Ordinance No. 11854.4. 64
ORDINANCE NO. 1185
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CYPRESS,
CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT BY AND
BETWEEN THE CITY OF CYPRESS AND SP ACQUISITION, LLC FOR
THE CYPRESS CITY CENTER PROJECT AND ADOPTING FINDINGS IN
SUPPORT THEREOF
WHEREAS, California Government Code Section 65864 et seq. (the
"Development Agreement Statute") authorizes the City to enter into a binding
Development Agreement ("DA" or "Development Agreement") with any person having a
legal or equitable interest in real property for the development of such property and
establishing certain development rights therein, all for the purpose of strengthening the
public planning process, encouraging private participation and comprehensive planning
and identifying the economic costs of such development; and
WHEREAS, City owns approximately 13.329 acres of land located at 5095-
5275 Katella Avenue, Cypress, California (APNs 241-091-022 through -026) ("Site"),
which is within City's municipal boundaries, and pursuant to that certain Exclusive
Negotiation Agreement (dated April 9, 2019) ("ENA"), City entered into exclusive
negotiations with SP Acquisition, LLC ("Developer") to reach an agreement for the
acquisition of the Site, subject to specified conditions precedent set forth therein; and on
November 19, 2019, as contemplated in the ENA, City entered into a Disposition and
Development Agreement ("DDA") that provides for City's disposition of the Site to
Developer, subject to the terms and conditions set forth therein; and with the execution
of the DDA by both parties, upon the effective date thereof, Developer obtained an
equitable interest in the Site for purposes of entering into this DA; and
WHEREAS, pursuant to the Development Agreement Statute, City has
adopted procedures and requirements for the consideration of development agreements,
which are set forth in City of Cypress Municipal Code ("Municipal Code"), Appendix I
(Zoning), section 4.21.40 ("City Development Agreement Procedures"); and this DA has
been prepared, processed, considered and adopted in accordance with such procedures
and the Development Agreement Statute; and
WHEREAS, Developer (including its Transferee(s) as that term is defined in the
DA) proposes to design, construct and operate a multi -family residential, mixed use
project upon the Site, which consists of commercial retail, restaurant and shopping center
uses consisting of a luxury cinema or other typical shopping center uses, along with
residential and hotel uses, as further described in the Initial Approvals and Subsequent
Approvals (as those terms are defined in the DA) (collectively, the "Project"); and
WHEREAS, City and Developer propose to enter into the DA that is attached
hereto as Exhibit A; and
WHEREAS, as set forth in more detail in the DA, City has determined that
redevelopment of the Site with the Project will facilitate achievement of numerous goals
and policies and is consistent with the actions, goals, objectives and policies of the City's
General Plan, the Cypress Business and Professional Center Specific Plan ("Specific
Plan"), as amended, and the Municipal Code; is in the best interests of the City of
Cypress; and is in conformity with and will promote the public convenience, health,
interest, safety, general welfare, and good land use practices; and
WHEREAS, the discretionary entitlement process for the Project is subject to
compliance with CEQA; and to satisfy requirements under CEQA, City, as the lead
agency, has caused the Project EIR (as that term is defined in the DA) to be prepared by
LSA Associates, Inc., and then processed the Project EIR in accordance with the
applicable requirements of CEQA; and
WHEREAS, the City Council of the Cypress, California ("City Council"), did on the
26th of May 2020, hold a duly noticed public hearing to consider the Project EIR, the Initial
Entitlements and the DA. After taking testimony and considering the matter, the City
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Council closed the public hearing, deliberated, and certified the Project EIR as reflecting
the City's independent judgment and having been prepared in accordance with CEQA;
and
WHEREAS, all actions required to be taken by City precedent to the adoption of
this Ordinance have been regularly and duly taken.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS,
CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Findings.
The City Council hereby finds as follows:
1. The DA is in the best interests of the City.
2. The DA is consistent with the actions, goals, objectives, and policies of the
General Plan, the Specific Plan, and the City's zoning ordinance.
3. The DA will promote the public convenience, health, interest, safety, and
welfare of the City.
Section 2. Approval.
The City Council hereby approves and adopts the DA in the form presented to the
City Council concurrent with the approval and adoption of this Ordinance, which form is
attached hereto as Exhibit A. The City Council authorizes and directs the Mayor to sign
the DA on behalf of the City, and the City Clerk to record the DA in the Official Records
of Orange County in accordance with applicable law.
Section 3. Environmental.
The City has caused to be prepared the Project EIR, which analyzed the Project's
potential environmental impacts and therefore considered the Initial Approvals including,
among others, the DA. The City certified the Project EIR on May 26, 2020.
Section 4. Effective Date.
This Ordinance shall be in full force and effect thirty (30) days after its adoption.
Section 5. Posting.
The City Clerk shall certify to the passage and adoption of this Ordinance, and
shall cause the same to be posted in at least three public places designated by resolution
of the City Council, and shall cause this Ordinance and its certification, together with proof
of posting, to be entered into the Book of Ordinances of this City.
FIRST READ at a regular meeting of the City Council of said City held on the 26th
day of May, 2020 and finally adopted and order posted at a regular meeting held on the
8th day of June, 2020.
ADOPTED, SIGNED and APPROVED this 8th day of June, 2020.
MAYO O THE CITY OF CYPRESS
ATTEST:
Q
CITY C RK O THE ITY OF CYPRESS
01006.0005/643797.2
.18
SCID
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
I, Alisha Farnell, City Clerk of the City of Cypress, DO HEREBY CERTIFY
THAT THE FOREGOING Ordinance was duly adopted by said City Council at a regular
meeting held on the 8th day of June 2020, by the following roll call vote:
AYES: 3 COUNCIL MEMBERS: Morales, Peat and Johnson
NOES: 2 COUNCIL MEMBERS: Berry and Yarc
ABSENT: 0 COUNCIL MEMBERS: None
CI LERK OF THE CITY OF CYPRESS
01006.0005/643797.2
EXHIBIT A
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cypress
5275 Orange Avenue
Cypress, CA 90630
Attn: City Manager
(For Recorder's Use Only)
Exempt from filing fee pursuant to Gov. Code §§ 6301 and 27383
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF CYPRESS
AND
SP ACQUISITION, LLC
REGARDING CYPRESS CITY CENTER PROJECT
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DEVELOPMENT AGREEMENT BY AND BETWEEN
THE CITY OF CYPRESS AND SP ACQUISITION, LLC REGARDING
CYPRESS CITY CENTER PROJECT
THIS DEVELOPMENT AGREEMENT ("Development Agreement") is entered into as of
, 2020 by and between the CITY OF CYPRESS, a California charter
municipality ("Citi'), and SP ACQUISITION, LLC, a California limited liability company
("Developer"). City and Developer are occasionally referred to herein jointly as the "parties"
and individually as a "partj/'.
RECITALS
A. To strengthen the public planning process, encourage private participation in
comprehensive planning and reduce the economic risk of development, the Legislature of the
State of California enacted Government Code section 65864 et seq. ("Development
Agreement Statute"), which authorizes a city to enter into a development agreement with any
person having a legal or equitable interest in real property regarding the development of such
property and establishing certain development rights therein.
B. Pursuant to the Development Agreement Statute, City has adopted procedures
and requirements for the consideration of development agreements, which are set forth in City
of Cypress Municipal Code ("Municipal Code"), Appendix I (Zoning), section 4.21.40 ("City
Development Agreement Procedures"). This Development Agreement has been prepared,
processed, considered and adopted in accordance with such procedures.
C. City owns approximately 13.329 acres of land located at 5095-5275 Katella
Avenue, Cypress, California (APNs 241-091-022 through -026), which is within City's municipal
boundaries and more particularly described in Attachment A hereto ("Site"). Pursuant to that
certain Exclusive Negotiation Agreement (dated April 9, 2019) ("ENA"), City entered into
exclusive negotiations with Developer to reach an agreement for the acquisition of the Site,
subject to specified conditions precedent set forth therein. On November 19, 2019, as
contemplated in the ENA, City entered into a Disposition and Development Agreement ("DDA")
that provides for City's disposition of the Site to Developer, subject to the terms and conditions
set forth therein. With the execution of the DDA by both parties, upon the effective date thereof,
Developer will have obtained an equitable interest in the Site for purposes of entering into this
Development Agreement. The parties seek to use this Development Agreement to further refine
and implement certain provisions of the DDA, and pursuant to Section 3.1 below, in the event of
any inconsistency between this Development Agreement and the DDA, this Development
Agreement shall control and prevail.
D. The Site fronts the arterial of Katella Avenue and includes multiple points of
ingress and egress from the signalized intersections of Siboney Street and Winners Circle. The
Site is located on a six -lane arterial Orange County Transit Authority "Smart Street" (Katella
Avenue), and has easy regional access from major freeways including Highway 91, Interstate
405 and Interstate 605. A major retail magnet is already in place adjacent to the Site, Costco,
which (as a chain) generates some of the highest consumer activity in the industry. As reflected
in the DDA, City has determined that redevelopment of the Site with the Project will facilitate
achievement of numerous goals and policies of the City's General Plan as well as the Specific
Plan and is in conformity with the public convenience, general welfare, and good land use
practices.
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E. Developer proposes to design and construct a multi -family residential, mixed use
project upon the Site, which consists of the following components, including a total of
approximately sixty three thousand nine hundred seventy-five (63,975) square feet of
commercial retail, restaurant and related uses along with residential and hotel uses, as further
described below and in the Initial Approvals and Subsequent Approvals as and when granted,
issued or approved (collectively, the "Project'):
1. The "Residential Component," which consists of multi -family residential
uses with a maximum gross density of twenty (20) dwelling units per acre,
not to exceed a total of (251) multi -family dwelling units and related
improvements and amenities.
2. The "Hotel Component," which consists of that portion of the Site to be
improved with the construction and operation of a single hotel tenant and
related improvements with up to one hundred twenty (120) keys.
3. The "Cinema Component," which consists of that portion of the Site to
be improved with the construction and operation of a nationally -
recognized cinema and related improvements (if such cinema use is
deemed feasible in Developer's sole discretion). Provided, however, for
avoidance of doubt, if Developer determines a cinema use is infeasible,
then other commercial/retail uses consistent with a shopping center are
permitted as set forth in more detail in the Initial Approvals, including,
without limitation, a grocery and/or other retail and restaurant use(s).
4. The "Retail Component," which consists of that portion of the Site to be
improved with the construction and operation of general commercial/retail
uses, including, without limitation, a grocery and/or other retail and
restaurant use(s) consistent with a shopping center, along with related
improvements.
F. The discretionary entitlement process for the Project is subject to compliance
with CEQA. To satisfy requirements under CEQA, City, as the lead agency, has caused the
Project EIR to be prepared by LSA Associates, Inc. To that end, on November 22, 2019, City
published a Notice of Preparation ("NOP') for the Project, which circulated for a thirty (30) -day
public comment period. City held a public scoping meeting on December 11, 2019, to present
the Project and to solicit input on the proper scope of CEQA review. On February 11, 2020, City
issued the Draft EIR, with a 45 -day public comment period. Thereafter, in May 2020, City
issued the Final EIR.
G. On May 26, 2020, at a duly noticed public hearing, after taking testimony and
considering the matter, the City Council closed the public hearing, deliberated, and took the
following actions (collectively, the "Initial Approvals"):
1. Pursuant to and in compliance with CEQA, by Resolution No. 2020-,
the City Council certified the Project EIR, adopted a Statement of
Overriding Considerations, adopted the MMRP, and made the requisite
written findings as set forth in that resolution.
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2. The City Council conducted the first reading of Ordinance No. an
ordinance approving this Development Agreement and directing this
Development Agreement's execution by City ("Approving Ordinance").
3. The City Council conducted the first reading of Ordinance No. , an
ordinance amending the Specific Plan to create a new mixed-use land
use district for the Site to allow residential and hotel uses ("Specific Plan
Amendment Ordinance");
4. The City Council approved the Tentative Parcel Map, by Resolution No.
2020-, required for the subdivision of the Site; and
5. The City Council approved Conditional Use Permit No. 3158, by
Resolution No. 2020-_, for the hotel, theater, commercial/retail,
restaurant and alcohol uses.
H. On , 2020, the City Council conducted the second reading of and
adopted the Approving Ordinance and the Specific Plan Amendment Ordinance.
City and Developer now desire to enter into this Development Agreement to
provide, among other things, for Developer's vested right to develop the proposed Project on
the Site, along with Developer's development obligations related thereto, as more particularly
set forth herein and in accordance with the Applicable Law.
K. City finds that this Development Agreement is consistent with the actions, goals,
objectives and policies of the City's General Plan, the Specific Plan, and the Municipal Code, as
amended by the Initial Approvals; is in the best interests of the City of Cypress; and will promote
the public convenience, health, interest, safety and welfare of the City of Cypress.
NOW, THEREFORE, based on the above recitals, which are deemed true and correct
and which are incorporated into the terms of this Development Agreement, and in consideration
of the mutual covenants and promises set forth herein, the parties agree as follows:
AGREEMENT
SECTION 1. DEFINITION OF TERMS.
This Development Agreement uses certain terms with initial capital letters that are
defined in this Section 1 or elsewhere in this Development Agreement. City and Developer
intend to refer to those definitions when the capitalized terms are used in this Development
Agreement.
1.1. "Applicable Law" has the meaning set forth in Section 3.2(a) below.
1.2. "Approving Ordinance" has the meaning set forth in Recital G(2) above.
1.3. "Assignment and Assumption Agreement" has the meaning set forth in
Section 10.5 below.
1.4. "Authorized Cinema Developer List" has the meaning set forth in Section
10.2(c) below.
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1.5. "Authorized Grocer Developer List" has the meaning set forth in Section
10.2(c) below.
1.6.
below.
"Authorized Hotel Developer List" has the meaning set forth in Section 10.2(b)
1.7. "Building Permit" means the document issued by City's Building Official
authorizing the holder to construct a building or other structure, as provided for in the City of
Cypress Municipal Code.
1.8. "CEQA" means the California Environmental Quality Act set forth in Public
Resources Code Section 21000 et seq. and CEQA Guidelines (Tit. 14 CCR § 15000 et seq.).
1.9. "Cinema Component" has the meaning set forth in Recital E(3) above.
1.10. "City" means the City of Cypress, a California charter municipal corporation, as
set forth in the Preamble.
1.11. "City Council" means the Cypress City Council.
1.12. "City Development Agreement Procedures" has the meaning set forth in
Recital B above.
1.13. "City Party(ies)" has the meaning set forth in Section 11.11 below.
1.14. "Claims" has the meaning set forth in Section 11.11 below.
1.15. "CO" has the meaning set forth in Section 10.3(a) below.
1.16. "Commence Construction" (or any reasonable variation thereof) has the
meaning set forth in Section 4.5 below.
1.17. "Conditional Use Permit" means CUP Application No. 3158 for a conditional
use permit (CUP) that is required for the proposed hotel, theater, commercial/retail, restaurant
and alcohol uses as set forth in Resolution No. (Approving Conditional Use Permit No.
3158).
1.18. "County Recorder" means the Orange County Recorder, which is responsible,
in part, for recording legal documents that determine ownership of real property and other
agreements related to real property.
1.19. "Days" means calendar days unless otherwise expressly indicated.
1.20. "Default" has the meaning set forth in Section 7.1 below.
1.21. "Developer" has the meaning set forth in the Preamble.
1.22. "Developer Affiliate" has the meaning set forth in Section 10.2(a) below.
1.23. "Development Agreement" has the meaning set forth in the Preamble and shall
include all attachments, which attachments are a part hereof and incorporated herein in their
entirety.
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1.24. "Development Agreement Statute" has the meaning set forth in Recital A
above.
1.25. "Development Standards" has the meaning set forth in Section 3.1 below.
1.26. "Discretionary Entitlement(s)" means any and all discretionary entitlement(s),
permit(s), and approval(s) from City and/or other government or quasi -governmental authorities
with jurisdiction over aspect(s) of the Project that are necessary to construct and operate the
Project, including, without limitation, General Plan amendment(s), specific plan amendment(s),
zoning code/map amendment(s), tentative subdivision/parcel map(s), conditional use permit(s),
major and minor use permit(s), design review, site plan review, encroachment permit(s), sign
permit(s), tree removal permit(s), and/or permits necessary for the purchase and sale of
alcoholic beverages.
1.27. "Effective Date" means the date that is thirty (30) days following the adoption of
the Approving Ordinance approving this Development Agreement. The Effective Date shall be
inserted above, where indicated.
