01-20-2004 -City of West Covina
' ° f Memorandum
r
AGENDA
TO: Andrew G. Pasmant, City Manager and ITEM NO. C-1
Ahe City Council DATE January 20, 2004
Andrew G. Pasmant, Executive Director and
the Community Development Commission
FROM: Christopher J. Chung
Redevelopment Director,
SUBJECT: JOINT PUBLIC HEARING — APPROVAL OF DISPOSITION AND .
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF WEST
COVINA COMMUNITY DEVELOPMENT COMMISSION AND WEST
COVINA HEIGHTS, S.C., LLC. REGARDING THE SOUTHERN 43-
ACRE_ PORTION OF PARCEL 1 OF PARCEL MAP 24585 LOCATED AT
THE NORTHEAST QUADRANT OF AMAR ROAD AND AZUSA
AVENUE. (REFER TO COMMUNITY DEVELOPMENT COMMISSION
AGENDA ITEM NO. I)
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution (Attachment
No.l ):
Q RESOLUTION NO. - A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF WEST COVINA APPROVING AND AUTHORIZING
J THE EXECUTION OF THE DISPOSITION AND DEVELOPMENT
�0- AGREEMENT . BY AND BETWEEN THE COMMUNITY
�C� DEVELOPMENT COMMISSION AND WEST COVINA HEIGHTS, S.C.,
LLC. AND MAKING CERTAIN FINDINGS IN CONNECTION
THEREWITH
DISCUSSION:
The Community Development Commission (formerly the Redevelopment Agency, "Agency") is
currently pursuing the development of the West Covina Sportsplex project, which is located on
approximately 280 acres of land at the former BKK landfill site. One of the major components
of this project includes a commercial development component, which is being proposed on the
southern 43 acre portion of a 100 acre parcel (Parcel 1) located adjacent to Azusa Avenue
(Attachment No. 2). The estimated net developable area of the proposed commercial project is
33.67 acres.
On May 7, 2002, the Agency (now the Community Development Commission, "CDC")
approved a 120-day Exclusive Negotiating Agreement (ENA) with Eclipse Development Group
(Eclipse) to pursue a commercial retail development on Parcel 1. The Agency also authorized
additional amendments to the ENA. These ENA extensions were necessary to identify site
tenants, address grading issues, obtain California Environmental Quality Act (CEQA) approval
and to negotiate a Disposition and Development Agreement (DDA) with Eclipse.
On November 3, 2003, the Planning Commission conducted all necessary approvals and actions
for the project pursuant to the California Environmental Quality Act (CEQA). The following
documents were approved:
• Supplemental Environmental Impact Report (SEIR)
• General Plan Amendment No. 03-04
• Zone Change No. 03-06
• West Covina Sportsplex Park Master Plan
• Tentative Parcel Map No. 60193
• Conditional Use Permit No. 503
Andrew G. Pasmant, City Manager and the City Council
January 20, 2004
Page 2 - - - - --
Following the Agency's approval of the ENA, representatives of Eclipse and staff met, numerous
times to address outstanding issues, refine the project and incorporate all deal points into a
Disposition and Development Agreement (DDA). The parties to the DDA are the CDC and
West Covina Heights S.C., LLC (Eclipse Development Group).
DDA Major Deal Points
The following is a description of major deal points of the DDA:
1. Project Description:
West Covina Heights S.C., LLC (WCH) is to purchase approximately 43 gross acres of
land from the CDC to develop not less than 240,000 square feet and no more than
375,000 square feet of a commercial retail center.
2. Purchase Price:
WCH is to purchase approximately 43 gross acres (approximately 33.67 net developable
acres) from the Agency for $12,833,320 million or $8.75 per square foot for a rough
graded site (Agency grades).
3. Purchase Adjacent 4-Acre Parcel:
WCH is to purchase, grade and improve an adjacent parcel (approximately 4.03 acres)
from a private party and incorporate it as part of the overall commercial development.
4. Supplemental Environmental Impact Report (SEIR) Cost:
WCH is to pay the cost of the SEIR, currently estimated at $86,119, plus assume all
mitigation costs associated with the commercial development (i.e., methane gas systems,
onsite storm drainage costs, slope landscaping, etc.)
5. Good Faith Deposit:
WCH is to submit a $125,000 good faith deposit, which shall be credited towards the
balance of the purchase price.
6. 84" Storm Drain & Inlet:
WCH is to construct, at its sole cost, all necessary improvements for the commercial
development including an 84" storm drain and storm drain inlet from an Azusa Avenue
inlet to the Parcel 1 / BKK property boundary.
7. Underground Electrical Utilities:
WCH is to pay to the City $300,000 to underground electrical utilities located along
Azusa Avenue contiguous to the commercial site.
8. Maintenance District Participation:
WCH and all subsequent purchasers of the site along with BKK shall participate in the
newly formed maintenance district for the maintenance of gnatcatcher habitat and shall
contribute their pro rata share of all costs to maintain the habitat.
9. Sale of Electricity and Reclaimed Water:
WCH and the commercial development (tenants) are to purchase electricity or reclaimed
water at competitive rates from the City through a future formed City Utility System.
10. Indemnity From Tenants:
WCH agrees to indemnify the City, Agency and its representatives from all claims,
demands, liabilities, etc. of the commercial development's tenants.
11. Sidewalk, Bus Turnout (as part of deceleration lane):
WCH is to construct a sidewalk and turnout along Azusa Avenue. _
12. Traffic Mitigation Impact and Road Paving Fees:
J
WCH is to pay for $425,000 in traffic impact and road paving fees for the commercial
development.
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Andrew G. Pasmant, CityRanager and the City Council
January 20, 2004
Page 3
13. Slope Area:
The CDC has the right to retain ownership of a portion of the slope area along the eastern
side of Parcel 2 of tentative parcel map 60193 for future development by the CDC.
14. 120 Day Due Diligence Period:
WCH shall have a 120-day due diligence period to investigate the site, its physical
condition, and all other matters, which affect or influence the proposed use of the site
prior to completing its purchase of the CDC Parcels.
15. Delivery of Graded Site:
CDC agrees to convey CDC Property to Developer in cleared and rough graded condition
including removal of all hazardous materials and solid wastes, as specified in the
Agreement.
16. Delivery of Documents:
CDC agrees to provide copies of all biological, wetlands, environmental, engineering,
soils and other documents and reports concerning the physical condition of the CDC
Property in possession of the CDC within 10 days from execution of the Agreement.
Financial Analysis of the Project
Pursuant to Section 33433 of the California Health and Safety Code, prior to the sale of property
by a redevelopment agency, a report is required that describes the cost of the agreement to the
Agency, the estimated value of the property to be conveyed determined at its highest use under
the redevelopment plan, and the purchase price to be paid by the developer. Essentially, a 33433
Report is a disclosure statement of the costs associated with the project '
A 33433 Report has been prepared by Wald Realty Advisors, Inc. (Attachment No. 3). A
summary of the salient points of the 33433 Report are as follows:
1.. CDC agrees to convey CDC Property to Developer in cleared and rough graded condition
including removal of all hazardous materials and solid wastes, as specified in the
Agreement. If the CDC determines at its sole discretion that the cost to remove any solid
wastes and hazardous materials is prohibitive, CDC may terminate the Agreement.
2. The Developer is planning to purchase the Site for development of a major retail center
with a maximum build out of 375,000 square feet of retail space. Preliminary plans
indicate parking for over 2,000 cars; attractive landscaped areas including non -usable
portions of the site, traffic mitigation improvements and significant offsite improvements
to Azusa Avenue.
3. Developer agrees to purchase the CDC Property from the CDC for a price of $8.75 per
net square foot of land area ($12,833,320 based on 33.67 net acres)
4. Developer agrees to acquire adjacent parcel (approximately 4.03 acres) at its cost as a
condition for CDC transfer of CDC Property to Developer consistent with the terms of
the Agreement.
5. The total CDC prorated cost for the CDC Property including the land and gas -monitoring
costs was $1,379,131. In addition, the CDC is incurring approximately $1,200,000 in
grading, related costs and soil export to adjacent CDC property planned for development
of a golf course. In total, CDC costs are $2,579,131.
6. The Agreement generates CDC revenues of $17,536,420 (in present value), which are
comprised of the purchase price ($12,833,320) and net tax increment revenues
($4,703,100). After subtracting the CDC cost ($2,579,131) from CDC revenues
($17,536,420), the Agreement generates a positive economic benefit to the CDC of
$14,957,289.
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Andrew G. Pasmant City Manager and the City Council
�
January 20, 2004
Page 4
7. Wald Realty's analysis concluded that the purchase price exceeds the estimated reuse
value ($11,595,700).
FISCAL IMPACT:
It is important to note that the CDC purchased the proposed commercial portion of the BKK
property for an estimated $0.94 per square foot or $1,379,131 based upon approximately 33.67
net developable acres. The property was then appraised for $7.25 per square foot or $10,633,300
based upon approximately 33.67 net developable acres. The developer's proposed consideration
for the property is $8.75 per square foot or $12,833,320 based upon approximately 33.67 net
developable acres. Therefore, the CDC negotiated a sale price that exceeded the purchase price
and appraised price of the land. As a result, it appears that the CDC will receive approximately
$9,591,320 in land sale proceeds (difference between sale price and purchase price of land),
which can be used to offset other sportsplex related project costs.
In addition to the land sale proceeds, the CDC will also benefit from future project sales tax and
property tax increment generation over the life of the project area (estimated at 34 years).
According to Wald Realty Advisors, the cumulative sales tax generation is estimated at $47.6
million (or $17.1 million in net present value) over the life of the project'. The cumulative net
tax increment generation is estimated at $14.0 million (or $4.7 million in net present value) over
the life of the project2. The combined total cumulative sales tax and tax increment generation is
estimated at $61.6 million (or $21.8 in net present value) over the life of the project based on
proposed commercial retail use.
CONCLUSION:
The proposed sale of the subject property for development of a commercial retail center has
numerous benefits to the City of West Covina including the following:
■ The proposed developer purchase price of $12,833,320 is above market value and is a
critical component to offsetting the West Covina Sportsplex Project development costs
and contributing to the overall success of the project.
■ This proposed commercial project will generate substantial sales tax and tax increment
revenues, which are also essential to offsetting the West Covina Sportsplex Project
development costs and contributing to the overall success of the project.
■ This proposed commercial project is estimated to generate 650 new permanent and 300
new construction job opportunities, according to the commercial developer.
■ This proposed commercial project is located in an area, which would not typically attract
or feature this type of commercial development. The infusion of new commercial retail
in this area will promote and spur economic development and private investment in -
surrounding areas.
■ This proposed commercial project would further eliminate blighted and underutilized
areas such as the former BKK site, which has been difficult and challenging to redevelop
due to the various mitigation measures, conditions of approval and necessary extensive
grading and infrastructure improvements.
As previously indicated, the sale and ultimate development of the commercial site (33.67 net
acres) is a critical component in the successful redevelopment of the former BKK site and can
help further reduce the overall project cost of the entire West Covina Sportsplex Project. Along
with the BLD Sports Park and municipal golf course, the proposed commercial development has
the potential to turn a former landfill into a marquee recreation facility and shopping center near
the focal center of West Covina and thus create a regional destination attraction.
' The sales tax projection assumes a maximum project build out and an estimated sales tax amount of $I.Imillion at
Year 1, which is inflated 2% annually. The Net Present Value is calculated using a discount factor of 7% based on
estimates and assumptions provided by Regan & Associates.
2 Net tax increment is based on estimated assessed valuation of the completed development at a 1.0% tax rate less (1)
existing tax increment from the CDC Property; (2) statutory tax pass-throughs to other agencies; and (3) 20%
housing set -aside funds. The net present value (7% discount rate) of net tax increment over the Redevelopment Plan
time limit is estimated at $3,545,500 with an additional present value of $1,157,600 in housing set -aside funds based
on estimates and assumptions provided by Regan & Associates.
bkk496dgv1
Andrew G. Pasmant, City Manager and the City., Council
J ti January 20, 2004
Page 5
4-- J�
Prepared by: Duran Villegas Reviewed/A/ rovedby:
Project Manager
Approved via telephone
Reviewed/Approved by: Arnold M. Alvarez-Glasman
Agency General Counsel
istopher J. Chung
evelopment Director l
Attachments: No. 1 — City Council Resolution approving and authorizing execution of DDA
No. 2 — Site Plan
No. 3 — 33433 Report
bkk496dgv1
L-1
EXHIBIT A
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR THE WEST COVINA HEIGHTS S.C., LLC, A CALIFORNIA LIMITED
LIABILITY COMPANY
PARTIES:
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST
COVINA
1444 West Garvey Avenue
West Covina, CA 91793
(The "CDC")
WEST COVINA HEIGHTS S.C., LLC, a California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
(The "Developer")
DATE: 12004
r PLACE: West Covina, California
094/023022-0007
466916.01 a01/15/04
•
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS AGREEMENT is entered . into by and between the COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF WEST- COVINA (previously
known as the REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA
(the "CDC")) (the "CDC")and WEST COVINA HEIGHTS S.C., LLC, a California
Limited Liability Company (the "Developer") and is dated and effective as of
, 2004. In consideration of the mutual covenants and agreements
contained herein, the parties hereby agree as follows:
RECITALS AND REPRESENTATIONS
A.. Developer enters into this Disposition and Development Agreement
("Agreement") in order to acquire certain CDC -owned property included in
the Site as shown on the map which is attached here as Exhibit A (the
"Site"). Developer agrees to use its commercially reasonable efforts to
build on the Site, including the land identified as the Developer's Parcel,
as defined below, a commercial retail shopping center containing
approximately 47 acres improved with not less than 240,000 square feet
and not more than 375,000 square feet of retail -commercial space, with
related amenities, parking and landscaping.
B. The Site shall be the aggregate of: (i) the approximately 43 acre site, to be
more specifically defined pursuant to the ALTA survey as set forth below,
located in West Covina, Los Angeles County, and as more particularly
described in the Legal Description as set forth in Exhibit B ("CDC's
Parcels"); (ii) the approximately 4.03 acre site (south of the CDC's
Parcels) to be acquired by the Developer and to be integrated with the
CDC's Parcels ("Developer's Parcel") (iii) all permits, licenses, surveys,
plans, studies, contract. rights and documents pertaining to the Property;
and (iv) easement rights, strips, gores, interest in adjoining rights -of -way
and other appurtenances pertaining to the Site.
C. The Site is located in the City of West Covina, California (the "City") within
the area originally designated as Redevelopment Plan (the
"Redevelopment Plan") for the West Covina Redevelopment Project (the
"Project Area"), by the merger of the Central Business District and the
Eastland Redevelopment Plans on December 21, 1.993 by Ordinance No.
1928 and the City Council did duly pass and approve Ordinance No. 1951
on December 20, 1994, and did thereby amend the Plan. The Ordinances
and Redevelopment Plan as they are now or may be amended are
incorporated herein by reference and made a part of this Agreement as
though fully set forth herein. This Agreement shall control to define those
terms, conditions and covenants . interpreting the Ordinances,
West Covina Heights S.C., LLC, A California Limited Liability C*pany
011304
Redevelopment Plan as it is now or may be amended, not inconsistent
with the terms of this Agreement.
