROVEMENTS AND SUCH IS A REASONABLE AMOUNT AS
LIQUIDATED DAMAGES. THE AGENCY SHALL, THEREFORE, BE
ENTITLED TO THE FULL AMOUNT OF ONE HUNDRED THOUSAND
DOLLARS ($]00,000.00), PLUS ACCRUED INTEREST, IF DUE, AS THE
AGENCY'S EXCLUSIVE REMEDY AND IN LIEU OF AN ACTION AT LAW
FOR MONEY DAMAGES FOR DEVELOPER'S FAILURE TO UNDERTAKE
AND COMPLETE THE PHASE I IMPROVEMENTS. SAID AMOUNT SHALL
BE DUE TO THE AGENCY AND SHALL BE THE AGENCY'S PROPERTY
WITHOUT ANY DEDUCTION, OFFSET, OR RECOUPMENT (OR ANY RIGHT
THEREOF) WHATSOEVER. BY INITIALING THE SPACES WHICH FOLLOW,
THE AGENCY AND THE DEVELOPER SPECIFICALLY AND EXPRESSLY
AGREE TO ABIDE BY THE TERMS AND PROVISIONS OF SECTION 1202.1
OF THE AGREEMENT CONCERNING LIQUIDATED DAMAGES IN THE
EVENT THE DEVELOPER FAILS TO COMPLETE GRADING AND PULL
BUILDING PERMITS FOR THE PHASE I IMPROVEMENTS AS SET FORTH IN
SECTION 1202.1 OF THE AGREEMENT.
DEVELOPER INITIAL HERE
AGENCY INITIAL HERE
Nothing in the foregoing provisions relating to payment of liquidated damages shall relieve
the Developer of its independent and ongoing obligations hereunder relating to payment of costs for
and completion of the legal action(s) for assembly of the Phase] Acquisition Parcels (and the
Phase II and/or Phase III Acquisition Parcels, if such has occurred), payment of and liability for
Relocation costs, maintenance of insurance policies, and performance under each and every
indemnification provision hereunder. The foregoing payment of liquidated damages by the
Developer to the Agency is intended by the parties to compensate the Agency solely for Developer's
failure to commence and complete the Phase I Improvements and not intended to relieve the
Developer of such outstanding or ongoing performance obligations and liabilities.
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(2) Failure of Developer to Commence Construction of Phase II
Improvements and Liquidated Damages Therefor. In the event the
Agreement terminates as a result of the Developer's failure to complete
grading and pull building permits for the Phase II Improvements on or before
the date specified in the Schedule of Performance (subject to force majeure,
extensions thereof provided by the Agency Executive Director or the Agency
pursuant to Section 501.1 of the Agreement, and other extensions provided
thereunder,) due to the Default of the Developer or the failure of the
Condition Precedent in Section 506.2(1) of the Agreement, the Developer
hereby expressly agrees as follows:
(a) Except as to payment of the liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Agency shall have no
other remedy available at law or equity for Developer's
non-performance of the covenant to construct the Phase II
Improvements set forth in Section 910 of the Agreement, nor shall the
Agency have any other or further perforrnance obligation(s) under the
Agreement.
(b) Subject to the payment of liquidated damages amount set forth
hereinafter by the Developer to the Agency, the Developer shall be
relieved of the covenant to construct the Phase II Improvements set
forth in Section 910 of the Agreement.
(e) The Developer shall pay to the Agency Fifty Thousand Dollars
($50,000.00) within ten (10) business days of such termination as
reimbursement for the Agency's out of pocket expenses incurred in
the negotiation and implementation of the Agreement. In the event
the Developer fails to pay the Agency within such time, the
$50,000.00 shall commence to accrue interest at ten percent (10%)
per annum compounded quarterly until paid in full. Further, in the
event of such untimely payment or failure of payment, the Agency
shall be entitled to reimbursement of all out of pocket expenses,
including but not limited to, legal fees expended to obtain payment of
the $50,000.00.
(I) The act or failure to act of any third party, including but not limited to
the fulfillment of obligations under the Developer's limited liability
company member agreement or to obtain title to any of the Developer
Parcels shall not relieve Developer of its obligation to pay such
I iquidated damages to the Agency.
THE DEVELOPER AND THE AGENCY, BY THIS AGREEMENT, MUTUALLY
AGREE THAT IN THE EVENT THE AGREEMENT IS TERMINATED PRIOR
TO THE COMPLETION OF GRADING AND PULLING OF BUILDING
PERMITS FOR THE PHASE II IMPROVEMENTS DUE TO THE DEVELOPER'S
DEFAULT (AND FAILURE TO CURE DURING ANY APPLICABLE CURE
PERIOD) AND/OR FAILURE OF CONDITION PRECEDENT SECTION 506.2(F)
DOCSOC\662779v 13\24212.0002
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OF THE AGREEMENT, THE AGENCY WILL SUSTAIN SUBSTANTIAL
DAMAGES WHICH ARE IMPRACTICAL OR INFEASIBLE TO ASCERTAIN,
INCLUDING WITHOUT LIMITATION LOSS OF REDEVELOPMENT AND
LOCAL REVENUE OPPORTUNITIES ASSOCIATED WITH THE
REDEVELOPMENT OF AND CONSTRUCTION OF THE IMPROVEMENTS TO
THE SITE. THE PARTIES AGREE THAT THE SUM OF $50,000.00
REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH THE
AGENCY WOULD SUFFER DUE TO DEVELOPER'S FAILURE TO
COMPLETE GRADING AND PULLING OF BUILDING PERMITS FOR THE
PHASE II IMPROVEMENTS AND SUCH IS A REASONABLE AMOUNT AS
LIQUIDATED DAMAGES. THE AGENCY SHALL, THEREFORE, BE
ENTITLED TO THE FULL AMOUNT OF FIFTY THOUSAND DOLLARS
($50,000.00), PLUS ACCRUED INTEREST, IF DUE, AS THE AGENCY'S
EXCLUSIVE REMEDY AND IN LIEU OF AN ACTION AT LAW FOR MONEY
DAMAGES FOR DEVELOPER'S FAILURE TO UNDERTAKE AND
COMPLETE THE PHASE II IMPROVEMENTS UNDER THE AGREEMENT.
SAID AMOUNT SHALL BE DUE TO THE AGENCY AND SHALL BE THE
AGENCY'S PROPERTY WITHOUT ANY DEDUCTION, OFFSET, OR
RECOUPMENT (OR ANY RIGHT THEREOF) WHATSOEVER. BY
INITIALING THE SPACES WHICH FOLLOW, THE AGENCY AND THE
DEVELOPER SPECIFICALLY AND EXPRESSLY AGREE TO ABIDE BY THE
TERMS AND PROVISIONS OF SECTION 1202.2 OF THE AGREEMENT
CONCERNING LIQUIDATED DAMAGES IN THE EVENT THE DEVELOPER
FAILS TO COMPLETE GRADING AND PULL BUILDING PERMITS FOR THE
PHASE II IMPROVEMENTS AS SET FORTH IN SECTION 1202.2 AND THE
AGREEMENT.
DEVELOPER INITIAL HERE
AGENCY INITIAL HERE
Nothing in the foregoing provisions relating to payment of liquidated damages shall relieve
the Developer of its independent and ongoing obligations hereunder relating to payment of costs for
and completion of the legal action(s) for assembly of the Phase I and Phase II Acquisition Parcels
(and the Phase III Acquisition Parcels, if such has occurred), payment of and liability for Relocation
costs, maintenance of insurance policies, and performance under each and every indemnification
provision hereunder, and performance under the Agreement Affecting Real Property for the Phase I
Improvements. The foregoing payment of liquidated damages by the Developer to the Agency is
intended by the parties to compensate the Agency solely for Developer's failure to commence and
complete the Phase II Improvements and not intended to relieve the Developer of such outstanding or
ongoing performance obligations and liabilities.
(3) Failure of Developer to Commence Construction of Phase III
Improvements. In the event the Agreement terrninates as a result of the
Developer's failure to complete grading and pull building permits for the
Phase III Improvements on or before the date specified in the Schedule of
Performance (subject to force majeure, extensions thereof provided by the
Agency Executive Director or the Agency pursuant to Section 701.1 of the
Agreement, and other extensions provided thereunder,) due to the uncured
ATTACHMENT NO.6
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Default of the Developer or the failure of the Condition Precedent in Section
706.2(h) of the Agreement, the parties agree that the Agency may, but is not
obligated to, seek any remedy at law for Developer's non-perforrnance of the
covenant to construct the Phase lIIlmprovements.
Nothing in the foregoing paragraph of this section shall relieve the Developer of its
independent and ongoing obligations hereunder relating to payment of costs for and completion of
the legal action(s) for assembly of the Phase I, Phase II and/or Phase III Acquisition Parcels, payment
of and liability for Relocation costs, maintenance of insurance policies, and performance under each
and every indemnification provision hereunder, and performance under the Agreement Affecting
Real Property for the Phase I Improvements and the Agreement Affecting Real Property for the
Phase II Improvements. The Agency's foregoing waiver of remedies for Developer's
non-performance of the covenant to construct the Phase III Improvements is not intended to relieve
the Developer of such outstanding or ongoing performance obligations and liabilities.
C. Legal Actions
(I) Institution of Legal Actions. In addition to any other rights or remedies and
subject to the restrictions in Sections 120 I and 1202 of the Agreement, any
party may institute legal action to cure, correct or remedy any Default, to
recover damages for any Default, or to obtain any other remedy, available at
law or in equity, consistent with the purposes of this Agreement in the
Superior Court of the County of San Diego, State of California, in an
appropriate municipal court in that county, or in the Federal District Court in
the Southern District of California.
(2) Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
(3) Acceptance of Service of Process. In the event that any legal action is
commenced against the Agency, service of process on the Agency shall be
made by personal service upon the Agency Secretary/City Clerk or in such
other manner as may be provided by law. In the event any legal action is
commenced against the Developer, service of process on the Developer shall
be made by personal service upon any member of the Developer entity and
shall be valid whether made within or outside the State of California or in
such other manner as may be provided by law.
(4) Attorney's Fees. Except as otherwise expressly provided in this Agreement,
in the event any legal action is instituted between Agency and Developer or
any member of the Developer or its successor(s) and assign(s) in connection
with this Agreement, then the prevailing party shall be entitled to recover
from the losing party all of its costs and expenses, including court costs and
reasonable attorneys' fees, and all fees, costs, and expenses incurred on any
appeal or in collection of any judgment.
D. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this
Covenants Agreement and the Agreement, the rights and remedies of the parties are
ATTACHMENT NO.6
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cumulative, and the exercise by either party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights
or remedies for the same Default or any other Default by any other party.
E. Inaction Not a Waiver of Default. Any failures or delays by any party in asserting
any of their rights and remedies as to any Default shall not operate as a waiver of any
Default or of any such rights or remedies, or deprive such party of its right to institute
and maintain any actions or proceedings which it may deem necessary to protect,
assert or enforce any such rights or remedies.
16. SEVERABILITY. If any terrn, provision, condition or covenant of this
Covenants Agreement or its application to any party or circumstances shall be held, to any
extent, invalid or unenforceable, the remainder of this Covenants Agreement, or the
application of the terrn, provision, condition or covenant to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not be affected, and
shall be valid and enforceable to the fullest extent permitted by law.
17. TITLES AND CAPTIONS. Titles and captions are for convenience of reference only and
do not define, describe or limit the scope or the intent of this Covenants Agreement.