1.28. "ENA" has the meaning set forth in Recital C above.
1.29. "Estoppel Certificate" has the meaning set forth in Section 6.3 below.
1.30. "Exaction(s)" means any exaction(s) that may be imposed by City or other
governmental or quasi -governmental authorities as a condition of developing the Project,
including, without limitation, requirements for acquisition, dedication or reservation of land; and
obligations to construct on-site or off-site public and private infrastructure improvements such as
roadways, utilities or other improvements; this is the case whether such exaction(s) constitute
subdivision improvements, mitigation measures in connection with environmental review of the
Project, or impositions made under applicable laws and regulations. Provided, however, any
condition imposed on the Project that meets the definition of an Exaction, but also meets the
definition of an "Impact Fee," (as defined in Section 1.36 below) shall be considered an Impact
Fee.
1.31. "Excused Delay" means any delay described in Section 7.4 below.
1.32. "Fee Vesting Period" has the meaning set forth in Section 5.3(a).
1.33. "Future User" has the meaning set forth in Section 10.3(a) below.
1.34. "General Plan" means the City of Cypress General Plan in effect as of the
Effective Date.
1.35. "Hotel Component" has the meaning set forth in Recital E(2) above.
1.36. "Impact Fee(s)" means any monetary amount(s) charged by City or other
governmental or quasi -governmental authority in connection with a Project Approval in order to
lessen, offset, mitigate or compensate for the impacts of development of the Project on the
environment; facilities, services, improvements and/or infrastructure; or other public interests,
including, without limitation, any "fee" defined by Government Code section 66000(b) as well as
any fee imposed "in lieu of" an Exaction. Any such monetary amount imposed on the Project
that meets the definition of an Impact Fee as well as the definition of an Exaction shall be
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considered an Impact Fee. The Parties acknowledge and agree that City Impact Fees in effect
on the Effective Date are identified in Attachment B hereto.
1.37. "Large Commercial Tenant" has the meaning set forth in Section 10.3(a) below.
1.38. "Later Enactment(s)" has the meaning set forth in Section 3.2(c) below.
1.39. "Major Amendment" has the meaning set forth in Section 11.4(b) below.
1.40. "Ministerial Permit(s)" means any and all ministerial approval(s), permit(s),
license(s) and other entitlements from City and/or other governmental or quasi -governmental
authorities with jurisdiction over aspect(s) of the Project that are necessary to construct and
operate the Project including, without limitation, final/parcel map(s), grading permit(s),
demolition permit(s), building permit(s), encroachment permit(s), certificate(s) of occupancy,
core and shell occupancy permit(s), temporary occupancy permit(s), building permit sign -off and
permits relating to the purchase and sale of alcoholic beverages and shall expressly exclude all
Discretionary Entitlements.
1.41. "Minor Amendment" has the meaning set forth in Section 11.4(b) below.
1.42. "Mortgage" means any mortgage, deed of trust, security agreement, sale and
lease -back financing, or other like security instrument encumbering all or any portion(s) of the
Site and/or any of Developer's rights under this Development Agreement.
1.43. "Mortgage Holder" means the holder of any Mortgage, and any Transferee of
any such Mortgage Holder.
1.44. "MMRP" means the mitigation monitoring and reporting plan that incorporated all
identified mitigation measures set forth in the Project EIR.
1.45. "Notice" has the meaning set forth in Section 11.7 below.
1.46. "Notice of Default" has the meaning set forth in Section 7.1 below.
1.47. "Notice of Intent to Terminate" has the meaning set forth in Section 8.2 below.
1.48. "Pad Sale Buyer" has the meaning set forth in Section 10.3(a) below.
1.49. "Party(ies)" has the meaning set forth in the Preamble.
1.50. "Periodic Review" has the meaning set forth in Section 6.1(a) below.
1.51. "Permitted Affiliate Assignee" has the meaning set forth in Section 10.2(a)(i)
below.
1.52. "Permitted Residential Affiliate Assignee" has the meaning set forth in Section
10.2(a)(ii) below.
1.53. "Permitted Transfer(s)" has the meaning set forth in Section 10.2 below.
1.54. "Planning Director" means the Director of the City of Cypress Community
Development Department, Planning Division.
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1.55. "Project" has the meaning set forth in Recital E above.
1.56. "Project Approvals" means, collectively, the Initial Approvals and the
Subsequent Approvals as and when granted, issued or approved.
1.57. "Project Phase" has the meaning set forth in Section 4.1 below.
1.58. "Project EIR" means, collectively, the Cypress City Center Project Draft
Environmental Impact Report (February 2020) (SCH No. 2019110458) and all attached
appendices ("Draft EIR") and the Cypress City Center Project Responses to Comments/Final
Environmental Impact Report and all attached appendices ("Final EIR").
1.59. "Regulatory Processing Fees" means any and all fees, costs and charges
adopted or otherwise imposed by City for the purpose of defraying City's actual costs incurred
or to be incurred in the processing and administration of any form of permit, approval, license,
entitlement, or formation of a financing district or mechanism, or any and all costs adopted or
otherwise imposed by City for the purpose of defraying City's actual costs of periodically
updating its plans, policies, and procedures, including, without limitation, the fees and charges
referred to in Government Code Section 66014.
1.60. "Residential Component" has the meaning set forth in Recital E(1) above.
1.61. "Retail Component" has the meaning set forth in Recital E(4) above.
1.62. "Schedule of Performance" has the meaning set forth in Section 4.7 below.
1.63. "Shea Entity" has the meaning set forth in Section 10.2(a)(i) below.
1.64. "Site" has the meaning set forth in Recital C above.
1.65. "Specific Plan" means the Amended and Restated Cypress Business &
Professional Center Specific Plan (2012), as further amended by the Initial Approvals.
1.66. "Specific Plan Amendment" has the meaning set forth in Recital G(3) above.
1.67. "Substantially Complete" (or any reasonable variation thereof) has the meaning
set forth in Section 4.5 below.
1.68. "Subsequent Approval(s)" means any and all land use, environmental, building,
construction and development approvals, entitlements and/or permits that are necessary or
desirable to develop and operate the Project on the Site subsequent to the Effective Date,
including, without limitation, amendments or other modifications to any Initial Approvals;
vacation or abandonment of public right(s) of ways; final subdivision maps, parcel maps and lot
line adjustments; site plan review; conditional use permits; design review; Building Permits;
grading permits; encroachment permits; Certificates of Occupancy; formation of financing
districts or other financing mechanisms; General Construction Permit; Groundwater Dewatering
Permit; Proposed FAA Construction or Alteration Determination; and any amendments thereto
(administrative or otherwise).
1.69. "Tentative Parcel Map" means Application No. 96-121 for a tentative parcel map
to subdivide the Site as contemplated by the Project.
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1.70. "Term" has the meaning set forth in Section 2.4 below.
1.71. "Third -Party Litigation" means the filing of litigation by a third party challenging
this Development Agreement and/or other Project Approval(s) on CEQA or any other grounds.
1.72. "Transfer" has the meaning set forth in Section 10.1 below.
1.73. "Transferee(s)" has the meaning set forth in Section 10.1 below.
SECTION 2. DESCRIPTION OF SITE; PROPOSED DEVELOPMENT; EFFECTIVE DATE;
TERM
2.1. Description of Site. This Development Agreement vests laws applicable to
development of the Project on the Site, as more particularly described and shown in
Attachment A.
2.2. Proposed Development. Subject to the terms of this Development Agreement,
the other Initial Approvals, and the Subsequent Approval(s) as and when issued, granted or
approved, Developer has the right to construct and operate the Project on the Site.
2.3. Effective Date. The rights, duties, and obligations hereunder shall be effective
and the Term shall commence on the "Effective Date," which shall be the effective date of the
Approving Ordinance.
2.4. Term of Agreement. Subject to extension(s) provided for in Section 2.5 below
and/or any Excused Delay, the term of this Development Agreement shall commence on the
Effective Date and continue for a period of seven (7) years unless sooner terminated as
provided herein ("Term"). The Term may be extended at any time before termination by the
mutual agreement of the parties in writing and in accordance with the Development Agreement
Statute and City's Development Agreement Procedures. Following the expiration of the Term,
this Development Agreement shall be deemed terminated and of no further force and effect,
except for the provisions hereof that expressly survive termination. While the parties intend the
foregoing termination to be automatic and self-executing, City agrees to promptly execute and
deliver such documents and instruments in recordable form as Developer may reasonably
request in order to evidence the termination of this Development Agreement.
2.5. Extension of Term. Within thirty (30) days of Developer's request, the Term
shall be extended once for a period of three (3) years so long as Developer is in compliance in
all material respects with its obligations hereunder ("Mandatory Extension"). The City
Manager shall have the authority to grant the Mandatory Extension administratively, and no
public notice or public hearing shall be required. In addition to the Mandatory Extension, upon
Developer's request, the City Council may decide, in its sole discretion, to further extend the
Term for a total of up to three (3) additional years ("Discretionary Extension") so long as
consideration of this request takes place at a duly -noticed public hearing.
SECTION 3. STANDARDS, LAWS, AND PROCEDURES GOVERNING THE PROPOSED
DEVELOPMENT
3.1. Vested Right to Develop the Project. As of the Effective Date, Developer shall
have the vested right to construct and operate the Project on all or any portion(s) of the Site in
accordance with the Applicable Law. The permitted uses of the Site; the density and intensity of
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such uses; the maximum height, bulk and size of proposed buildings; the provisions for the
reservation or dedication of land for public purposes and the location of public improvements;
the general location of public utilities; the construction, installation and extension of public
improvements; and other terms and conditions of development applicable to the Project shall be
as set forth in the Applicable Law (collectively, "Development Standards"). In the event of any
inconsistency between this Development Agreement and the Applicable Law, or between this
Development Agreement and any Subsequent Approval(s), or between this Development
Agreement and the DDA, to the fullest extent legally possible, this Development Agreement
shall prevail and control.
3.2. Rules, Regulations and Policies Governing Construction and Operation of
the Project.
(a) Applicable Law. "Applicable Laud' consists of the rules, regulations and
official policies governing the Development Standards applicable to the Project existing as of the
Effective Date, as supplemented and modified by the Initial Approvals, the Subsequent
Approvals as and when they are issued, granted or approved, and Later Enactments, all except
as otherwise provided in this Development Agreement.
(b) Processing Subsequent Approvals Generally. The Parties acknowledge
that in order to develop the Project on the Site, Developer will need to obtain City approval of
various Subsequent Approvals. For all such Subsequent Approvals, Developer shall file an
application with City for the Subsequent Approval at issue in accordance with the Applicable
Law, and shall pay any applicable Regulatory Processing Fees in connection therewith. City
shall diligently and expeditiously process each such application in accordance with the
Applicable Law, and shall exercise any discretion City has in related thereto in accordance with
the terms and conditions of this Development Agreement. Except as expressly provided herein,
this Development Agreement does not restrict City's exercise of its police powers, and City
reserves those powers to itself.
(c) No Conflict with Vested Rights. City, or the electorate through adoption of
initiatives, may adopt new or modified rules, regulations or official policies after the Effective
Date (each a "Later Enactment' and, collectively, "Later Enactments"); provided, however,
any such Later Enactment(s) shall be applicable to the Project on the Site only to the extent that
application of any Later Enactment does not modify the Project; does not prevent or impede
development of the Project; and does not conflict with this Development Agreement. Any Later
Enactment shall be deemed to conflict with this Development Agreement and Developer's
vested rights hereunder if the enactment seeks to accomplish any one or more of the following
results, either with specific reference to the Project or the development of the Site, or as part of
a general enactment that would otherwise apply to the Site:
(i) Limit or reduce the density or intensity of the Project under the
Applicable Law;
(ii) Change any land use designation or permitted or conditionally
permitted use(s) of the Site or require a change in the amount of any particular land use to be
developed on the Site, as described in the Applicable Law;
(111) Require, for any work necessary to develop the Project on the
Site, the issuance of permits, approvals, or entitlements by City other than those required by the
Applicable Law;
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(iv) Limit or control the location of buildings, structures, grading,
or other improvements of the Project, or limit the hours of operation or uses on the Site, in a
manner that is inconsistent with the Initial Approvals;
(v) Limit the timing or rate of the development of the
Project (including, without limitation, the timing of approval and issuance of any Subsequent
Approvals), or materially limit the processing of, the procuring of applications for, or approval of
the Subsequent Approvals; or
(vi) Result in Developer having to substantially delay construction of
the Project.
(d) Applicable Later Enactments. Notwithstanding the foregoing, City shall
not be precluded from applying a Later Enactment to the Project under the following limited
circumstances:
(i) Specifically mandated by changes in state or federal laws or
regulations adopted after the Effective Date as provided in Government Code Section 65869.5;
(ii) Specifically mandated by a court of competent jurisdiction;
(iii) Specifically mandated as a result of changes to the Uniform
Building Code or similar uniform construction codes (such as the California Fire Code) so long
as such code (as modified to include the foregoing changes) has been adopted by City and is in
effect on a Citywide basis; or
(iv) Required as a result of facts, events or circumstances presently
unknown or unforeseeable that would otherwise have an immediate and substantially adverse
risk on the health or safety of the surrounding community as reasonably determined by City and
documented by substantial evidence in the administrative record.
If City imposes a Later Enactment on the Project as a result of the occurrence of one of
the circumstances set forth in subsection (d)(i)-(iv) above, then the parties shall work diligently
and in good faith to amend this Development Agreement in a manner to reasonably reflect the
required Later Enactment while still achieving the underlying purposes of this Development
Agreement. If state and/or federal law(s) and/or regulation(s) enacted after the Effective Date
prevent or preclude compliance with one or more provisions of this Development Agreement,
and further if Developer does not consent to a reasonable amendment that is required to make
this Development Agreement consistent therewith in accordance with Government Code section
65869.5, City shall provide Developer written notice of the immediate suspension of this
Development Agreement, and it shall remain suspended until the date the Development
Agreement is so amended.
3.3. Developer's Application for Non -City Permits, Entitlements and Approvals.
City and Developer acknowledge and agree that other governmental and quasi -governmental
authorities not within City's control may possess jurisdiction to regulate aspect(s) of the
development of the Site and the Project and that this Development Agreement does not limit the
jurisdiction of such other authorities. City shall reasonably cooperate with Developer in
Developer's effort to process its applications to obtain such permits, entitlements and approvals
as may be required by other governmental or quasi -governmental authorities in connection with
the development of, or the provision of services to, the Site and/or the Project; provided,
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however, City shall have no obligation to incur any material costs, without compensation or
reimbursement, or to amend any City policy, regulation or ordinance in connection therewith.
3.4. Processing Subsequent Approvals. The Subsequent Approvals shall be
deemed mechanisms to implement those final policy decisions reflected by the Initial Approvals
and other provisions of Applicable Law. City shall cooperate and diligently and expeditiously
work with Developer to promptly process and consider all applications for Subsequent
Approvals (provided such application(s) are in a proper form and include all reasonably required
information and payment of any applicable Regulatory Processing Fees), in accordance with
Developer's vested rights granted hereunder, and taking into consideration such factors, among
others, as cost efficiencies, economies of scale, and appropriate engineering practices. In the
event that City and Developer mutually determine that it would be necessary to retain additional
personnel or outside consultants to assist City to expeditiously process any Subsequent
Approval(s), Developer may request that City retain such additional personnel or consultant(s),
and shall direct any such additional personnel or consultant(s) to work cooperatively and in a
cost-efficient and timely manner with Developer to accomplish the objectives under this Section
3.4; provided, however, that Developer shall pay all actual costs associated therewith, although
said personnel or consultant(s) shall be under City's direction. Subject to the terms of this
Development Agreement and Developer's rights hereunder, City shall retain its discretionary
authority in its consideration of any and all Subsequent Approvals that involve discretionary
decisions.
3.5. Life of Project Approvals. All Initial Approvals and any and all Subsequent
Approvals as and when granted, approved or issued, including, without limitation, tentative
subdivision maps or parcel maps (pursuant to Government Code section 66452.6(a)), shall be
deemed extended for the longer of the Term of this Development Agreement or the term
otherwise applicable to such Initial Approval or Subsequent Approval.
3.6. Timing of Development. The parties acknowledge that construction may be
delayed by litigation, market factors, or other reasons that are not within Developer's control.