D: The CDC has determined that the construction and subsequent use of the
Site by Developer as described herein are within the purposes of the
Redevelopment Plan to redevelop, rehabilitate, and revitalize the area
within the boundaries of the Project Area and to eliminate and prevent the
spread of blight and deterioration. The CDC has also determined that
Developer's operation of the Site will further the purpose of redevelopment
expressed in. California, Health and Safety Code Section 33071 by
expanding employment opportunities in the City of West Covina for its
residents and as a result will improve the City's general level of economic
activity. This Agreement sets forth the terms of an agreement between
the CDC and the Developer whereby the CDC agrees to convey title to the
CDC's Parcels (as defined below) to the Site to Developer.
E. The Developer shall bear the expense of obtaining any reviews or
approvals required by the California Environmental Quality Act ("CEQA")
which are necessary to implement the terms of this Agreement up to the
maximum amount stated in Section 126. The City shall be the lead
agency for CEQA purposes and shall select the environmental consultant
and direct the CEQA report process.
F. The Site currently is zoned through the City's Specific Plan designation
and is identified as SP (Specific Plan) - 14. The City and the CDC have
determined, and represent and warrant to Developer, that the construction
and subsequent use of the Site by the Developer as described herein are
consistent with the current zoning and the General Plan designations, or
as amended.
G. The CDC is a redevelopment agency organized and existing under the
Community Redevelopment Law, Sections 33000 et seq. of the California
Health and Safety Code. The principal offices of the CDC are located at
City Hall, 1444 West Garvey Avenue, West Covina, California 91793.
"CDC" as used in this Agreement includes the CDC and any assignee of
or successor in interest to its rights, powers and responsibilities.
H. Developer's principal office for purposes of this Agreement is 17802
Skypark Circle, Suite 200; Irvine, California 92614. The term
"Developer," as used herein, shall refer to West Covina Heights S.C., LLC,
A California Limited Liability Company, and shall include any assignee or
successor in interest of Developer, as permitted by this Agreement.
The Proposed Development of the Site is conditioned upon Developer's
acquisition of Developer's Parcels from third parties. If the foregoing
condition is satisfied, CDC will then transfer the CDC's Parcels, consistent
with the terms of this Agreement and allow Developer to develop, and use
West Covina Heights S.C., LLC, A California Limited Liability C(2npany
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of the Site in conformity with this Agreement and the Redevelopment Plan
as set out herein and as required by California Health and Safety Code
Section 33432.
J. Developer shall use commercially reasonable efforts to obtain, as of the
date of the close of the escrow, funds in amounts sufficient to acquire the
Site and to construct the improvements as defined in the Scope of
Development, set forth in Exhibit E.
K. Developer represents and warrants to the CDC for the benefit of CDC's
successors and assigns that:
Developer is duly organized and validly existing under the laws of
the State of California and has been duly qualified to conduct its
business in California, has full power and authority to own its
properties and conduct its business as now conducted and as it will
be conducted on the Site, and has full power and authority to enter
into this Disposition and Development Agreement and to perform its
obligations as set forth herein. Developer has obtained appropriate
approval and has taken all action required by law and otherwise to
enter into this Agreement and has or shall have taken all action
required by law and otherwise to perform its obligations as set forth
herein;and
2. This Agreement is a valid and binding agreement enforceable
against Developer in accordance with its terms.
L. Developer represents and warrants to the CDC that there is no suit,
action, or arbitration, legal, administrative or other proceeding, or
governmental investigation, process which has been served upon
Developer or which, to Developer's actual knowledge, is otherwise
pending or threatened against Developer in which any party is making or
has made a claim or defense that, if sustained, would materially and
adversely affect the performance of Developer under this Agreement or
materially and adversely interfere with the ability of Developer to
consummate the transactions contemplated herein.
M. Developer represents and warrants to the CDC that it has not at any time
directly or indirectly paid or given any member, official, or employee of the
CDC any money or other consideration as an inducement to cause the
CDC to execute this Agreement.
N. Developer represents and warrants to the CDC that Developer is entering
into this Agreement and constructing the Site facilities for the purpose of
redeveloping the Site as required by this Agreement and not for
speculation in land holding or land banking consistent with Health and
Safety Code Section 33437.5, and in that regard Developer recognizes:
West Covina Heights S.C., LLC, A California Limited Liability Cc3npany
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1-. The importance of the development of the Site to the general
welfare of the residents of the City, and
2. The fact that the qualifications and identity of Developer are of
particular concern to the CDC and that . it is because of such
qualifications and identity that the CDC is entering into this
Agreement with Developer.
O. The CDC and Developer acknowledge- that neither the CDC nor
Developer is relying upon any representations or warranties other than
those set out in this Agreement, and that the representations and
warranties set out in this Agreement constitute all of the representations
and warranties of the CDC and Developer in regard to this transaction.
P... CDC. represents, covenants, and warrants as follows for the benefit of
Developer and Developer's successors and assigns:
CDC will provide to Developer or make available to Developer
copies of all biological, wetlands, hydrology, environmental, and
engineering studies, studies, surveys, soils reports, building plans,
and all other documents concerning the physical conditions of the
Site and the BKK Landfill Site (as defined in Section 113(iv)) in
possession of CDC or CDC's agents, all of which shall be conveyed
or made available to Developer within ten (10) days following the
Effective Date of this Agreement. The CDC makes no
representation in regard to accuracy of the contents of such reports
or the competency of any persons making any studies or rendering
any opinions that may be contained therein. Developer
acknowledges that the CDC's Parcels was part of a now closed
landfill site. CDC further represents and Developer acknowledges
that Developer, along with Developer's subsequent occupants,
tenants or owners of the Site, will be required, as set forth below, to
cooperate and or implement certain remediation measures
associated .with the monitoring or clean-up of the closed landfill.
2. CDC appoints Developer as CDC's agent for, and shall cooperate
with and assist Developer in obtaining all approvals required for
Developer' contemplated plan for development of the Site, but CDC
shall not be required to spend any money in fulfilling this obligation.
Developer is authorized to begin work on obtaining such approvals
and CDC hereby appoints Developer as its attorney -in -fact for the
purpose of applying and processing Developer' plan of
development and agrees to execute and/or record all instruments
necessary to effectuate the intent of this Paragraph, provided
Developer shall obtain CDC's written approval of any matter
concerning Developer' Site which would be irrevocable and binding
West Covina Heights S.C., LLC, A Califomia Limited Liability C*pany
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upon CDC if Developer failed to purchase the Site, which approval
shall not be unreasonably withheld.
3. CDC represents and warrants to Developer, to the best of its
knowledge, that the title to be conveyed to Developer will not be
encumbered by any easements, claims of easement, rights,
licenses, interests, discrepancies, conflicts in boundary lines,
shortages in area, encroachments, water or ditch rights, mining
claims, reservations, leases, rental agreements, persons in
possession, government patents, or other rights not disclosed by
public record and/or the Title Report and/or ALTA/ACSM Survey,
as approved or conditionally approved by Developer. CDC
acknowledges that Developer shall have the right to approve the
condition of title in Developer's reasonable discretion subject to the
terms of this Agreement.
4. CDC represents and warrants, to the best of CDC's knowledge,
that there are no threatened or pending annexation, condemnation,
or other proceedings or litigation against or affecting any part of the
Site.
5. CDC represents and warrants that neither the entering into of this
Agreement nor the consummation of this transaction will constitute
a violation or breach by CDC of any contract or other instrument to
which it is a party, or to which it is subject, or by which any of its
assets or properties may be affected or any judgment, order, writ,
injunction or decree issued against or imposed upon it.
6. CDC shall not commit or suffer to be committed any waste in or
upon the Site. Waste shall include, but not be limited to, any injury
to the Site which renders them in a condition materially different
from their condition at the date of this Agreement. CDC shall
permit no dumping of extraneous material on the Site.
7. This is a valid and binding agreement enforceable against CDC in
accordance with its terms.
8. There is no suit, action, or arbitration, legal, administrative, or other
proceeding or governmental investigation, or process, which has
been served upon CDC or which, to CDC's actual knowledge, is
otherwise pending or threatened against CDC in which any party is
making or has made a claim or defense that, if sustained, would
materially and adversely affect the performance of CDC under this
Agreement or materially and adversely interfere with the ability of
the CDC to consummate the transactions contemplated herein.
West Covina Heights S.C., LLC, A California Limited Liability Company
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0 . 0
I. [§100] SUBJECT OF AGREEMENT
A. [§101] Purpose of Agreement
The purchase of this agreement is for the sale and purchase of this site by
the developer for the potential development of a commercial retail center,
pursuant to this Agreement, and the fulfillment generally of the Agreement,
are in the vital and best interests of the CDC, the health, safety and
welfare of its residents of the City of West Covina (the "City"), and in
accord with applicable federal, state and local laws and requirements.
This Agreement and the exhibits hereto are intended to effectuate the
purpose of the California Community Redevelopment Law (Health and
Safety Code §33000, et sec..) by providing for Developer's development of
the Project on the Site.
B. [§102] The Project
For purposes of this Agreement, the
retail shopping center of not less than
than 375,000 square feet, with
landscaping.
C. [§103] The Site
Project will consist of
240,000 square feet
related amenities,
a commercial
and not more
parking and
The Site consists of (i) approximately 43 acres in area and is composed of
real property contained in an undeveloped parcel of land (also referred to
herein as the "Property") located at the southerly portion of the former
BKK landfill identified as Parcels 1, West Covina, California, and more
particularly described in the Legal Descriptions and depicted on. the Site
Map attached hereto as Exhibit A; (ii) the approximately 4.03 acre site
(southwest of the CDC's Parcels) to be acquired by the Developer and to
be integrated with the CDC's Parcels ("Developer's Parcel"); (iii) all
permits, licenses, surveys, plans, studies, contract rights and documents
pertaining to the Site; and (iv) easement rights, strips, gores, interest in
adjoining rights -of -way and other appurtenances pertaining to the Site.
D. [§104] Parties to the Agreement
[§105] The CDC
The CDC is a public body, corporate and politic, exercising
governmental functions and powers and organized and existing
under the Community Redevelopment Law of the State of California
(Health and Safety Code Section 33000, et seq.). The principal
office of the CDC is located at 1444 West Garvey Avenue, West
Covina, California 91793.
West Covina Heights S.C., LLC, A California Limited Liability Company
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The term "CDC", as used in this Agreement, includes the
Redevelopment CDC of the City of West Covina, and any assignee
of, or successor to its rights, powers and responsibilities.
2. [§106] The Developer
The Developer is WEST COVINA HEIGHTS S.C., LLC, a California
limited liability company. Developer's principal office for purposes
of this Agreement is 17802 Skypark Circle, Suite 200; Irvine,
California 92614.
The term "Developer," as used herein, shall refer to and shall
include any assignee of, or successor in interest of Developer.
E. [§107] Prohibition Against Change in Ownership, Management,
Control and Transfer of Developer
The qualifications and identity of the Developer and its principals are of
particular concern to the CDC. It is because of such qualifications and
identity that the CDC has entered into this Agreement with the Developer.
No voluntary or involuntary successor in interest of the Developer shall
acquire any rights or powers under this Agreement, except as expressly
set forth herein.
Except for assignments and transfers permitted to be made by Developer
prior to the issuance,of the Certificate of Compliance, the Developer shall
not assign all or any part of this Agreement prior to the issuance of the
Certificate of Compliance without prior written approval of the CDC, which
approval shall not be unreasonably withheld, delayed, or conditioned.` Any
such assignment without prior written approval of CDC will be a default of
this Agreement. If Developer seeks an assignment, Developer shall
promptly notify the CDC in writing of any and all changes whatsoever in
the identity of the parties thereof, of which it or any of its officers have
been notified or otherwise have knowledge or information. CDC will have
the option to approve any such changes in writing and CDC will not
unreasonably withhold such approval. If not approved by the CDC, this
Agreement may be terminated by the CDC in the event of significant
change (voluntary or involuntary) in membership, management, or control
of Developer prior to the issuance of a Certificate of Compliance for each
project property as hereinafter provided, subject to the rights of any
mortgagees. The prohibition contained in this Section shall not apply to
any leases or sales contracts for the tenant uses anticipated by this
Agreement.
Prior to the recordation by CDC of a Certificate of Compliance for
construction of the Project or applicable portion thereof, the Developer
shall not, except as permitted by this Agreement, make any total or partial
West Covina Heights S.C., LLC, A California Limited Liability Cd7npany
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sale, transfer, conveyance; or assign the whole or any part of the Property
or the buildings or structures within the Property, without the prior written
approval of the CDC which shall not be unreasonably withheld,
conditioned, or delayed. This prohibition shall not be deemed to prevent
the granting of temporary easements or permits to facilitate the
construction of the Project.
Except as expressly hereinafter provided, any such proposed transferee,
for which the CDC's consent is required hereunder, shall have the
qualifications and financial responsibility necessary and adequate as may
be reasonably determined by CDC, to fulfill the obligations undertaken in
this Agreement by Developer. Any such proposed transferee, for whose
consent CDC approval is needed, by instrument in writing satisfactory to
CDC and in recordable form for itself, its successors and assigns, and for
the benefit of CDC shall expressly assume all of the obligations of
Developer under this Agreement and , agree to be subject to all the
conditions of Developer under this Agreement and agree to be subject to
all the conditions and restrictions to which Developer is subject. There
shall be submitted to CDC for review, all instruments and other legal
documents proposed to affect any such transfer; and if approved by CDC
in its reasonable discretion, its approval shall be indicated to Developer in
writing.
In the absence of a specific written agreement by the CDC, no such
transfer, assignment or approval by the CDC shall be deemed to relieve
the Developer or any other party from any obligations under this
Agreement until completion of construction of the Project.
F. [§108] Permitted Conveyances
Notwithstanding any other provision -of this Agreement to the contrary,
CDC approval of a transfer or conveyance of the Site, or any part thereof,
shall not be required in connection with the following:
1. Any requested conveyance for construction financing
purposes including the grant of a deed of trust to secure the
funds for the construction or permanent financing of the
Project.
2. The conveyance or dedication of any portion of the Site to
the City of West Covina or other appropriate governmental
agency, or the granting of easements or permits to facilitate
construction of the development of the Project.
3. The sale, conveyance, lease, transfer, assignment, or
dedication of any portion of the Site to an occupant of the
Site which will occupy a minimum of 100,000 square feet of
West Covina Heights S.C., LLC, A California Limited Liability Company
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retail space and which occupant/purchaser has been
approved by CDC.
4. The assignment or transfer of all or any portion of
Developer's interests in the Site or this Agreement to any
entity owned or controlled by Developer or any of .its
members, including a limited liability company, limited
partnership, general partnership, or corporation.
In the event of a conveyance by Developer under subparagraphs (1), (2),
(3) or (4), inclusive, not requiring CDC's prior approval, Developer
nevertheless shall give written notice to CDC of such conveyance at least
ten (10) business days prior to such conveyance.
G. [§109] Developer's Material Obligations
For purposes of this Agreement, the phrase "Developer's Material
Obligations" shall mean and include, but not be limited to, the Developer's
obligations to perform the following actions when and as required by this
Agreement, each of which is more fully described hereinafter:
1. To acquire fee title to the Developer's Parcel located
adjacent to the Site, as set forth in paragraph I of the
Recitals, and to incorporate the use of the Developer's
Parcel into the overall retail -commercial development use of
the Site;
2. To construct a retail shopping center consisting of not less
than 240,000 square feet nor more than 375,000 square feet
of space, with related amenities.