18. MODIFICATION. The Agency, its successors and assigns, and the Developer and its
successors and assigns in and to all or any part of the fee title to the Phase _ Parcels or the
Site shall have the right with the mutual consent of the Agency to consent and agree to
changes in, or to eliminate in whole or in part, any of the covenants herein without the
consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary
under a deed of trust or any other person or entity having any interest less than a fee in the
Phase _ Parcels or the Site. However, the Agency and the Developer are obligated to
give written notice to and obtain the consent of any first mortgagee prior to consent or
agreement between the parties concerning such changes to this Agreement. The covenants
contained in this Agreement, without regard to technical classification, shall not benefit or be
enforceable by any owner of any other real property within or outside the Redevelopment
Project, or any person or entity having any interest in any other such realty. Any amendment
to the Redevelopment Plan which proposes to change the uses or development permitted on
the Phase _ Parcels or the Site, or otherwise proposes a change of any of the restrictions
or controls that apply to the Phase _ Parcels or the Site, shall require the written consent
of the first mortgagee and the Developer or the successors and assigns of Developer in and to
all or any part of the fee title to the Phase _ Parcels or the Site, but any such amendment
which proposes a change affecting the Phase _ Parcels or the Site shall not require the
consent of any tenant, lessee, easement holder, licensee, mortgagee (other than the first
mortgagee), trustee, beneficiary under a deed of trust or any other person or entity having any
interest less than a fee in the Phase Parcels or the Site.
19. PRIORITY. This Covenants Agreement shall be a lien against the Phase _ Parcels or the
Site prior and superior to the lien of the Construction Financing for the applicable Phase and
any permanent financing, and this Covenants Agreement shall not be subordinated.
20. WAIVER. Failure or delay by either party to perform any term or provision of this
Covenants Agreement constitutes a default under this Covenants Agreement. The aggrieved
DOCSOC\662779v 13\242 I 2. 0002
ATTACHMENT NO.6
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party shall give written notice of the default to the party in default. The defaulting party must
within a reasonable time commence to cure, correct, or remedy such default, and shall
complete such cure, correction or remedy with reasonable and due diligence, and during such
period or curing shall not be in default.
A. The waiver by one party of the performance of any covenant, condition, or promise
shall not invalidate this Agreement nor shall it be considered a waiver by such party
of any other covenant, condition or promise hereunder. The exercise of any remedy
shall not preclude the exercise of other remedies Agency or Developer may have at
law or at equity.
21. ATTORNEYS' FEES. In the event of litigation arising out of any breach of this Covenants
Agreement, the prevailing party shall be entitled to recover reasonable costs and attorney's
fees, and all costs, fees and expenses incurred in any appeal or in collection of any judgment.
22. AGREEMENT BINDING UPON SUCCESSORS. The terms and conditions, covenants
and agreements set forth herein shall apply to and bind the heirs, successors, executors,
administrators, assigns and grantees of Developer with respect to the Phase _ Parcels or
the Site and of Agency.
23. COUNTERPARTS. This Covenants Agreement may be executed in counterparts and may
be delivered by facsimile or otherwise.
IN WITNESS WHEREOF, the parties have executed this Covenants Agreement as of the
date and year first written above.
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Chairman or Authorized Designee
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency General Counsel/City Attorney
GATEWAY CHULA VISTA, LLC, a California
limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
ATTACHMENT NO.6
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By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
"DEVELOPER"
APPROVED AS TO FORM:
Counsel to Developer
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.6
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EXHIBIT "A" TO ATTACHMENT NO.6
LEGAL DESCRIPTION OF SITE
THE LAND REFERRED TO HEREIN IS SITUATED IN THE CITY OF CHULA VISTA,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA.
[insert legal description for applicable Phase parcels]
EXHIBIT "A" TO ATTACHMENT NO.6
Page 1 of I
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ATTACHMENT NO.7
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
Recording Requested By and
When Recorded Mail To:
Redevelopment Agency of the City of Chula
Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Agency Secretary
This document is exempt from the payment of a
recording fee pursuant to Government Code
Section 6103.
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
This MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
("Memorandum"), dated for identification purposes as of ,20_, is entered into by
and between the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public
body corporate and politic ("Agency") and GATEWAY CHULA VISTA, LLC, a California
limited liability company ("Developer").
A. Disposition and Development Agreement. Agency and Developer have executed
an Disposition and Development Agreement ("Agreement"), dated as of , 2000
which provides for the redevelopment of certain real property in the Town Centre I Redevelopment
Project Area located generally at the intersection of Third A venue and H Street, City of Chula Vista,
County of San Diego, State of California, more fully described in Exhibit "A" attached hereto and
incorporated herein by this reference (the "Site"). The Agreement is available for public inspection
and copying at the office of the City Clerk, Chula Vista City Hall, 276 Fourth Avenue, Chula Vista,
California. All of the terrns, conditions, provisions and covenants of the Agreement are incorporated
in this Memorandum by reference as though written out at length herein, and the Agreement and this
Memorandum shall be deemed to constitute a single instrument or document.
B. Purpose of Memorandum. This Memorandum is prepared for recordation purposes
only, and in no way modifies the terms, conditions, provisions and covenants of the Agreement. In
the event of any inconsistency between the terms, conditions, provisions and covenants of this
Memorandum and the Agreement, the terrns, conditions, provisions and covenants of the Agreement
shall prevai I.
ATTACHMENT NO.7
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C. Counterparts. This Memorandum may be executed in counterparts and may be
delivered by facsimile or otherwise.
The parties have executed this Memorandum of Disposition and Development Agreement
as of the date specified in the first paragraph hereof.
GATEWAY CHULA VISTA, LLC, a California
limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
"DEVELOPER"
APPROVED AS TO FORM:
Counsel to Developer
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Chairman or Authorized Designee
"AGENCY"
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency General Counsel/City Attorney
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.7
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EXHIBIT "A" TO ATTACHMENT NO.7
LEGAL DESCRIPTION OF SITE
THE LAND REFERRED TO HEREIN IS SITUATED IN THE CITY OF CHULA VISTA,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA:
[to be inserted]
DOCSOC\662779v 13\24212.0002
EXHIBIT "A" TO ATTACHMENT NO.7
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ATTACHMENT NO.8
CONSTRUCTION INSURANCE REQUIREMENTS
The Developer has represented the following to the Agency: (i) the construction of the
Project will be under the general contracting of , (ii)
(iii)
. Developer covenants to provide a
copy of the master policy to the City's Risk Manager; and (v) said coverage shall be at least as broad
as Insurance Services Office Commercial General Liability Form CG 0001, 11/85 or 11/88 edition
with no added restricting endorsements.
From the period commencing upon the earliest to occur of (i) the effective date of the
General Contractor contract, or (ii) the date the Contractor enters onto the Site, or (iii) the date of any
work or improvement on the Site, through the date the Agency issues the Release of Construction
Covenants for all Phases of the Project Improvements pursuant to the Agreement, the Developer shall
cause its General Contractor ("Contractor") to provide and maintain at no expense to the Agency,
insurance policies meeting the requirements set forth in this Attachment No.8. Said insurance shall
protect Contractor, Contractor's agents, representatives, employees, vendors, anyone directly or
indirectly employed by any of them, or anyone for whose acts they may be liable.
Contractor shall provide insurance according to the requirements set forth here. Contractor
will maintain the following coverages on behalf of Developer, and City and Agency and any and all
of their boards, officials, employees and agents.
A. Commercial General Liability Insurance shall be provided on Insurance Services Office-
CGL form No. CG 00 01 II 85 or 88 or equivalent subject to approval by Agency. Policy limits
shall be no less than twenty-five million dollars ($25,000,000.00) (or such lesser policy limit amount
as authorized by the City's risk manager in his/her sole discretion, but in no event policy limits of
less than fifteen million dollars ($15,000,000.00)) per occurrence for all coverages and general
aggregate. There shall be no cross liability exclusion. Coverage shall apply on a primary non-
contributing basis in relation to any other insurance or self-insurance (primary or excess) available to
Developer, City, and/or Agency, and any and all of their boards, officials, employees or agents.
General liability insurance will not be limited to coverage for the vicarious liability or the
supervisory role of the additional insureds. There shall be no contractor's limitation endorsement.
Coverage for the additional insureds shall apply to the fullest extent permitted by law excepting only
the active negligence of the City or agency as established by agreement between the parties or by the
findings of a court of competent jurisdiction. Developer and City and Agency, and any and all of
their boards, officials, employees and agents shall be added as additional insureds using Insurance
Services Office additional insured endorsement form CG 20 10 II 85.
B. Business Auto Coverage shall be written on Insurance Services Office Business Auto
Coverage form CA 00 01 0692 including owned, non-owned and hired autos. Limits shall be no less
than twenty-five million dollars ($25,000,000.00) (or such lesser policy limit amount as authorized
by the City's risk manager in his/her sole discretion, but in no event policy limits of less than fifteen
million dollars ($15,000,000.00)) per accident combined single limit. If Contractor owns no autos, a
non-owned auto endorsement to the General Liability policy described above is acceptable.
ATTACHMENT NO.8
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C. Workers' Compensation/Employer's Liability shall be written on a policy form providing
workers' compensation statutory benefits as required by law. Employer's liability limits shall be no
less than one million dollars per accident or disease. Unless otherwise agreed, this policy shall be
endorsed to waive any right of subrogation as respects Developer, and City and Agency, and any and
all of their boards, officials, employees or agents.
D. Course of Construction (Builder's Risk) Insurance shall be provided by Developer or
Contractor and shall include as named insureds all parties to this agreement. Coverage shall be for
the full completed value of the applicable Phase under construction. Any deductible amounts shall
be the responsibility of the first named insured on the policy and shall not be the responsibility of the
Agency or City. The policy shall cover all real and personal property for "all risks" of loss including
but not limited to the perils of earth movement including earthquake and flood for all buildings,
structures, fixtures, materials, supplies, machinery and equipment to be used on or incidental to the
construction at any Project site, off site, or in transit, for the full replacement value of such
properties. Coverage shall be included for property of others in the care, custody or control of the
insured for which any insured may be liable.
E. General conditions pertaining to provision of insurance coverage by Contractor.
Contractor must agree to the following provisions regarding insurance provided by Contractor:
(I) Contractor agrees to provide insurance in accordance with the requirements
set forth here. If Contractor uses existing coverage to comply with these
requirements and that coverage does not meet the requirements set forth
herein, Contractor agrees to amend, supplement or endorse the existing
coverage to do so. In the event any policy of insurance required under this
Agreement does not comply with these requirements or is canceled and not
replaced, Agency has the right to order contractor to discontinue work until
suitable replacement coverage is obtained.
(2) The coverage required here will be renewed annually by Contractor as long as
Contractor continues to provide any services under this or any other contract
or agreement with the Developer or the Agency.
(3) No liability insurance coverage provided to comply with this Agreement shall
prohibit Contractor, or Contractor's employees, or agents, from waiving the
right of subrogation prior to a loss. Contractor waives its right of subrogation
against Agency.
(4) No liability policy shall contain any provision or definition that would serve
to eliminate so-called "third party action over" claims, including any
exclusion for bodily injury to an employee of the insured or of any contractor
or subcontractor. Contractor expressly agrees not to use any statutory
immunity defenses under workers' compensation or related laws with respect
to Agency, its employees, officials and agents, to avoid Contractor's
indemnity obligation for such third party action over claims.
(5) All insurance coverage and limits provided by Contractor and available or
applicable to this agreement are intended to apply to the full extent of the
policies. Nothing contained in this Agreement or any other agreement
ATTACHMENT NO.8
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relating to the Agency or its operations limits the application of such
insurance coverage.