Except as expressly set forth in Section 4.5 below, there is no requirement that Developer
commence or complete construction of the Project at all or within any particular period of time
during the Term; and City shall not impose any such timing requirement on any Subsequent
Approval. The parties further acknowledge that Developer cannot, at this time, predict when or
the rate at which the Project may be constructed. In light of the foregoing, Developer shall have
the right to develop the Project on the Site (or any portion(s) thereof) in such order, at such rate,
and at such times as Developer deems appropriate within the exercise of its sole subjective
business judgment, subject only to the terms of this Development Agreement.
SECTION 4. DEVELOPER'S OBLIGATIONS RELATING TO PROJECT DEVELOPMENT
GENERALLY
4.1. Phasing of Project Development. As shown on the Tentative Parcel Map,
development of the Project is intended to be constructed in multiple phase(s) (each, a "Project
Phase"), which may occur concurrently or sequentially subject to the Performance Guidelines
set forth in the Schedule of Performance (which the parties may amend from time to time
pursuant to Section 4.7 below) and otherwise in accordance with the Project Approvals.
Notwithstanding anything to the contrary in the foregoing, for any Project Phase that involves
the Retail and/or Cinema Component(s), Developer may further refine the scope of same so
long as the revised Project Phase contains a minimum of twenty thousand (20,000) square feet
of commercial/retail uses. Developer shall have the right, in its sole and absolute discretion, to
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479
commence and complete any Project Phase(s) of construction pursuant to Section, 4.5 below; if
Developer so elects, then Developer shall Substantially Complete that Project Phase in
accordance with this Development Agreement.
4.2. Storm Water Improvements.
(a) Existing Off-site Conditions. As of the Effective Date, pursuant to the
Initial Approvals, the existing off-site flows draining toward the Site will be captured and directed
through improvements to existing infrastructure and installation of new drainage improvements,
to be located within an existing drainage easement that extends east and west along the
northern border of the Site. If off-site flows from the area north of the Site would otherwise
exceed the capacity of the planned improvements, then Developer shall have the right to elect
to install, in its discretion, one of two improvement scenarios as further described in the Draft
EIR. The parties acknowledge that both scenarios are considered interim conditions until the
area to the north of the Site is developed and a stormwater management and detention system
is constructed to serve that future development, which is anticipated to connect to the extended
Winners Circle storm drain and would be held to the same applicable flow restriction standard.
(b) Storm Drain Improvements. The parties acknowledge that the proposed
storm drain improvements as further defined in the Draft EIR as "Scenario 1" is the preferred
development scenario. For purposes of this Development Agreement, the foregoing
improvements shall be collectively referred to herein as the "Scenario 1 Improvements".
Because the Scenario 1 Improvements are considered the preferred development scenario, the
parties shall work cooperatively and in good faith to facilitate construction of said improvements,
as such obligation shall be further described in conditions of approval for the Tentative Parcel
Map.
4.3. Siboney Street Improvements. As described more fully in the Project EIR and
the Initial Approvals, Developer desires to improve Siboney Street to enhance the Project's
main entry along with resolving existing drainage issues, although as of the Effective Date, the
entirety of Siboney Street is owned (subject to Developer's existing easement rights for access
and utilities) by an adjacent third party property owner. Developer shall improve Siboney Street
in accordance with the Initial Approvals, including repaving a portion of an off-site parking lot
and reconstructing that portion of Siboney Street along the western side of the Site to adhere to
applicable City standards for public streets ("Siboney Street Improvements"), subject to
Developer acquiring the third party property interest(s) necessary to construct and operate
same, in which case Developer shall pay the costs to construct the Siboney Street
Improvements subject to being reimbursed for those costs that exceed Developer's
proportionate fair share by other benefitting property owner(s).
4.4. General Construction and Security Obligations. In constructing any Project
infrastructure, Developer shall (a) provide adequate security in accordance with the
requirements of the Subdivision Map Act and City's Subdivision Ordinance; and (b) promptly
and diligently oversee and coordinate the construction of said infrastructure in a good and
workmanlike manner and free from all defects, and in accordance with the Project Approvals
and any other applicable City standards. Any Subdivision Improvement Agreement(s) required
to implement the Project shall be in substantially the same form as is typically used by City in
accordance with the Subdivision Map Act and City's Subdivision Ordinance and shall be
consistent with this Development Agreement and reasonably acceptable to Developer.
4.5. Developer's Discretion to Commence and Complete Project Phase(s). The
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Project is contemplated to be constructed in Project Phase(s), with each being dependent on a
variety of market and other considerations. Accordingly, the decision whether to Commence
Construction of any Project Phase(s) shall be within Developer's sole and absolute discretion.
"Commence Construction" shall mean the pouring of concrete footings for the first (1st)
building of the Project Phase at issue. Provided, however, if Developer elects to Commence
Construction of a Project Phase, then Developer shall: (a) confirm what constitutes the Project
Phase at issue and notify City of same; and (b) use commercially reasonable efforts to
Substantially Complete said Project Phase within the timing milestones to complete set forth in
the Schedule of Performance (as may be amended from time to time by the parties' mutual
agreement), subject to any extension(s) provided for herein and/or any Excused Delay(s).
"Substantially Complete" or any verb tense thereof shall mean that the improvements at issue
shall have been completed to the point that City has issued a CO for the core and shell for all
building(s) within said Project Phase. Furthermore, notwithstanding anything to the contrary in
the foregoing, given City's desire for other Project Phase(s) to be constructed in addition to the
Project Phase for the Residential Component, if Developer elects, in its sole and absolute
discretion, to Commence Construction of the Residential Component, then City may, in its sole
discretion, withhold any Certificate of Compliance of DA Obligations for such Residential
Component or certificate of occupancy on such Residential Component until such time as
Developer (or its Transferee) obtains building permits, and pays all of City's applicable fees then
due, including, without limitation, Impact Fees, therefor, for either (a) the Hotel Component, or
(b) up to twenty thousand eight hundred (20,800) square feet of the Retail or Cinema
Component(s), with the foregoing election (i.e., hotel or 20,800 sf of retail, restaurant or other
shopping center uses) being within Developer's sole and absolute discretion.
4.6. Schedule of Performance and Progress Reports. Subject to Developer's right
to elect whether and/or when to Commence Construction of any Project Phase(s) pursuant to
Section 4.5 above, the parties acknowledge and agree that the Schedule of Performance,
attached hereto as Attachment C, reflects the parties' mutual desire to consummate the
transaction(s) contemplated hereunder, including the processing and consideration of Project
Approval(s), the Closing (as that term is defined in the DDA), and the Commencement of
Construction and Substantial Completion of the Project, and thus the purpose of the Schedule
of Performance is to reflect a good faith estimate of anticipated timing to achieve key
milestones, with the intent that the Schedule of Performance shall: (A) identify each key
milestone; (B) identify the anticipated timeline for each milestone; and (C) confirm whether the
anticipated timeline shall be treated as (i) merely a guideline that shall be adjusted from time to
time as requested by either party so long as the requesting party is acting in a commercially
reasonable and diligent manner to achieve the milestone at issue (each, a "Performance
Guideline"), or (ii) a deadline that shall be achieved by the relevant party(ies) unless extended
as provided for herein or due to the occurrence of Excused Delay(s) (each, a "Performance
Deadline"). A Performance Deadline may be extended: (W) by the parties' mutual consent in
writing; (X) as expressly provided for in the Schedule of Performance; (Y) pursuant to an
Excused Delay; or (Z) by delays caused by the acts or omissions of City or any City Party. The
City Manager shall have the authority to consent on City's behalf to any such extension(s).
During the Term of this Development Agreement, the parties shall keep each other
reasonably informed of their efforts to achieve the identified milestones in the Schedule of
Performance. If Developer elects, in its sole and absolute discretion, to Commence
Construction of a Project Phase pursuant to Section 4.5 above, then Developer shall notify City
accordingly and thereafter shall keep City reasonably informed of the progress towards
Substantial Completion of said Project Phase.
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4.7. Costs of Project Construction. If Developer elects, in its sole and absolute
discretion, to Commence Construction of a Project Phase pursuant to Section 4.5 above, then
as between City and Developer, Developer shall be solely responsible for all costs to construct
that Project Phase, subject to any applicable fee credit(s) and/or reimbursement due to
Developer hereunder or pursuant to the other Project Approvals. Said costs shall include all
hard and soft construction costs for said Project Phase, including costs associated with Project
design, site preparation, permitting, construction management, and payment of applicable fees
and charges.
4.8. Applicable Laws and Regulations. Subject to Developer's right to elect, in its
sole and absolute discretion, to Commence Construction of any Project Phase pursuant to
Section 4.5 above, Developer shall carry out the construction of said Project Phase in
conformity with the Applicable Law, including all applicable federal and state labor laws, and in
accordance with the Project Approvals.
4.9. Anti -discrimination During Construction and Operation. Subject to
Developer's right to elect, in its sole and absolute discretion, to Commence Construction of any
Project Phase pursuant to Section 4.5 above, Developer agrees that in the construction of said
Project Phase, it shall not discriminate against any employee or applicant for employment
because of race, color, creed, religion, sex, marital or familial status, sexual orientation,
ancestry or national origin.
Furthermore, Developer shall not discriminate against, or segregate, any persons, or
group of persons, on account of race, color, creed, religion, sex, marital status, sexual
orientation, national origin or ancestry in the rental, sale, lease, sublease, transfer, use,
occupancy, or enjoyment of the Site or any portion(s) thereof with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of
the Project. The nondiscrimination and non -segregation covenants contained herein shall
survive termination of this Development Agreement and remain in effect in perpetuity.
4.10. Maintenance of Project Improvements. Subject to Developer's right to elect, in
its sole and absolute discretion, to Commence Construction of any Project Phase pursuant to
Section 4.5 above, Developer shall record a reciprocal easement agreement ("REA"), which
shall include provisions that require the owner(s) and/or occupants of the Site to maintain all
improvements that may exist on the Site from time to time, including without limitation, buildings,
parking lots, lighting, signs, and walls as follows: (a) in good and reasonable condition and
repair, reasonable wear and tear excepted; (b) in proper operating condition; and (c) in a neat,
clean, sanitary and attractive condition, meaning that the Site shall be kept reasonably free from
accumulation of debris or waste materials. Improvements shall be required to be regularly
painted so as to avoid fading, cracking or pealing. The owner(s) or occupants of the Site shall
also maintain all on-site landscaping required pursuant to approved landscaping plan(s), as may
be amended from time to time, in a healthy condition, including replacement of any dead or
diseased plants. City shall have the right to review said REA prior to recordation to ensure that
the provisions required by this Section 4.10 are included. All maintenance work, including
excavation or construction, shall be performed in compliance with all applicable laws and
regulations and by contractors duly licensed by the State of California. Work once commenced
shall be diligently pursued until completion. Any ingress and egress easement area(s) shall be
maintained in a smooth and level condition with the type of material originally installed or
material that is similar or better in quality, use and durability. Potholes and cracks in any
ingress and egress easement area(s) resulting in vertical displacement shall be repaired in a
timely manner.
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SECTION 5. FEES AND OTHER PAYMENT OBLIGATIONS.
5.1. Regulatory Processing Fees. Developer shall pay all Regulatory Processing
Fees required by City under then -current regulations for processing applications for Subsequent
Approvals, and for monitoring compliance with any Project Approvals.
5.2. Other Fees and Charges.
(a) Vesting of Fees Generally. All Impact Fees, mitigation fees, connection
fees, and all other fees and charges that are not Regulatory Processing Fees that are in effect
as of the Effective Date, and chargeable by City, shall apply to the Project for a period of five (5)
years from the Effective Date ("Fee Vesting Period"). After expiration of this 5 -year time
period, Developer shall be required to pay the amount of all applicable Impact Fees, mitigation
fees, connection fees, and all other fees and charges then in effect at the time they are required
to be paid. The Impact Fees set forth in Attachment B constitute all Impact Fees that are in
effect on the Effective Date, and City shall not seek to impose any new Impact Fees (either in
amount or type) on the Project during the Fee Vesting Period; provided that any Impact Fees,
mitigation fees, connection fees, and all other fees charged by any entity other than City shall
not be subject to any vesting and Developer acknowledges that City does not control the
amount of such fees.
(b) Credit for Private Park and Recreational Facilities. Pursuant to
subsection (a) above, during the Fee Vesting Period, Developer shall vest into Impact Fees for
park and recreational facilities under Section 25-41 et seq. of the Municipal Code (collectively,
"Park Impact Fees") that are in effect on the Effective Date. In calculating the Park Impact
Fees, the Project shall receive a fee credit for the private open space provided in the Project for
park and recreational purposes in the amount of Dollars ($ ) ("Park Fee
Credit'), which Developer shall receive on a per -Project building permit basis. The Park Fee
Credit is based on the City Council's determination, exercised in its discretion, that granting the
Park Fee Credit is in the public interest, regardless of the numbers of parcels within the Project,
and that all of the standards set forth in Section 25-47(b)(1-5) have been satisfied. Said Council
determination, which has been exercised in the Council's discretion, shall be deemed to comply
with the requirements set forth in Section 25-47 of the Municipal Code and the Applicable Law.
SECTION 6. PERIODIC COMPLIANCE REVIEW; ESTOPPEL CERTIFICATES.
6.1. Periodic Compliance Review.
(a) No later than ten (10) months after the Effective Date, and no later than
every twelve (12) months thereafter, Developer and the Planning Director, or designee, shall
meet and review this Development Agreement annually to ascertain the good faith compliance
by Developer with the Development Agreement's terms. This periodic compliance review shall
be conducted in accordance with the Development Agreement Statute and City's Development
Agreement Procedures ("Periodic Review"). In conducting this Periodic Review, City
acknowledges and agrees that any finding of non-compliance on Developer's part shall be
limited in effect to that Developer's interest in the Site or the Project. If, as a result of City's
Periodic Review, City determines, on the basis of substantial evidence, that Developer has not
complied in good faith with the terms of this Development Agreement, City may terminate this
Development Agreement in accordance with the Development Agreement Statute and City's
Development Agreement Procedures. Developer reserves any and all rights it may have to
challenge in court City's termination of this Development Agreement under this Section 6.1 and
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the basis therefor. If more than one Developer has obtained rights and assumed obligations
hereunder as a result of a Transfer pursuant to Section 10 below, then termination of this
Development Agreement as a result of a Developer Default shall extend only to those rights and
obligations of the applicable Developer, and shall not terminate as to those rights and
obligations of Developer(s) that are not in Default.
6.2. Certificate(s) of Compliance of Development Agreement Obligations. If
Developer elects, in its sole and absolute discretion to Commence Construction of a Project
Phase pursuant to Section 4.5 above, then upon Substantial Completion of each said Phase,
City shall furnish Developer with a "Certificate of Compliance of DA Obligations" for the
relevant Project Phase in substantially the same form as Attachment D upon written request
therefor by Developer. Each Certificate of Compliance of DA Obligations shall be executed and
notarized so as to permit it to be recorded in the Office of the Recorder of Orange County,
California.
Each Certificate of Compliance of DA Obligations shall be, and shall state that it
constitutes, conclusive determination of satisfactory completion of Developer's obligations
hereunder with respect to the relevant Project Phase. After issuance of a Certificate of
Compliance of DA Obligations, City shall not have any rights or remedies under this
Development Agreement with respect to the relevant Project Phase, at which time, the
applicable entitlement and any standards or conditions of approval for such relevant Project
Phase shall be subject to the terms of the Specific Plan and/or applicable CUP. City shall not
unreasonably withhold, delay, deny or condition any Certificate(s) of Compliance of DA
Obligations. City shall respond to Developer's request for any Certificate(s) of Compliance of DA
Obligations within thirty (30) days after receipt thereof. If City notifies Developer in writing that it
is refusing to furnish the requested Certificate of Compliance, then City shall provide a written
statement of City's reasons for doing so and shall also contain City's opinion of the action
Developer must take to obtain the requested Certificate of Compliance. Notwithstanding
anything to the contrary in the foregoing, if the reason for such refusal is confined to the
immediate availability of specific items or materials for landscaping or other minor so-called
"punch list" items, City shall issue a Certificate of Compliance of DA Obligations for the relevant
Project Phase upon the posting of a bond, by Developer at its cost, (or other assurance
reasonably satisfactory to City) in an amount representing one hundred fifty percent (150%) of
the estimated value of the minor, punch -list work items not yet completed. If City fails to
respond in writing to Developer's request with the foregoing 30 -day period, then City shall be
conclusively deemed to have determined Developer to be in compliance with its obligations
hereunder with respect to the relevant Project Phase and shall be fully and finally estopped from
proclaiming otherwise in any subsequent litigation by or against Developer or relevant Mortgage
Holder. Nothing herein shall prevent or affect Developer's right to obtain CO(s) or similar
permits from City before any Certificate(s) of Compliance of DA Obligations for a particular
Project Phase is issued.