3. To submit to the Executive Director of the CDC or his
designee site plans and design development drawings
regarding the Improvements, as well as construction
drawings and specifications for construction of the Project,
and to submit the aforementioned documents to all
necessary City departments for review and approval
consistent with the Schedule of Performance attached
hereto as Exhibit F. CDC agrees to process such submittals
in an expeditious manner consistent with the Schedule of
Performance. If Developer seeks a more expedited
processing, Developer may make such request of the CDC
who can retain the necessary contractors to process the
submittals at Developer's expense;
4. To commence and complete construction in the manner
described in the Scope of Development (Exhibit E) and
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within the times set forth in the Schedule of Performance
(Exhibit F);
5. To fully comply with all the other time lines set forth in the
Schedule of Performance;
6. To pay for, operate and maintain (a) all mitigation measures
associated with the retail -commercial use of the Site (i.e.
methane gas recovery systems, onsite storm drainage and
slope landscaping) specifically set forth in the "EIR" and/or
"SEIR" (as defined in Exhibit "_" and hereinafter referred to
as the "Mitigation Measures", or (b) imposed by the City as
a condition to the issuance of the discretionary entitlements
required by Developer for the Project (the "Discretionary
Entitlements");
7.
H. [§110]
To pay for and install an 84" storm water pipe within the Site
and inlet immediately adjacent ("Storm Water Pipeline") in
accordance with plans and specifications to be prepared and
permitted by CDC, at its expense, in a form that satisfies the
requirements of the BKK Purchase Agreement and the Los
Angeles County Flood Control District ("Flood Control
District"), which plans and specifications shall be approved
by CDC and Developer.
.CDC's Material Obligations
For purposes of this Agreement, the phrase "CDC's Material Obligations"
shall' mean and include, but not be limited to, the CDC's obligations to
perform the following actions when and as required by this Agreement,
each of which is more fully described hereinafter:
To convey the CDC Parcels to the Developer at the Close of
Escrow in the condition required pursuant to the terms of this
Agreement, including but not limited to completing the
following work on the Site ("Site Preparation"):
a) the grading requirement ("Grading Requirement")
set forth in Exhibit I attached hereto which
includes (i) the "CDC Grading" as defined in
Exhibit "I", at CDC expense: (ii) removal of any
solid waste or hazardous materials, and
disposition of any other unknown conditions
discovered of
accordance �
expense to D
of the Site to
Grading") to
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the Site during Site Preparation in
,ith all applicable laws and without
;veloper; and (iii) additional grading
accommodate the Project ("Specific
be performed .,prior to Closing at
Developer's expense in accordance with Section
137 below; and
b) In the event that the cost to the CDC to remove
solid waste or hazardous materials set forth in
1(a)(ii) above is cost prohibitive as determined by
the CDC in its sole and absolute discretion, CDC
may notify the Developer of its intent to terminate
this Agreement consistent with the terms set forth
herein; provided that such right of termination shall
be exercised by CDC, if at all, not later than 90-
days prior to the date for close of escrow shown in
the Schedule of Performance.
c) the relocation of the existing underground utilities
within the Site which serve the adjoining property
owned by BKK to a location underlying the
proposed main entry drive to the Project as shown
on the Site Plans; BKK's relinquishment of the
current utility easements in favor of BKK which
encumber the Site upon delivery of replacement
utility service and easements; and grant of new
easement(s) to BKK for the relocated utilities in a
form and location acceptable to Developer, all at
CDC's expense.
2. To deliver or make available to Developer the information
and materials described in Recital P above, and to grant to
Developer and its consultants and permittees a license to
enter all of the Site from and after the Effective Date, subject
to reasonable conditions of insurance, indemnities and prior
notice.
3. To assign to Developer and its successors in interest all
rights of the City and/or CDC under the "DTSC Agreement",
the "EPA Agreement" and the "BKK Agreement" (as those
terms are defined in Section 119 below) to the extent such
rights are applicable to the CDC Parcels, and to cooperate
with Developer (without expense to CDC) in Developer's
efforts to obtain the Comfort Letter (as defined in Section
123(xii) below).
4. To timely process, and to assist the Developer in seeking the
City's timely processing of the "Discretionary Approvals" (as
defined in Section 116(iii) below) for the Project.
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{
5. To not add or permit without developers reasonable approval
to be added any lien or encumbrance on the CDC's Parcels
after the earlier of (i) the date of the Survey or (ii) the date of
the Commitment for Title Insurance (as described in Section
122 below).
6. To satisfy all conditions to the City's approval of Tentative
Parcel Map 60193 (the "Parcel Map") to be satisfied prior to
recordation the Parcel Map and record the Parcel Map prior
to Closing.
7. To perform any obligations of the owner of the CDC's Parcel
under the DTSC Agreement, the EPA Agreement and the
BKK Agreement that are required to be performed by the
owner prior to the Closing.
8. To use diligent efforts to cause the Flood Control District, on
or before the Closing, to accept an easement for the Storm
Water Pipeline in a form acceptable to Developer. In the
event that the Flood Control District does not accept the
Storm Water Pipeline, CDC will resolve ownership of
easement issue prior to the close of escrow.
9. To obtain the written agreement of BKK to relocate all utility
easements held by BKK in the Site in accordance with
Section 123 xi below.
II. [§111] DISPOSITION OF THE SITE
A. [§112] Disposition and Transfer of the "Site"
The CDC agrees to convey fee title to the CDC's Parcels to Developer in
the manner set out in this Agreement and to execute the Grant Deed
attached hereto as Exhibit C. Developer agrees to use commercially
reasonable efforts to acquire fee title to the "Developer's Parcel" from its
fee owner and the CDC Parcels from the CDC in such condition and in
accordance with and subject to all the terms, covenants and conditions of
this Agreement.
B. [§113] Purchase Price and Terms of Transfer of the CDC's Parcels
The parties agree that the purchase price to be paid by Developer to the
CDC for the CDC's Parcels (the "Purchase Price") being conveyed by the
CDC to Developer and the terms of the conveyance shall be as described
below:
West Covina Heights S.C., LLC, A California Limited Liability Ctopany
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(i) A sum equal to Eight and 75/100 Dollars ($8.75) per net square
foot within the Site. The Site contains approximately forty-three
(43) gross acres and 33.67 net acres resulting in an estimated
Purchase Price of Twelve Million Eight Hundred Thirty -Three
Thousand Three Hundred Twenty and 00/100 Dollars
($12,833,320.00). In the event that the Site is determined to be
above or below the 33.67 net acres, the .Purchase Price shall be
adjusted -to a sum equal to $8.75 multiplied by the number of net
square feet contained in the final ALTA survey of the CDC's
Parcels:
Within five (5) days after the date of execution of this Agreement by
the Parties, Developer shall deliver a good faith deposit of One
Hundred Twenty Five Thousand and, 00/100 Dollars ($125,000.00)
(the "Deposit"), of which the Developer has previously paid and
deposited a total of Fifty Thousand and 00/100 Dollars
($50,000.00), leaving a final payment of Seventy-five Thousand
and 00/100 Dollars ($75,000.00) to be paid into. Escrow for the final
Deposit total. Within five (5) days after the date of execution of this
Agreement by the Parties, CDC shall transfer to the Escrow Agent
the initial Fifty Thousand Dollar ($50,000) deposit payment made
by Developer to CDC. The Deposit shall be held in an interest -
bearing account by the First American Title Company (the "Title
Company") pending the "Closing" as define in Section 132 or earlier
termination of this Agreement. The Deposit shall be applied to the
Purchase Price. -At Closing and upon fulfillment of all conditions
required of the Parties by this Agreement prior to Closing,
Developer shall: pay to into Escrow (subject to prorations and
adjustments of which the Deposit with interest thereon shall be a
part) in cash, wire transfer, or by cashier's check, the balance of the
Purchase Price of ±$12,708,320.00 plus closing costs of Escrow.
(iii) The CDC represents to the Developer and its successors in interest
to all or any part of the CDC's Parcels that the CDC has
determined, based on an independent appraisal and an
independent economic analysis, that the foregoing Purchase Price
is at least the fair market value of the CDC's Parcels, assuming the
following: that (i) the CDC will pay the cost of the CDC Grading of
the CDC Parcels only, and (ii) Developer shall pay for all costs of
the Specific Grading and all costs of installing the Storm Water
Pipeline.
(iv) The parties agree that the CDCshall transfer the CDC's Parcels at
the time of Closing to the Developer. Developer acknowledges that
the CDC's Parcels are located adjacent to a now closed landfill site
(the "BKK Landfill Site"). At Closing, Developer shall take title
subject to all Mitigation Measures and subject to the conditions to
West Covina Heights S.C., LLC, A California Limited Liability Cp&pany. .
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all Discretionary Entitlements. Additionally, Developer shall be
responsible to implement, at Developer's cost, unless otherwise
relieved of such costs by agreement or order, environmental
remedies or other actions required to be performed by the owner of
the CDC's Parcels following the Closing under the EPA Agreement,
the DTSC Agreement, the BKK Agreement, the EIR, the SEIR, and
-any other agreements related to the development or improvement `
of the Site that are the obligation of the Site and which have been
identified and approved in writing by Developer, in Developer's
reasonable discretion, within the times set forth in the Schedule of
Performance. CDCCDC
C. [§114] Time for Delivery of Possession and Conveyance of Title
The CDC's conveyance to Developer of fee title to and possession of the
CDC's Parcels be completed upon "Close of Escrow" as set forth in the
Schedule of Performance or may otherwise be mutually 'agreed to in
writing by the parties and communicated in writing to the .Escrow Agent.
D. [§115] Due Diligence Review and Approval
1. [§116] Developer Conditions
Within the- period ending 120 days after the Effective Date ("Due
Diligence Period"), the Developer shall have the opportunity to
conduct the Developer's own investigation of the Site, its physical
condition, determine the exact legal description of the Site, the soils
and toxic conditions of the Site and all other matters which in the
Developer's judgment affect or influence the Developer's proposed
use of the Site and the Developer's willingness to develop the Site
pursuant to this Agreement, including, without limitation, the
following (the "Developer's Conditions"):
(i) Review and approve all information provided or made
available by CDC to Developer concerning the physical
condition of the Site and the BKK Landfill Site ("Site
Condition");
(ii) Review title to the Site, including those title matters resulting
'from recordation of the Parcel Map, in accordance with the
provisions of Section 122 below ("Title");
(iii) Confirm issuance of suitable subdivision and zoning
approvals for the Project and acquire additional discretionary
entitlements required for the intended use and development
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of the Project, including those required for the proposed
operations to .be conducted on Parcels 1 and 2 of the Parcel
Map (hereinafter "Major Users"); evaluate the feasibility of
the . conditions (including mitigation measures) to such
entitlements; confirm expiration of appeal periods on all
CEQA, subdivisions, zoning and other discretionary
entitlements required by Developer and the Major Users,
and determine as of the Closing, the absence of any legal
challenge of the foregoing entitlements .and approvals that
may preclude funding of construction financing, timely
commencement of construction of the Project and/or the
willingness of a Major User to proceed (collectively, the
"Discretionary Entitlements"),
(iv) Evaluate and analyze all available information on the current
environmental condition of the Site including preparation of
an updated environmental site assessment by Developer's
consultant and all available information concerning the
current environmental condition of the adjoining BKK Landfill
and confirm (A) the likelihood that BKK will timely complete
all closure obligations for which it is responsible that could
impact the Site; (B) the availability by closing of all written
consents and approvals of the EPA, DTSC and BKK to the
transfer by CDC to Developer and the Major Users of all
benefits of the EPA Agreement, the DTSC Agreement and
the BKK Agreement, to the extent relating to the Site; (C)
the issuance of the comfort letter from the Regional WQCB
("Comfort Letter") confirming that neither Developer or its
successors in interest to the Site will be responsible parties
for any contaminated ground water on, adjacent to or
impacted by this Site; and (D) the availability and cost of
pollution legal liability insurance to insure against risks for
liability to third parties and for risks of clean up of any
existing contamination (collectively, "Environmental Issues");
(v) Confirm the willingness of the Major Users to proceed and
purchase Parcels 1 and 2 of the Parcel.Map from Developer
substantially concurrently with Developer's purchase from
CDC, and subject to covenants imposed on the Site by CDC
("Major User Participation");
(vi) Perform due diligence on the Developer Parcel and confirm
the commitment and ability of the owner of the Developer
Parcel to convey marketable title to Developer concurrently
with Developer's purchase of the CDC's Parcel from CDC ("4
Acre Acquisition");
West Covina Heights S.C., LLC, A California Limited Liability gf9pany
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•
(vii) Review and determine suitability and timeliness of (A) CDC
geotechnical studies and reports for the CDC Grading, (B)
the plans and specifications for CDC Grading, (C) the plans
and specifications for installation of the Storm Water Pipeline
and evidence that the plans and specifications for the Storm
Water Pipeline satisfy CDC's obligations to BKK and the
Flood Control District requirements; (D) evidence that Flood
Control District will accept and maintain the Storm Water
Pipeline; and (E) the plans and specifications for the
Specific Grading and determination by Developer that the
Specific Grading for the Site and installation of the Storm
Water Pipeline can be accomplished prior to Closing as part
of the Site Preparation.
2. ' [§ 116A] Approval/Disapproval of Developer Conditions
Developer shall notify CDC in writing on or before expiration of the
Due Diligence Period of one of the following: (i) Developer's
approval of the Due Diligence Conditions and commitment to
proceed, subject only to the "Extended Conditions" (as defined
below); or (ii) Developer's inability to satisfy one or more. Developer
Conditions prior to Closing and its election to terminate the
Agreement and recover the Deposit. Developer's failure to deliver
written notice to CDC on or before expiration of the Due Diligence
Period shall be deemed Developer's disapproval and election to
terminate. Developer's approval or disapproval of the Developer
Conditions during the Due Diligence Period shall be in the sole and
absolute discretion of Developer. Notwithstanding Developer's
approval of the Developer Conditions` during the Due Diligence
Period, Developer's obligation to complete its purchase of the CDC
Parcels shall be subject to satisfaction, in Developer's reasonable
discretion, of the following ("Extended Conditions"): (A) any
Developer Condition for which new information is discovered or
new circumstance occurs after expiration of the Due Diligence
Period, but only if and to the extent such new information or
circumstance materially and adversely affects the cost and/or
timing 'of Developer's Project; and (B) those Developer Conditions
depending on actions to be taken by third parties (such as the
Discretionary Entitlements and Environmental Issues) which are not
accomplished before expiration of the Due Diligence Period, and/or
not scheduled to occur until concurrently with the Closing under this
Agreement (such as the Major User Participation, the 4 Acre
Acquisition and the Site Preparation).
3. [§117] 'Condition of the Site Accepted "As -Is"
West Covina Heights S.C., LLC, A California Limited Liability Ct&pany
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Except as expressly stated in this Agreement, the CDC and
Developer each acknowledge and represent to the other that each
has relied on its own investigation and not on any representation or
warranties of the other or the others' agents, employees or
representatives in determining the condition and suitability of the
property and property interests acquired or sold. The Parties
acknowledge that the CDC has disclosed and Developer is
acquiring the CDC's Parcels with full knowledge that the CDC's
Parcels is located adjacent to a now closed landfill site (the "BKK
Landfill Site"). All property, property interests, soils condition,
suitability of the Site for the Project and other related issues
concerning the Site are accepted as of the Closing, "As -Is" with no
warranty as to condition or suitability, provided that (a) Developer
shall have the right to inspect the Site Preparation during
construction and upon completion to assure conformance with the
approved plans; and (b) CDC shall assign to Developer at Closing
the CDC's rights under all engineering and grading contracts
pursuant to which the Site Preparation was designed and installed.