(6) Unless otherwise approved by Agency, insurance provided pursuant to these
requirements shall be written by insurers authorized to do business and
admitted to do insurance business in the State of California and with a
minimum "Best's" Insurance Guide rating of A:VII.
(a) As and if requested by the Developer, the Agency may consider and
approve an insurer or insurers that is/are not yet authorized and/or
admitted to do business in the State of California; provided however,
that the State of California, Department of Insurance has identified
such insurer(s) as eligible to do insurance business in California, and
the insurer(s) has a Best's Insurance Guide minimum rating of A:Vll,
and the insurer(s) has strictly complied with all other requirements set
forth in this subsection E. If the Developer desires to request such
non-admitted insurer(s), then such request shall be in writing
accompanied with sufficient information to enable the Agency
Executive Director (or his risk management designee) to evaluate the
qualifications and conformity of such insurer(s) to the requirements
hereunder.
(7) Any "self-insured retention" must be declared and approved by Agency.
Agency reserves the right to require the self-insured retention to be
eliminated, reduced, or replaced by a deductible. Self-funding, policy
fronting or other mechanisms to avoid risk transfer shall be fully disclosed
Agency before any notice to proceed is issued.
(8) Contractor shall provide proof that policies of insurance required herein
expiring during the term of this Agreement have been renewed or replaced
with other policies providing at least the same coverage. Proof that such
coverage has been ordered shall be submitted prior to expiration. A coverage
binder or letter from Contractor's insurance agent to this effect is acceptable.
A certificate of insurance and/or additional insured endorsement as required
in these specifications applicable to the renewing or new coverage must be
provided to Agency within five days of the expiration of the coverages.
(9) Contractor agrees to provide evidence of the insurance required herein,
satisfactory to Agency, consisting of: a) certificate(s) of insurance evidencing
all of the coverages required and, b) an additional insured endorsement to
Contractor's general liability policy using Insurance Services Office form
CG 20 10 II 85 or equivalent that is not restricted to Contractor's "ongoing
operations." Contractor agrees, upon written request by Agency to provide
complete, certified copies of any policies required by this section, within
I 0 days of such request. Any actual or alleged failure on the part of Agency
or any other additional insured under these requirements to obtain proof of
insurance required under this Agreement in no way waives any right or
remedy of Agency or any additional insured, in this or any other regard.
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO.8
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(10) Certificate(s) are to reflect that the insurer will provide 30 days notice to
Agency of any cancellation of coverage. Contractor agrees to require its
insurer to modify such certificates to delete any exculpatory wording stating
that failure of the insurer to mail written notice of cancellation imposes no
obligation, or that any party will "endeavor" (as opposed to being required) to
comply with the requirements of the certificate.
(11) Contractor agrees to require all subcontractors or other parties hired for this
project to provide workers' compensation, general liability and automobile
liability insurance, unless otherwise agreed to by Agency with minimum
liability limits of $1 million. The Contractor shall require that each
subcontractor's general liability insurance shall add as additional insureds all
parties to this Agreement using Insurance Services Office form
CG 20 10 II 85. Contractor agrees to obtain certificates evidencing such
coverage and make reasonable efforts to ensure that such coverage is
provided as required here.
(12) Contractor agrees to require design professional liability insurance from any
design professional engaged for this project in an amount no less than $2
million per claim. Contractor agrees to require that no contract, standard
form or otherwise, used by any party in any way connected with this
Agreement, or contracts Contractor enters into on behalf of Agency, will
reserve the right to charge back to Agency the cost of insurance required by
this or any other agreement.
(13) Contractor agrees that upon request, any agreements with subcontractors or
others with whom Contractor enters into contracts with on behalf of Agency,
will be submitted to Agency for review. Failure of Agency to request copies
of such agreements will not impose any liability on Agency, or its employees.
(14) Requirements of specific coverage features or limits contained in this Section
are not intended as a limitation on coverage, limits or other requirements, or a
waiver of any coverage normally provided by any insurance. Specific
reference to a given coverage feature is for purposes of clarification only as it
pertains to a given issue and is not intended by any party or insured to be all
inclusive, or to the exclusion of other coverage, or a waiver of any type.
(I5) Contractor agrees to provide immediate notice to Agency of any claim or loss
against Contractor that includes Developer, or Agency, or City as a defendant
and of any claim or loss arising out of the work performed under this
agreement in which the demand or probable ultimate cost exceeds
$20,000.00. Agency assumes no obligation or liability by such notice, but
has the right (but not the duty) to monitor the handling of any such claim or
claims if they are likely to involve Agency.
(I 6) The insurance requirements set forth in this Section are intended to be
separate and distinct from any other provision in this Agreement and are
intended to be interpreted as such.
ATTACHMENT NO.8
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(I 7) The requirements in this Section supersede all other sections and provisions
of this Agreement to the extent that any other section or provision conflicts
with or impairs the provisions of this Section.
For purposes of insurance coverage only, this Agreement will be deemed to have been
executed immediately upon any party hereto taking any steps that can be deemed to be in furtherance
of or towards performance of this Agreement.
A TT ACHMENT NO.8
Page 5 of 4
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ATTACHMENT NO.9
GRANT DEED
Recording Requested By and
When Recorded Mail To:
Redevelopment Agency of the City ofChula
Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Agency Secretary/City Clerk
This document is exempt from the payment of a
recording fee pursuant to Government Code
Section 6103.
GRANT DEED
For a valuable consideration receipt of which is hereby acknowledged,
The REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body,
corporate and politic, of the State of California, herein called "Grantor" acting to carry out the
Redevelopment Plan, herein called "Redevelopment Plan" for the Town Centre I Redevelopment
Project, herein called "Project", under the Community Redevelopment Law of California, hereby
grants to GATEWAY CHULA VISTA, LLC, a California limited liability company, herein called
"Grantee", the real property hereinafter referred to as the "Parcels" ["Agency Parcels" or
"Acquisition Parcels", as applicable], described in Exhibit A attached hereto and incorporated
herein.
1. Grantor excepts and reserves from the conveyance herein described all interest of the Grantor
in oil, gas, hydrocarbon substances, gasses, and minerals of every kind and character lying more than
500 feet below the surface, together with the right to drill into, through, and to use and occupy all
parts of the Parcels lying more than 500 feet below the surface thereof for any and all purposes
incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from
said site or other lands, but without, however, any right to use either the surface of the Parcels or any
portion thereof within 500 feet of the surface for any purpose or purposes whatsoever.
2. Said Parcels are conveyed in accordance with and subject to the Redevelopment Plan which
was approved and adopted and amended by the City Council of the City ofChula Vista by Ordinance
Nos. and a Disposition and Development Agreement entered into between
Grantor and Grantee dated (the "DDA"), a copy of which is on file with the Grantor
at its offices as a public record and which is incorporated herein by reference. Any further
amendments to the Redevelopment Plan which change the uses or development permitted on the
Parcels, or otherwise change any of the restrictions or controls that apply to the Parcels, shall require
the written consent of Grantee. Pursuant to the DDA the Parcels are being combined and assembled
with other real property presently owned by the Grantee (the "Developer Parcels") for the
ATTACHMENT NO.9
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development and operation of a mixed use commercial office/retail project. The Parcels and the
Developer Parcels, as assembled by the Grantee pursuant to the DDA, are referred to as the "Site"
[Phase I Parcels the Phase II Parcels or Phase III Parcels) in the DDA. This Grant Deed
expressly refers to that certain Agreement Affecting Real Property, recorded concurrent with the date
of this Grant Deed which establishes certain conditions, covenants and restrictions for the Site
(including the Parcels) pursuant to the requirements of the DDA.
3. The Grantee agrees for itself and any successor in interest not to discriminate upon the basis
of race, color, creed or national origin in the sale, lease, or rental or in the use or occupancy of the
Parcels hereby conveyed or any part thereof. Grantee covenants by and for itself, its successors, and
assigns, and all persons claiming under or through them that there shall be no discrimination against
or segregation of, any person or group of persons on account of sex, marital status, ancestry, race,
color, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure,
or enjoyment of the Parcels, nor shall the Grantee itself or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees, or
vendees in the Parcels. The foregoing covenants shall run with the land. The Grantee shall refrain
from restricting the rental, sale or lease of the Parcels on the basis of race, color, creed, religion, sex,
marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts
shall contain or be subject to substantially the following nondiscrimination or nonsegregation
clauses:
(a) In deeds: "The grantee herein covenants by and for himself or herself, his or
her heirs, executors, administrators and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, religion, sex, marital
status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the
grantee himself or herself or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the land herein conveyed. The
foregoing covenants shall run with the land."
(b) In leases: "The lessee herein covenants by and for himself or herself, his or
her heirs, executors, administrators and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the
following conditions:
"There shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, marital status,
handicap, age, ancestry or national origin in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the premises herein
leased nor shall the lessee himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, sublessees, subtenants or
vendees in the premises herein leased."
ATTACHMENT NO.9
Page 2 of4
DOCSOC\662779v 13\24212.0002
('-;J31
'T .....
(c) In contracts: 'There shall be no discrimination against or segregation of, any
person, or group of persons on account of race, color, creed, religion, sex, marital
status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself
or herself or any person claiming under or through him or her, establish or permit any
such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants,
sub lessees or vendees of the premises."
4. No violation or breach of the covenants, conditions, restrictions, provisions or limitations
contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of
any mortgage or deed of trust or security interest permitted by Sections 107, 3] 5, and 417 of the
DDA, as referenced in paragraph 4 of this Grant Deed; provided, however, that any subsequent
owner of the Conveyance Parcels shall be bound by such remaining covenants, conditions,
restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed
in lieu of foreclosure, trustee's sale or otherwise.
IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be
executed on their behalf by their respective officers hereunto duly authorized, this day of
,20_.
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Chairman
APPROVED AS TO FORM:
Agency General Counsel/City Attorney
[Signature block for Grant Deed continued on next page.)
ATTACHMENT NO.9
Page 3 of4
DOCSOC\662779v 13\24212.0002
{ - ;;J3;:J
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The Grantee consents to and approves the foregoing.
GATEWAY CHULA VISTA, LLC, a California
limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
"DEVELOPER"
APPROVED AS TO FORM:
Counsel to Developer
A TT ACHMENT NO.9
Page 4 of 4
DOCSOC\662779v 13\24212.0002
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DOCSOC\662779v 13\24212.0002
EXHIBIT "A" TO ATTACHMENT NO.9
LEGAL DESCRIPTION OF PARCELS
(to be inserted)
EXHIBIT "A" TO ATTACHMENT NO.9
Page I of 1
C -;;2.3 <j
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ATTACHMENT NO. 10
DEVELOPER ADVANCE NOTE
(SECURED BY DEED(S) OF TRUST)
($
)
Date:
RECITALS
A. On or about , 2000 the REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA, a public body corporate and politic, ("Agency") and GATEWAY
CHULA VISTA LLC, a California limited liability company ("Developer") entered into a
Disposition and Development Agreement (the "DDA") which provides for the disposition and
development of certain property situated in the Agency's Downtown Costa Mesa Project Area and
bounded by Newport Boulevard, 19th Street, and Harbor Boulevard (the "Site"). A copy of the DDA
is on file in the office of the City Clerk of the City of Costa Mesa, whose address is at 77 Fair Drive,
Costa Mesa, California 92626. The DDA, as the same may be amended from time to time, is
incorporated herein by this reference. Pursuant to Sections 202-205 of the DDA, the Developer
agreed to advance to the Agency the sum of Dollars ($ ) (the
"Developer Advance") and the Agency agreed to deliver to the Developer a promissory note, (the
"Developer Advance Note") memorializing the Agency's obligation to repay or otherwise discharge
the Agency's obligations with respect to the Developer Advance, all as more particularly set forth
therein.