Notwithstanding anything to the contrary in the foregoing, if a Certificate of Compliance
of DDA Obligations (as that term is defined in the DDA) has already been furnished to
Developer for the relevant Project Phase, then said certificate shall also constitute City's
conclusive determination of satisfactory completion of Developer's obligations hereunder with
respect to the relevant Project Phase.
6.3. Estoppel Certificates. At the request of Developer, any potential or existing
Mortgage Holder(s), tenant(s), and/or other Transferee(s), City shall, from time to time, timely
execute and deliver to the requesting party a written statement of City that certifies the following:
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(a) this Development Agreement is in full force and effect; (b) this Development Agreement has
not been amended or modified or, if so amended or modified, identifying the amendments or
modifications; (c) Developer is not in Default of the performance of its obligations, or if in
Default, to describe therein the nature and extent of any such Defaults; (d) City is not in Default
of the performance of its obligations, or if in Default, to describe therein the nature and extent of
any such Defaults; (e) any or all Project Phase(s) have been Substantially Completed, or if not
Substantially Completed, to describe the nature and extent of any additional work required to
achieve Substantial Completion; and (f) any such other matters as may be reasonably
requested by the requesting party. The requesting party shall pay, within thirty (30) days
following receipt of City's invoice, the actual costs borne by City in connection with its review of
the proposed estoppel certificate, which costs shall not exceed the total amount of Two
Thousand Dollars ($2,000); provided the estoppel form is substantially in the form of Attachment
E. Otherwise, Developer shall pay the actual costs borne by City in connection with its review of
any substantially modified or alternate form of the estoppel certificate. The Planning Director
shall be authorized to execute any estoppel certificate requested hereunder. The form of
estoppel certificate shall be in the form of Attachment E hereto or such other form reasonably
acceptable to the City Attorney. The Planning Director shall execute and return such certificate
within fifteen (15) days following a request therefor. Developer and City acknowledge that an
estoppel certificate hereunder may be relied upon by any existing or potential Mortgage
Holders, tenant(s), and/or other Transferee(s). If City fails to deliver an estoppel certificate
within the aforementioned fifteen (15) day period, then Developer shall have the right to deliver
a second request clearly indicating thereon that failure of City to respond within five (5) days of
its receipt of such second notice shall be deemed City's approval of all of the terms and
conditions set forth in the estoppel certificate.
SECTION 7. DEFAULT, RIGHTS TO CURE AND WAIVERS; LEGAL ACTIONS; RIGHTS
AND REMEDIES; EXCUSED DELAY; MORTGAGE HOLDER RIGHTS.
7.1. Default and Cure; Dispute Resolution. Subject to any Excused Delay, failure
or delay by either party to timely perform any material term or condition of this Development
Agreement constitutes a default under this Development Agreement, but only if the party who so
fails or delays does not commence to cure, correct or remedy such failure or delay within sixty
(60) days after receipt of a written notice ("Notice of Default) from the non -defaulting party
specifying such failure or delay, and does not thereafter prosecute such cure, correction or
remedy with diligence to completion (in such case, a "Default'). City shall continue to process
in good faith development applications for any and all Subsequent Approval(s) during any cure
period, but need not approve any such application if it relates to a proposal on the Site with
respect to which there is an alleged default hereunder.
Upon occurrence of a Default and without any right to further notice or additional cure
period (except with respect to the Right of Reverter pursuant to Section 7.3 below), the non -
defaulting party shall have all remedies available to it under this Development Agreement as set
forth in Section 7.3 below; provided, however, neither party shall have the right to recover any
punitive, consequential, or special damages. Failure or delay in giving any Notice of Default
shall not constitute a waiver of any Default and any waiver of a Default shall be in writing and be
signed by the non -defaulting party. For purposes of instituting a legal action under this
Development Agreement, any City Council determination as it relates to an alleged Default
hereunder shall be deemed a final agency action. Except as otherwise provided in this
Development Agreement, waiver by either party of the performance of any term or condition
herein shall not invalidate this Development Agreement, nor shall it be considered a waiver of
any other term or condition. Waiver by either party of the time for performing any act shall not
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constitute a waiver of time for performing any other act or an identical act required to be
performed at a later time. The delay or forbearance by either party in exercising any remedy or
right as to any Default shall not operate as a waiver of any Default or of any rights or remedies
or to 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. Nothing in this
Development Agreement shall relieve a non -defaulting party from satisfying any applicable
requirements of the California Government Claims Act.
If a Default is not cured in the manner required by this Section 7.1 above, the non -
defaulting party shall provide the defaulting party written notice ("Dispute Notice") that
specifies, in reasonable detail, the reasons that a Default and dispute exists, and what, if any,
reasonable actions may be taken to cure the default and resolve the dispute. Within thirty (30)
days after the Dispute Notice is given, the parties shall meet in person and confer in good faith
in an attempt to resolve the dispute. In addition to any other rights or remedies, if, following the
meet and confer process, the non -defaulting party determines that the dispute cannot be
resolved informally, the non -defaulting party may institute legal action to cure, correct, or
remedy the default, enforce any covenant or agreement herein, enforce by specific performance
the obligations and rights of the Parties hereto, or obtain any other remedy consistent with this
Development Agreement. Notwithstanding anything to the contrary in the foregoing, if more
than one Developer has obtained rights and assumed obligations hereunder as a result of a
Transfer pursuant to Section 10 below, then provisions under this Section 7 shall apply only to
the extent those rights and obligations so assumed by a Developer are implicated with respect
to a Default hereunder.
7.2. Legal Actions.
(a) Institution of Legal Actions. Upon occurrence of a Default and subject to
the parties' good faith participation in the meet and confer process described in Section 7.2
above, the non -defaulting party shall have all rights and remedies available to it under this
Development Agreement and applicable law, including, without limitation, the right to institute a
legal action or proceeding to cure, correct or remedy such Default. Legal actions must be
instituted and maintained in the Superior Court of the County of Orange County, State of
California, or in any other appropriate court in that county.
(b) Applicable Law and Forum. The internal laws of the State of California
shall govern the interpretation and enforcement of this Development Agreement without regard
to conflict of law principles.
(c) Acceptance of Service of Process. If any legal action is commenced by
Developer against City, service of process on City shall be made by personal service upon the
City Clerk, or in such other manner as may be provided by law. If any legal action is
commenced by City against Developer, service of process on Developer shall be made by
personal service upon Developer at the address indicated in Section 11.1 below, or in such
other manner as may be provided by law.
(d) Attorney's Fees. In the event of any litigation by either party pertaining to
this Development Agreement, the prevailing party in such litigation, in addition to any other relief
which may be granted, shall be entitled to its reasonable litigation costs and expenses,
including, without limitation, reasonable attorneys' fees.
7.3. Rights and Remedies.
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(a) Rights and Remedies are Cumulative. Except as otherwise expressly
stated in this Development Agreement, the rights and remedies of the parties are cumulative,
and the exercise by either party of one or more of its rights or remedies shall not preclude the
exercise by it, at the same or different times, of any other rights or remedies for the same
Default or any other Default by the other party. Provided, however, that in the event of a
Developer Default, City shall, under no circumstances, have the right to seek specific
performance or other equitable relief to compel Developer to Commence Construction or
Substantially Complete construction of any Project Phase(s). Notwithstanding the foregoing, if
Developer, in its sole and absolute discretion elects to Commence Construction of a Project
Phase pursuant to Section 4.5 above and thereafter fails to Substantially Complete said Project
Phase pursuant to the timing required hereunder and provided that no other remedy is
reasonably available to City, then City shall have, as its sole and exclusive remedy, the Right of
Reverter with respect to said Project Phase as provided for under subsection (b) below.
(b) Right of Reverter. The parties acknowledge and agree that Developer
shall have no obligation hereunder or as a condition of any Subsequent Approvals, to
Commence Construction of any Project Phase, and therefore any election not to do so shall not
be deemed a Default by Developer. However, if Developer does not Commence Construction
or, in its sole and absolute discretion elects to Commence Construction of a Project Phase
pursuant to Section 4.5 above and thereafter fails to Substantially Complete said Project Phase
pursuant to the timing required under the Schedule of Performance, then City shall have the
Right of Reverter with respect to that Project Phase, subject to an additional opportunity for
Developer to cure as provided for in this subsection (b). Such right to repurchase, reenter and
repossess that Project Phase, to the extent provided in this Development Agreement, shall be
subordinate and subject to and be limited by and shall not defeat, render invalid or limit: (i) any
Mortgage permitted by this Development Agreement; (ii) any rights or interests provided in this
Development Agreement for the protection of the Mortgage Holder(s); and (iii) any right or
interests provided in the REA or any other covenants, conditions and restrictions recorded on
the Site.
To exercise its Right to Reverter with respect to a Project Phase as provided for under
this subsection (b), City shall pay to Developer in cash an amount equal to (hereinafter referred
to as "Reverter Price"):
(x) The Purchase Price paid by Developer for the relevant Project Phase
based on the allocation set forth in the Financial Information' less
The total amount of any Mortgage(s) or other liens encumbering the
relevant Project Phase at the time of the repurchase, reentry and
repossession, which such amounts shall be used by City to repay and/or
satisfy any such Mortgages or other liens.
(y)
In order to exercise this Right of Reverter, City shall give Developer Notice of such
exercise and Developer shall, within sixty (60) days after Developer's receipt of such Notice,
shall have a further right to cure any Default by Substantially Completing the relevant Project
Phase (and if there is no Default, then Developer shall have the right to elect to Commence
Construction within said 60 -day period); and if the cure (or election to Commence Construction,
in the case of no Default) cannot be reasonably be completed within said 60 -day period, then
Developer's commencement of the cure (or election to Commence Construction, in the case of
no Default) and diligent prosecution thereafter to Substantial Completion shall be deemed a
cure.
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If after said 60 -day period (as the same may be extended pursuant to the terms hereof),
Developer decides not to cure (or elects not to Commence Construction in the case of no
Default), or decides to cure (or elect to Commence Construction in the case of no Default) but
fails to thereafter diligently prosecute the same to Substantial Completion, then City shall
request that Developer provide it with a detailed accounting of the Reverter Price. City, within
thirty (30) days after its receipt of such accounting, shall have the Right of Reverter for the
relevant Project Phase subject to City's payment to Developer in cash all sums owing pursuant
to this subsection (b), if any. Once City has made said payment and repaid in full all obligations
and loans secured by all Mortgages encumbering the relevant Project Phase of the Project, then
Developer shall thereupon execute and deliver to City a quitclaim deed transferring to City all of
Developer's interest in the relevant Project Phase and assign to City (and City shall assume) all
leases and contracts related to the Site and all declarant rights under the REA, if any. The
transfer of the Site to City pursuant to the City's Right of Reverter shall be in its then AS -IS
Condition and City shall execute a waiver and release of known and unknown claims
substantially similar to the one contained in Section 503 of the DDA in connection with such
transfer.
Notwithstanding anything to the contrary in the foregoing, City's Right of Reverter under
this subsection (b) shall terminate with respect to each Project Phase upon the Substantial
Completion of each relevant Project Phase. Provided, however, that City's rights under this
subsection (b) shall survive termination of this Development Agreement. Furthermore, City's
rights under this subsection (b) shall be coextensive with City's Right of Reverter under the
DDA, and shall not be construed as in any way broadening or supplementing said rights.
7.4. Excused Delay: Extension of Times of Performance. Time is of the essence
in the performance of this Development Agreement. In addition to the specific provisions of this
Development Agreement, performance by either party hereunder shall not be deemed to be in
Default when the delay or Default is due to war; infectious disease; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
pandemics; global and/or national health crises; epidemics; quarantine or shelter in place
restrictions and/or government orders related thereto; freight embargoes; lack of transportation;
governmental restrictions or priority; unusually severe weather that prevents, limits, delays or
hinders the ability to perform; environmental conditions discovered that delay construction or
development, including delays resulting from investigation and/or remediation of such
conditions; initiatives, referenda, Third -Party Litigation challenging this Development Agreement
and/or other Project Approval(s) on CEQA or any other grounds or any other material litigation
related to the Project; delays of a contractor, subcontractor, or supplier acts of another party;
acts or the failure to act of a governmental or quasi -governmental authority (except that acts or
the failure to act of City shall not excuse performance by City); economic or product demand
declines that make it not commercially feasible to proceed with development of the Site with the
Project or a Project Phase thereof; or any other similar causes beyond the control or without the
fault of the party claiming an extension of time to perform (each, "Excused Delay'). Excused
Delay shall also include (provided the party seeking the extension is acting with reasonable
diligence), additional reasonable period(s) (a) required to complete compliance with and/or
obtain approval, adoption or certification (as applicable) of any supplemental or subsequent
environmental analysis and/or documentation required for the Project or any portion(s) thereof;
(b) the full and final resolution of any Third -Party Litigation filed (and if no Thirty -Party Litigation
has been filed, then the running of all applicable statutes of limitations period(s)) challenging this
Development Agreement and/or other Project Approval(s) on CEQA or any other grounds or
any other material litigation related to the Project such that the full and final resolution thereof is
acceptable to Developer in its sole and absolute discretion; and (c) required to complete any
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pending application or request before City for an action or approval under this Development
Agreement or before City for an action or approval under the Project Approvals.
Notwithstanding anything to the contrary in the foregoing, Developer's failure to obtain financing
for the Project shall not be considered an Excused Delay. City's financial condition shall
similarly not be considered an Excused Delay that can be relied on by City for failure to satisfy
any City obligation hereunder.
Notwithstanding the foregoing or anything else to the contrary contained in this
Development Agreement, no delay shall be deemed an Excused Delay unless the party
claiming the benefit of this provision shall, as a condition thereto, give notice to the other party in
writing within fifteen (15) days of the declaring party having actual knowledge of the incident
specifying with reasonable particularity the nature thereof, the reason therefor, the date and
time such incident occurred and a reasonable estimate of the period that such incident will delay
the fulfillment of obligations contained herein. If any notice of Excused Delay is given later than
fifteen (15) days after the party declaring such delay has actual knowledge of the existence of
the Excused Delay, then the Excused Delay occurring during the period commencing on the
sixteenth (16th) day after the commencement of the Excused Delay and ending on the date of
such notice, shall be disregarded and deemed not to have occurred.
In the event of an Excused Delay, the party delayed shall continue to exercise
reasonable diligence to minimize the period of the delay. An extension of time for any such
cause shall be limited to the period of the Excused Delay, and shall commence to run from the
time of the commencement of the cause. Times of performance under this Development
Agreement may also be extended by mutual written agreement by City and Developer, with the
City Manager having the authority on behalf of City to so consent.
7.5. Rights of Mortgage Holders of Approved Security Interests in Site.
(a) Developer's Default Shall Not Defeat Mortgage Lien. If Developer
Defaults, any such Default shall not defeat or render invalid the lien of any Mortgage(s) made in
good faith and for value as to the Site, or any portion(s) thereof or interest(s) therein; provided,
however, that unless otherwise provided herein, the terms and conditions of this Development
Agreement shall be binding and effective against any and all Mortgage Holder(s) whose interest
is acquired by foreclosure, trustee's sale or otherwise.
(b) Holder Not Obligated to Commence or Complete Project. A Mortgage
Holder shall in no way be obligated by the provisions of this Development Agreement to
Commence Construction or Substantially Complete construction of any Project Phase(s) or to
guarantee any such commencement and/or completion of same nor shall any covenant or any
provision in the conveyances from City to Developer evidencing the realty comprising the Site or
any part thereof be construed so to obligate such Holder; provided, however, nothing in this
Development Agreement shall be deemed to or be construed to permit any such Holder to
devote the Site or any portion(s) thereof to any uses, or to construct any improvements thereon,
other than those uses or improvements provided for or authorized by this Development
Agreement and the other Project Approvals.
(c) Notice of Default to Mortgagee, Deed of Trust or Other Security Interest
Holders. With respect to any Mortgage granted by Developer on the Site or any portion(s)
thereof, whenever City shall deliver any notice or demand to Developer with respect to any
Default by Developer, City shall at the same time deliver a copy of such notice or demand to
each Mortgage Holder of record who has previously made a written request to City therefor, or
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[Draft, as of May 20, 2020]
to the representative of such Mortgage Holder as may be identified in such a written request.
No notice of Default shall be effective as to the Mortgage Holder unless such notice is given.