Each party represents that they have employed legal counsel and
such other experts as each deems necessary to evaluate these
matters and are relying on these experts and not the other party.
4. [§118] Indemnity for Environmental Claims
The Developer agrees as of Close of Escrow to defend, indemnify,
protect and hold harmless the CDC and the City and its officers,
employees, agents, attorneys, `representatives, legal successors
and assigns ("CDC Indemnitees") from and against (i) any and all
liabilities, obligations raised through the approval process of this
Agreement or related CEQA-approvals, including any contract, tort
or other legal or equitable claims against the CDC Indemnitees in
State, Federal courts or other administrative actions, also all orders,
decrees, judgments, liens, demands, actions Environmental
Response Actions (as defined herein); (ii) and any claims, losses,
damages, fines, penalties, expenses, Environmental Response
Costs (as defined herein) or costs of any kind or nature
whatsoever, together with fees (including, without limitation,
reasonable attorneys' fees and experts'; and consultants' fees),
including actions brought by or on behalf of future purchasers,
tenants or occupants, but only if arising from, resulting from or in
connection with the actual generation, storage, handling,
transportation, use, presence, placement, migration and/or release
of Hazardous Materials (as defined herein) by Developer, or its
contractors, agents or, employees, at, on, in, beneath or from the
Site (sometimes herein collectively referred to as "Contamination").
The Developer's indemnification provided pursuant to this Section
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will allow the Developer the right to settle such matters if deemed in
the best interest of the CDC, the City and the Developer.
The -Developer's defense, indemnification, protection and I hold
harmless obligations herein shall include, without limitation, the
duty to respond to any governmental inquiry, investigation, claim or
demand regarding the Contamination, at.the Developer's sole cost.
The Developer shall not be responsible for (and the indemnity
provided for herein shall not apply to) any acts, errors or omissions
of the CDC or its officers, employees, contractors or agents or any
third party, including without limitation, any other former owner or
occupant of all or part of the Site. Nothing herein shall be
construed to foreclose the Developer from proceeding against and
holding liable any other former owner or occupant of the Site who
might be responsible for the contamination and CDC agrees to
reasonably cooperate with the Developer by executing and
delivering written assignments of CDC's rights and claims against
such potentially responsible party or by joining with Developer to
pursue such former owner or occupant.
5. [§119] Definitions
(i) As used in this Agreement, the term "Environmental.
Response Actions" means any and all activities, data
compilations, preparation of studies or reports, interaction
with environmental regulatory agencies, obligations and
undertakings associated with environmental investigations,
removal activities, remediation activities or responses to
inquiries and notice letters, as may be sought, engendered,
initiated or required in connection with any local, state or
federal governmental or private party claims, including any
claims by the Developer.
(ii) As used in this Agreement, the term "Environmental
Response Costs" means any and all costs associated with
Environmental Response Actions including, without
limitation, any and all fines, penalties and damages.
(iii) As used in this Agreement, the term "Hazardous Materials"
or "Hazardous Substance" means all materials deemed
hazardous under any Hazardous Substance Law (as defined
below), excluding naturally -occurring substances but
including without limitation asbestos or any substance
containing asbestos, the group of organic compounds known
as polychlorinated biphenyls, chlorinated hydrocarbons,
heavy metals, flammable explosives, radioactive materials,
chemicals known to the State of California or the EPA Jo
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cause cancer or reproductive toxicity (excluding beer, wine
and other distilled beverages, tobacco smoke and food
additives), pollutants, effluents, contaminants, emissions or
related materials in any, items included in the definition of
hazardous or toxic waste, materials or substances, any oil or
petrochemical products, ureaformaldehyde, flammable
explosives, radioactive materials, or any substance, product,
waste or other material of any kind or nature whatsoever
which may give rise to liability under any federal, state or
local law, ordinance,- rule or regulation or under any statutory
or common law theory based on negligence, trespass,
intentional tort, nuisance or. strict liability, or under any
reported decision of a state or federal court.
Hazardous Substance Laws. As used in this Agreement, the
term "Hazardous Substance Laws" means the collective
federal, state and local regulations ordinances and laws
relating to environmental conditions, industrial hygiene or
hazardous waste, including but not limited to, the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42
U.S.C. § 6901 et seq., the Comprehensive Environment
Response, Compensation and Liability Act of 1980
("CERCLA"), 42.U.S.C. §§ 9601-9657, as amended by the
Superfund Amendments and Reauthorization Act of 1987
("SARA"), the Hazardous 'Materials Transportation Act, 49
U.S.C. § 690 et seq., the Federal Water Pollution Control
Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. §
-741 et sec., the Clean Water Act, 33 U.S.C. §7401, the
Toxic Substances control Act, 15 U.S.C. §§ 2601-2629, the
Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j, the
California Hazardous Waste Control Act, California Health
and Safety Code § 25100 et sec.., the California Hazardous
Substance Account Act, California Health and Safety Code §
25330 et seq., the California Safe Drinking Water and Toxic
Enforcement Act, California Health and Safety Code §
25249.5 et seq., California Health and Safety Code § 25280
et seq. (Underground Storage of Hazardous Substances),
the California Hazardous Waste Management Act, California
Health and Safety Code § 25170.1 et seq., California Health
and Safety Code § 25501 et seq. (Hazardous Materials
Release Response Plans and Inventory), the California
Porter -Cologne Water Quality Control Act, California Water
Code § 13000 et sec ., all as amended, and all similar
federal, state and local environmental statues, ordinances
and the regulations, orders, decrees now or. hereafter
promulgated thereunder.
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•
(iv) As used in this Agreement, the term "BKK Agreement"
means .the Agreement, of Purchase and Sale and Joint
Escrow Instructions between BKK Corporation ("BKK") and
CDC (formerly known as the Redevelopment Agency of
West Covina) dated June 27, .2002, as amended by
Amendments dated November 7, 2002, December 6, 2002,
January 27, 2003, April 28, 2003, May 22, 2003 and July 15,
2003.
(v) As used in this Agreement, the term "DTSC Agreement"
shall mean the Prospective Purchase Agreement between
California Environmental Protection Agency, Department of
Toxic Substances. Control ("DTSC") and the City of West
Covina dated July 9, 2003.
(vi) As used in this Agreement, the term "EPA Agreement" shall
mean the Agreement and Covenant Not to Sue the City of
West Covina, California between the United States on behalf
of the Environmental Protection Agency ("EPA") and the City
of West Covina dated May 22, 2003.
(vii) As used in this Agreement, the term "EIR" shall mean the
BKK Class III Landfill Closure, Postclosure Development
Environmental Impact Report" (October 2000), and the term
"SEIR" shall mean "Final Supplemental Environmental
Impact Report' for "Big League Dreams City Park, Sports
Complex and Commercial Retail Center," dated August 21,
2003, which accompanies the "Draft Supplemental
Environmental Impact Report" for the same project title
(State Clearinghouse Number 2002081092), dated May
2003.
E. [§120] Conditions to the CDC's Obligation to transfer CDC's
Parcels and Developer's Obliaation to accept CDC's Parcels and
1. [§121] Issuance of "Title Evidence
Developer shall obtain, at Developer's sole cost and expense, with
"Title Evidence" as defined in subsections (i) and (ii) below:
(i) A "Title Report" to enable the issuance of a title insurance
policy as further described herein. The "Title
Report" shall include a preliminary title report of the Site and copies
of all documents listed as exceptions to title in such report.
West Covina Heights S.C., LLC, A California Limited Liability C2@pany
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r:
(ii) A current American Land Title Association ("ALTA") survey
(the "Survey") (which shall include a perimeter description of
the Site) for the Site, which shall show location . and
dimension of all improvements and exceptions referred to in
the Title Report and contain a certificate of the Net Square
Feet of the entire Site.
2.. [§122] Approval of Title
Following receipt of the Title Evidence described in Section 121,
Developer shall have such time as described in the Schedule of
Performance, Exhibit F, hereto (the "Title Review Completion
Date") to review and approve or conditionally approve the status of
title of the CDC's Parcels, and. shall indicate its approval,
conditional approval or disapproval of the status of title of the
CDC's Parcels in writing delivered to the, Title Insurance Company
and to CDC on or before the Title Review Completion Date.
In the event Developer notifies CDC and the Title Company in
writing prior to the Title Evidence Completion Date of any
unacceptable title exceptions as revealed in the Title Report or
Survey, CDC shall have fifteen (15) after receipt of such notice to
use its best efforts to cause removal of such unacceptable title
exceptions, or to agree to cause removal of such unacceptable title
exceptions by close of Escrow, or to notify Developer in writing that
is cannot, despite its best efforts, cause such removal. In the event
the Title Company amends or supplements the Title Evidence
within the last ten (10) days of the Due Diligence Period or
thereafter to show revised or additional title exceptions ("New Title
Exceptions"), then Developer shall have fifteen (15) days after
receipt of the New Title Exceptions to notify the Title Insurance
Company and the CDC, in writing, of its approval, conditional
approval or disapproval of the New Title Exceptions and the CDC
shall notify Developer of its ability and willingness to remove the
New Title Exceptions in the same manner as provided above.
Notwithstanding the foregoing, Developer hereby approves of the
following title exceptions:. (a) the, lien of any non -delinquent
property taxes and assessments (to be pro -rated at the Close of
Escrow); and (b) the Redevelopment Plan.
3. [§123] 'Status of Land and Other Matters as Conditions
Precedent to Developer's Purchase
In addition to Developer's approval of Title Evidence as described
in Sections 121 and 122 above, the following conditions, obtained
at the respective Parties' own expense, as designated below, must
exist on or before the Closing:
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0
(i) The Extended Conditions to Developer's obligations
described in Section 116A above have been satisfied;
(ii) The conditions to Escrow Agent's obligations described in
Section 132 below have been satisfied,
(iii) CDC has performed all obligations required to have then
been performed by CDC under this Agreement;
(iv) Developer has performed all obligations required to have
then been performed by Developer under this Agreement.
(v) The Title Insurance Company is committed to issue to
Developer upon recordation of the CDC Grant Deed, its
ALTA extended coverage owner's policy of title insurance in
the amount of the Purchase Price ("Owner's Policy")
showing fee title to the CDC's Parcels, described with
reference to recorded Parcel Map 90163, vested in
Developer, subject only to those title exceptions shown in
the Title Evidence and approved by Developer pursuant to
Section 116 and 116A above.
(vi) EPA and DTSC shall have each executed and delivered in a
form reasonably acceptable to CDC and Developer, their
consent, if required, to the assignment by CDC to Developer
and its successors in interest, of all right, title and interest of
CDC under the EPA Agreement, the DTSC Agreement
respectively (collectively, the "Environmental Rights
Assignments"), to the extent such rights and interests relate
to the Site.
(vii) Developer will acquire the Developer's Parcel substantially
concurrently with acquisition of the CDC's Parcels;
(viii) The Major. Users will acquire from Developer Parcels 1 and
2, respectively of the Parcel Map, substantially concurrently
with Developer's acquisition of the CDC's Parcel;
(ix) The Flood Control District shall have reviewed and approved
the plans and specifications for the Storm Water Pipeline
and agreed to accept an easement for the use and
maintenance of the Storm Water Pipeline.
(x) CDC shall have assigned to Developer all rights of CDC
under the BKK Agreement that apply to the Site (to the
extent CDC has the right to do so)(the "BKK Assignment");
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and BKK shall have reviewed and approved the plans and
specifications for the Storm Water Pipeline, if necessary, and
agreed in writing that installation of the improvements shown
on the plans and specifications and grant of an easement of
the Storm Water Pipeline to the Flood Control District
satisfies all obligations of CDC concerning the Storm Water
Pipeline set forth in the BKK Agreement.
(xi) CDC shall have obtained the written agreement of BKK to
relinquish all easements within the Site upon City's
relocation of the existing utility service provided to BKK's
property located north of the Site and the grant to BKK of a
new easement which corresponds to the relocated utilities.
(xii) All discretionary entitlements required for the Project
Improvements to be constructed and operated on the Site
shall have been issued by the City.
4. [§124] Truth of Representations and Warranties
The representations and warranties made by Developer in
Paragraphs K, L, M and N, of the Recitals and Representations, the
representations and warranties made by CDC in Paragraphs F and
P of the Recitals and Representations, the representations and
warranties of Agency under Section 113(iii) of this Agreement, and
the representations and warranties of both parties under Sections
117, 174.and 185 of this Agreement shall be true and correct as of
the date of this Agreement, and shall be continuing and shall be
true and correct as of the close of escrow for the Site with the same
force and effect as if remade by Developer or CDC, as the case
may be in a separate certificate at that time. The truth and
accuracy of these representations and warranties not only shall
constitute a condition to the close of escrow, but they shall survive
the close of escrow and the Grant Deed.
5. [§125] Non -Satisfaction of Condition
(i) The condition to .the close of the escrow as set forth in
Section123(i), (iii), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii) and
(xiii), and, to the extent made for the benefit of Developer,
Section (ii) above, is solely for the benefit of Developer. The
conditions to the close of the escrow as set forth in Section
(iv), and Section (ii) to the extent made for the benefit of the
CDC above are solely for the benefit of the City and CDC.
At least ten (10) days prior to the Closing Date, CDC and
Developer shall each notify the other, in writing, of any
conditions for its benefit that it has determined will not be
satisfied on or before the Closing Date. At the request of
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either party, CDC and Developer shall meet to determine
those actions, if any, which may be taken to resolve the
unsatisfied condition and the time required to take such
actions. So long as the party for whose benefit the condition
exists has used commercially reasonable efforts to satisfy
the unsatisfied condition, the Closing Date identified in the
Performance Schedule will be extended for up to sixty (60)
days at the request of either party for purposes of attempting
to satisfy the condition. Any further extension of the Closing
Date will require approval of both parties. If an unsatisfied
condition for -a party's benefit is not approved or waived by
such party after the extensions to the Closing Date
described above, Developer, or the CDC, as the case may
be, may terminate the obligations of the parties under this
Agreement, by delivery to the other party of written notice
thereof. Such termination shall be effective as of the date of
the delivery of such notice to the other party. Such
termination shall not prejudice the rights of a party arising
out of a default by the other party hereunder pursuant to
Section V. (Defaults and Terminations). In the event of such
termination, the CDC shall be free. to enter into agreements
with others with respect to the Site without any further
obligation to Developer, but subject to Developer's rights
available as a result of such termination.
(ii) Upon delivery of the notice of termination described in
Sections 116A, 125(i)rabove or 130 below, both parties shall
notify the Escrow Agent in writing that the escrow is
cancelled, and Escrow Agent shall promptly return to the
CDC and Developer all funds, including the Deposit, and
documents deposited by them, respectively, into escrow less
any title company or escrow cancellation charges. If the
escrow is canceled due to the non -satisfaction of a condition
to the close of the escrow as set forth above or for a reason
other than the default of Developer or the CDC under this
Agreement, any such escrow cancellation charges shall be
borne by Developer, and all other charges shall be borne by
the party incurring same. Any party in default hereunder
shall bear the full cost of any such cancellation charges.
Notwithstanding the foregoing, if the termination of this
Agreement is for a reason or condition caused or created by
the Developer, Developer shall not be entitled to a refund of
the Deposit, and the Escrow Agent is directed to pay all
Deposit funds to the CDC as CDC's sole and exclusive
remedy, except as ,otherwise provided in Sections 160 or
161 below.