DDA.
B. This promissory note constitutes the Developer Advance Note referenced in the
COVENANTS
1. Recitals. The foregoing Recitals are true and correct.
2. Definitions. Unless otherwise specifically stated herein, the defined terms in this Developer
Advance Note shall have the same meanings that such terms have in the DDA.
3. Amount of Developer Advance; Endorsements. As the Agency receives funds on the
Developer Advance (whether such funds are obtained directly from the Developer or from a draw
upon the Letter of Credit to be provided by the Developer pursuant to the DDA), the Agency shall
become obligated to repay or otherwise discharge its obligations with respect to such advances as set
forth herein. Each time the Agency receives an advance of funds on the Developer Advance, the
Agency shall concurrently execute its endorsement on Exhibit "A" of this Developer Advance Note
acknowledging the amount then being received by the Agency on the Developer Advance and the
then-unpaid principal balance on the Developer Advance Note. Notwithstanding the foregoing, the
Agency agrees that it shall be obligated to repay or otherwise discharge all amounts it actually
receives on the Developer Advance (whether such funds are obtained directly from the Developer or
from a draw upon the Letter of Credit to be provided by the Developer pursuant to Section 203 of the
ATTACHMENT NO. 10
Page 1 of4
DOCSOC\662779v 13\24212.0002
( -,;)35"
,.
DDA), in accordance with the provisions of this Developer Advance Note even if the Agency has
failed or refused to endorse this Developer Advance Note as provided herein.
4. Interest Rate and Accrual. The Developer Advance shall not accrue interest.
5. Security, Recordation of Deeds of Trust. At the time of the Agency's first receipt of funds
on the Developer Advance (whether such funds are obtained directly from the Developer or from a
draw upon the Letter of Credit), the Agency shall record against the "Agency Parcels" described in
the DDA and shall deliver to the Developer the Agency's deeds of trust securing (in part) its
obligation to repay (or otherwise discharge its obligations with respect to) the Developer Advance.
In addition, as soon as the Agency closes each individual escrow to acquire one of the parcels
comprising the "Acquisition Parcels" described in the DDA, or when the Agency acquires title
pursuant to court order as a result of each action in eminent domain, if any, the Agency shall record
against such parcel and deliver to the Developer its deed oftrust securing (in part) its obligation to
repay (or otherwise discharge its obligations with respect to) the Developer Advance. Each deed of
trust shall name the Developer (or, at the Developer's request, the bank or, other entity providing the
Developer Advance or such party's designee) as the beneficiary and the "Title Company" (as that
term is defined in the DDA) as the trustee, and shall be on the standard Short Form Deed of Trust and
Assignment of Rents of the Title Company. At the time of delivery of each deed oftrust, the
Agency, shall also deliver to the Developer (or, at the Developer's request, to the bank or, other
entity providing the Developer Advance, or such party's designee,) a standard form CL T A lender's
(or, at the Developer's request, an ALTA) policy of title insurance insuring the deed of trust in the
amount of the acquisition price to the Agency as to each individual parcel comprising the Acquisition
Parcels. The cost of each recordation and title insurance policy shall be borne by the Developer.
6. Cancellation or Payment of the Developer Advance Note.
( a) Upon Conveyance of the Parcels. At such time that the Agency conveys the
"Acquisition Parcels" to the Developer pursuant to the DDA, the Developer Advance
shall be cancelled.
(b) Upon Termination ofthe DDA Prior to Conveyance of the Acquisition Parcels.
At such time as the DDA is terminated prior to the Conveyance of the Acquisition
Parcels the this Note shall be deemed cancelled and the rights and remedies provided
in Section 400, et seq. of the DDA shall be effected.
7. Source of Payment. All payments hereunder shall be made in lawful money of the United
States of America. The obligation of the Agency to repay this Developer Advance Note shall be a
special obligation of the Agency payable only from and limited by the availability of funds from the
sale/resale proceeds, as described in the DDA.
8. Prepayment. The Agency may prepay any portion of the Developer Advance Note without
penalty.
9. Assignment. The Developer shall be entitled to assign its rights under this Developer
Advance Note to any person or entity to which the DDA is assigned in accordance with the
provisions thereof, as applicable.
ATTACHMENT NO.tO
Page 2 of 4
DOCSOC\662779v 13\24212.0002
(-;)3&
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10. No City Debt. This Developer Advance Note shall not constitute a debt of the City ofChula
Vista or any other public entity except the Agency, and the City of Chula Vista shall have no
obligation whatsoever with respect to this Developer Advance Note.
11. Miscellaneous.
(b)
(c)
Agency:
Developer:
With copies to:
DOCSOC\662779v 13\24212.0002
(a)
Attorney's Fees. In the event of any litigation arising out of the
matters referenced in this Developer Advance Note, or any deed of
trust securing in whole or in part the payment of this Developer
Advance Note, the prevailing party, in addition to whatever other
legal or equitable relief to which it may be entitled, shall be entitled to
recover its reasonable attorney's fees and litigation expenses,
including without limitation expenses for preparation and discovery,
expert witnesses, court costs, and the like, and the obligation to pay
such expenses shall accrue on the commencement of the action
whether or not the same proceeds to a final judgment.
Time of the Essence. Time is of the essence of the performance of
all obligations under this Developer Advance Note.
Place of Payment and Notices. Payments to the Developer and
written notices, demands, and communications between the Agency
and the Developer shall be sufficiently given if delivered by hand or
dispatched by registered or certified mail, postage prepaid, return
receipt requested, to the addresses of the Agency and the Developer
set forth below:
Redevelopment Agency of the City ofChula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
Gateway Chula Vista, LLC
765 Third Avenue
Chula Vista, California 91910
Attention: James V. Pieri
Geoffrey Payne Group
17100 Gillette Avenue
Irvine, California 92614
Attention: Geoffrey Payne, Esq.
Sheppard, Mullin, Richter & Hampton LLP
Nineteenth Floor
501 West Broadway
San Diego, California 92101
Attention: Christopher B. Neils, Esq.
ATTACHMENT NO.tO
Page 3 of4
(-,;J37
...
Payments and notices, demands, and communications may be sent in the same manner to such other
addresses as either party may from time to time designate by mail as provided herein. Any written
notice, demand, or communication shall be deemed received immediately if delivered by hand and
shall be deemed received on the fifth day from the date it is postmarked if delivered by registered or
certified mail.
(d) Entire Agreement; Amendments. This Developer Advance Note
(and the reference to and description of this Developer Advance Note
in the DDA) contains the entire understanding between the Agency
and Developer relating to the transaction contemplated hereby and all
prior agreements, understandings, representations, and statements,
oral and written, are merged herein and shall be of no further force or
effect. In the event of any inconsistency between the express
provisions of this Developer Advance Note and the DDA, this
Developer Advance Note shall govern. This Developer Advance
Note cannot be amended except by the further agreement in writing
executed by both the Agency and Developer.
IN WITNESS WHEREOF, this Developer Advance Note is made on the day and year first
written above.
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Chairman
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency General Counsel/City Attorney
ATTACHMENT NO.IO
Page 4 of 4
DOCSOC\662779v 13\24212.0002
(-,;)3 Y
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EXHIBIT "A" TO DEVELOPER ADVANCE NOTE
FUNDS RECEIVED BY THE AGENCY
ON THE DEVELOPER ADVANCE
[to be inserted)
EXHIBIT "A" TO ATTACHMENT NO. 10
Page 1 of 1
DOCSOC\662779v 13\24212.0002
{-;)37
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ATTACHMENT NO. 11
NET PROPERTY TAX BASE AMOUNTS FOR ALL PARCELS COMPRISING THE SITE
ADDRESS
PARCEL NUMBER
NET TAXABLE
VALUE
341 H Street 568-450-48-00 $136,135
353 H Street 568-450-49-00 $656,837
4783'" Ave. 568-450-34-00 $ 56,275
482 3m Ave. 568-450-35-00 $ 59,369
3'" Ave. (Lot 4) 568-450-36-00 $130,760
492 3m Ave. 568-450-37-00 $367,380
4943'" Ave. 568-450-38-00 $166,138
3] 5 H Street 568-450-40-00 $195,545
323 H Street 568-450-43-00 $746,452
335 H Street 568-450-44-00 $800,000
331 H Street 568-450-46-00 $ 27,386
337 H Street 568-450-47-00 $ 62,6]2
Agency Parcel 568-450-39-00 tax exempt
Agency Parcel 568-450-41-00 tax exempt
Agency Parcel 568-450-42-00 tax exempt
Agency Parcel 568-450-45-00 tax exempt
ATTACHMENT NO. II
Page I ofl
DOCSOC\662779vI3\242 12.0002
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ATTACHMENT NO. 12
SCHEDULE OF ESTIMATED PERMIT FEES
PHASE I PERMIT FEES
Total Area Total Value
BUIlOIng ~4.UUU st ~).204,UUU
parkIng ~4,UUU st ~2,4~ I ,UUU
HEM Total Estimate
School ~2~,2UU
HUIIOIng permIt IOr oIIlce $21,173
ljUIIOIng permIt IOr parkIng $11,051
Plan check tor ollIce (J)';'o ~jj,/(J2
Plan check IOr parKIng 0)% $'/,I~J
PlannIng applicatIOns ~(J,UUU
Sewer plan check ~2,UUU
Sewer capacIty ,
Water capacIty ,
water SprInKler tee $7,)UU
LanOscape tee ~)2U
1 rattlc signal ree $J),~ U
OraInage Tee $15,9~2
Total tor Phase I ~. ',>VJ
ATTACHMENT NO. 12
Page 1 of3
DOCSOC\662779v 13\24212.0002
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PHASE" Permit Fees
1 otal Area I otal ValUe
lJUIldmg 11/,UUU st $6,"2,UUU
Parkmg II/,UUU Sl $3, I UU,OUU
I 1t""VI Total Mtrmate
"cnool ,;o,lUU
Imllamg penlllt tor ottice 'LO,O /4
lJUIlQmg penlllt for parKmg $ IJ,2/6
!'Ian cnecK ror ottice 00'7. >10,010
!' Ian cneCK ror parking 0''7. 'O,02~
Plannmg applicatIOns 'o,uuu
"ewer plan check $2,UUU
"ewer capacIty 'OL,IOU
water capacIty
Water spnnkler tee $I,'UU
Lanascape lee ,OLU
I ramc sIgnal tee '4j,U~O
I Vramage tee , IO,~OL
Total for Phase 2 ,
A TT ACHMENT NO. 12
Page 2 of3
DOCSOC\662779v 13\24212.0002
c.. -C} '/;J
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PHASE III Permit Fees
T otarArea lotal Value
tlUlldmg -yr,UUU st $5,2U~,UUU
Parkmg 93,UUU sf $2,464,)uu
ITJ;;M Total EstImate
School $L I,~UU
tlUIldmg penmt tor otltce $2U,~6~
tlUlldmg permIt tor parkmg $lU,'154
Plan check tor otlJce 65% $13,62'1
Plan check tor parking 65% $I,ILU
Plannmg applIcatIOns $U
Sewer plan check $2,lJUU
Sewer capacIty ,
Water capacIty $I'I,UUU
Water spnnkler tee $7,5UU
Landscape tee $52U
Tramc sIgnal tee $j),'1U
I Vramage tee $15,'1~2
Total for Phase 3 $214,/00
ATTACHMENT NO. 12
Page 3 00
DOCSOC\662779v 13\24212.0002
C - L:) <13
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ATTACHMENT NO. 13
RESOLUTIONS OF AGENCY AND CITY COUNCIL APPROVING AGREEMENT
[to be attached)
ATTACHMENT NO. 13
Page 1 of I
DOCSOC\662779v 13\24212.0002
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ATTACHMENT NO. 14
TOWN CENTRE SIGN POLICY, TOWN CENTRE DESIGN MANUAL SIGN CRITERIA
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO. 14
Page 1 of6
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PLJfDOSe
TOWN CENTRE SIGN POLICY
To expedite the review process of signs in the Town Centre Project that are not part of
an exterior remodeling or a new building.