(d) Right to Cure Developer Default Hereunder. Each Mortgage Holder
(insofar as the rights of City are concerned) shall have the right, at its option, within ninety
(90) days after the receipt of the notice of Default, to:
(i) Cure or remedy or commence to cure or remedy any such Default
and diligently pursue said cure until the same is completed, and
Mortgage.
(ii) Add the cost of said cure to the Mortgage debt and the lien of its
Provided that in the case of a Default which cannot with diligence be remedied or cured
within such ninety (90) day period, such holder shall have additional time as reasonably
necessary to remedy or cure such Default.
If possession of the Site (or portion(s) thereof) 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 ninety (90) days, diligently pursues
such proceedings to completion, and, after obtaining possession, diligently completes such cure
or remedy (the foregoing time periods being subject to extension during the period that such
holder is precluded from taking or pursuing any such action as a consequence of any
bankruptcy stay or other court order).
If there is more than one such holder, the right to cure or remedy a Default of Developer
under this Section 7.5 shall be exercised by the Mortgage Holder first in priority or as the
holders may otherwise agree among themselves, but there shall be only one exercise of such
right to cure and remedy a Default of Developer under this Section 7.5.
Nothing in this Development Agreement shall be deemed to permit or authorize such
holder to commence or continue the construction of any Project Phase(s) (beyond the extent
necessary to preserve or protect the improvements or construction already made) without first
having expressly assumed Developer's obligations to City with respect to such improvements by
written agreement, in substantially the same form as Attachment F hereto, with respect to the
Site or any portion(s) thereof in which the holder has an interest. Any such Holder Substantially
Completing a Project Phase shall be entitled, upon written request made to City, to a Certificate
of Compliance of DA Obligations pursuant to Section 6.2 above.
(e) City's Rights upon Failure of Holder to Cure Developer Default on
Mortgage. During the Term of this Development Agreement and subject to any rights of
Developer to challenge, cure, or satisfy any liens or encumbrances on the Site or any
portion(s) thereof, in any case where thirty (30) days after default by Developer on a Mortgage
and the Developer has not exercised the option to cure afforded in the Mortgage or if it has
exercised such option and has not proceeded diligently to cure, City may cure the Mortgage
default prior to completion of any foreclosure. In such event, City shall be entitled to
reimbursement from Developer of all costs and expenses incurred by City in curing the
Mortgage default, including legal costs and attorneys' fees, which right of reimbursement shall
be secured by a lien upon the Site or portion(s) thereof to the extent of such costs and
expenses. Any such lien shall be subject to:
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Agreement; and
(i) Any Mortgage for financing permitted by this Development
(ii) Any rights or interests provided in this Development Agreement
for the protection of such Mortgage Holders.
City shall execute from time to time any and all documentation reasonably requested by
Developer to effect such subordination.
Nothing contained herein shall be deemed to impose upon City any affirmative obligation to cure
a Mortgage default by Developer (by the payment of money, construction or otherwise) with
respect to the Site in the event of its enforcement of any such lien.
(f) Modifications. If a Mortgage Holder should, as a condition of providing
financing for development of all or a portion of the Project, request any modification of this
Development Agreement in order to protect its interest in the Site or this Development
Agreement, then City shall consider such request consistent with its land use authority and
processed as an amendment pursuant to the terms of Section 11.4 below.
SECTION 8. TERMINATION.
8.1. Termination Upon Completion of Project or Expiration of Term. This
Development Agreement shall terminate upon the earlier of the expiration of the Term or when
the Project on the Site has been fully developed and Developer's obligations in connection
therewith and with this Development Agreement have been satisfied. Upon termination of this
Development Agreement, either party may cause a notice of such termination in a form
reasonably satisfactory to the City Attorney to be duly recorded in the official records of Orange
County and the other party shall reasonably cooperate in this regard. Upon termination of this
Development Agreement as to any Project Phase or the entirety of the Project, the applicable
entitlement and any standards or conditions of approval for such relevant Project Phase or the
entirety of the Project shall be subject to the terms of the Specific Plan and/or applicable CUP
8.2. Termination Due to Default. After notice and expiration of the sixty (60) day
cure period as specified in Section 7.1(a) above, if the Default has not been cured or it is not
being diligently cured in the manner set forth above, the noticing party may, at its option, give
notice of its intent to terminate this Development Agreement pursuant to the Development
Agreement Statute and City's Development Agreement Procedures ("Notice of Intent to
Terminate"). Within sixty (60) days of receipt of a Notice of Intent to Terminate, the matter shall
be scheduled for consideration and review in the manner set forth in the Development
Agreement Statute and City's Development Agreement Procedures. Following consideration of
the evidence presented in said review, the party alleging the default may give written notice of
termination of this Development Agreement. If a party elects to terminate as provided herein,
upon sixty (60) days' written notice of termination, this Development Agreement shall be
terminated. Notwithstanding the foregoing, a written notice of termination given under this
Section 8.2 is effective to terminate the obligations of the noticing party only if a default has
occurred. If the noticing party is not so authorized to terminate, the non -noticing party shall
have all rights and remedies provided herein or under applicable law, including, without
limitation, the right to specific performance of the defaulting party's obligations under this
Development Agreement. Once a party alleging Default has given a written notice of
termination, legal proceedings may be instituted to obtain a declaratory judgment determining
the respective termination rights and obligations under this Development Agreement.
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8.3. Termination by Mutual Consent. This Development Agreement may be
terminated by mutual consent of the parties in the manner provided in the Development
Agreement Statute and in City's Development Agreement Procedures.
SECTION 9. PARTICIPATION IN THIRD -PARTY LITIGATION; INDEMNITY.
The parties acknowledge and agree that each shall have the right to elect to defend any
Third -Party Litigation subject to the obligations of this Section 9, which shall survive the
expiration or termination of this Development Agreement.
9.1. Developer Indemnification in the Event of Third -Party Litigation. Subject to
Section 9.2 below, Developer agrees to indemnify City and the City Parties and shall hold and
save them and each of them harmless from any and all Claims concerning any Third -Party
Litigation except if and to the extent said Claims arise from City's sole negligence, willful
misconduct, or fraudulent acts. "Third -Party Litigation" shall mean any court action or
proceeding instituted by any third party (i.e., any private individual or entity or any non -City
governmental or quasi -governmental authority) challenging the validity of any provision of this
Development Agreement, the other Initial Approvals, the Subsequent Approvals as and when
issued, granted or approved, or any CEQA issue(s) or document(s) approved in connection
therewith. City and/or each indemnified City Party seeking defense or indemnity from
Developer concerning Third -Party Litigation shall provide Developer with prompt notice of the
pendency of any action or proceeding for which it believes it is entitled to indemnity under this
Section 9.1 and request that Developer defend it regarding such action or proceeding (but any
delay or failure to notify Developer shall reduce Developer's obligations to so defend or
indemnify to the extent of any actual prejudice suffered by Developer due to the delay or
failure). Developer's indemnification obligations under this Section 9.1 shall survive the
expiration or termination of this Development Agreement.
9.2. Cooperation in the Event of Third -Party Litigation. Subject to subsection (c)
below, Developer and City shall cooperate defending same pursuant to this subsection (b), and
the parties shall keep each other informed of all developments relating to such defense, subject
only to confidentiality requirements that may prevent the communication of such information.
(a) Meet and Confer. If Third -Party Litigation is filed, upon receipt of the
complaint or petition, the parties shall have twenty (20) days to meet and confer regarding the
merits of such Third -Party Litigation to determine whether each party elects to defend same and
if so, whether they elect to so jointly defend, which period may be extended by the parties'
mutual agreement so long as it does not adversely and materially impact any litigation
deadlines. Subject to an election to defend, City and Developer shall mutually commit to meet
all required litigation timelines and deadlines. If City and Developer agree jointly to defend the
Third -Party Litigation, they shall expeditiously enter a joint defense agreement, which shall
include, among other things, provisions regarding the preservation of confidential
communications. The City Manager is authorized to negotiate and enter such joint defense
agreement in a form reasonably acceptable to the City Attorney and Developer's attorneys.
Such joint defense agreement shall also provide that any proposed settlement of the Third -Party
Litigation shall be subject to Developer's approval, in its reasonable discretion, except in the
event City elects to solely defend under subsection (c) below. If the terms of the proposed
settlement would constitute an amendment or modification of this Development Agreement, the
settlement shall not become effective unless such amendment or modification is mutually
approved by the parties in accordance with applicable laws and regulations.
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(b) Defense Election. If, after meeting and conferring, the parties mutually
agree (each in its sole discretion) to defend against the Third -Party Litigation, then the following
shall apply:
(i) Developer shall take the lead role defending such Third -Party
Litigation and may, in its sole discretion, elect to be represented by the legal counsel of its
choice.
(ii) City may, in its sole discretion, elect to be separately represented
by the City Attorney with the reasonable costs of such representation to be paid by Developer.
Provided, however, if City elects to proceed with any outside legal counsel of its choice in
addition to the City Attorney, then City shall be solely responsible for any such additional legal
fees and costs.
(iii) To the extent due hereunder, Developer shall reimburse City,
within twenty (20) business days following City's written demand therefor, reasonable legal fees
and costs incurred by the City Attorney, as well as court costs, incurred in the month prior in
connection with the Third -Party Litigation. Provided, however, that Developer shall not be
required to pay any internal City staff costs associated with defending the Third -Party Litigation,
nor any outside City legal costs; moreover, City shall provide Developer with reasonably
sufficient information to document the basis for said request for payment.
The parties intend that City's role under subsection (B) above shall be primarily oversight
although City reserves its right to protect City's interests, and City shall make good faith efforts
to maximize coordination and minimize its legal costs (for example, minimizing filing separate
briefs, and duplication of effort to the extent feasible).
(c) Election Not To Defend. If, after meeting and conferring, Developer and
City both elect not to defend against the Third -Party Litigation, Developer shall remain obligated
to indemnify and hold City harmless from and against any damages, attorneys' fees or cost
awards that are actually awarded by a court of competent jurisdiction in accordance with
Section 9.1 above.
In the alternative, if Developer elects, in its sole and absolute discretion, not to defend
against the Third -Party Litigation, it shall deliver written notice to City regarding such decision. If
Developer elects not to defend, City has the right, but not the obligation, in its sole discretion to
proceed to defend against the Third -Party Litigation at its sole cost and expense, in which case
City shall then take the lead role defending such Third -Party Litigation. If, following receipt of
Developer's Notice of election not to defend, City elects to defend and takes the lead role in
such litigation, then City shall be solely responsible for all damages, attorney's fees or cost
awards, if any, which are actually incurred or awarded from and after such time City has made
such election. Provided, however, that City shall have no right to approve any settlement
obligating Developer to make any payment(s), incur any liability or take any action(s) related
thereto.
SECTION 10. TRANSFER; RIGHTS AND DUTIES OF MORTGAGEES.
10.1. Transfer. Except as otherwise expressly provided for herein, all of the terms,
covenants and conditions of this Development Agreement shall be binding on, and shall inure to
the benefit of Developer and Developer's Transferee(s) pursuant to this Section 10. Wherever
the term "Developer" is used in this Agreement, such term shall include any and all of its
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[Draft, as of May 20, 2020]
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Transferee(s). "Transfer' shall mean any assignment, transfer, sale, hypothecation, Mortgage,
pledge, conveyance, or encumbrance of a fee interest, ground lease or lease of all or any
portion(s) of the Site and/or the Project and the respective rights and obligations hereunder
related thereto.
10.2. Permitted Transfers. Notwithstanding any other provision set forth in this
Development Agreement to the contrary, Developer shall not be required to obtain City consent
for any of the following (each, a "Permitted Transfer'):
(a) Transfer(s) to Developer Affiliate(s). At all times, Developer shall have
the right to Transfer all or any portion(s) of the Site and/or the Project to any entity that is a
Developer Affiliate. "Developer Affiliate" shall mean: (i) any entity that owns or controls
Developer; (ii) any entity owned or controlled by Developer; (iii) any entity owned or controlled
by or affiliated with any entity that owns or controls Developer; (iv) any entity resulting from a
consolidation for which Developer is a party; (v) the surviving entity in case of a merger for
which Developer is a party; or (vi) any entity to which all or substantially all of the assets of
Developer have been sold. The term "Developer Affiliate" shall further mean:
(i) Any entity that is (A) wholly owned by Shea Properties LLC, Shea
Properties II LLC, or J.F. Shea Company (each, a "Shea Entity"); or (B) any limited liability
company, partnership or corporation in which Developer and/or any Shea Entity holds a majority
interest (50.1%) in the capital and profits and in which Developer and/or any Shea Entity agrees
to hold such majority interest (50.1 %) for at least the term of this Development Agreement
(each, a "Permitted Affiliate Assignee").
(ii) For purposes of the Residential Component only, any limited
liability company, partnership or corporation in which Developer and/or any Shea Entity
(A) holds an ownership interest in the capital and profits and in which Developer and/or such
Shea Entity agrees to hold such ownership interest for at least the term of this Development
Agreement, and (B) manages day to day operations thereof (each, a "Permitted Residential
Affiliate Assignee").
(b) Authorized Hotel Entity. At all times, Developer shall have the right to
Transfer all or any portion(s) of the Hotel Component to Authorized Hotel Entity(ies) without the
prior consent of the City. An Authorized Hotel Entity is any of the entities identified on the list
set forth in Attachment G hereto ("Authorized Hotel Developer List"). Upon Developer's
request, the City Manager shall have the authority to modify the Authorized Hotel Developer List
by including additional approved entities thereto without the need for public hearing or notice of
same.
(c) Authorized Grocery/Cinema Users. At all times, Developer shall have the
right to Transfer all or any portion(s) of the Retail and/or Cinema Component(s) to Authorized
Grocery User(s) and/or to Authorized Cinema User(s) without the prior written consent of the
City. An Authorized Grocery User is any of the entities identified on the list set forth in
Attachment G hereto ("Authorized Grocery Developer List) and an Authorized Cinema User
is any of the entitles identified on the list set forth in Attachment G hereto ("Authorized
Cinema Developer List'). Upon Developer's request, the City Manager shall have the
authority to modify the Authorized Grocery Developer List and/or Authorized Cinema Developer
List by including additional approved entities thereto without the need for public hearing or
notice of same.
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(d) Mortgages, Deeds of Trust, and Other Forms for Financing Purposes.
(i) At all times, Developer shall have the right to Transfer (via
Mortgage(s)) for the purpose of, and not exceeding the amount necessary for, financing or
refinancing Developer's direct and indirect costs to develop all or portion(s) of the Project.
(ii) At all times, in the event of a Transfer as a result of or in
connection with: (a) the judicial or non judicial foreclosure or deed in lieu of either of the
foregoing, or (b) Transfer arising from or relating to a Mortgage Holder exercising its remedies
under such lien, City shall not have any right to consent or not consent to a Transfer to any such
Mortgage Holder and/or to any other third party or parties acquiring all or any portion(s) of the
Site and/or the Project from such holder; provided, however, that any Mortgage Holder and/or
any third party or parties acquiring all or any portion(s) of the Site and/or Project from such
holder shall assume Developer's rights and obligations hereunder accruing after such Transfer
to the Mortgage Holder and be bound under the terms, conditions and covenants of this
Development Agreement as though they were parties hereto as provided for herein.
(e) Lease(s) to Individual Tenant(s). Except for lease(s) to Large
Commercial Tenant(s), which shall require City's prior approval as set forth below, at all times
Developer shall have the right to Transfer (via lease(s), ground lease(s), licenses, concessions
or other occupancy agreements) portion(s) of the Site and/or the Project to individual
commercial retail tenant(s).
(f) Grant of Easement(s). At all times, Developer shall have the right to
convey temporary or permanent licenses, easement(s) and/or rights-of-way on, over, across,
above and below the Site (via offer(s) of dedication or other form(s) of conveyance) for to
facilitate development of the Site in accordance with the Project Approvals.
(g) Common Areas. At all times, Developer shall have the right to Transfer
portion(s) of the Site and/or the Project as common area to property owners' association(s) (if
any) formed in connection with the Project.
(h) Leases/Sales Within Residential Component. At all times, Developer
shall have the right to lease or sell individual residential unit(s) within the Residential
Component.
(i) Subsequent Transfer(s). Once a Transfer has occurred in accordance
with the requirements of this Section 10, any subsequent Transfer(s) involving substantially the
same portion(s) of the Site and/or the Project shall be considered Permitted Transfer(s) and
thus shall require no further City consent; provided, however that any such Transfer(s) shall
reflect use(s) that are (or will be as a result of any necessary development application
process(es) related thereto) consistent with the General Plan and Specific Plan.