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6. [§126] Compliance
Act ("CEQA") . Prior
Title
Environmental
The Parties acknowledge and agree that the approval of this
Agreement is a critical step in the development process of the Site
and that prior to the Effective Date, all requirements of CEQA were
fulfilled, including the City's and CDC's review and consideration of
the SEIR. The cost of preparing the SEIR is estimated to be
approximately Eighty Six Thousand One Hundred Nineteen and
00/100 Dollars ($86,119.00). Developer shall reimburse the CDC
for said CEQA process in the amount of Eighty -Six Thousand One
Hundred Nineteen and 00/100 Dollars ($86,119.000) at the time of
Close of Escrow. The CDC or the City was the lead agency for
purposes of preparing and certifying the SEIR, and was the party to
select the SEIR consultant. The SEIR was prepared, circulated and
certified prior to execution of this Agreement.
F. [§ 127] Escrow
1. [§128] Opening of Escrow
The parties agree to open an escrow (the "Escrow") with First
American Title Company (for these purposes the "Escrow Agent')
within five (5) business: days of execution of this Agreement.
Sections 113, 114, 120 and 127 and Exhibits B through D attached
hereto constitute the joint escrow instructions of the CDC and
Developer for the Site escrow. Each party shall deliver to the
Escrow Agent a duplicate original of this Agreement in order to
open the Escrow. Upon receipt by the Escrow Agent of both such
documents from each party, the Escrow for the Site shall be
deemed to be opened.
In the event any additional instructions are necessary to carry out
the terms of this Agreement, :the CDC a.nd Developer agree to
jointly provide such additional escrow instructions consistent with
this Agreement as shall be necessary. Any amendment to the
escrow instructions shall be in writing and signed by the parties. All
communications from the Escrow Agent to the parties shall be
directed to the addressees and in the manner established in
Section 167 for notices, demands, and communications between
the parties. The liability of the Escrow Agent under this Agreement
is limited to performance of the obligations imposed upon it under
Sections-113, 114, 120. and 127, and Exhibits B through D.
2. [§129] Developer's Deposits in Escrow
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Developer agrees to deposit the following fees, charges and costs
in escrow promptly after the Escrow Agent has notified Developer
of the amount of such fees, charges and costs, but not earlier than
ten (10) days prior to the Closing:
(i) The Deposit in the amount of One Hundred Twenty -Five
Thousand and 00/100 Dollars ($125,000.00), CDC
acknowledges prior receipt of $50,000.00 of the Deposit and
upon the close of Escrow will authorize the application of
such funds to the Purchase Price, less applicable Escrow
fees;
(ii) One-half of all escrow fees;
(iii) The increase in premium for issuance of an ALTA extended
form title insurance policy instead of *a standard form CLTA
title insurance policy to be paid by Developer;
(iv) All necessary delivery and messenger costs.
3. [§130] Deposit of Grant Deed; Assignments, the CDC's
Escrow Charges and Obligations
(i) Prior to the Closing, the . CDC shall properly execute,
acknowledge, and deliver' to the Escrow Agent, (a) a Grant
Deed in the form attached hereto as Exhibit C and such
other recordable documents that may be required to convey
to Developer fee title to the CDC's Parcel subject only to the
Acceptable Exceptions described in subsection (iii) below;.
(b) the Environmental Rights Assignment of each of the EPA
Agreement, DTSC Agreement and Prospective Purchaser
Agreement (the "PPA") in a form consistant with the
requirements of the aforementioned PPA, and acceptab;le to
the Agency, the EPA and DTSC; (c) if not previously
executed, delivered and recorded, an easement in favor of
the Flood Control District covering the Storm Water Pipeline
with a Certificate of Acceptance attached, originally executed
and acknowledged by the Flood Control District;
(ii) One-half of all escrow fees, the premium for a CLTA
standard coverage title insurance policy in the -amount of the
Purchase Price and all documentary transfer taxes, if any;
(iii) At Closing, CDC shall assign to Developer all of its right, title
and interest in, and to all permits, documents, contract
rights, license and approvals pertaining to the Site ("General
Assignment"), including, but not limited to, an assignment to
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all surveys, environmental studies and engineering studies
which CDC has which pertain to the Site, and CDC shall
convey title to the Site by grant deed, free and clear of all
liens, claims and encumbrances except for the following
"Acceptable Exceptions":
(a) Taxes for the year of closing and subsequent years,
not yet.due and payable; and
(b) Matters affecting title to the Site which do not in the
opinion of Developer, in its sole discretion, affect the
use and/or operation of the Property with its intended
improvements thereon as specifically conditioned
and/or approved by the Developer in writing pursuant
to this Agreement. In the event that CDC cannot
clear items as requested by Developer after using
reasonable diligence, Developer shall have right to (a)
terminate this Agreement ,by delivery of written notice
to the other Party, whereupon this Agreement shall
terminate, the Deposit shall be returned to the
Developer, this Agreement shall be of no further force
and effect, and neither party shall have any further
obligation to the other, or (b) waive the matters
affecting title.
4. [§131] Prorations
All taxes and other proratable items shall be prorated and adjusted
as of the Closing, as defined in this Section 127 (Escrow).
5. [§132] Escrow Agent's Duties and Close of Escrow
The "Close of Escrow" or the "Closing" shall be the date the CDC's
Grant Deed ("Grant Deed") is recorded in the Official Records.
Upon satisfaction of the conditions described below in this
Agreement, the Escrow Agent shall undertake the actions
described below.
(i) Upon the satisfaction of the following conditions:
(a) The parties have deposited into Escrow the
documents, including proof of Developer's Grant
Deed to Developer's Parcels, and funds described in
Section 113;
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(b) The Title Company is prepared to issue to Developer
the Owner's Policy of title insurance from First
American Title Company;
(c) The Escrow Agent has recorded in the Official
Records any instruments delivered through this
escrow necessary or proper' to vest title in the
condition to be conveyed to Developer in accordance
with the "escrow instructions" portion of this
Agreement for the Site;
(d) The Escrow Agent has recorded in the Official
Records one (1) Memorandum of Disposition and
Development Agreement, assembled by the Escrow
Agent to include the signature and acknowledgment
;:. pages executed and completed by both parties;
(ii) The Escrow Agent shall:
(a) Concurrently record the Grant Deed (Exhibit C) for the
CDC's Parcels of the Site in the Official Records and
deliver all documents and funds to the parties entitled
thereto (the "Closing"); and
(b) Pay and charge the CDC and Developer,
respectively, as set forth in Sections 113 and for any
fees, charges and costs payable thereunder.
If the escrow is not in a condition to close by the time set forth in
Exhibit F (Schedule of Performance), any party who then shall have
fully performed all other acts to be performed by such party before
conveyance of the Site may follow the procedure for terminating the
obligations of the parties set forth in Sections 160 or 161 below, as
applicable. If any such party does not elect to follow the procedure
described above, the escrow shall be closed as soon as possible.
III. [§133] DEVELOPMENT OF THE SITE
A. [§134] Site Plan, Landscaping Plan and Exterior Elevations
Submission of Preliminary Architectural Plans
Within thirty (30) days following the Effective Date, Developer shall submit
to the CDC for approval by the CDC and the City, which approval may be
provided by the Executive Director; .shall not be unreasonably withheld,
preliminary .architectural plans for the development of the Site, including
architectural design and theme plans and concepts, and including a Site
Plan which indicates the overall plan for development and includes a plot
plan showing the general location of the improvements as they are to be
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constructed on the Site, a Landscaping Plan, and Exterior Elevations
showing elevations for the structures to be built on the Site. All such plans
are sometimes collectively referred to herein as the "Site Plans."
B. [§135] Agreement As to Development and Use of the Site
Developer agrees that it will develop and use the Site in accordance with
the provisions of this Agreement, including, but not limited to, the
provisions of the Redevelopment Plan, Section 148 (Uses of the Site), the
Site Plans, in the form approved by the CDC and City, the Scope of
Development of the Site (Exhibit E), and the Schedule of Performance for
the Site (Exhibit F).
C. [§136] CDC and City Approval of Changes to Site Plan,
Landscaping Plan, and Exterior'Elevations
Any proposed significant changes to the Site Plan, the Landscaping Plan
and the Exterior Elevations for the structures to be built on the Site either
in the form as previously submitted or as amended pursuant to changes
requested by the CDC or the City, must be submitted to the CDC and the
City by Developer in writing, and the CDC and the City shall approve or
disapprove such changes within thirty (30) days after their submission by
Developer, and such approval by the CDC and/or the City shall not be
unreasonably withheld conditioned, or delayed. Failure of CDC to notify
Developer in writing within thirty ($0) days after the date of submission
shall constitute approval by the CDC and/or the City as of thirty (30) days
from such date. Any disapproval shall state in writing the reasons for such
disapproval and the conditions, if any, under which the CDC or the City
would approve such changes.
D. [§137]. Developer's Cost of Construction; CDC Site Preparation
1. CDC shall cause the Required Grading (which includes the
CDC Grading, the Specific. Grading, and the relocation of the
utilities serving the BKK property) to be completed in
accordance with approved plans and specifications
(collectively referred to in this Agreement as the "Site
Preparation") prior to and as a condition to the Closing.
CDC shall pay the cost of the CDC Grading. Developer shall
pay directly to the grading contractor no later than the
Closing, the amount by which the cost to perform the
Specific Grading exceeds the cost to perform the CDC
Grading. Developer shall pay for the cost of installing the
Storm Water Pipeline.
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2. The plans and specifications for the CDC Grading and the
Storm Water Pipeline shall be prepared by CDC's engineer
at its expense and shall be subject to approval by Developer.
The plans and specifications for the Specific Grading shall
be prepared by Developer's engineer at Developer's
expense. The plans and specifications for all Site
Preparation shall be approved by the City and Developer
prior to expiration of the Due Diligence Period.,
3. Except as specifically provided above, the cost of developing
the Site and constructing all onsite improvements in
connection with such development shall be borne by the
Developer. All off -site improvements in connection with such
development shall be borne by the Developer. The Parties
shall cooperate in the identification, design and construction
of all off -site improvements necessary to service the Site.
However, the Developer shall be responsible for the actual
construction of the off -site improvements.
4. In the event Developer fails to timely perform any or all of the
above Site preparation or Storm Water Pipeline construction,
the CDC upon providing Developer thirty (30) days written
notice to perform and cure their default, the CDC shall have
the right, but not obligation, to perform such Site preparation
or construction and shall charge the Developer the actual
costs of performing all work (including permit fees and
related expenses), plus a 10% administrative overhead
assessment.
E. [§138] Construction Schedule
The parties shall. begin and complete all .construction and development
within the times specified in the Schedule of Performance for the Site
(Exhibit F). The Schedule of Performance for the Site is subject to revision
from time to time as may be mutually agreed upon in writing between the
parties.
F. [§139] Indemnity; Liability Insurance
1. CDC agrees to and shall indemnify, defend and hold harmless
Developer and its officers, employees, agents, attorneys, representatives,
legal successors and assigns in interest ("Developer Indemnitees") from
and against all claims, demands, losses, damages, fines, penalties,
expenses (including reasonable attorneys' fees and court costs) and all
liabilities arising from or in connection with the following: (a) CDC's entry
onto the Site following the Closing pursuant to its right of entry pursuant to
Section 142 below; and (b) the negligence or willful misconduct of the
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•
L7_
City, the CDC or of their respective
agents.
contractors, employees and/or
2. . Developer agrees to and shall indemnify, defend and hold harmless
.the CDC Indemnitees (as defined in Section 118) from and against all
claims, demands, liabilities, including any contract, tort or other legal or
equitable claims against the CDC Indemnitees in State, Federal courts or
other administrative actions, losses, damages, costs, or expenses
(including reasonable attorneys' fees and court costs) arising from or
relating to the matters listed in Section 118 above, and from the death of
any person or any accident, injury, loss, or damage whatsoever to person
or property, including actions brought by or on behalf of future purchasers,
tenants or occupants or governmental/public agencies, which shall occur
(a) on or from the Site following the Closing unless and to the extent
resulting from the negligence or willful misconduct of CDC or City, and (b)
which shall be directly or indirectly caused by the negligent or willful
misconduct of Developer or its agents, servants, employees, or
contractors. .
3: Developer agrees to furnish or cause to be furnished to the City
and CDC following the Effective Date and prior to Closing, certificates of
such bodily injury and property damage insurance liability policies. Such
policies shall include coverage for contractual liability, including coverage
for the agreement to indemnify the City and the CDC as described above,
shall be reasonably acceptable to the CDC, and shall be in the amount of
at least One Million and 00/100 Dollars ($1,000,000.00) combined single
limit. Such policies shall name the City and the CDC as additional
insured's and shall be issued by companies with a Best's rating of B+ or
better.
G. [§140] -Anti-Discrimination During Construction
Developer, for itself, its agents, successors and assigns, as pertaining to
each respective parcel within the Site-' agrees that in its performance
hereunder, it will not discriminate against any employee or applicant for
employment because of race, color, creed, religion, sex, marital status,
national origin,- or.ancestry.
H. [§141] City and Other Governmental CDC Permits
The requirements set forth in subsections 134 and 136 of this Section III in
regard to approval by the CDC of the Site Plan, Landscaping Plan and
Exterior Elevations for the Site and any changes thereto are in addition to,
and shall not be deemed a waiver of, the procedures and approvals in
regard to construction plans and other documents that may be required by
the City. Before expiration of the Due Diligence Period, Developer shall at
its own expense apply for and use commercially reasonable efforts to
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secure or cause to be secured any and all permits which may be required
by the City or any other governmental agency affected by such
construction, development or work, including all land use entitlements and
related actions (other than the Parcel Map, zone changes, general plan
amendments which have been secured by the CDC prior to the Effective
Date at its expense). The CDC shall provide all proper assistance to .
Developer in securing these permits. In this regard, Developer recognizes
that the CDC is a separate entity from the City and that the requirements
and objectives of the two entities are distinct and, in some cases, different.
Thus, the approval of an item by the CDC does not imply that such item
will thereby be approved by the City, and approval of -an item by the City
does not imply that such item will thereby be approved by the CDC.
I. [§142] CDC Right of Access
Representatives of the City and CDC shall have a reasonable right of
access to the Site following the Close of Escrow for the purposes of
inspecting the Improvements to be constructed hereunder, provided that
the CDC shall have no right to require changes or modifications to any
such Improvements constructed by . Developer, provided that all
Improvements are being constructed consistent with the plans previously
submitted and approved by the City/CDC. All rights of access to the Site
created by this Agreement in favor of CDC shall end .upon issuance of a
Certificate of Compliance.as to the applicable portion of the Site.
J. [§143] Security Financing; Rights of Holders
[§144] Permitted Encumbrances
Developer shall be permitted to execute mortgages, deeds of trust,
conveyances, and leasebacks, or any other form of conveyance
with respect to the Site, subject to the approval of the CDC, and
such approval may not be withheld unreasonably, which are
required for any reasonable method of financing before completion
of the construction of the improvements, but only for the purpose of
securing loans of funds to be used for financing the acquisition of
the Site, the construction of improvements on .the Site (including
both construction and permanent financing of any phase of
development on a part of the Site) and any other expenditures
necessary and appropriate to own or develop the Site under this
Agreement or which are required in connection with any refinancing
of the foregoing. The CDC agrees that the terms of this Agreement
shall be amended as may be reasonably required by a responsible
financial or lending institution for the purpose of obtaining such
financing, provided that such .amendments do not materially and
adversely affect the rights, powers and privileges of the CDC under
this Agreement. After the recordation , of the Certificate of
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Compliance in the Official Records as pertaining to each respective
parcel within the Site, Developer may execute mortgages, deeds of
trust, conveyances, and leasebacks, or any other form of
conveyance with respect to the Site (or a specific parcel, as the
case may be) for financing purposes without the CDC's written
consent.