Polify
Therefore, it is the policy of the Town Centre Design Review Board that:
1.
The staff of the Community Development and Planning Departments shall review
and approve the design of the following types of signs.
a.
b.
c.
d.
2.
Temporary signs as defined in Section 19.60.300 of the City
Code.
Replacement signs involving relettering, replacement copy, or
reconfiguration of content within an existing sign encasement.
New signs designed within the criteria of an approved sign program.
Signs proposed for buildings within the Town Centre Project Area may be
approved by the Planning and Community Development Directors when
proposed signs are designed in compliance with the adopted Town
Centre Sign Criteria and Sign Policy. Any significant variance from said
criteria or policy must be presented to the Design Review Committee for
consideration.
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In addition to allowed signs, restaurant uses may be permitted to place a menu
on the exterior building frontage of the business with the following conditions:
a.
b.
c.
d.
3.
Menus must be located in a glass encasement or permanently engraved
in a decorative board which is to be permanently affixed to the building.
Exterior menus must not exceed four (4) square feet in size and shall be
oriented to pedestrian traffic.
Advertisement other than the foods sold within the restaurant
establishment will not be permitted.
All menu encasements and boards must be approved and processed in
the same manner as Town Centre signs.
Signs may not violate any code requirements of the City of Chula Vista.
4.
All signs will require approval of zoning permit.
5.
The applicant may appeal the decision on any sign subject to staff approval to
the Design Review Board.
M;\HOME\COMMDEV\eUCHAN\MI'.STERS\ TCSIGNPO.MST
DOCSOC\662779v 13\24212.0002
ATTACHMENT NO. 14
Page 2 of6
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TOWN CENTRE DESIGN MANUAL
SIGN CRITERIA
1. Signs should be designed as supportive elements to land use. They should
be used primarily to identify businesses, professional offices, public and quasi.
public facilities, streets, enclosures, etc. They should also be used to promote
vecve, urbanity, and interest.
A
2. Signs should be compatible with the nature, character, and design of the
locale and land uses they serve.
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ATTACHMENT NO. 14
Page 3 of6
DOCSOC\662779v 13\24212.0002
c-;Jt./)
3. Good townscape requires that signs manifest artistic order and taste.
Sleazy or obtrusive signing should be avoided (see Glossary, Page 40, No.8!.
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DOCSOC\662779v 13\24212.0002
-ATTACHMENT NO. t4
Page 4 of6
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Underlying Zoning
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DOCSOC\662779v 13\24212.0002
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4 In their selection of signs, property owners and tenants should piece con.
siderable emphasis upon color, harmony, size, shape, texture, materials, and
character.
5. Signs within the Project ArE3-especially those which flank enclosures,
plazas, and parks-should be coordinated, end characterized by res:raint.
Where practical and practicable, ,,,istic graphics and fine art displays should
be used in lieu of "commercial" signs.
6. Signs throughout the three subare3s of the Town Centre Project Area
should, where feasible, be consistent with each other, notwithstanding the
underlying zonal pattern.
7. No sign shall be located Within the Project Area without the prior authori.
zation of the Design Review Eoard, or upon appeal, the Redevelopment
Agency.
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DOCSOC\662779v 13\24212.0002
ATTACHMENT NO. 14
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ATTACHMENT NO. 15
BASE PRO FORMAS FOR EACH PHASE OF PROJECT
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ATTACHMENT NO. 15
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Gateway Chula Vista, LLC
Development Costs Including Parking Structure
Financing and Equity Investment
Base Pro Forma
PERMANENT-FIN'ANCING COSTS
Loan Points
_~otal pe-rma_n.-~ntFinancfn-g-t-osts----------~--
-------~-------==:~_______~. I Phase INU~be;;:;:~~re ~ee;hase III _~ _ TOTAL
~~~~_~~i~--:'~46Ac;es _u____ _n_____ ~-:=--=-=-:+mJ~~}j~_----;t~~;f-;~1~; ~~~~~~;
8;;;",;';gI\7,,': Gco-ss___ --- - ,94,000' 117.000 93,000 304.000
Building Floor Area: I 21.700i 21,5001 20,700 63.900
~~:~:~~~~~:~~H~Z~. -- -- --- --+-----{~:~~~i--~~~:~~j-~~;~~ ~~::~~
Co-mmon-Area:sulldTng Only: ~. 7,5201 9,3601 7,440: 24,320
Common Area~Parkil1g,Drjveway, Larldscape.& Sidewalk 547911 37303 38,103; 130,197
'L"Eable-AreaYjlJs :3~~JJJldmgC~=e Fa-,lQ~: __~-: -::::::=_ - -- ;hase~:--i---Phasell ~ -- !_ Phase 111: TOTAL
SITE COSTS: _ II 4' 00-.00- 0-1- -_ _ n I, ___
Q~~s~eS!r~~_IL~~bl~)D~~~__-------'~_ - --- _ -_--~_ --- -- - ---. -- 400,000
Total Site Costs -I 400.000 1 _ 1 _ 400.000
~;~;.~~ =-~~-~:-== ----------------- . .. '1 8~600t__=6s~60+----,,~oooi-=--19S]l<i6_
~::~;~,'di~~~~~:;:s-~~~~~HardIsoftcape)&-ScU1Pi~re-==_ + 1 ~~:~~~t::::-.. ~tl~~:i.~ -.~~I~~~~~ .....::2~ij~~
Utilities-Water District & SDG&E: . .. _. _ .. __,. _ I 37,435 . _ _ _ 37,430_1_ _ 37,435 112,300
Constructlon- CostS:Phase-'JI~JU:Q<reclShell @j6/~9Jt ... ~~::_ _ _-__~26j,jj6PT--6;~2:00oi_ . S,208.00017 .024.000
Pa~iDg .?.kUcture-Fo~!:.~':-:~.1g~P9ces:___________-------'--S?1.2.J.~5_~3-,-1~0.,193----l-_"__2,480,1~3 _. _ _ 8.112-,-~01
I~~_~l!.l'Dl=!rov~.l)1en~_. -.---___~__________ i 2.228.6271 2.773.930 2204918; 7,207.475
Total Onsite Costs ___._ ________________ I 10.282.717 i 12.640.053_! 10.067.006 32.989.776
INDIRECT: , I I
A_rf.~i!.e_cl!!.~<!@_oSji-_~~-- =~-=--===-~-===-=- -------,.~65.615___L_~2.149-;=-_=~46.~6~1_---_ j ."094,445_
Consulting Costs - n_.. . __ 133.996 53.399 53.:f99-' - -246)95
SU-rVey, SOil&~Onsite-S_t;:uc-!u:re-Tests:'---------, - -- , 56,000 ~ 56.000; -~6.000-- 168.000
Permits, SCho'o/-Fee-s &-Bon-dS~----.-___-_'=~---' ~~-:--=~- ~-=-~---1~08-'-----124_~080-':-'- '124~080 367.468
Traffic Fees:---.---- ."------- - - -- -99.975T- -- 1'03.975 -j 103.975 . 307.925
L'?:g~Cfei~-(Iii[EL~~!!fy=_=.~~_==___=__=__~=~_ ~~--=-_~-=--=--==----=.- -- 1'B~1_o-;- -~f,1. 2~~-=~~-=-=- ~J._2_5.. - - _ 36.~00
App@i~al._ --- - ------ ---________,_____ --------!---~?.~0+----~-.~-'-g5-J----.3.1-25_: _ 1_2.500_
M<lr.k_eting~_?.rOr1],Q!j9i!:_________ -___. ______________ .___u _..I_~__6_9'_OiJ0____1.-- _23,000 i 23.000. 115,000
~~~~::~p~~1[ee~__ -- '-______ ___ ___-I 2~~~~~ L~~L_~5~i __2~~~~~~
D.!!~eJQpel.Eee; -.-----...--_____________ ; 990000 I I _~-jl90.000-
P!"9je.ft_Qver~gt1lE~~ -- -_______ __u__ __~_ _ ------.J---3}0.OQQJ__~}_Q,00'OJ____~3'O.OOO_: __ __9_9.0..90.0
Cg~@:!g~~fY Re~~~______.___..~____ _ _. -------L__ 251.000 ~__1Q1.000 i__----1Q19J~9_ '_._ _ 4~~0_qO_
L~a~9 Commi.ssions: __~__i 397,330' 515.646' 40Q....350 1.313.326
Total/ndirectCosts 1 3.107.243 1.722.018 i 1,461.254! 6.290.516
TOTAC DEVELOPMENT COSTS; -- ------ -- ---- ~-- Uu I 13,789.960 I 14,362.071 i 11,528.260 I 39.680.292
I I
I ~-------
27.802 1 28.956-;-------23;242-;--- -80.000
920 94ST-959.153r-'769-90-1-:-- 2:650.600
948.7481 988.109 793.143: 2,730,000
f--- I ___" ____
I,' 180.500 i 127,500+-fOb600-L-'-~l10]lS'-0:
1183.270 I 1 585389 : 1361 900: 4.130.559
i 1,363.770! 1,712.889 1,463,90Q: 4.540.559
---~-=--+- I : r-----
I 275.0001~3-55C)0{)T--27!:f oooi---- 909,000
_L 27S.000 I 3SS.000-,- 279.000 909.000
+ 16.377.478+,7.418.069L'4,064.36TL-47:859.-S50-
I 1 _L-____ L_
I 3.227,667' 3.227.667 3.227,666 9.683.000
1 , I I
i I -,-----.- ----
_n - T-fgjjjj5~144 T20~645)36+-1 i:291:969 -I. 57,542850
----- ------ --- ____n_ - _ --~-+-_____In_ _ _un - t= -_-t--- ~=
luaO~_~_5,558 L_ 2,~2~,i2E~8;oOCi:P.cco
I 13,000.000 I 15,000.009: 12,PQQ..QQO_! _49~09Q,909
4001 000 I 3000000 I 7.001.000
19.781.213 20.895.558 I 14.324.229--.:... 55,001,000
LANO-ACQUISITON FIN-A-NCiNG-C-6STS-~'----
Loan Paints
LandLOanlnteresl
-TOtal-Land Acqu-is-tionF'fnanc{ng_ Costs
CONSTRUCTTONFrN;\-riCING COSTS
Loan Points
Construction Loan -Interest---
-"oialconstruction Financjilg-costs
TOTACe-EVElOPMENT 6:iSTS ANe-FINANCING COS-TS:
LAND-AC-QUlS ITO"NAND RELOCA-tIONt-bsTS
TOTAe DEVELOPMENT CO~'3TS~-F[N-ANCING -COSTS~ --. -
LAND AND RELOCATION COSTS
LAND -LOAN -CONSTRUCTION FINA~NCING-AND EQUITY
INVESTMENT (Excludes Permanent Financinal
Land Loan Amount
ConstructfonLoan Amounts
l;-9uLtyJnveslr:!!.~n!_I?Y.: Q.i'!!~w~y 9~uLa_Yj~~._LLC M~l)1bers
Total Financing and Equity Investment
C-C;):)3
ATTACHMENT NO. 15
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ATTACHMENT NO. 16
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT FOR PUBLIC IMPROVEMENTS
(Gateway Chula Vista, LLC Commercial Office/Retail Project)
This REIMBURSEMENT AGREEMENT FOR PUBLIC IMPROVEMENTS
(Gateway Chula Vista, LLC Commercial Office/Retail Project) ("Reimbursement Agreement")
is made as of , 2000, by and between the REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA, a public body corporate and politic (the "Agency") and
GATEWAY CHULA VISTA, LLC, a California limited liability company (the "Developer").