(j) All Transfers Occurring After 5 -Year Period. Once the 5 -Year Period set
forth in 10.4 below ends, Developer shall be permitted to freely Transfer all or any portion(s) of
the Site and/or the Project without obtaining City consent.
Developer shall give at least ten (10) business days' prior written Notice to City of a
Permitted Transfer, except that no such Notice shall be required for any Permitted Transfer
under subsections (e) through (h) above. In addition, upon City's request, Developer, at
Developer's election, shall certify that the subject Transfer constitutes a Permitted Transfer, and
01004.0018/643375.4 Page 28 of 35
[Draft, as of May 20, 2020]
it 9 3
provide City with reasonably sufficient documentation to confirm it is a Permitted Transfer.
10.3. Transfer Restrictions Prior to Issuance of First CO. Subject to Section 10.2.
above, prior to issuance of the core and shell occupancy permit, temporary occupancy permit,
building permit sign -off or local equivalent (as the case may be, for core and shell) (each, a
"CO") for the Project's first (1st) building, the provisions on Transfer(s) set forth in
subsections (a) through (c) below shall apply.
The obligations in this Section 10.3 shall apply to the Project, including one (1) or more
of the Future Users (as that term is defined below), and the Transfer provisions set forth in this
Section 10.3 shall govern as set forth herein.
(a) Potential Future User(s) Subject to City Consent. Transfers to: (i)
purchaser(s) of a commercial pad to be developed with one (1) or more commercial building(s)
containing more than five thousand (5,000) square feet for a commercial/retail use (each a "Pad
Sale Buyer") other than to an entity on the Authorized Hotel Developer List, the Authorized
Grocery Developer List or the Authorized Cinema Developer List; (ii) any non-affiliated entity
that will operate a hotel, grocery or cinema that is not an Authorized Hotel Entity, an Authorized
Grocery User and/or an Authorized Cinema User (a "Grocery/Cinema User"); or (iii) a non-
affiliated entity that will lease commercial retail space not involving grocery or cinema uses that
exceeds forty thousand (40,000) square feet of continuous gross leasable area (each a "Large
Commercial Tenant") (each such Pad Sale Buyer, Grocery/Cinema User, and Large
Commercial Tenant is referred to herein as a "Future Use►''), shall be subject to City's prior
written consent, which shall not be unreasonably withheld, conditioned, delayed or denied
based on the criteria set forth in subsection (b) below.
(b) Criteria to be Used in Considering Transfer Request for Future User(s).
In considering any Transfer request for a Future User under this Section 10.2, City shall
consider factors such as (i) whether the completion of the Project Phase at issue would be
jeopardized if said Transfer request were granted; (ii) the financial strength and capability of the
proposed Transferee to perform Developer's obligations hereunder; (iii) the proposed
Transferee's experience and expertise in the planning, financing, development, ownership, and
operation of similar projects; and (iv) how the proposed Transferee will have the ability to
finance, own, operate and maintain high quality development in City, similar to the Project in
terms of reputation and amount of anticipated sales to be generated from the Site. Provided,
however, it is generally intended that City will consent to Transfer request(s) for Future User(s)
who (A) operate a chain of stores on a regional or nationwide basis; (B) are comparable, or
reasonably equivalent, to the exemplar authorized entities listed on Attachment G; and/or
(C) do or will do marketing within the general market area. In its reasonable discretion, City
may also consent to Transfer request(s) for other Future User(s) based on other appropriate
and relevant criteria, including, without limitation, those who operate local chain(s) of business.
For the avoidance of doubt, City agrees that City shall have no right to consent to any Transfer
to an entity on the Authorized Hotel Developer List, the Authorized Grocery Developer List or
the Authorized Cinema Developer List, otherwise listed on Attachment G or any other Transfer
described in Section 10.2 above.
(c) Procedure to be Used in Considering Transfer Request for Future
User(s). Any Transfer request by Developer for a Future User shall be in writing and shall
include such supporting information as may be reasonably requested by City within five (5) days
of its receipt of Developer's Transfer request in order for City, utilizing the criteria set forth in
subsection (b) above, to consider said request. Any financial information of a Future User
01004.0018/643375.4 Page 29 of 35
[Draft, as of May 20, 2020]
reasonably requested by City as part of its consideration of a Transfer request shall be delivered
to City's third -party advisor, such as Kosmont Realty Corporation (or another third -party
consultant reasonably approved by Developer) ("City Advisor"), as well as being shown to City,
and shall be treated confidential to the extent permitted under the Applicable Law.
Within ten (10) days of receipt of Developer's Transfer request for a Future User (and
supporting documentation reasonably requested by City within the five (5) day period
referenced above), City shall notify Developer whether City is consenting to said request. If City
notifies Developer it does not so consent, then said Notice shall state specific reasons for this
decision. If City fails to respond to said Transfer Request within this ten-day period, then City
shall be conclusively deemed to have consented to said request. The City Manager shall have
the authority to make a decision on any and all Transfer requests involving Future User(s),
which such consideration shall occur administratively and not require a public hearing or public
notice. If the City Manager denies any such Transfer request, Developer shall have the right to
request the City Manager reconsider its decision and/or appeal this decision to the City Council.
Said request for reconsideration and/or appeal shall be filed no later than ten (10) days following
Developer's receipt of Notice of any such denial. The City Manager shall take action on any
such reconsideration request within ten (10) days' receipt thereof, and/or the City Council shall
consider any such appeal at the next available Council meeting for which proper notice can be
provided.
10.4. Transfer Restrictions During 5 -Year Period. For a period of five (5) years from
the date of issuance of the CO for the core and shell for the Project's first (1st) building, SP
Acquisition, LLC and/or other Shea Entity(ies) shall own the Site and operate the Project;
provided, however, the foregoing restriction shall be subject to any and all Permitted Transfer(s)
and/or other Transfer(s) to Future User(s) receiving City consent pursuant to this Section 10,
none of which are prohibited by this Section 10.4.
10.5. Assignment and Assumption Agreement. For any Transfer made in
accordance with this Section 10, Developer and its Transferee shall execute an assignment and
assumption agreement in a form substantially the same as Attachment F hereto ("Assignment
and Assumption Agreement'). No later than ten (10) business days after the date said
Transfer becomes effective, Developer shall deliver to City a fully executed original of the
Assignment and Assumption Agreement. Upon the effective date of each such Transfer,
Developer shall be released and have no further obligations or liability under this Development
Agreement with respect to the interest(s) which are Transferred and the obligations assumed
under the relevant Assignment and Assumption Agreement.
10.6. Developer To Pay Transfer Request Costs. Developer shall pay City its actual
costs (which may include City staff and/or attorney time) expended to consider a Transfer
request made pursuant to this Section 10.6 where City consent is required, up to a maximum
amount of Two Thousand Five Hundred Dollars ($2,500) for each Transfer request; provided,
however, that Developer shall have no obligation to pay the foregoing costs with respect to any
Permitted Transfer(s) under Section 10.2 above.
SECTION 11. GENERAL PROVISIONS.
11.1. Independent Contractors. Each party is an independent contractor and shall
be solely responsible for the employment, acts, omissions, control and directing of its
employees. All persons employed or utilized by Developer in connection with implementing the
Project shall not be considered employees of City in any respect. Except as expressly set forth
01004.0018/643375.4 Page 30 of 35
[Draft, as of May 20, 2020]
herein, nothing contained in this Development Agreement shall authorize or empower any party
to assume or create any obligation whatsoever, express or implied, on behalf of any other party
or to bind any other party or to make any representation, warranty or commitment on behalf of
any other party.
11.2. Severability of Provisions. If any term or condition contained herein is held to
be invalid, void or otherwise unenforceable, by any court of competent jurisdiction, such holding
shall in no way affect the validity or enforceability of any other term or condition contained
herein.
11.3. Further Documents; Other Necessary Acts. Each party shall execute and
deliver to the other party all other instruments and documents as may be reasonably necessary
to carry out the purpose of this Development Agreement and the Project Approvals and
Subsequent Approvals, in order to provide or secure to the other party the full and complete
enjoyment of the rights and privileges granted by this Development Agreement.
11.4. Amendment to this Agreement.
(a) Amendment by Written Consent. Except as otherwise expressly provided
for herein, this Development Agreement may be terminated, modified or amended only by the
parties' mutual written consent.
(b) Major and Minor Amendments. Any amendment to this Development
Agreement that affects or relates to: (i) the Term; (ii) permitted uses on the Site; (iii) provisions
for the reservation or dedication of land; (iv) conditions, terms, restrictions or requirements for
subsequent discretionary actions; (v) the density or intensity of the use of the Site or the
maximum height or size of proposed buildings; or (vi) monetary contributions by Developer,
shall be deemed a "Major Amendment' and shall require giving of notice and a public hearing
before the City Council. Any amendment that is not a Major Amendment shall be deemed a
"Minor Amendment" and shall not, except to the extent otherwise required by applicable laws,
require notice of public hearing before the parties may execute an amendment hereto.
(c) Authority to Consider Minor Amendment. The City Manager or his or her
designee shall have the authority to reasonably determine if an amendment is a Major
Amendment or a Minor Amendment, as well as the authority to review and approve Minor
Amendment(s) administratively without public notice or hearing.
11.5. Covenants Running With The Land. This Development Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective heirs, successors,
and assigns (including any person or entity acquiring an interest in any portion of the Site or the
Project). All of the terms and provisions contained in this Development Agreement shall be
enforceable as equitable servitudes and shall constitute covenants running with the land
pursuant to California law including, but not limited to, California Civil Code section 1468.
11.6. Recordation Of Agreement. Within ten (10) days of the Effective Date,
Developer shall cause this Development Agreement to be duly recorded in the official records of
Orange County.
11.7. Notices, Demands and Communications Between the Parties. Any notice,
consent, report, demand, document or other such item (each, a "Notice") to be given under this
Development Agreement must be in writing and shall be given by: (a) certified mail, postage
01004.0018/643375.4 Page 31 of 35
[Draft, as of May 20, 2020]
prepaid, return receipt requested; (b) personal delivery; (c) reputable "overnight courier" such as
Federal Express; or (d) email, to the party to whom the Notice is directed at the address of the
party set forth below, or at any other address as that party may from time to time by written
notice designate to the other. Any Notice so given shall be deemed to have been given upon
receipt or refusal to accept delivery except that any Notice sent via email shall be deemed given
on the date sent (as evidenced by the sender's "sent mail" mailbox) if sent prior to 5:00 p.m. .
(Pacific Time) on a business day and, otherwise, on the next succeeding business day.
If to Developer:
With copies to:
And:
If to City:
A copy to:
SP Acquisition, LLC
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attn: Brad Deck
Email: brad.deckasheaproperties.com
Shea Properties
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attention: Julie Guizan, General Counsel
Email: iulie.guizan(cr�ifshea.com
Miller Starr Regalia
1331 North California Blvd., Fifth Floor
Walnut Creek, CA 94596
Attention: Hans Lapping
Email: hans.lappingmsrlegal.com
City of Cypress
5275 Orange Avenue
Cypress, CA 90630
Attn: Peter Grant, City Manager
Email: pgrant( .cvpressca.orq
Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 1700
Irvine, California 92612
Attn: Anthony Taylor, City Attorney
Email: atavlor(cr�awattornevs.com
Notices sent by a party's attorney on behalf of such party shall be deemed delivered by such
party.
11.8. No Financial Assistance; Prevailing Wage Matters. City is not providing any
direct or indirect financial assistance to Developer that would make any part of the Project a
"public work" "paid for in whole or in part out of public funds," as described in California Labor
Code Section 1720, such that it would cause Developer to be required to pay prevailing wages
for any aspect of the Project.
11.9. Applicable Law. This Development Agreement shall be construed and enforced
in accordance with the laws of the State of California.
11.10. Venue. Any action brought relating to this Development Agreement shall be held
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[Draft, as of May 20, 2020]
exclusively in a state court in the County of Orange.
11.11. Indemnification. Developer shall indemnify, defend (with counsel reasonably
acceptable to City), and hold harmless City (including its elected officials, officers, agents, and
employees) (collectively, "City Parties") from and against any and all claims, demands,
damages, liabilities, costs, and expenses (including court costs and attorney's fees) (collectively,
"Claims") resulting from or arising out of the development contemplated by this Development
Agreement, including, without limitation, Claims that arise from or result from activities or
operations of Developer, or its contractors, subcontractors, agents, or employees, under this
Developer Agreement, or that are related to the development of the Project, other than a liability
or claim based upon City's sole negligence or willful misconduct. The indemnity obligations of
this Development Agreement shall not extend to Claims arising from activities associated with
the maintenance or repair by the City or any other public agency of improvements that have
been accepted for dedication by the City or such other public agency.
11.12. No Waiver. Waiver of a breach or default under this Development Agreement
shall not constitute a continuing waiver or waiver of a subsequent breach of the same or any
other provision of this Development Agreement.
11.13. Interpretation. The terms of this Development Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against
either party by reason of the authorship of this Development Agreement or any other rule of
construction which might otherwise apply. The Section headings are for purposes of
convenience only, and shall not be construed to limit or extend the meaning of this Development
Agreement.
11.14. Entire Agreement; Waiver. This Development Agreement integrates all of the
terms and conditions mentioned herein, or incidental hereto, and this Development Agreement
supersedes all negotiations and previous agreements between the parties with respect to all or
any part of the subject matter hereof, including without limitation the DDA. All waivers of the
provisions of this Development Agreement, unless specified otherwise herein, must be in writing
and signed by the appropriate representatives of City or Developer, as applicable.
11.15. Execution. This Development Agreement may be executed in counterparts,
each of which shall be deemed to be an original, and such counterparts shall constitute one and
the same instrument. Delivery of the executed Development Agreement may be accomplished
by transmittal of a PDF by electronic mail, and if so done, the electronically mailed copy shall be
deemed an executed original counterpart of the Development Agreement for all purposes.
11.16. No Third Party Beneficiaries. This Development Agreement is not intended to
create, nor shall it be construed to create, any third party beneficiary rights in any person or
entity that is not a party to this Development Agreement.
11.17. Parties Not Co -Venturers. The Project is a private undertaking of Developer.
Nothing in this Development Agreement is intended to or does establish the parties as partners,
co -venturers, or principal and agent with one another.
11.18. Authority To Execute. The individuals executing this Development Agreement
represent and warrant that they have the right, power, legal capacity, and authority to enter into
and to execute this Development Agreement on behalf of the representative legal entities of
Developer and City.
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[Draft, as of May 20, 2020]
11.19. Listing And Incorporation Of Attachments. The attachments to this
Development Agreement, each of which is hereby incorporated herein by reference, are as
follows:
Attachment A: Legal Description and Depiction of Site
Attachment B: Impact Fees
Attachment C: Schedule of Performance
Attachment D: Form of Certificate of Compliance of DA Obligations
Attachment E: Form of Estoppel Certificate
Attachment F: Form of Assignment and Assumption Agreement
Attachment G: List of Authorized Entities (Hotel, Grocer, Cinema)
IN WITNESS WHEREOF, the parties have entered into this Development Agreement as
of the Effective Date.
"CITY"
CITY OF CYPRESS, a California Charter City
ATTEST:
By:
By: , Mayor
City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
By:
Anthony Taylor, City Attorney
"DEVELOPER"
SP ACQUISITION, LLC
a California limited liability company
By: Shea Properties Management Company,
Inc., a Delaware corporation
500
By:
Name:
01004.0018/643375.4 Page 34 of 35
[Draft, as of May 20, 2020]
501
Title:
By:
Name:
Title:
01004.0018/643375.4 Page 35 of 35
[Draft, as of May 20, 2020]
502
ATTACHMENT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CYPRESS IN
THE COUNTY OF
ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL A:
PARCELS 7, 8, AND 9 OF PARCEL MAP 96-121, IN THE CITY OF CYPRESS, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 298,
PAGE(S) 13 TO 16 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA.
SAID LAND IS ALSO DESCRIBED AS PARCEL 1 OF THAT CERTAIN LOT LINE
ADJUSTMENT NO. LL -2007-01, DATED AUGUST 16, 2007, IN THE CITY OF CYPRESS,
COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED JANUARY 30, 2008 AS
INSTRUMENT NO. 2008000044840 OFFICIAL RECORDS OF SAID COUNTY.