2. [§145] Holder Not Obligated To Construct Improvements
Any -mortgagee, beneficiary of a deed of trust or holder of a security
interest in the Site authorized by this Agreement ("Secured Party"),
by virtue of its status as the Secured Party shall not be obligated by
the provisions of this Agreement to construct or complete the
improvements or to guarantee such construction or completion; nor
shall any covenant or any provision in the deed for the Site be
construed to so obligate any such Secured Party. However,
nothing in this Agreement shall be deemed to construe, permit, or
authorize any Secured Party to devote the Site or any part thereof
to any uses, or to construct any improvements thereon, other than
those uses or improvements provided for or authorized by this
Agreement and conforming to the Redevelopment Plan.
[§146] [Intentionally Deleted.]
L. [§147] Certificate of Compliance
Upon completion by Developer of all construction and
development of the "Minimum Project Improvements" (as
hereinafter defined) upon the Site (or with respect to a
separate legal parcel within the Site), in substantial
accordance with the plans and specifications for such
improvements (as approved by the CDC or City), the CDC
shall furnish Developer with a Certificate of Compliance, in
the form attached hereto as Exhibit G. Such Certificate of
Compliance shall be (and shall state that it is) a conclusive
determination of satisfactory completion of the construction
required by this Agreement upon the Site (or such applicable
parcel thereof), and of full Completion with the terms hereof
with respect to the Site (or such applicable parcel thereof) as
of the date of its issuance. The term "Minimum Project
Improvements" shall mean the following: (i) the buildings to
be constructed by or for the Major Users on Parcels 1,and 2
of the Parcel Map as shown on the approved Site Plans; (ii)
all common area improvements within the Site depicted on
the approved Site Plans; and (iii) the buildings to be
constructed on any two of the remaining four (4) legal
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parcels within the Site as shown on the approved Site Plans.
The approval by the CDC of such plans and specifications
are part of the approval process contemplated herein.
2. Such Certificate of Compliance shall not constitute evidence
of Completion with or satisfaction of any obligation of
Developer to any holder of a mortgage, or any insurer of a
mortgage securing money loaned to finance the
improvements, or any part thereof. Such Certificate of
Compliance is not a notice of completion as defined in
California Civil Code Section 3093.
3. The CDC shall issue a partial, as pertaining to each
respective parcel within the Site, or total Certificate of
Compliance upon the Developer substantially completing the
Minimum Project Improvements. The term "substantial
completion" shall mean that all buildings, landscaping,
utilities, parking and other related on -site improvements,
`have been constructed in substantial Completion with all
zoning, building and related local ordinances and other state
and/or federal laws.
4. The CDC shall issue a Certificate of Compliance of an
individual parcel within the Site upon substantial completion
of the improvements set forth in the Scope of Development
identified to be developed on such parcel.
IV. [§148] USE OF THE SITE
A., [§149] Uses .
Developer covenants and agrees that:
1 After construction, Developer and/or its successors and
assigns in interest shall occupy and use the Site as a retail
commercial center with not less than 240,000 and not more
than 375,000 square feet of building space and other related
amenities usually and customarily associated with a retail
center of this size and scope as shown in the Site Plans to
be approved by the CDC and the City in accordance with
Section 134 above. The Developer shall use its
commercially reasonable efforts to acquire national retailers
as the major users to own and/or operate the retail buildings
to be constructed on Parcels 1 and 2 of the Site. Developer
shall undertake these activities, and only these activities, on
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the Site for a period of ten (10) years after the issuance of
the Certificate of Compliance. Except as provided below,
the Site shall not be used for any other purposes. After the
issuance of the Certificate of Compliance as set forth in
Section G. above, - if the defined uses are no longer
commercially viable at the Site, as determined by an
independent economic/financial analysis, and as approved
by the CDC, the Developer' may change uses at the Site,
provided that such use is permitted, by all applicable zoning
and other local, state or federal laws.
2. Such occupation and use by Developer and its successors
and assigns shall be in conformity with the uses specified in
this Agreement, the Redevelopment Plan, the Scope of
Development of the Site (Exhibit E), the Site Plans and the
PPA.
3. The covenants expressed above, shall be contained in the
Grant Deed issued for the Site.
4. After the Closing, Developer, or its permitted successors in
interest, shall construct, at its sole cost, all necessary
improvements for the commercial development of the Site.
Prior- to closing, Developer shall pay the additional grading
costs resulting from the Specific Grading and shall install
and pay for the Storm Water Pipeline.
5. At Closing, Developer shall pay to the City the amount of
$300,000 to underground the electrical facilities located
along that portion of Azusa Avenue contiguous to the Site.
6. Developer and all subsequent purchasers of the Site (along
with BKK, the CDC and their respective successors as
owners of the lands formerly owned by BKK), shall
participate in the special district to be formed by the City or
CDC for maintenance of the gnatcatcher habitat to be
established by the CDC or City prior to Closing in
accordance with the BKK Agreement and applicable
requirements of the California Department of Fish and
Wildlife, and will contribute their pro rata share of all costs to
maintain the habitat, but not to form or operate the District or
to acquire or initially establish the habitat.
7. Developer and all subsequent purchaser, tenants and
occupants are to purchase electricity or reclaimed water
from the City through the City's Utility System to be formed
at a future date, so long as such ,services are offered at
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competitive rates.
8. Developer shall install or cause to be installed, at
Developer's (or Developer's successor's) sole cost and
expense, membrane structures underneath the building
footprints and monitoring , devices within the buildings
constructed at the Site as required by the terms of the EIR,
SEIR or other related landfill or regulatory agency
documents.
9. following the Closing, Developer shall construct, at
Developer's sole cost and expense, the sidewalk and a
turnout (as part of. the decel lane) along Azusa Avenue and
the traffic signal and intersection work at the entry to the
Project from Azusa Avenue.
10. Developer shall pay to the City at the Closing, the sum of
Four Hundred Twenty-five Thousand and 00/100 Dollars
($425,000.00) in traffic impacts fees and road paving fees for
the Project, which amount has been computed as
Developer's fair share of said traffic impacts.
11.
assignees. In the event the CDC retains ownership of the
CDC Slope Parcel. the CDC shall have the right to reserve
Slope Parcel Developer and its successors in interest or
assignees shall be obligated to own and maintain the area
identified as the CDC Slope Parcel. 30 days prior to close,
CDC shall inform developer of said ownership of portion of
slope parcel
B. [§150] Maintenance; New Construction and Changes to Building
After Issuance of Certificate of Compliance; Environmental
Covenants and Indemnity
1. From and after the Close of Escrow, Developer shall
maintain the improvements on the Site in proper working.
order and condition, shall from time to time make all.
necessary repairs, and shall keep the Site free from the
accumulation of waste and debris and the unsightly storage
of materials or equipment. Developer shall maintain the
West Covina Heights S.C., LLC, A California Limited Liability (:3&any
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landscaping, parking areas and exterior surfaces in such
manner that the Site shall at all time have an aesthetically
pleasing appearance.
2. Recent investigations of our environment have identified a
number of substances found to be harmful to humans and to
the environment. Numerous laws and regulations have been
enacted which regulate the possession, production, use, and
disposal of these substances, and legislative activity in this
area continues so that we may expect additional laws and
regulations to be . enacted by legislative bodies and
governmental agencies in the future. These laws and any
other laws, ordinances, rules, regulations, orders, permit
conditions and other similar requirements pertaining to
health, safety or the environment, including laws pertaining
to Hazardous Materials (as defined above.), and all
amendments thereto are collectively referred to herein as the
"Environmental Laws." In these laws, the regulated
substances are referred to by various names, such as
"hazardous substances," "hazardous wastes," "hazardous
materials," "toxic .materials," or "toxic substances," and other
similar names.
3. Developer hereby agrees that:
(i) Any Hazardous Materials used by Developer or its agents
on, in, or about the Site will be contained, stored, used and
disposed of in a safe manner and in accordance with all
Environmental Laws. I .
(ii) To the extent Developer has direct control over the Site;
Developer will use, keep and maintain the Site in compliance
with, and shall not cause or permit such property to be in
violation of all Environmental Laws.
(iii) Neither Developer nor. its agents will use the Site in a
manner which may,cause any Hazardous Materials to be
deposited, and will not deposit any Hazardous Materials, into
the soil or into the ground water of such property. If
Developer or its agents shall cause or permit a "release," as
such term is defined in the Environmental Laws, Developer
will promptly, upon becoming aware of such "release",notify
the CDC in writing of such release and immediately begin
investigation and remediation of such release and. complete
such remediation at Developer's own cost and expense as
required by the Environmental Laws and to the satisfaction
of all governmental agencies with appropriate jurisdiction.
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(iv) Developer's covenants in Sections 149 through 150,
inclusive, above and Developer's obligations pursuant to the
indemnity in Subsections 118 and 139, above, shall survive
the termination of this Agreement and the Close of Escrow,
and shall not merge with the Grant Deed, and shall survive
any re -conveyance of the Site, or any portion thereof, by
Developer to the CDC as provided in this Agreement as a
result of the exercise by the CDC of the options provided for
therein.
C.. [§151] Cessation of Use of the Site as a Retail -Commercial Center
Excluding (1) temporary vacancies (which shall defined as a continuous
vacancy, of twelve (12) months); (2) periods of closure caused by
remodeling, renovation or restoration after a casualty or condemnation
loss; or (3) 1 periods of closure resulting from an event of "Enforced Delay"
(as -defined in Section 171 below), in the event that Developer or any
subsequent purchasers of Developer ceases to use the Site, or any parcel
thereof, as a retail -commercial center as set forth in this Agreement, CDC
shall have the right at its option and as CDC's exclusive remedy, to
repurchase the parcel or parcels ("Parcel") which are not in compliance..
with the foregoing covenant, as set forth herein, with all improvements
thereon.
The rights of the CDC under this Section 151 shall be applicable, only to a
Parcel whose, then owner or occupant is no longer operating a retail -
commercial use on such Parcel, and shall not give the CDC rights 'as to
any other Parcel. Such right to repurchase shall be subordinate and
subject to and shall not defeat, render invalid or limit any mortgage, deed
of trust or other security instrument permitted by this Agreement.
CDC shall exercise its right to repurchase, if at all, by delivering to the
"Owner" (as defined below) of the Parcel in question ("PIQ") a written
notice to repurchase the PIQ ("Notice to Repurchase") no earlier than one
hundred eighty (180) days and no later than two hundred forty (240) days
after the. date (the "Cessation Date") of the actual cessation of any,
retail/commercial use of the PIQ by the Owner or other occupant of the
PIQ. Upon delivering to Owner its written Notice of Repurchase, CDC
shall establish an escrow to purchase the PIQ (the "Repurchase Escrow")
with Escrow Agent in accordance with the Escrow Agent's standard
purchase and sale escrow instructions for a purchase price which is equal
to the greater of (a) the sum of (i) the purchase price paid by the Owner
for, the PIQ plus (ii) the actual cost of constructing the improvements that
exist on such PIQ as of the date of the opening of such Repurchase
Escrow (with the improvement costs included in clauses (i) and/or (ii)
above reduced by a sum representing straight line depreciation over. the
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useful life of the improvements, as determined in accordance with
applicable accounting rules), or (b) the purchase price for such PIQ, as
improved, as set forth in any bona fide written offer (a "Bona Fide Offer")
received by the Owner since the Cessation Date from any third party who
is not affiliated with either Owner, Developer, or CDC (an "Unaffiliated
Third Party"). The Repurchase Escrow shall close, if at all, not later than
ninety (90) days after the receipt of CDC's Notice to Repurchase by the
Owner of such PIQ,, subject to any reasonable extensions as deemed
necessary by the Parties. The term "Owner" for purposes of this
paragraph means the record owner of the PIQ as shown in the Official
Records at all relevant times described in this paragraph. The CDC's right
to repurchase as set forth in this Section shall expire at 5:00 p.m., Pacific
Standard Time, on the date which is ten (10) years after the issuance of
the Certificate of Compliance. The CDC's foregoing right to repurchase
shall be subject to , and subordinate to , any liens and encumbrances of
record existing on the date of the Notice to Repurchase.
This Section and the provisions and remedies contained herein shall apply
to all Parcels, unless specifically waived by the CDC.
19
1. [§ 152] [Intentionally Deleted]
2. [§153] Nondiscrimination Covenant
.The Developer covenants .by and for itself and any successors in
interest that there shall be no discrimination against or segregation
of any person or group of persons on account of race, color, creed,
religion, sex, marital status, handicap, national origin or ancestry in
the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Site, nor shall the Developer or any person
claiming under or through it or them establish or permit any such
practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Site. The
foregoing covenants shall run with the land.
The Developer shall refrain from. restricting the rental, sale or lease
of the Site on the basis of race, color, creed, religion, sex, marital
status, handicap, national origin or ancestry of any person. All such
deeds, leases or contracts as pertaining to each respective Parcel
within the Site, shall contain or be subject to substantially the
following nondiscrimination or non -segregation clauses:
(i) In deeds:
"The grantee herein covenants by and for himself or herself,
his or her heirs, executors, administrators and assigns, and
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all persons claiming under or through them, that there shall
be no discrimination against or segregation of, any person or
group of persons on account of race, color, creed, religion,
sex, marital status, handicap, national origin or ancestry in
the sale, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the land herein conveyed, nor shall the
grantee himself or herself or any person claiming under or
through him or her, establish or permit any such practice or
practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or. vendees _in the. land
herein conveyed. The foregoing covenants shall run with the
land."
(ii) In Leases:
"The lessee herein covenants by and for himself or herself,
his or her heirs, executors, and assigns, and all persons
claiming under or through him, or her, and his lease is made
and accepted upon and subject to the following conditions:
"There shall be no discrimination against or segregation of
any person or group of persons on account of race, color,
creed, religion, sex, marital status, handicap, ancestry or
national origin in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the premises herein
leased nor shall the lessee himself or herself, or any person
claiming under or through him or her, establish or permit any
such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or
occupancy of tenants, lessees, sublessees, subtenants, or
vendees in the premises herein leased."
(iii) In Contracts:
"There shall be no discrimination against or segregation of
any person, or group of persons on account of race, color,
creed, religion, sex, marital status, handicap, ancestry or
national origin, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the premises, nor shall
the transferee himself or herself or any person claiming
under or through him or her, establish or permit any such
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or
vendees of the premises."
3. [§154] Minimum Improvement Value Covenant
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Developer agrees for itself, its successors, assigns and every
successor in any interest to the property comprising the Site, to use
commercially reasonable efforts to assure that as of the date of
issuance of the final Certificate of Compliance for the Site, the
minimum value of all improvements and propertyshall not be less
than Thirty-five Million and 00/100 Dollars (the "Minimum
Improvement Value"). In acknowledgment that CDC and City shall
have approval rights over the development approvals, construction
plans, and building permits, Developer or its successors shall have
no liability in the event the actual total development cost for the on -
site improvements of the Site is less than the Minimum
Improvement Value.