RECITALS
The following recitals are a substantive part of this Reimbursement Agreement:
A. Concurrent with the date of this Reimbursement Agreement he Agency and the
Developer are entering into that certain Disposition and Development Agreement dated
, 2000 (the "Agreement"). Capitalized terms used in this Reimbursement Agreement
are as defined in the Agreement or as specifically defined herein.
B. The Agreement relates to a proposed development Site which includes approximately
4.39 acres of real property consisting of sixteen (I 6) separate parcels, including: (i) the Phase I
Parcels comprised of the Phase I Developer Parcels and the Phase I Agency Parcels; (ii) the Phase II
Parcels comprised of the Phase II Developer Parcels, Phase II Agency Parcels, and Phase II
Acquisition Parcels; and (iii) Phase III Parcels comprised of the Phase III Developer Parcels and the
Phase III Acquisition Parcels, located both within and outside the Town Centre I Redevelopment
Project Area. Thus, the Site comprises the entire proposed development property which is the
subject of the Agreement, and, together with the Improvements required thereunder, including the
Phase I Improvements, inclusive of certain Public Improvement, the Phase II Improvements, and the
Phase III Improvements, is referred to as the Project. The Project, if the Site is assembled, will be
developed in up to three (3) Phases, Phase I Improvements, Phase II Improvements, and Phase III
Improvements, and, when completed, shall include, a First Class, First Quality mixed-use
commercial/office project with Restaurant and retail components with common areas, including one
parking structure that spans all three Phases of the Project. The Public Improvements are a part of
the Phase I Improvements under the Agreement.
C. The Redevelopment Plan for the Project Area authorizes the Agency to pay all or a
part of the value of improvements required to ready a project site for development, which are
enumerated in the Redevelopment Plan and materials and supporting documents referenced in the
Redevelopment Plan.
D. Pursuant to the Agreement certain Public Improvements are required to be
constructed at the Developer's sole cost and expense, subject to reimbursement of costs in a
maximum not to exceed amount of $300,000.00.
E. The Agency has determined that it would be expeditious for Developer and its
contractor(s) to actually construct and complete the Public Improvements, subject to reimbursement
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of the cost thereof by the Agency pursuant hereto and the Agreement in the maximum amount of
$300,000.00. The Public Improvements which the Agency desires Developer to construct are set
forth in Exhibit "A" which is attached hereto and incorporated herein.
F. Developer desires by this Reimbursement Agreement to cause the construction and
completion of the Public Improvements, subject to the Agency's reimbursement to Developer of the
cost thereof pursuant to the Agreement and this Reimbursement Agreement in the maximum amount
of $300,000.00.
G. To the extent there is an inconsistency or conflict between the provisions of this
Reimbursement Agreement and the provisions of the Agreement, the provisions of the Agreement
shall prevail and control.
NOW, THEREFORE, the Agency and Developer agree as follows:
1. Construction of Public Improvements. Developer shall construct or cause its contractor to
construct the Public Improvements in connection with the constructions and completion of
the Phase I Improvements. The identity of the Developer's contractor responsible for the
construction of the Public Improvements (the "Contractor") is subject to the bidding
procedures of Section 6 hereinafter and the approval of the Agency Executive Director and
City Engineer, which approval shall not unreasonably be withheld. Developer fully assumes
all obligations, requirements and conditions under the Agreement and this Reimbursement
Agreement with respect to the completion of the Public Improvements and Developer agrees
to construct and/or cause the construction and completion ofthe Public Improvements in
accordance with the Plans and Specifications (as defined in Section 5 below) and applicable
City standards, regulations, and state and federal laws.
2. Reimbursement. Developer shall cause the undertaking and completion of and shall pay for
the costs of engineering, design, administrative management and the construction and
completion of the Public Improvements, including without limitation bond costs and Permit
Fees, as more particularly provided below. Agency shall reimburse Developer for up to
$300,000.00 in costs incurred at the time of and in connection with the payment of the First
Installment Payment of Agency Assistance; provided however, to the extent any claimed
reimburseable cost is otherwise requested by Developer or is otherwise reimbursed pursuant
to the Agreement, then such costs shall not be eligible for reimbursement hereunder, in order
to prevent any double reimbursement for costs associated with the design, construction, and
completion of the Public Improvements. As and when the work of improvement and all the
Public Improvements are completed and the Final Accounting Procedure as described herein
has been accomplished and the Conditions Precedent to the First Installment Payment are
made, Developer will be eligible for reimbursement in an amount not to exceed $300,000.00,
subject to the provision prohibiting double reimbursement as described above in this Section
2.
3. Cost of Other Improvements. Developer shall bear all costs of any and all the Phase I
Improvements on the Phase I Parcels, and any and all costs related to the Public
Improvements in excess of the maximum reimbursement amount of$300,000.00. Nothing
contained herein shall limit or impair the Agency's or Developer's obligations under the
Agreement with respect to any other improvements other than the Public Improvements
reimburseable hereunder.
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4. Engineering and Construction Management Costs. Subject to reimbursement by the
Agency pursuant hereto, Developer shall engage and pay for a qualified, licensed third party
civil engineer to prepare the construction drawings and detailed Plans and Specifications for
the Public Improvements as may be required in order to adequately bid such items of work.
5. Plans and Specifications for Public Improvements. Developer shall prepare, or cause to
be prepared, and submit to Executive Director and City Engineer plans and specifications,
construction drawings, and related documents for the Public Improvements (the "Plans and
Specifications") for review and written approval, as and at the respective times established
therefor in the Schedule of Performance to the Agreement. The Plans and Specifications
shall be submitted in three (3) stages: preliminary schematic, 50% complete, and final
working drawings. Preliminary schematic drawings shall include plans, elevations and
sections of the Public Improvements as they are to be constructed on the Site and a
description of the structural, mechanical and electrical systems pertaining to the Public
Improvements. Final working drawings for the Plans and Specifications are hereby defined
as those in sufficient detail to obtain building permits and in conformity with all applicable
City standards for public works projects as determined by the City Engineer. Approval of
progressively more detailed drawings and specifications will be granted by Executive
Director and City Engineer, or their designee(s), if they are not in conflict with drawings or
specifications theretofore approved. Any items so submitted and approved in writing by
Executive Director and City Engineer shall not be subject to subsequent disapproval. Agency
shall not be responsible either to Developer or to third parties in any way for any defects in
the construction drawings and related documents, nor for any structural or other defects in
any work done according to the approved construction drawings and related documents.
6. Bidding and Award. Developer shall solicit not fewer than three (3) bids from qualified
licensed contractors for each portion of the Public Improvements. The Developer shall use
reasonable efforts to solicit and obtain bids from local businesses by making available all
plans for the Public Improvements to local contractors by submission to local trade
publications. The Developer shall enter into construction contract(s) with the selected
bidder(s), the Contractor(s), for the performance of the work set forth in the selected bides).
The Developer shall submit to the Agency a summary of all bid solicitations, bids, and
construction contracts within fifteen (I5) after each construction contract is executed. To the
extent feasible, contracts for work to be performed in connection with the construction of the
Public Improvements shall be awarded to business concerns which are located in, or owned
in substantial part by persons residing within, the City.
7. Stop Notices. Developer shall include in each construction contract a provision authorizing
Developer to withhold payments otherwise due to such Contractor for work on the Public
Improvements in the event that stop notices are filed with Agency or City. In the event that a
stop notice, which is valid on its face, is timely filed with Agency or City, Agency will
promptly notify Developer. In the event that any apparently valid stop notices are on file
with Agency or City when Developer renders its final accounting to Agency in accordance
with Section 15 herein, Agency shall withhold from the amount owed to Developer under
this Reimbursement Agreement a sum equal to ] 25% of the amount claimed in each stop
notice until Developer provides the Agency Executive Director proof of payment and
unconditional release, conditional release and payment, expiration by operation of law, or
disposition pursuant to court order of such stop notice.
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8. Bonds. Developer shall obtain and maintain, or require each Contractor constructing the
Public Improvements to obtain and maintain, faithful performance and labor and material
bonds in a form approved by the City Attorney, each with a responsible corporate surety
business within the State of California and subject to the qualification requirements for surety
bonds for other City public works contracts, in amounts equal to 100% of the estimated cost
to construct the Contractor's (inclusive of all subcontractors' portiones) of the Public
Improvements) for the faithful performance bond and 100% of the estimated cost to construct
the Contractor's (and subcontractors') portion of the Public Improvements for the labor and
material bond. The faithful performance bond shall be released ninety (90) days after the
Developer or Contractor records a notice of completion. All surety bonds shall be issued by
a surety company admitted in California and such company(ies) shall have an "A-V" or
better rating. The labor and material bond shall be released ninety (90) days after the
Developer or Contractor records in the Official Records, County of San Diego, a notice of
completion pursuant to Civil Code Section 3093.
9. Public Works Requirements.
A. Prevailing Wages and Maximum Hours. With respect to each Contractor
(and subcontractor(s)) constructing the Public Improvements, Developer is required
and shall be responsible to fully inform all Contractor(s) of their obligation to comply
with and maintain adequate records evidencing Contractor's compliance with all
prevailing wage requirements pursuant to Health and Safety Code Sections 33423
through 33426, and Labor Code Section 1770, et seq., the keeping of all records
required pursuant to Labor Code Section 1776 and the maximum hours requirements
of Labor Code Sections 1810 through 18] 5. To the extent it is alleged or determined
that any Contractor has failed to comply with such prevailing wage requirements, it
shall be the obligation and responsibility of the Developer to cause such compliance
and production ofrecords evidencing satisfactory compliance with such prevailing
wage obligations.
B. Compliance With Laws. The Developer shall carry out and cause the design,
construction and operation of the Public Improvements in conformity with all
applicable laws, including all applicable state labor standards, the City zoning and
development standards, building, plumbing, mechanical and electrical codes, and all
other provisions of the City Municipal Code, and all applicable disabled and
handicapped access requirements, including without limitation (to the extent
applicable) the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq.,
Government Code Section 4450, et seq., Government Code Section 11135, et seq.,
and the Unruh Civil Rights Act, Civil Code Section 51, et seq.
10. Insurance. Developer shall not permit Contractor(s) to commence work until Contractor(s)
has/have obtained the insurance required herein and such insurance has been approved by
Agency as to form and amount.
A. Developer shall require each Contractor to obtain and maintain, during the term of
this Reimbursement Agreement, workers compensation insurance; and, if any work is
subcontracted, Developer shall require Contractor to obtain and maintain from all
subcontractors such workers compensation insurance. The Contractor's workers
compensation insurance shall provide that the insurance may not be cancelled until
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thirty (30) days after written notice of such cancellation is provided to Agency.