PARCEL B:
APPURTENANT EASEMENTS TO USE, MAINTAIN, OPERATE, ALTER, REPAIR, REPLACE,
RECONSTRUCT AND INSPECT THE UTILITIES, AS SAID EASEMENT IS SET FORTH IN
THAT CERTAIN RECIPROCAL UTILITIES EASEMENT AGREEMENT RECORDED JULY 31,
1991 AS INSTRUMENT NO. 91-404179 OFFICIAL RECORDS.
PARCEL C:
AN APPURTENANT EASEMENT FOR STORM WATER DRAINAGE, AS SAID EASEMENT IS
SET FORTH IN THAT CERTAIN GRANT OF DRAINAGE EASEMENT RECORDED
SEPTEMBER 11, 1990 AS INSTRUMENT NO. 90-482118 OFFICIAL RECORDS, AS
AMENDED BY THAT CERTAIN AMENDMENT TO DRAINAGE EASEMENT RECORDED
JANUARY 18, 1991, AS INSTRUMENT NO. 91-026004 OFFICIAL RECORDS, AND ALSO AS
AMENDED BY THAT CERTAIN GRANT OF EASEMENTS AND AGREEMENT REGARDING
DRAINAGE EASEMENT RECORDED JUNE 3, 1997 AS INSTRUMENT NO. 19970253674
OFFICIAL RECORDS.
PARCEL D:
A NON-EXCLUSIVE, PERPETUAL EASEMENTS FOR PEDESTRIAN AND VEHICULAR
ACCESS AND FOR INSTALLATION AND MAINTENANCE PURPOSES, AS SAID EASEMENT
IS SET FORTH IN THAT CERTAIN ACCESS AND UTILITY EASEMENT AGREEMENT
RECORDED SEPTEMBER 11, 1990 AS INSTRUMENT NO. 1990-482112 OFFICIAL
RECORDS, AS AMENDED BY THAT CERTAIN AMENDMENT TO ACCESS AND UTILITY
EASEMENT AGREEMENT RECORDED JANUARY 10, 1991 AS INSTRUMENT NO. 91-
025992 OFFICIAL RECORDS, AND AS FURTHER AMENDED BY THAT SECOND
SEPP-54334\2274269.1 Page 1 of 2 ATTACHMENT A
503
AMENDMENT RECORDED OCTOBER 9, 1997 AS INSTRUMENT NO. 1997-507990
OFFICIAL RECORDS.
APN: 241-091-022 thru 026
SEPP-54334\2274269.1 Page 2 of 2 ATTACHMENT A
504
ATTACHMENT B
IMPACT FEE SCHEDULE
For purposes of Section 5.2 of the Development Agreement, the parties acknowledge and agree
that the Impact Fees in effect on the Effective Date shall be those set forth in the following
provided that any Impact Fees charged by any entity other than City shall not be subject to any
vesting and Developer acknowledges that City does not control the amount of such fees:
1. Cypress City Council Resolution No. 6182, including any and all attached exhibits
(adopted March 8, 2010).
2. Cypress City Council Ordinance No. 1170, including any and all attached exhibits
(adopted November 27, 2017).
3. Orange County Sanitation District, Ordinance No. OCSD-50, including any and all
attached exhibits (adopted on March 28, 2018); as may be amended or increased by the
Orange County Sanitation District.
4. Orange County Fire Authority, Fee Schedule (Planning and Development Services),
effective as of September 29, 2017, as may be amended or increased by the Orange County
Fire Authority.
5. Cypress School District Resolution No. 178-17, including any and all attached exhibits
(adopted May 10, 2018), as may be amended or increased by the Cypress School District.
S EP P\54334\2127334.17
Page 1 of 1 ATTACHMENT B
505
ATTACHMENT C
SCHEDULE OF PERFORMANCE
FOR DEVELOPMENT AGREEMENT
S EPP-54334\2274284.1
Page 1 of 8
ATTACHMENT C
Item To Be Performed
Time For Performance
Agreement
Reference
Performance
Guideline or
Deadline
1 •
City Council completes
CEQA and approves or
disapproves
Discretionary
Entitlements
Within 180 days from
submittal of Project
Discretionary
Entitlements
§§702.2,
702.3 of DDA
Performance
Guideline
2.
Escrow Agent gives
notice of fees, charges,
and costs to close
escrow
Within 30 business days
prior to Closing
§407.2 of
DDA
Performance
Deadline
3.
Deposits into Escrow by
City:
a) Executed Deed
On or before 1:00 p.m.
on the business day
preceding the Closing
Date
§§ 406.2,
407.3 of
DDA
Performance
Deadline
b) Payment of City's Share
of Escrow Costs
On or before 1:00 p.m.
on the business day
preceding the Closing
Date
§§ 406.2,
407.3 of
DDA
Performance
Deadline
c) Estoppel Certificate
On or before 1:00 p.m.
on the business day
preceding the Closing
Date
§§ 406.2,
407.3 of
DDA
Performance
Deadline
d) Taxpayer ID Certificate
Prior to Closing Date
§407.3 of
DDA
Performance
Deadline
S EPP-54334\2274284.1
Page 1 of 8
ATTACHMENT C
506
S E P P-54334\22 74284.1
Page 2 of 8
ATTACHMENT C
Item To Be Performed
Time For Performance
A reement
9
Reference
Performance
Guideline or
Deadline
e) FIRPTA Certificate
Within 15 days after
opening
§407.3
of DDA
Performance
Deadline
4.
Deposits into Escrow by
Developer:
a) The remaining amount
of the Purchase Price
due pursuant to Section
§403.
On or before 1:00 p.m.
on the business day
preceding the Closing
Date
§§ 406.1,
407.3
of DDA
Performance
Deadline
b) Lender's Deed of Trust
or Security, if applicable
On or before 1:00 p.m.
on business day
preceding the Closing
Date
§§ 406.2,
407.3
of DDA
Performance
Deadline
c) Estoppel Certificate
On or before 1:00 p.m.
on the business day
preceding the Closing
Date
§§ 406.2,
407.3
of DDA
Performance
Deadline
d) Payment of Developer's
Share of Escrow Costs
On or before 1:00 p.m.
on the business day
preceding the Closing
Date
§§ 406.2,
407.3
of DDA
Performance
Deadline
e) Taxpayer ID Certificate
Prior to Closing Date
§§ 406.2,
407.3
of DDA
Performance
Deadline
S E P P-54334\22 74284.1
Page 2 of 8
ATTACHMENT C
507
SEP P-54334\2274284.1
Page 3 of 8 ATTACHMENT C
Item To Be Performed
Time For Performance
Agreement
Reference
Performance
Guideline or
Deadline
5.
Close of Escrow;
recordation and delivery
of documents
Upon satisfaction of
City's and Developer's
Closing Conditions, but
not later than 12/31/20,
unless extended
pursuant to subsection
(b) below and/or any
Excused Delay(s)
§407.1
of DDA
Performance
Deadline
6.
Parties execute
Purchase and Sale
Agreement with Hotel
Subject to Developer's
sole and absolute
discretion of proceeding
with the Phase in
question, within 30 days
of Approval of
Discretionary
Entitlements
§703.1,
Atch. B
of DDA
Performance
Guideline
7.
Developer delivers to
City certificates
evidencing insurance
Before Developer may
Commence Construction
§707.1
of DDA
Performance
Deadline
SEP P-54334\2274284.1
Page 3 of 8 ATTACHMENT C
508
SEP P-54334\2274284.1
Page 4 of 8 ATTACHMENT C
Item To Be Performed
Time For Performance
Agreement
Reference
Performance
Guideline or
Deadline
8.
Developer submits
building
permits/improvement
plans
Subject to Developer's
decision to Commence
Construction of a
particular Project Phase,
in its sole and absolute
discretion, then:
a. Residential
Component: Within 210
days of Close of Escrow
b. Hotel Component:
Within 12 months from
Close of Escrow.
c. Cinema Component:
Within 210 days from
Close of Escrow
d. Retail Component:
Within 210 days from
Close of Escrow
§§702.2;
703.1
of DDA
Performance
Guideline
9.
Developer revises and
resubmits plans,
drawings, and
specifications, if
necessary
Within 30 days after
disapproval
§702.2
of DDA
Performance
Guideline
10
City staff approves or
disapproves final
drawings
Within 30 days after
submittal of revised
plans, drawings and
specifications, if
necessary
§702.2
of DDA
Performance
Guideline
SEP P-54334\2274284.1
Page 4 of 8 ATTACHMENT C
509
SEPP-54334\2274284.1 Page 5 of 8 ATTACHMENT C
Item To Be Performed
Time For Performance
Agreement
Reference
Performance
Guideline or
Deadline
11
Developer pulls
necessary building
permits
Subject to Developer's
decision to Commence
Construction of a
particular Project Phase,
in its sole and absolute
discretion, then:
a. Residential
Component: Within 210
days from Submittal
b. Hotel Component:
Within 180 days from
Submittal
c. Cinema
Component: Within 180
days from Submittal
d. Retail Component:
Within 180 days from
Submittal
§§702.2;
703.1
of DDA
Performance
Guideline
SEPP-54334\2274284.1 Page 5 of 8 ATTACHMENT C
510
S E P P-54334\22 74284.1
Page 6 of 8 ATTACHMENT C
Item To Be Performed
Time For Performance
Agreement
Reference
Performance
Guideline or
Deadline
12
Developer Commences
Construction of Project
Subject to Developer's
decision to Commence
Performance
Construction of a
particular Project Phase,
in its sole and absolute
discretion, then:
Guideline
a. Residential
Component: Within 90
days from Event 11
b. Hotel Component:
Within 90 days from
Event 11
c. Cinema
Component: Within 90
days from Event 11
d. Retail Component:
Within 90 days from
Event 11
S E P P-54334\22 74284.1
Page 6 of 8 ATTACHMENT C
511
It is understood that the foregoing Schedule of Performance is subject to all of the terms
and conditions set forth in the text of the Agreement, including, without limitation, Section 4.6 in
the Development 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 conflict or inconsistency between this Schedule of Performance and the text
SEP P-54334\2274284.1
Page 7 of 8
ATTACHMENT C
Item To Be Performed
Time For Performance
Agreement
Reference
Performance
Guideline or
Deadline
13
Developer Substantially
Completes construction
of relevant Project
Phase
Subject to Developer's
decision to Commence
Construction of a
particular Project Phase,
in its sole and absolute
discretion, then:
Residential Component:
Within 2.5 years from
Commencement of
Construction of
Residential Component
b. Hotel Component:
Within 1 year from
Commencement of
Construction of Hotel
Component
c. Cinema
Component: Within 1
year from
Commencement of
Cinema Component
d. Retail Component:
Within 1 year from
Commencement of Retail
Component
§§702.2;
703.1
of DDA
Performance
Guideline
14
City issues Certificate of
Compliance of DA
Obligations for a
particular Project Phase
Within 30 days of receipt
of written request by
Developer, and
Developer's satisfactory
completion of all
improvements of the
Project or Phase
§6.2
of DA
Performance
Deadline
It is understood that the foregoing Schedule of Performance is subject to all of the terms
and conditions set forth in the text of the Agreement, including, without limitation, Section 4.6 in
the Development 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 conflict or inconsistency between this Schedule of Performance and the text
SEP P-54334\2274284.1
Page 7 of 8
ATTACHMENT C
512
of the Development Agreement, the text shall govern. In the event of any conflict between this
Attachment C and the Schedule of Performance attached to the DDA, this Attachment C and
the Development Agreement shall control.
The time frames set forth in the Schedule of Performance constitute either a
Performance Guideline or a Performance Deadline, as indicate therein, which may be either
adjusted or amended pursuant to Section 4.6 of the Development Agreement.
SEPP-54334\2274284.1 Page 8 of 8 ATTACHMENT C
513
ATTACHMENT D
FORM OF CERTIFICATE OF COMPLIANCE OF DA OBLIGATIONS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cypress
5275 Orange Avenue
Cypress, CA 90630
Attn: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for recorder's use
FORM OF CERTIFICATE OF COMPLIANCE OF DA OBLIGATIONS
THIS CERTIFICATE OF COMPLIANCE OF DA OBLIGATIONS ("Certificate of
Compliance of DA Obligations") is made by the CITY OF CYPRESS, a California charter
municipality ("City"), in favor of ("Developer"), as of the date set forth below
("Effective Date").
RECITALS
A. City and Developer are parties to that certain Development Agreement dated as
of , 2020 ("DA") concerning [all or a portion of] property located at 5095-5275 Katella
Avenue, Cypress, California (APNs 241-091-022 through -026) ("Site"). This Certificate of
Compliance of DA Obligations affects [Insert as applicable: description of the relevant Project
Phase(s] of the Site as more particularly described in attached Attachment 1 (the "Property").
Capitalized terms used herein without definition shall have the meaning ascribed to such terms
in the DDA.
B. Pursuant to Section 6.2 of the DA, City is required to furnish Developer or its
Transferee(s), in a form suitable for recordation, a Certificate of Compliance of DA Obligations
upon Substantial Completion of the relevant Project Phase.
C. City has determined that the relevant Project Phase on the Property is
Substantially Complete as required by the DA.
NOW, THEREFORE, City hereby certifies as follows:
1. This Certificate of Compliance of DA Obligations shall constitute City's conclusive
determination that the relevant Project Phase is Substantially Completed on the Property as
required under the DA.
SEPP-54334\2274291.1 Page 1 of 4 ATTACHMENT D
514
2. After the Effective Date of this Certificate of Compliance of DA Obligations, City
shall not have any rights or remedies under the DA with respect to the relevant Project Phase
on the Property except for (a) the non-discrimination covenants contained in Section 4.9 of the
DA, and (b) any Developer indemnification obligations that survive termination of the DA to the
extent these are applicable to the Property.
3. This Certificate of Compliance of DA Obligations shall not constitute evidence of
compliance with or satisfaction of any obligation of Developer to any Mortgage Holder, or any
insurer of a Mortgage. Any Certificate(s) of Compliance of DA Obligations shall not constitute
notice of completion as referred to in the California Civil Code Section 8180 et seq.
4. Nothing contained in this instrument shall be deemed or construed to modify any
provisions of the DA or any other document executed in connection therewith.
IN WITNESS WHEREOF, City has executed and issued this Certificate of Compliance of
DA Obligations as of the date set forth below.
CITY:
CITY OF CYPRESS, a California charter
municipality
Dated: , 20_ By:
Name:
Title:
S EP P-54334\2274291.1
FORM — DO NOT SIGN
Page 2 of 4 ATTACHMENT D
515
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Contra Costa
On , before me, , a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
S E P P-54334\2274291.1
Page 3 of 4 ATTACHMENT D
516
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Contra Costa
On , before me, , a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
S E P P-54334\22 74291.1
Page 4 of 4 ATTACHMENT D
ATTACHMENT E
FORM OF ESTOPPEL CERTIFICATE
, 20
LLC ("Owner)
c/o Shea Properties LLC
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attn: Julie Guizan
LLC ("Purchase►" "Lessee"))
Attn:
517
RE: 5095-5275 Katella Avenue, Cypress, California (APNs 241-091-022 through -026) (the
"Property'); Estoppel Certificate
Ladies and Gentlemen:
Reference is made to that certain Development Agreement dated , 2020 and
recorded as Instrument No. of the Official Records
of Los Angeles County, California (the "DA") attached hereto as Exhibit A, by and between the
undersigned (the "City") and Owner for the development of the Site. City understands that
[Purchaser/Lessee] may be [purchasing/leasing] all or a portion of the Site from Owner, and
[Purchaser/Lessee] is relying upon this Estoppel Certificate (this "Certificate"), as provided for
in Section 6.3 of the DA, in connection with such transaction. All capitalized terms used herein
have the meaning set forth in the DA unless otherwise expressly indicated.
With such understanding and as of the date of this Estoppel Certificate, City hereby represents,
warrants and agrees, on behalf of itself and its successors and assigns, for the benefit of
Owner; [Purchaser/Lessee]; their affiliates; their current, potential and future members, partners,
shareholders, lenders, and investors; and each of their respective transferees, successors and
assigns, as follows:
1. A true, correct and complete copy of the DA is attached hereto as Exhibit A. The DA
represents the entire agreement between the parties as to the Site, and there are no side
agreements, modifications, amendments, or supplements with respect thereto, except as set
forth in Exhibit A.
S E P P-54334\227429 8.1
Page 1 of 3 ATTACHMENT E
518
2. The DA is in full force and effect and is hereby ratified and reaffirmed by City.
3. To the best of the City's knowledge, there is no default by Owner under the DA and no
event has occurred that, with the passage of time or the giving of notice, or both, would
constitute a default by Owner under the DA. The undersigned has not cured any default by
Owner under the DA as to which it claims any right of reimbursement and/or lien under the DA.