4. [§155] Assessed Valuation.
Developer covenants and agrees for itself, its successors and
assigns and every successor in interest to the Site, or any part
thereof, that Developer shall not take any action to lower the total
assessed valuation of the Site's on -site improvements below eighty
percent (80%) of the Minimum Majors' Improvement Value.
5. [156] Effect of Violation of the Terms and Provisions of this
Agreement After Completion of Construction
The CDC is deemed the beneficiary of the terms and provisions of
this Agreement and of the covenants running with the land, for and
in its own right and for the purposes of protecting the interest of the
community and other parties, public or private, in whose favor and
for whose benefit this Agreement and the covenants running with
the land have been provided, without regard to whether the CDC
has .been; remains or is an owner of any land or interest therein in
the. Site. The CDC shall have the 'right, if the Agreement or
covenants are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper
proceedings to enforce the curing of such breaches to which it or
any other beneficiaries of this Agreement and covenants may be
entitled, subject to CDC's agreement that its right to repurchase a
Parcel pursuant to Section 151 constitutes CDC's sole remedy for
the failure of an Owner or occupant to operate a retail commercial
use on its Parcel. The following covenants contained in this
Agreement shall remain in effect after the issuance of the
Certificate of Compliance:
(i) The covenants pertaining to the use and operation of the
Site for retail purposes, as set forth in Sections 149 and 150,
which shall remain in effect for a period of ten (10) years
West Covina Heights S.C., LLC, A California Limited Liability CQf¢pany
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s.
from the issuance of a certificate of occupancy for each retail
unit located at.the Site
(ii) The covenants against discrimination, as set forth in Section
153, the indemnification provisions set forth in Sections 118
and 139 shall remain in effect in perpetuity; and,
(iii) The covenant establishing the Minimum Improvement Value
as set forth in Section 154, which shall remain in effect for a
period of ten (10) years after the term of the Redevelopment
Plan.
V. [§157] DEFAULTS AND TERMINATION.
A. [§158] Defaults —General
Subject to extensions of time for "Enforced Delay" events as described in
Section 171, if either party is in default or breach of its obligations,
covenants, representations, or warranties under this Agreement, then the
non -defaulting party may give written notice to the defaulting party setting
forth with reasonable specificity the nature of the default or breach and the
actions required to cure such default or breach. Except as specifically
provided otherwise this Agreement, if the defaulting party fails (1) to
complete such cure within ten (10) business days after delivery to the
defaulting party of such notice with regard to any payment obligation or (2)
to substantially complete such cure within thirty (30) business days after
delivery of such notice with regard to all other obligations, covenants,
representations, or warranties, or with respect to those cures that cannot
reasonably be completed within such thirty (30) day period if such cure
has commenced within such thirty (30) day period but thereafter the
defaulting party is not diligently pursuing such cure to completion, then the
non -defaulting party shall have those remedies provided in Sections 159
through 164, below. All notices of default in order to be effective must
state with reasonable specificity (a) the nature of the default, (b) the
actions which the defaulting party must take to cure such default, and (c)
the time in which such actions must be taken.
J
B. [§159] Remedies and Rights of Termination Prior to Conveyance
[§160] Termination by Developer
In the event that prior to Close of Escrow the Developer is not in
default under this Agreement and (a) the CDC does not tender title
and/or possession to the Site pursuant to the Grant Deed in the
manner and condition, and by the dates provided for in this
Agreement, or (b) one or more of the Developer's Conditions is/are
not fulfilled (or waived by Developer in its sole and absolute
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discretion) on or before the time set forth in the Schedule of
Performance, the Agreement may then, at the option of Developer,
be terminated by written notice thereof to the CDC, and neither the
CDC nor Developer shall have any further rights or remedies
against or liability to the other under this Agreement with respect to
said Site, except that (a) the CDC will return the Developer's
Deposit to Developer; (b) within sixty (60) days after the
termination, CDC shall reimburse ' Developer those out of pocket
costs,. if any, incurred by Developer to install the Storm Water
Pipeline (the "Pipeline Costs") ; and (c)subject to the limitation listed
immediately below, in the event the CDC is in material default of
any of its obligations under this Agreement, and such material
default of the CDC prior to the Closing is not cured, after written
demand by the Developer, within the time set forth in Section 158
hereof, Developer shall have all rights and remedies available to it
at law or equity.
LIQUIDATED DAMAGES THE DEVELOPER AND THE
CDC BY THIS AGREEMENT, MUTUALLY AGREE THAT IN THE
EVENT OF A DEVELOPER TERMINATION. OF THIS
AGREEMENT DUE TO THE CDC'S DISCOVERY OF SOLID
WASTE OR HAZARDOUS MATERIALS AT THE SITE
RESULTING IN CIRCUMSTANCES WHICH CAUSE THE
DEVELOPMENT OF THE SITE AS SET FORTH IN THIS
AGREEMENT COST PROHIBITIVE TO. THE CDC, AS
DETERMINED BY THE CDC IN ITS SOLE AND ABSOLUTE
DISCRETION, DEVELOPER SHALL BE ENTITLED TO
REIMBURSEMENT FROM CDC OF DEVELOPER'S ACTUAL
"SOFT COSTS" AS LIQUIDATED DAMAGES AS THE SOLE
AND EXCLUSIVE REMEDY OF THE DEVELOPER FOR SUCH
UNCURED MATERIAL DEFAULT, AT LAW AND/OR IN EQUITY.
IN THE EVENT OF SUCH TERMINATION FOR SUCH REASON,
THE DEVELOPER WOULD SUSTAIN DAMAGES BY REASON
THEREOF WHICH WOULD BE UNCERTAIN AND SUCH
DAMAGE AND LOSS TO THE. DEVELOPER IS IMPRACTICAL
AND EXTREMELY DIFFICULT TO FIX, BUT THE PARTIES ARE
OF THE OPINION, UPON THE BASIS OF ALL INFORMATION
AVAILABLE TO THEM, THAT SUCH DAMAGES WOULD
APPROXIMATELY EQUAL THE DEVELOPER'S ACTUAL "SOFT
COSTS" AS INDICATED ABOVE, AND SUCH AMOUNT SHALL
BE PAID TO THE DEVELOPER BY THE CDC UPON
TERMINATION BY THE DEVELOPER DUE TO THE DEFAULT
BY CDC SET FORTH HEREIN, OF THE TOTAL OF ALL
LIQUIDATED DAMAGES FOR SUCH CDC DEFAULT AND NOT
AS A PENALTY. THE TERM "SOFT COSTS" SHALL MEAN
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THE AMOUNT SHOWN IN PAID INVOICES PROVIDED BY
DEVELOPER TO THE CDC FOR OUT-OF-POCKET COSTS
INCURRED BY DEVELOPER WITH ATTORNEYS, ENGINEERS,
ARCHITECTS AND OTHER CONSULTANTS IN CONNECTION
WITH THIS AGREEMENT AND THE PROJECT, PROVIDED IN
NO EVENT SHALL SUCH SUM EXCEED ONE HUNDRED
TWENTY-FIVE AND 00/100 DOLLARS ($125,000.00). THE
DEVELOPER AND CDC SPECIFICALLY ACKNOWLEDGE THIS
LIQUIDATED DAMAGES PROVISION BY THEIR SIGNATURES
BELOW:
DEVELOPER CDC
2. [§161] Termination by CDC
In the event that prior to Close of Escrow the CDC is not in default
under this Agreement and (a) one or more of the CDC's Conditions
to Close of Escrow is/are not fulfilled (or waived by CDC in its sole
and absolute discretion) on or before the time set forth in the
Schedule of Performance, or (b) Developer is in material default of
any of its obligations under this Agreement, and such material
default of the Developer prior to the Closing is not cured, after
written demand by the CDC, within the time.set forth in Section 158
above, this Agreement may, at the option of the CDC, be
terminated by CDC, in which event, neither Developer nor CDC
shall have any further rights or remedies against or liability to the
other under this Agreement with respect to the Site, other than the
obligation of CDC to reimburse Developer for the Pipeline Costs
within sixty (60) days after the termination. In the event of
termination is due to (a) above, the Escrow Agent shall return the
Deposit, in full, to Developer, provided, however, that the Escrow
shall not take any action to return the Deposit and cancel the
Escrow for a period of ten (10) days after receipt of such notice of
termination to allow the non -terminating party to contest such
termination, and if so contested, the Escrow Agent shall not cancel
the Escrow and shall retain the Deposit pending additional
instructions from CDC and Developer. If termination is due to (b)
above, the Developer's Deposit less the Pipeline Costs, if any, shall
be retained by the CDC as liquidated damages and as its property
without additional deduction, offset, or recoupment whatsoever, and
Developer (or assignee or transferee) shall have no further rights
under the Agreement with respect- to the Site, and any
improvements to be developed and constructed thereon, and
Developer shall have no other or further liability under this
Agreement.
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The right of termination and retention of the Developer's deposit as
liquidated damages shall be CDC's sole and exclusive remedy
against Developer in the event of Developer's default or failure as
provided above prior to conveyance of title to the Site. Developer
recognizes that Developer's prompt purchase and development of
the Site, in accordance with this Agreement, is of critical importance
to the CDC's ability to carry out its other activities within the Project
Area by financing other projects from the tax increment which will
be generated by this development, pursuant to California Health'&
Safety Code §33670 et seq.
LIQUIDATED DAMAGES: THE DEVELOPER AND THE CDC, BY
THIS AGREEMENT, MUTUALLY AGREE THAT IN THE EVENT
OF CDC TERMINATION OF THIS AGREEMENT DUE TO AN
UNCURED MATERIAL DEFAULT BY DEVELOPER OF
DEVELOPER'S MATERIAL OBLIGATIONS PRIOR TO THE
CLOSE OF ESCROW, CDC SHALL BE ENTITLED TO THE
DEPOSIT IN THE SUM OF $125,000 PLUS ACCRUED INTEREST
THEREON, -FROM THE ESCROW AGENT, AS LIQUIDATED
DAMAGES AS THE SOLE. AND EXCLUSIVE REMEDY OF THE
CDC HEREUNDER AT LAW AND/OR INEQUITY. IN THE EVENT
OF SUCH TERMINATION FOR SUCH REASON, THE CDC
WOULD SUSTAIN DAMAGES BY REASON THEREOF WHICH
WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE
SUCH VARIABLE FACTORS AS THE DELAY OR FRUSTRATION
OF TAX REVENUES THEREFROM TO THE CITY AND THE CDC,
THE DELAY OR FAILURE OF THE CDC TO FURTHER THE
IMPLEMENTATION OF THE REDEVELOPMENT PLAN, AND A
LOSS OF OPPORTUNITY TO ENGAGE IN OTHER POTENTIAL
TRANSACTIONS, RESULTING IN DAMAGE AND LOSS TO THE
CDC. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO
FIX THE AMOUNT OF SUCH DAMAGES TO THE CDC, BUT THE
PARTIES ARE OF THE OPINION, UPON THE BASIS OF ALL
INFORMATION AVAILABLE TO THEM, THAT SUCH DAMAGES
WOULD APPROXIMATELY EQUAL THE DEPOSIT AMOUNT OF
$125,000 PLUS THE ACCRUED INTEREST THEREON, AND
SUCH AMOUNT SHALL BE PAID TO THE CDC UPON
TERMINATION BY THE CDC DUE TO AN UNCURED MATERIAL
DEFAULT BY DEVELOPER'S OF DEVELOPER'S MATERIAL
OBLIGATIONS, AS THE TOTAL OF ALL LIQUIDATED DAMAGES
FOR ANY AND ALL SUCH DEFAULTS AND NOT AS A PENALTY.
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r
THE DEVELOPER AND THE CDC SPECIFICALLY
ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY
THEIR SIGNATURES BELOW
Developer CDC
3. [§162] Remedies of CDC for Default by Developer. After
Passage of Titleand Prior to Completion of Construction.
After conveyance of title to the Site, and prior to issuance of a
Certificate, of Compliance, if' the Developer defaults with regard to
any provision of this Agreement, the CDC shall serve written notice
of such default upon the Developer. If the default is not
commenced to be cured by the Developer within thirty (30) days
after service of the notice of default and thereafter pursued
diligently to completion, the CDC at its option may, as its sole and
exclusive remedy, exercise its option to repurchase that Parcel or
Parcels within the Site which is the subject of the Default and for
which a Certificate of Compliance has not yet been required to be
issued by the CDC. In no event shall CDC be entitled to seek or
recover from Developer or its successors or assignees, any
damages for lost or foregone tax revenues or income of any kind or
nature.
4. [§163] Legal Actions
(i) Institution of Legal Actions
Any legal actions must be instituted in the Superior Court of
the County of Los Angeles, State of California, East District.
(ii) Applicable Law
The. laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
(iii) 'Acceptance of Service of Process
West Covina Heights S.C., LLC, A California Limited Liability CQ&pany
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In the event that any legal action is commenced by
Developer against the CDC, service of process on the CDC
shall be made by personal service upon the Executive
Director or in such other manner as maybe provided by law.
In the event that any legal action is commenced by the CDC
against the Developer, service of process on Developer shall
be made by personal service and shall be valid whether
made within or without the State of California or in such
other manner as may be provided by law.
(iv) Default RemediesFailure by either party to perform
any action or covenant required by this Agreement within the
time periods provided herein following notice and failure to
cure as described hereafter, constitutes a "Default" under
this Agreement. A party claiming a Default shall give written
notice of Default to the other party specifying the Default
complained of. Except as otherwise expressly provided in
this Agreement, the claimant shall not institute any
proceeding against any other party, and the other party shall
not be in Default if such party within thirty (30) days from
receipt of such notice immediately, with due diligence,
commences to cure, correct or remedy such failure or delay
and shall complete such cure, correction or remedy with
diligence.
(v) Rights and Remedies Are Cumulative
Except with respect to rights and remedies expressly
declared to be exclusive in this Agreement, the rights and
remedies of the parties are cumulative, and the exercise by
either party of one or more of such rights or remedies shall
not preclude the exercise by it, at the same or different
times, of any other rights or remedies permitted by this
Agreement or applicable law for the same default or any
other default by the other party.
(vi) Attorneys' Fees
In the event of any action, litigation, arbitration, and/or other
proceeding arising out of or relating to this Agreement
including, without limitation, its terms, negotiation,
interpretation, breach and/or enforcement; the prevailing
party shall recover from the non -prevailing or defaulting
party, its costs and expenses incurred in connection with the
prosecution or defense of such action, litigation, arbitration
or other proceeding, including its reasonable attorneys' fees,
including those attorneys' fees incurred on appeal, in
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enforcement of judgment proceedings, and/or bankruptcy
proceedings.
B. [§164] Specific Performance
The delineation of the parties' rights to terminate this Agreement
prior to the Closing is not intended to limit either party from
exercising any other remedy for,such default provided under law or
equity. ' Without limiting the generality, of the foregoing statement, in
the event of a Default by either party prior to the Closing, the non -
Defaulting party may exercise any right or remedy available in law
or equity, including, without limitation, the right to initiate an action
for specific performance and to recover all damages proximately
caused by such Default, except as limited in the event of CDC
termination in .which the event the CDC shall be limited to retaining
the. Developer's Deposit.