B. Developer shall obtain and maintain, or require each Contractor to obtain and
maintain, during the life of this Reimbursement Agreement the following insurance
coverage:
(I) Comprehensive general liability and automobile liability with limits not less
than five million dollars ($5,000,000) combined single limit and per
occurrence.
(2) An endorsement shall be obtained for the policies providing the above
insurance naming the City and the Agency as additional named insureds and
providing for thirty (30) days advance notice of cancellation.
(3) Developer shall provide to Agency Executive Director proof satisfactory to
Agency Executive Director showing the above insurance coverage prior to
permitting such Contractor to begin work under this Reimbursement
Agreement on a Construction Contract. Any certificate of insurance must be
in a form and content approved by the City Attorney.
11. Hold Harmless. Developer agrees to protect, defend, indemnify and hold harmless the City
and Agency and their elective and appointive boards, officers, agents and employees from
any and all claims, liabilities, expenses or damages of any nature, including attorney fees, for
injury to or death of any person, and for injury to any property, including consequential
damages of any nature resulting therefrom, arising out of or in any way connected to the
construction of the Public Improvements by or on behalf of Developer, including damages
resulting, or allegedly resulting from violation of any statute, regulation or other legal
requirement concerning a safe place for employment of workers, except to the extent of
damages resulting from the negligence or City or Agency. Nothing contained in this Section,
however, shall be deemed to be a warranty against construction defects, the only such
warranty being contained below.
Developer shall comply with and shall require Contractor(s) to comply with all of the
provisions of the Workers' Compensation Insurance and Safety in Employment Laws of the State of
California, including the applicable provisions of Divisions 4 and 5 of the California Labor Code and
all similar state, federal or local laws applicable; and shall indemnify and hold harmless Agency and
City from and against all claims, liabilities, expenses, damages, suits, actions, proceedings and
judgments of every nature and description, including reasonable attorney's fees, presented, brought
or recovered against City or Agency or their officers, employees, and agents, for or on account of any
liability under any of said laws which may be incurred by reason of any work performed under this
Reimbursement Agreement by Developer or on behalf of Developer.
Agency does not, and shall not, waive any rights against Developer which it may have by
reason of the aforesaid hold harmless agreements because of the acceptance by Agency or the deposit
with Agency by Developer of any insurance policies or certificates of insurance purporting to
indemnify for the aforesaid losses. The aforesaid hold harmless agreements shall apply to all
liabilities, claims, expenses, and damages of every kind including but not limited to attorney fees,
suffered or alleged to have been suffered, by reason of the aforesaid operations of Developer or any
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contractor or others performing on behalf of Developer, regardless of whether or not such insurance
policies are applicable.
12. Contract(s) Warranty. Developer shall include in its agreement with Contractor(s) the
following provision:
Contractor(s) WARRANTS to Developer and to the City ofChula Vista and the Agency that
all materials used in the work and all labor performed shall be in conformity with the plans and
specifications. Contractor(s) shall, at his own expense, make any and all repairs and replacements
that shall become necessary as the result of any failure of the work to conform to the aforementioned
plans, specifications; provided, however, that Contractor shall be obligated under this provision only
to the extent of those failures or defects of which it is given notice within a period of twelve (12)
months from the date that the Notice of Completion is recorded.
13. Administration of Contract and Schedule of Performance. Developer shall be due no fee
to administer, manage, and/or supervise the performance of the Contract(s) from design
through completion of construction of the Public Improvements. The Developer shall use
reasonable efforts to complete the Public Improvements in conformity with the Schedule of
Performance under the Agreement. Any material changes in the scope of the work to be
performed by Contractor(s) or other change orders under the Construction Contract(s)
relating to the Public Improvements shall be reviewed and approved by Agency Executive
Director in writing prior to Contractor's commencement of such work.
14. Inspection. Construction inspection of the Public Improvements shall be performed by City
Public Works Inspectors. City's usual plan check and inspection fees as applicable for the
Public Improvements shall be reimburseable by Agency in accordance with the Agreement
relating to Permit Fees.
15. Final Accounting. Following completion of construction of the Public Improvements and
following full payment of all third party invoices for materials, supplies and contractors for
the completion of the Public Improvements, Developer shall submit to Agency Director a
final accounting to determine the total out of pocket cost of design, engineering, constructing
and related work thereto to complete the Public Improvements. Developer shall also submit
to Agency Executive Director all supporting information reasonably necessary to document
Developer's expenditures on the Public Improvements, including specific details on the costs
and work attributable to the Public Improvements, including invoices, third-party invoices,
billings, and receipts for construction surveying, soil testing, blueprinting, actual construction
costs and similar expenses. The final reimbursement payment by Agency of up to
$300,000.00 will be made in accordance with the Agreement and the payment of the First
Installment Payment of Agency Assistance and only after Developer has submitted all
documentation reasonably necessary to substantiate the cost of constructing and completing
the Public Improvements in accordance with the Approved Plans and subject to the
provisions of Section 2 herein relating to prohibition of double reimbursement for any costs
relating to the Public Improvements. Final inspection and sign-off by the City's Public
Works Inspectors shall be sufficient evidence of the completion of the Public Improvements.
16. Default. Failure or delay by either party hereto to perform any term or provision of this
Reimbursement Agreement shall constitute a default under this Reimbursement Agreement.
The party who so fails or delays must immediately commence to cure, correct, or remedy
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,
such failure or delay, and shall complete such cure, correction or remedy with diligence. In
the event of a default, the injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Except as required to
protect against further damages, the injured party may not institute proceedings against the
party in default until thirty (30) days after giving such notice, provided however, that no
proceedings shall be instituted if the defaulting party shall commence and proceed to cure
such default in a diligent manner and the nature of the default is such that it cannot be cured
within thirty (30) days. Failure or delay in giving such notice shall not constitute a waiver of
any default, nor shall it change the time of default.
17. Notices. Any notice, request, demand, consent, approval or other communication required to
be given shall be addressed as set forth in the Agreement.
18. Non-Discrimination. Developer agrees to comply with the non-discrimination requirements
of the Agreement in the performance of its obligations hereunder.
19. Governing Law. This Reimbursement Agreement shall be governed by the laws of the State
of California. Any legal action brought under this Reimbursement Agreement must be
instituted in the Superior Court of the County of San Diego, State of California, in an
appropriate municipal court in that county, or in the Federal District Court in the Southern
District of California.
20. Amendment of Reimbursement Agreement. No modification, rescission, waiver, release
or, amendment of any provisions of this Reimbursement Agreement shall be made except by a
wtitten agreement executed by Developer and Agency.
21. Independent Contractor. Developer and its Contractor(s) shall be acting as independent
contractors under this Reimbursement Agreement, and not as an agent, partner or employee
of the Agency.
22. Developer Assignment Prohibited. In no event shall Developer assign or transfer any part
of this Reimbursement Agreement without the prior express written consent of Agency,
which consent may be given or withheld in Agency's sole discretion.
23. Entire Agreement. This Reimbursement Agreement together with all attachments hereto,
and the Agreement and all attachments thereto, constitute the entire understanding and
agreement of the parties with respect to the subject matter of this transaction. This
R~imbursement Agreement integrates all of the terms and conditions mentioned herein or
incidental thereto, and supersedes all prior negotiations, discussions and previous agreements
between Agency and Developer concerning all or any part of the subject matter of this
Reimbursement Agreement; provided, however, that this Reimbursement Agreement shall
not supersede all or any portion of the Agreement.
24. Attorneys' Fees and Costs. In the event that any action is instituted under this
Reimbursement Agreement, the parties hereto agree that the non-prevailing party shall be
re~ponsible for and shall pay all costs and attorneys' fees incurred by the prevailing party in
enforcing this Reimbursement Agreement.
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25. Contingent Upon Closing. The effectiveness of this Reimbursement Agreement is
cdntingent upon the Developer's commencement of construction of the Phase I
Improvements under the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Reimbursement Agreement as of
the date set forth above.
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA, a public body corporate and
politic
By:
Chairman or Authorized Designee
"AGENCY"
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
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Agency General Counsel/City Attorney
GATEWAY CHULA VISTA, LLC, a California
limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
"DEVELOPER"
APPROVED AS TO FORM:
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Counsel to the Developer
ATTACHMENT NO. 16
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DOCSOC\66~779v 13\24212.0002
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DOCSOC\662~79v 13\24212.0002
EXHIBIT A TO ATTACHMENT NO. 16
PUBLIC IMPROVEMENTS DESCRIPTION
(TO BE ATTACHED)
EXHIBIT "A" TO ATTACHMENT NO. 16
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ATTACHMENT NO. 17
RIGHT OF ENTRY AGREEMENT
(Phasej II Agency Parcels for the Gateway Chula Vista Commercial Office/Retail Project)
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T~is RIGHT OF ENTRY AGREEMENT (Phase II Agency Parcels for the Gateway
Chula Vi~ta Commercial Office/Retail Project) ("Right of Entry Agreement") is made and entered
into as of · , 2000 by and between the REDEVELOPMENT
AGENC~ OF THE CITY OF CHULA VISTA, a public body, corporate and politic, and
GATEWAY CHULA VISTA, LLC, , a California limited liability company ("Developer"), with
respect to ~he following:
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RECITALS
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A.' Concurrent with the date of this Right of Entry Agreement he Agency and the
Develope~ are entering into that certain Disposition and Development Agreement dated
I , 2000 (the "Agreement"). Capitalized terms used in this Right of Entry Agreement
are as defihed in the Agreement or as specifically defined herein.
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B.I The Agreement relates to a proposed development Site which includes approximately
4.39 acreslofreal property consisting of sixteen (16) separate parcels, including: (i) the Phase I
Parcels comprised of the Phase I Developer Parcels and the Phase I Agency Parcels; (ii) the Phase II
Parcels comprised of the Phase II Developer Parcels, Phase II Agency Parcels, and Phase II
Acquisitiqn Parcels; and (iii) Phase IJJ Parcels comprised ofthe Phase 1Il Developer Parcels and the
Phase IJJ ~cquisition Parcels, located both within and outside the Town Centre I Redevelopment
Project Area. Thus, the Site comprises the entire proposed development property which is the
subject of~he Agreement, and, together with the Improvements required thereunder, including the
Phase llnjprovements, Phase II Improvements, and Phase 1Illmprovements, is referred to as the
Project. llhe Project, if the Site is assembled, will be developed in up to three (3) Phases, Phase I
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Improvements, Phase II Improvements, and Phase IJJ Improvements, and, when completed, shall
include, a first Class, First Quality mixed-use commercial/office project with Restaurant and retail
componen~s with common areas, including one parking structure that spans all three Phases of the
Project.
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c.: Subject to the right of the Agency to approve and authorize demolition of the existing
improvem~nts on the Phase I Parcels and/or the Phase II Parcels pursuant to Section 211 of the
Agreemen~, in connection with the design, site preparation, construction, and completion of the
Phase I Injprovements on the Phase I Parcels, it is necessary for the Developer to utilize and gain
access to t~e Phase II Agency Parcels for construction staging and other predevelopment and
developm~nt work related to the construction and completion of the Phase I Improvements
(the "Worf"), prior to the Phase II Conveyance.
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D.: The Agency desires to accommodate the Developer's desire to gain a right of entry to
the Phase II Agency Parcels to facilitate construction and completion of the Phase I Improvements
and underjake the Work through this Right of Entry Agreement by granting a right of entry to
Develope~ subject to and upon certain terms and conditions as set forth herein.
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DOCSOC\662V79v 13\24212.0002
ATTACHMENT NO. 17
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E.l To the extent there is an inconsistency or conflict between the provisions of this
Right ofSntry Agreement and the provisions of the Agreement, the provisions of the Agreement
shall prev~il and control.