City has no other claims against Owner with respect to the Site or the DA, and City has not
disputes with Owner with respect to the Site and/or the DA.
4. f 1 Project Phase(s) have been Substantially Completed, or if not Substantially
Completed, following is a description of the nature and extent of any additional work required to
achieve Substantial Completion.
5. The individual executing this Certificate on City's behalf hereby represents and warrants
that he or she is duly authorized to so execute this Certificate on behalf of City.
Very truly yours,
CITY OF CYPRESS, a California charter city
By:
Name:
Its:
Attest:
Name:
Its: City Clerk
Approved as to Form:
By:
Name:
Its: City Attorney
S E P P-54334\22742 98.1
Page 2 of 3 ATTACHMENT E
S E P P-54334\227429 8.1
519
Exhibit A to Estoppel Certificate
Development Agreement
[See Attached]
Page 3 of 3 ATTACHMENT E
520
ATTACHMENT F
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
RECORDING REQUEST BY AND
AFTER RECORDING RETURN TO:
(Space Above for Recorder's Use)
FORM OF PARTIAL ASSIGNMENT AND ASSUMPTION OF
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS PARTIAL ASSIGNMENT AND ASSUMPTION OF DISPOSITION AND
DEVELOPMENT AGREEMENT ("Assignment Agreement") is made as of the f 1 day of
20_ by and between , a
("Assignor"), and
("Assignee"), with reference to the following facts:
,a
A. SP Acquisition, LLC, a California limited liability company ("SP") and the City
entered into that certain Development Agreement, recorded in the Official Records of Los Angeles
County, State of California (the "Official Records") on , 2020 as Instrument
No. (the "DA").
B. SP assigned [all or a portion of] its rights and obligations under and with respect
to the DA to pursuant to an Assignment and Assumption
of Development Agreement dated and recorded in the Official Records on
, as Instrument No.
C. Concurrently herewith, Assignee acquired fee title to the Property as more
particularly described on Exhibit A attached hereto ("Assigned Parcel(s)") from Assignor on the
date first written above (the "Acquisition Date").
D. Assignor desires to assign to Assignee those interests, rights, obligations,
conditions and requirements under the DA to the extent related to the development of the Property
(collectively, "Benefits and Burdens"), and Assignee desires to accept the assignment of such
Benefits and Burdens, subject to the terms, conditions and restrictions set forth in this Assignment
Ag reement.
E. Assignor [has requested approval from the City of the assignment to Assignee
described herein pursuant to Section 10 of the DA 11 has the right to make the assignment to
Assignee described herein as a "Permitted Transfer" under Section 10.2 of the DA.]
F. Assignor represents that neither it nor City is in violation or breach of any provision
of the DA and that the DA remains valid and in full force and effect as of the Effective Date.
S E P P-54334\2274302.1
Page 1 of 7 ATTACHMENT F
521
G. [City has consented to the assignment described herein pursuant to Section 10.3
of the DA, as documented in City's execution of same attached hereto // Pursuant to Section 10.2
of the DA, the assignment contemplated herein is a Permitted Transfer because
.]
NOW THEREFORE, in consideration of the foregoing facts and the mutual covenants and
conditions herein below set forth, it is agreed:
1. For good and valuable consideration, the receipt of which is hereby acknowledged,
and in accordance with Section 10 of the DA, Assignor hereby assigns, transfers and conveys to
Assignee the Benefits and Burdens under the DA with respect to the Assigned Parcels and
delegates to Assignee all of the Benefits and Burdens under the DA that accrue after the
Acquisition Date of this Assignment under the DA with respect to the Assigned Parcels. Upon the
execution of this Assignment Agreement [and written consent of the City// NOTE: include the
foregoing bracketed language only if City consent is required], Assignee shall become substituted
for Assignor as the "Developer" under the DA with respect to the Assigned Parcels. Assignee
acknowledges that Assignor or a predecessor -in -interest has previously made one or more partial
assignments of the DA to a party or parties that acquired other property subject to the DA, and
that this Assignment assigns only the Benefits and Burdens with respect to the Assigned Parcels.
2. Notwithstanding any other provision of this Assignment Agreement, Assignee
hereby assumes and agrees to perform all of the Benefits and Burdens under the DA with respect
to the Assigned Parcels.
3. As of the Effective Date, Assignor hereby relinquishes all Benefits hereby assigned
to Assignee under this Assignment, and all Burdens of Assignor hereby assigned under this
Assignment shall be terminated as to, and shall have no more force or effect with respect to,
Assignor.
4. As of the Effective Date, any default or breach by Assignee under the DA following
the Effective Date with respect to the Assigned Parcel or the Benefits and Burdens ("Assignee
Breach") shall not constitute a breach or default by Assignor under the DA and, provided Assignor
is not in default under the terms of the DA shall not result in (a) any remedies imposed against
Assignor, including without limitation any remedies authorized pursuant to Section 7.3 of the DA,
or (b) modification or termination of the DA with respect to any other property subject to the DA
retained by Assignor after the conveyance of the Assigned Parcel (the "Assignor Property").
Similarly, any default or breach by Assignor under the DA prior to or after the Effective Date
("Assignor Breach"), shall not constitute a breach or default by Assignee under the DA and,
provided Assignee is not in default under the terms of the DA shall not result in (x) any remedies
imposed against Assignee, including without limitation any remedies authorized pursuant to
Section 7.3 of the DA, nor a (y) modification or termination of the DA with respect to the Assigned
Parcel.
5. JCity Consent; City is Third -Party Beneficiary. [The executed City Consent below
is for the limited purposes of indicating consent to the assignment and assumption set forth in this
Assignment Agreement if and to the extent said consent is required by DA, and for clarifying that
there is privity of contract between City and Assignee with respect to the DA in such
circumstances.] [NOTE: Include the foregoing bracketed language only if the City's consent to
the assignment is required.] City is an intended third -party beneficiary of this Assignment
Agreement, and has the right, but not the obligation, to enforce the provisions hereof.
S E P P-543 34\2274302.1
Page 2 of 7 ATTACHMENT F
522
6. For purposes of Section 11.7 of the DA, the address of the owner of the Assigned
Parcels is:
Assignee:
7. This Assignment Agreement shall be recorded in the Office of the Los Angeles
County Recorder.
8. If there is any dispute, action, lawsuit or proceeding relating to this Assignment
Agreement, or any default hereunder, whether or not any action, lawsuit or proceeding is
commenced, the non -prevailing party shall reimburse the prevailing party for its reasonable
attorneys' fees, expert witness fees and all fees, costs and expenses incurred in connection with
such dispute, action, lawsuit or proceeding, including, without limitation, any post -judgment fees,
costs or expenses incurred on any appeal, in collection of any judgment or in appearing in any
bankruptcy proceeding.
9. Each party hereto covenants and agrees to perform all acts to prepare, execute
and deliver such written agreements, documents, instruments, statements, filings and notices as
may be reasonably necessary to carry out the terms and provisions of this Assignment
Agreement.
10. Each party to this Assignment Agreement represents and warrants to the other
that the persons executing this Assignment Agreement on its behalf has the right, power, legal
capacity and authority to enter into and to execute this Assignment Agreement on behalf of the
respective legal entities of the Assignor and the Assignee.
11. This Assignment Agreement may only be amended or modified by a written
instrument signed by both parties hereto.
12. This Assignment Agreement shall be binding upon and inure to the benefit of the
heirs, successors and assigns of the respective parties hereto. Assignee shall have the right to
reassign these Benefits and Burdens only in connection with a conveyance of the fee title to the
Property and in accordance with the DA's terms and conditions.
13. This Assignment Agreement sets forth the entire understanding between the
parties hereto with respect to all matters discussed herein and supersedes any and all prior
agreements whether written or oral regarding such matters. Should any term, condition, covenant
or provision of this Assignment Agreement be held to be invalid or unenforceable, the remainder
of this Assignment Agreement shall continue in full force and effect.
14. This Assignment Agreement may be executed in several counterparts and, when
so executed, shall constitute one agreement binding on both parties hereto, notwithstanding that
both parties are not signatory to the original and the same counterpart.
15. All capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to such terms as set forth in the DA.
S E P P-54334\22 74302.1
[SIGNATURE PAGES TO FOLLOW]
Page 3 of 7 ATTACHMENT F
523
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
Agreement as of the date first set forth above.
"Assignor" , LLC,
a California limited liability company
"Assignee"
S E P P-54334\2274302.1
By: Shea Properties Management Company, Inc.,
a California limited liability company,
its Manager
By: FORM — DO NOT SIGN
Name:
Title:
By:
Name:
Title:
a
By: FORM — DO NOT SIGN
a , its
By:
Name:
Title:
By:
Name:
Title:
Page 4 of 7 ATTACHMENT F
524
CITY OF CYPRESS CONSENT
[NOTE: THIS SIGNATURE TO BE INCLUDED ONLY IF CITY CONSENT IS REQUIRED
UNDER DA]
The City hereby consents to the covenants, terms and conditions of the foregoing Assignment
and Assumption of Development Agreement. In accordance with Section 10 of the Development
Agreement, City hereby releases Assignor from the Benefits and Burdens with respect to the
Assigned Parcels.
City:
By: FORM — DO NOT SIGN
Name:
Its:
Date:
Approved to Form: By:
Name:
Its: City Attorney
S E P P-54334\22743 02.1
Page 5 of 7 ATTACHMENT F
EXHIBIT A TO PARTIAL ASSIGNMENT AND ASSUMPTION OF
DEVELOPMENT AGREEMENT
LEGAL DESCRIPTION OF ASSIGNED PARCELS
[Attach Legal Description]
S E P P-54334\2274302.1
525
Page 6 of 7 ATTACHMENT F
526
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of
On , before me, , a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
S E P P-54334\2274302.1
Page 7 of 7 ATTACHMENT F
527
ATTACHMENT G
LIST OF AUTHORIZED ENTITIES FOR PURPOSES OF
THE HOTEL COMPONENT AND RETAIL COMPONENT
As detailed more fully in the Development Agreement, the followed entities shall be treated as
Authorized Hotel Entity(ies), Authorized Grocery User(s), and Authorized Cinema User(s), as
applicable.
Defined terms used in this Attachment G shall have the same meaning set forth in the
Development Agreement unless otherwise expressly indicated.
Authorized Hotel Entities
Aloft by Marriott
Courtyard by Marriott
Four Points by Sheraton
Hyatt Place by Hyatt
Hilton Garden Inn
Hotel Indigo
Ayres
Cambria Suites by Choice Hotels
Homewood Suites
Authorized Cinema Users
Cinemark
Alamo Drafthouse
Cinepolis
The Lot
Arclight
Studio Movie Grill
Metro Theaters
iPic
S E P P\54334\212 7334.17
Page 1 of 2 ATTACHMENT B
528
Authorized Grocery Users
Mother's Market
Sprouts
Whole Foods
Trader Joes
Lazy Acres Market
Gelson's
SEPP\54334\2127334.17 Page 2 of 2 ATTACHMENT
G
529
Shea
May 13 , 2020
Properties
Mr. Peter Grant
City Manager
City of Cypress
5275 Orange Avenue,
Cypress, CA 90630
Re: Request for Park Fee Credits for the Cypress City Center
Dear Mr. Grant:
Pursuant to the City's Municipal Code, specifically Sec 25-47 (as outlined below) SP Acquisition, LLC hereby
requests certain park fee credits for private improvements contemplated to be constructed, owned and maintained
as part of the mixed-use development at the approximately 13.29 acre site (Site), commonly referred to as the
Cypress City Center. As you are aware the Cypress City Center mixed-use project will include a number of on-site
park and recreational amenities for its residents, guests, and customers as part of its "place -making" and
consistent with relevant goals and policies in the City's General Plan's Conservation/Open Space/Recreation
Element. Such amenities include, among others, a resort style pool and clubhouse, first-class fitness center, dog
park, public plazas, and meandering pathways. Some of these improvements such as the dog park, plazas, and
meandering pathways will be open to the public. Pursuant to provisions in the Disposition and Development
Agreement (dated Nov. 19, 2010) and the Development Agreement (being considered by the Council on May 26,
2020), SP Acquisition, LLC has agreed that all of the foregoing improvements will be privately maintained and
owned and restricted for park and recreational purposes in accordance with a Reciprocal Easement Agreement
(REA) that will be recorded against the Site.
As the City's Municipal Code provides (Sec. 25-47 1-3), SP Acquisition, LLC believes that the Cypress City Center
mixed-use project is in compliance with all the standards outlined below and that the City Council has the authority
to make the required findings:
Sec. 25-47. Credit for private open space.
(a) Where private open space for park and recreational purposes is provided in a proposed subdivision and
such space is to be privately owned and maintained by the future residents of the subdivision, the city council, in
its discretion, may credit such areas against the requirement of dedication for park and recreation purposes, as set
forth in section 25-45 hereof, or the payment of fees in lieu thereof, as set forth in section 25-46 hereof, to a
percentage of the required dedication or payment of fees. The percentage of such credit shall be determined at the
discretion of the city council, but shall be at least one (1) percent but not to exceed fifty (50) percent of the
required dedication or payment of fees.
(b) In order to be eligible for the credit described in subsection (a), the city council, in its discretion, must
find that it is in the public interest to do so, regardless of the number of parcels in the development, and that all of
the following standards are met:
(1) That yards, court areas, setbacks and other open areas required to be maintained by the zoning and building
regulations shall not be included in the computation of such private open space; and
130 Yantis, Suite 200
Aliso Viejo, CA 92656
T: 949 389 7261 F: 949 389 7466
Shea
Properties,
530
(2) That the private ownership and maintenance of the open space is adequately provided for by written
agreement; and
(3) That the use of the private open space is restricted for park and recreational purposes by recorded covenants
which run with the land in favor of future owners of property within the tract and which cannot be defeated or
eliminated without the consent of the city council; and
(4) That the proposed private open space is reasonably adaptable for use for park and recreational purposes,
taking into consideration such factors as size, shape, topography, geology, access, and location of the private open
space land excluding enclosed structures (such as club houses), pools, or other similar facilities; and
(5) That facilities proposed for the open space are consistent with the provisions of the recreational element of
the general plan, and are approved by the design review committee.
o (Ord. No. 582, § 2, 9-13-76; Ord. No. 769, § 5, 12-8-86; Ord. No. 874, § 1, 9-23-91; Ord. No.
1170, § 2, 11-27-17.)
Further, I have attached to this request an exhibit outlining our approximate development costs with eligible credits
(Exhibit A) for said improvements, as well as a site plan outlining the anticipated locations of improvements (Exhibit
B).
As always please feel free to call me with any questions or concerns regarding this request.
Kevin McCook
Vice President, of Acquisitions and Development
Cc: Brad Deck
Sean McEachern
Greg Anderson
CoIm Macken
130 Vantis, Suite 200
Aliso Viejo, CA 92656
T: 949 389 7261 F: 949 389 7466
Cypress Park Fee Credit Summary
Cypress Open Space Common Area Cost Estimate
Clubhouse (Residents Only)
Fitness (Residents Only)
Main Recreation Courtyard (Residents Only) (1)
Main Recretaion Courtyard Pool Area
Dog Grooming Room (Residents Only)
Southwestern Greenbelt (Public)
Northwestern Greenbelt (Public)
Northern Greenbelt & Dog Park (Semi -Public)
Public Plazas
SF
3,882
3,364
17,694
2,361
180
8,798
14,280
15,355
24,936
Cost
1,899,850
1,411,500
2,936,750
300,000
51,500
137,980
217,800
337,500
$733,750
Total Development Costs
8,026,630
531
Cypress Open Space Fee Credit Request
% eligible requested
0%
0%
30%
0%
0%
100%
100%
100%
100%
Eligible Costs
881,025
137,980
217,800
337,500
733,750
Total Eligible Credits
(1) Main Recreation Area includes improvements such as: BBQ Area, seating with firepits, hardscape, lush lands pae, structures (bar), outdoor activies, etc.
2,308,055
0
MULTI -FAMILY
RESIDENTIAL
MOVIE THEATER
llllllll�
L.LLLLL111111.
RETAIL
RETAIL
RETAIL
A
11111)11iill11i1111!I1
KATELLA AVE.
GROUNDLEVEL Shea ',Properiies
CYPRESS MIXED-USE
111111111
11111111
Schematic Design
532
PARK / AMMENITIES TOTAL SF
Mla PARK/AMENITY (PUBLIC) _
63,161 SF
PARK/ AMENITY (COMMON ARO
27,669 SF
iia To�_ae
Open Space Diagram