NOW, THEREFORE, based on the foregoing Recitals, which are a substantive part of this
Right of Entry Agreement and for good and valuable consideration, the Agency and the Developer
hereby agtee as follows:
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Right of Entry. Provided that all of the terms and conditions of this Right of Entry
Atreement are fully satisfied, in particular the insurance requirements are fully satisfied prior
to lany entry upon the subject parcels, the Agency hereby grants to Developer and its agents
ant contractors the non-exclusive right to enter upon the Phase II Agency Parcels to perform
th Work only, and expressly for no other purposes without the prior written approval of the
A ency's Executive Director or his designee, which approval the Agency Director may grant
or deny in his sole discretion. All use of and entry upon the Phase II Agency Parcels shall be
at rhe sole cost, risk and expense of the Developer.
Aj Term of Right of Entry. This Right of Entry Agreement shall automatically
terminate and expire on the first to occur of the following: (i)
L-> days from the date of this Right of Entry Agreement, or (ii) upon the Phase II
Conveyance and delivery of title and possession of the Phase II Agency Parcels by
the Agency to the Developer pursuant to the Agreement, or (iii) upon the termination
of the Agreement.
1.
B.l
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No Property Rights Granted. It is expressly understood this Right of Entry
Agreement does not in any way whatsoever grant or convey any rights of possession,
easement or other interest in the Phase II Agency Parcels to the Developer, at this
point in time. or through this Right of Entry Agreement.
2.
Thmination of Right of Entry for Work beyond the Scope of the Work. Under the terms
o*his Right of Entry Agreement in no event shall Developer commence or cause to be
c9mmenced any work or improvement on the Phase II Agency Parcels outside the scope of
th~ defined Work, and provided further that the right to commence the Work is subject to
S1ction 211 of the Agreement relating to the authority of the Agency to determine when and
wether demolition of the existing improvements to the Phase I Parcels and/or the Phase II
P rcels should proceed. In the event Developer commences, undertakes, or completes any
otper work at the Phase II Agency Parcels outside the scope ofthe described Work, or,
cdmmences any demolition of existing improvements to said parcels prior to authority to
ddmolish pursuant to Section 211 of the Agreement, this Right of Entry Agreement shall
automatically terminate. Developer shall immediately vacate the Phase II Agency Parcels,
sh~1I have no further rights to enter the Phase II Agency Parcels for the Work, shall be liable
arjd responsible to the Agency for any and all damages and mechanics liens, if any, relating
tolthe Phase II Agency Parcels, and shall be responsible for the unauthorized demolition of
e~isting improvements, if such occurs.
A~ditional Conditions and Representations. By execution of this Right of Entry
A reement, Developer agrees for itself and on the behalf of its employees, agents,
c nsultants and contractors as follows:
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ATTACHMENT NO. 17
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4.
Compliance with All Applicable Governmental Requirements. All acts and
things done by Developer on the Phase II Agency Parcels will be done in a careful
and reasonable manner, in accordance with all applicable federal, state and local
laws, and all Governmental Requirements.
Developer at Own Risk. Developer enters the Phase II Agency Parcels entirely at its
own cost, risk and expense, and Developer acknowledges that the Agency and the
City of Chula Vista, and their officers, employees, agents or contractors, have made
no warranty or representation to Developer that the Phase II Agency Parcels, or any
part thereof are safe or suitable for the intended purpose of carrying out the Work.
Insurance. Prior to the Developer's entry upon the Phase II Agency Parcels and
during the period of this Right of Entry Agreement, there shall be in effect policies of
insurance in compliance with the requirements of the Agreement.
No Mechanics Liens. Developer shall not permit or suffer any mechanics',
materialmen's or other liens of any kind or nature to be filed or enforced against the
Phase II Agency Parcels.
No Reimbursement for Improvement Pertaining to the Realty. Any and all
Work, improvements pertaining to the realty added to the real property, or other
construction activities, if any, performed upon the Phase II Agency Parcels under this
Right of Entry Agreement shall be the property of the Agency, and Developer shall
not have any interest in the Phase II Agency Parcels or be entitled to any
reimbursement or repayment therefor.
F
General Maintenance and Clean-Up. During the term of this Right of Entry
Agreement, the Developer shall maintain the Phase II Agency Parcels in a safe and
good condition within reasonable commercial construction standards, with the mutual
understanding that the nature and scope of the Work relates to construction staging.
G,
Security. During the term of this Right of Entry Agreement, the Developer shall
keep secure and fenced the Phase II Agency Parcels to keep the property safe with
limited access to prevent accidents, vandalism, trespassing, and other negligent or
intentional acts or omissions; provided however such fencing of the Phase II Agency
Parcels may be included as a part of the larger construction project and the
construction fencing erected and maintained in connection with the development of
the Phase I Improvements.
H~zardous Materials. With respect to the Work and any other construction activities
p~rformed by and/or at the direction of Developer, the Developer shall take all necessary
c~mmerCiallY reasonable precautions to prevent the import and/or release into the
e vironment of any Hazardous Materials (as such term is defined in the Agreement), which
a imported to, on, or under the Phase II Agency Parcels or any other parts ofthe Site during
t/1k: term of this Right of Entry Agreement. If, at the direction, action, or inaction of
Dbveloper, or its agents, or in conjunction with the Work at the Phase II Agency Parcels or
arly other part of the Site, Hazardous Materials are imported onto the Phase II Agency Parcels
oq any other part of the Site, the Developer shall be solely responsible for removing or
c~using to be removed any imported Hazardous Materials in conformance with all applicable
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ATTACHMENT NO. 17
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DOCSOC\661779v 13\24212.0002
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G~vernmental Requirements. Such precautions shall include compliance with all applicable
G~vernmental Requirements with respect to Hazardous Materials. In addition, Developer
sh~1I install and utilize such equipment and implement and adhere to such procedures as are
corsistent with commercially reasonable standards as respects the disclosure, storage, use,
rejnoval, and disposal of Hazardous Materials.
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6.
Developer shall notify the Agency, and provide to the Agency a copy or copies, of all
environmental permits, disclosures, applications, entitlements or inquiries relating to
the Phase II Agency Parcels or any other parts of the Site, including notices of
violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease
and desist orders, reports filed pursuant to self-reporting requirements and reports
filed or applications made pursuant to any Governmental Requirements relating to
Hazardous Materials and/or underground tanks, if any, thereon. The Developer shall
report to the Agency, as soon as possible after each incident, any unusual or
potentially important incidents with respect to the environmental condition of the
Phase II Agency Parcels.
In the event Hazardous Materials are imported in or on the Phase II Agency Parcels
or any other parts of the Site during the Work or a release of any Hazardous Materials
occurs into the environment, the Developer shall, as soon as possible after the release,
furnish to the Agency a copy of any and all reports relating thereto and copies of all
correspondence with governmental agencies relating to the import and/or release.
Upon request, the Developer shall furnish to the Agency a copy or copies of any and
all other environmental entitlements or inquiries relating to or affecting the Phase II
Agency Parcels or any other parts of the Site, including, but not limited to, all permit
applications, permits and reports including, without limitation, those reports and other
matters which may be characterized as confidential.
I~emnity. The Developer hereby agrees to defend, indemnify and hold the Agency and the
C ty of Chula Vista, and their respective officers, officials, members, employees, agents and
re resentatives, harmless from and against any and all loss, damage, injury, liability, claim,
c st or expense (including, without limitation, reasonable attorneys' fees, expert witness fees,
cc!urt costs, and expenses) arising from or attributable to the activities of Developer, or any of
it~ employees, agents, consultants or contractors upon the Phase II Agency Parcels or any
p4rts of the Site pursuant to this Right of Entry Agreement for the Work, any action or failure
tol act under this Right of Entry Agreement, or which may arise out of Developer, and/or its
c~ntractors, completing or causing the completion of any inspections, investigations, tests,
e~vironmental assessments hereunder; except to the extent of negligent and/or intentional
mlisconduct ofthe Agency and/or the City adjudged by a court of competent jurisdiction for
w~ich the Agency agrees to be financially responsible to the extent of such determined
li,bility. This indemnity is in addition to and shall replace or supplant any indemnity
o~ligations set forth in the Agreement.
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Miscellaneous.
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Attorneys' Fees. In the event either party hereto brings an action or proceeding for a
declaration of the rights of the parties under this Right of Entry Agreement, for
injunctive relief, or for an alleged breach or default of, or any other action arising out
of this Right of Entry Agreement or the transactions contemplated hereby ("action"),
ATTACHMENT NO. 17
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DOCSOC\667779v 13\24212.0002
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the prevailing party in any such action shall be entitled to an award of reasonable
attorneys' fees and costs and expert witness fees, if any, incurred in such action or
proceeding, in addition to any other damages or relief awarded, regardless of whether
such action proceeds to final judgment.
Choice of Law; Forum. This Right of Entry Agreement is to be governed by, and
construed in accordance with, the laws of the State of California. The Municipal and
Superior Courts of the State of California in the County of San Diego, or such other
appropriate court in such county, shall have exclusive jurisdiction of any litigation
between the parties arising out of or related to this Right of Entry Agreement.
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Remedies. Either party shall, in addition to all other rights provided herein or as may
be provided by law, be entitled to the remedies of specific performance and
injunction to enforce its rights hereunder, except to the extent expressly provided to
the contrary in this Right of Entry Agreement. All rights and remedies under this
Right of Entry Agreement are cumulative and no one of them shall be exclusive of
any other, and each party shall have the right to pursue anyone or all of such rights
and remedies or any other remedy which may be provided by law, whether or not
stated in this Right of Entry Agreement, except to the extent expressly provided to the
contrary in this Right of Entry Agreement.
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Counterparts. This Right of Entry Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
Non-Liability of Public Officials. No officer, employee, member, agent or
representative of the Agency or ofthe City ofChula Vista shall be personally liable
to Developer in the event of any default or breach by the Agency, or for any amount
which may become due to Developer or its successor, or for any breach of any
obligation of the terms of this Right of Entry Agreement.
F.
City Is Not a Party. The City ofChula Vista is not a party to this Right of Entry
Agreement and shall have no rights or obligations hereunder, except that the City and
the City's and Agency's respective officers, officials, members, employees, agents,
and representatives shall be third party beneficiaries with respect to insurance and
indemnity obligations hereunder.
G.
No Assignment. The rights granted by this Right of Entry Agreement are personal to
the Developer and Developer shall not assign, transfer, lease, pledge, surrender or
otherwise dispose of this Right of Entry Agreement without the prior express written
approval of the Agency Executive Director, in his sole and absolute discretion.
[signature block on next page)
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DOCSOC\662t79V 13\24212.0002
ATTACHMENT NO.1?
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INlWITNESS WHEREOF, the parties hereto have entered into this Right of Entry
Agreemeni as of the date and year first set forth above.
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA,
a public body, corporate and politic
By:
Agency Executive Director
ATTEST!
Agency S cretary
D AS TO FORM:
Agency eneral Counsel/City Attorney
GATEWAY CHULA VISTA, LLC, a California
limited liability company
By: Coast Pacific Properties, LLC
Its: Co-Managing Member
James V. Pieri, Manager
By: Chula Vista Asset Management, LLC
Its: Co-Managing Member
Jess Rae Booth, Manager
"DEVELOPER"
APPRO ED AS TO FORM:
Counsel t the Developer
DOCSOC\61j2779V 13\24212.0002
ATTACHMENT NO. 17
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