VI. [§165] GENERAL PROVISIONS
A. [§166] Severability
If any term, provision; covenant, or condition of this Agreement is held by
a court of .competent jurisdiction to be invalid, void, or unenforceable, the
remainder of this Agreement shall not be affected thereby to the extent
such remaining provisions are not rendered impractical to perform taking
into consideration the purposes of this Agreement. In the event that all or
any portion of this Agreement is found to be unenforceable, this
Agreement or that portion which is found to be unenforceable shall be
.deemed to be a statement of intention by the parties; and the parties
further agree _that in such event, and to the maximum extent permitted by
law, they shall take all steps take all steps necessary to comply with such
procedures or requirements as may be necessary in order to make valid
this Agreement or that portion which is found to be unenforceable.
B. [§167] Notices and Demands Between the Parties
All notices, requests and other communications under this Agreement
shall be in writing, and shall be (a) delivered personally, (b) sent via
Federal Express or similar private express mail service (hereinafter
"Federal Express" ), (c), sent via facsimile, or (d) mailed, certified or
registered mail, return receipt requested, ,postage prepaid, deposited in
Los Angeles County, California and addressed as follows:
CDC: Community Development Commission ,of
theCity of West Covina1444 West Garvey Avenue
West Covina, California 91793
West Covina Heights S.C., LLC, A Califomia Limited Liability C4@parry
011304
0
J
Attention: Executive Director
With a copy to: Arnold M. Alvarez-Glasman, Esq.
Alvarez-Glasman & Colvin
100 North Barranca Avenue
Suite 1050
West Covina, California 91791
Developer: West Covina Heights S.C., LLC, A California Limited
Liability Company
c/o Eclipse Development Group, LLC
17802 Skypark Circle, Suite 200
Irvine, California 91614
Attention: Doug Gray
Such written notices, requests -and communications may be sent in the
same manner to such other addresses of which the CDC and Developer
shall have given notice as herein provided. Personally delivered notices
shall be deemed given upon. actual personal delivery to the intended
recipient. Notices sent via Federal Express shall be deemed given the
immediately following business day after deposit with Federal Express.
Facsimile notices shall be deemed given upon completion of transmission
to the receiving facsimile machine. Mailed notices shall be deemed given
upon the earliest of three (3) business days after deposit into the United
States mail, registered or certified with postage fully prepaid, or the date of
actual receipt as evidenced by the return receipt.
All notices of default in order to be effective must state with reasonable
specificity (a) the nature of the default, (b) the actions which the defaulting
party must take to cure such default, and (c) the time in which such
actions must be taken.
C. [§168] Conflict of Interests
No member, official or employee of the CDC shall have any personal
interest, direct or indirect, in this Agreement, nor shall any such member,
official or employee participate in any decision relating to the Agreement
which affects his or her personal interests or the interests of any
corporation, partnership or association in which it is directly or indirectly
interested. Developer shall not at any time directly or indirectly pay or give
any member, official, employee or Agent of the CDC any money or other
consideration as an inducement to cause the CDC to execute this
Agreement.
D. [§169] Non -Liability of CDC Officials and Employees
West Covina Heights S.C., LLC, A California Limited Liability C49pany
011304
No member, official or employee of the CDC or the City shall be
personally liable to Developer or any successor in interest, for any default
or breach by the CDC hereunder or for any amount which may become
due to Developer or such successor on any obligations under the terms of
this Agreement. Notwithstanding the foregoing, the CDC and City shall be
responsible and liable for any acts, negligent or intentional, of its agents,
officials and employees, which cause injury or damage to the Developer or
third parties, except as specifically assumed by the Developer pursuant to
the terms of this Agreement. -
E. [Intentionally Deleted.]
F. [§171] Enforced Delay; Extension of Times of Performance
Time is of the essence of this Agreement. However, a party hereunder
shall not be deemed to be in default hereunder where delays in
performance or defaults are due to: war; insurrections; strikes; lock -outs;
riots; floods; earthquakes; fires; casualties; acts of God; acts of the public
enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governmental restrictions or priority; eminent domain
proceedings; direct challenges to the -approval of this Agreement;
unusually severe weather; inability to secure necessary labor, materials
and tools; delays of any contractor, subcontractor or supplier, when such
party to, this Agreement is faultless; acts of the other party; acts or failures
to act of any other public or governmental entity; or any other causes
beyond the control (other than financial) or without, the fault of the party
claiming an extension of time to perform. An extension of time for any
such cause shall be for the period of ,the enforced delay and shall
commence to run from the time of the commencement of the cause, if
notice by the party claiming such extension is sent to the other party in
writing within thirty (30) days after the commencement of the cause:
provided, however, that no such cause shall extend the time for any
payment obligation of either party.
Times of performance under this,Agreement may also be extended in
writing signed by both the CDC and Developer.
G. (§1721 Intentionally Deleted
H. [§173] Approvals
Wherever this Agreement requires any party to approve any contract,
document, plan, specification, drawing or other matter, such approval shall
be given in a prompt and timely manner in writing and shall not be
unreasonably withheld. If disapproval is given, the reasons for such
disapproval must also be given in writing.
West Covina Heights S.C., LLC, A California Limited Liability C�)Qpany
011304
[§174] Real Estate Commission
CDC and Developer both represent to each other that they did not use the
services of any real estate broker or person that may claim a commission,
or finder's fee with respect to this transaction. CDC and Developer, by
their signatures below, each agree to indemnify, defend, and hold the
other harmless from any liability arising out of claims that may be made
against the other Party by any person, firm, or corporation for the payment
of a commission or finder's fee in connection with this transaction.
J. [§175] Successors and Assigns
All of the terms, covenants and conditions of this. Agreement shall be
binding upon the .Developer, its permittedsuccessors and assigns.
Whenever the term "Developer" is used in this Agreement, such term shall
include any other permitted successors and assigns as herein provided
unless otherwise noted.
Upon such assignment, transfer or conveyance by Developer to an
assignee, transferee or successor, Developer shall be relieved of all
obligations and liability with respect to the assigned matters.
K. [§176] Assignment by CDC
The CDC may assign or transfer any of its rights or obligations under this
Agreement with the approval of the Developer which approval shall not be
unreasonably withheld; provided, however, that the CDC may assign or
transfer any of its interests hereunder to the City at any time without the
consent of the Developer.
L. [§177] Relationship Between CDC and Developer.
It is hereby acknowledged that the relationship between the CDC and the
Developer is not that of a partnership or joint venture and that the CDC
and the Developer shall not be deemed or construed for any purpose to
be the agent of the other. Accordingly, except as expressly provided
herein or in the Exhibits hereto, the CDC shall have no rights, power,
duties or obligations with respect to the development, operation,
maintenance or management of the Site or Project thereon.
M. [178] Entire Agreement, Waivers and Amendments/Counterparts
This Agreement may be signed in multiple counterparts which, when
signed by all parties, shall constitute a binding agreement. This
Agreement is executed in four (4) originals, each of which is deemed to be
an original. This Agreement comprises _ pages, consisting of _ pages
West Covina Heights S.C., LLC, A California Limited Liability C5rhpany
011304
of text and ! pages of exhibits, which constitute the entire understanding
and agreement of the parties.
This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations and previous
agreements between the parties with respect to all or any part of the
subject matter hereof.
All amendments hereto must be in writing and signed by the Executive
Director or the Redevelopment Director and Secretary of the CDC or by
the Developer. In this regard, the CDC hereby authorizes the Executive
Director or the Redevelopment Director and the Secretary, acting
together, to execute waivers and enter into amendments on behalf of the
CDC (including but not limited to amendments required by any lenders or
mortgagees), as well as take actions required to implement this
Agreement on behalf of the CDC, including but not limited to approving
escrow instructions and estoppel agreements.
N. [§179] Time for Acceptance of Agreement by the CDC
Four (4) copies of this Agreement shall- be executed and initialed by
Developer and delivered to the CDC. This Agreement shall be effective
as of the date set out on page 1, provided that the CDC, within thirty (30)
days of the CDC's approval of the Agreement, shall have delivered to
Developer one (1) copy of the Agreement executed and initialed by the
CDC together with a certified copy of the Resolution by the CDC
authorizing such execution and delivery.
O. [§180] Titles and Captions
Titles- and captions are for convenience of reference only and do not
define, describe or limit the scope or the intent of this Agreement or of any
of its terms. References to section numbers are to sections in this.
Agreement, unless expressly stated otherwise.
P. [§181] Interpretation
As used in this Agreement, masculine, feminine or neuter gender and the
singular or plural number shall each be deemed to include the others
where and when the context so dictates. The word "including" shall be
construed as if followed by the words "without limitation." This Agreement
shall be interpreted as though prepared jointly by both parties.
Q. [§182] No Waiver
A waiver by either party of a breach of any of the covenants, conditions or
agreements under this Agreement to be performed by the other party shall
West Covina Heights S.C., LLC, A California Limited Liability C5LIpany
011304
not be construed as a waiver of any succeeding breach of the same or
other covenants, agreements, restrictions or conditions of this Agreement.
R. [§183] Modifications
Any alteration, change or modification of or to this Agreement, in order to
become effective, shall be made in writing and in each instance signed on
behalf of each party.
S. - [§184] .Computation of Time
The time in which any act is to be done under this Agreement is computed
by excluding the first day (such as the day escrow opens), and including
the last day, unless the last day is a holiday or Saturday or Sunday, and
then that day is also excluded. The term "holiday" shall mean all holidays
as specified in Section 6700 and 6701 of the California Government Code.
If any act is to be done by a particular time during a day, that time shall be
Pacific Time Zone time.
T. [§185] Legal Advice
Each party represents and warrants to the other the following: they have
carefully read this Agreement, and in signing this Agreement, they do so
with full knowledge of any right which they may have; they have received
independent legal advice from their respective legal counsel as to the
matters set forth in this Agreement, or have knowingly chosen not to
consult legal counsel as to the matters set forth in this Agreement; and
they have freely signed this Agreement without any reliance upon any
agreement, promise, statement or representation by or on behalf of the
other party, or their respective agents, employees, or attorneys, except as
specifically set forth in this Agreement, and without duress or coercion,
whether economic or otherwise.
U. [§186] Time of Essence
Time is expressly made of the essence with respect to the performance by
the CDC, and Developer of each and every obligation and condition of this
Agreement.
V. [§ 187] Cooperation
Each party agrees to cooperate with the other in this transaction and, in
that regard, to sign any and all documents which may be reasonably
necessary, helpful or appropriate to carry out the purposes and intent of
this Agreement including, but not limited to, releases or additional
agreements.
West Covina Heights S.C., LLC, A California Limited Liability Q(�pany
011304
J
W. [§ 188] Offer
Any delivery of unsigned copies of this Agreement,is solely for the
purpose of review by the party to whom delivered, and neither the delivery
nor any prior communications between the parties, whether oral or written,
shall in any way be construed as an offer by CDC or Developer, nor in any
way imply that CDC or Developer is under any obligation to enter the
transaction which is the subject of this Agreement. This is not a binding
agreement until and unless executed on behalf of CDC by its Executive
Director or his designee after adoption of a resolution by -the CDC Board
and the City Council.
X. [Intentionally Deleted]
[End of Text. Signature Page Follows]
West Covina Heights S.C., LLC, A California Limited Liability C5t*pany
011304
SIGNATURE PAGE TO THE
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR THE PROJECT
IN WITNESS WHEREOF, the CDC and Developer have executed this
Agreement as of the date and at the place set out on page 1, and all pages
hereof have been initialed by Developer and a representative of the CDC.
"CDC"
COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF
WEST C:OVINA:
January , 2004'
Andrew Pasmant, Executive
Director
ATTEST':
APPROVED AS TO FORM:
Arnold M. Alvarez-Glasman,
Alvarez-Glasman & Colvin,
CDC General Counsel
West Covina Heigbts S.C.. LLC, A Califomia limited liability (:Np-y
011304
Janet Berry, CDC Secretary
"DEVELOPER"
WEST COVINA HEIGHTS S.C.,
LLC, A California Limited Liability
1
EXHIBIT LIST
Exhibit A
SITE MAP
Exhibit B
LEGAL DESCRIPTION
Exhibit C
GRANT DEED
Exhibit D .
MEMORANDUM OF DISPOSITION AND DEVELOPMENT
AGREEMENT
Exhibit E
SCOPE OF DEVELOPMENT
Exhibit F
SCHEDULE OF PERFORMANCE
Exhibit G
CERTIFICATE OF COMPLIANCE
Exhibit H
GRADING REQUIREMENTS
West Covina Heights S.C., LLC, A California Limited Liability C%pany
011304
EXHIBIT A
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N
o Prepared By: CITY OF WEST COVINA
PLANNING ■ DESIGN ■ CONSTRUCTION
COMMERCIAL DEVELOPEMENT
Q 14725 ALTON PARKWAY SITE MAP EXHIBIT
W IRVINE, CALIFORNIA 92618-2027
CONSULTING 949.472.3505 • FAX 949.472.8122 • www.RBF.com
SCALE: 1 "= 300' DATE: 1 1-13-04
EXHIBIT B
PARCELS ONE (1), TWO (2), THREE (3), FOUR (4), FIVE (5) AND SIX (6) OF
TENTATIVE PARCEL MAP 60193
West Covina Heights S.C., LLC, A California Limited Liability C5@pany
011304
EXHIBIT C
GRANT DEED
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
West Covina Heights S.C., LLC, a
California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
MAIL TAX STATEMENTS TO:
West Covina Heights S.C., LLC, a
California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
THE AREA ABOVE IS RESERVED FOR
RECORDER'S USE
No recording fee required; this document
exempt from fee pursuant to Section 6103 of
the California Government Code
GRANT DEED
For a valuable consideration, receipt of which is hereby acknowledged.
THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
WEST COVINA, a public body, corporate and politic ("Grantor"), hereby grants to
West Covina Heights S.C., LLC, a California limited liability company ("Grantee"),
that certain real property described in Exhibit "A" - attached hereto and
incorporated herein by this reference ("Property").
1. The Grantee covenants 'by and for itself and any successors in
interest that there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Property, nor shall the Grantee itself or any person
claiming under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
West Covina Heights S.C., LLC, A California Limited Liability C59pany
011304
use of occupancy of tenants, lessees, subtenants, sublessees or vendees in the
Property.
All deeds, leases or contracts made relative to the Property, the
improvements thereon or any part thereof, shall contain or be subject to
substantially the following nondiscrimination clauses:
a. In deeds: "The Grantee herein covenants by and for himself
or herself, his or her heirs, executors, administrators, and assigns and all
persons claiming under or through them, that there shall be no discrimination
against or segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein
conveyed, nor shall the Grantee himself or herself, or any person claiming under
or through him or her, establish or permit any such practice or practices of,
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
land herein conveyed. The forgoing covenants shall run with the land."
b. In leases: "The Lessee herein covenants by and for himself
or herself, his or her heirs, executors, administrators and assigns, and all
persons claiming under or through him or her, and this lease is made and
accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex, marital
status, national origin or ancestry in the leasing, subleasing, transferring, use of
occupancy, tenure or enjoyments of the land herein leased, nor shall the lessee
himself or herself, or any person claiming under or through him or her, establish
or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use of occupancy of tenants,
lessees, sublessees, subtenants or vendees in the land herein leased."
C. , In contracts: "There shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed,
religion, sex, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the
transferee himself or herself, or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
lessees, sublessees, subtenants or vendees in the land."
2. The Grantee covenants by and for itself and any successors in
interest that the Property shall only be used exclusively for retail -commercial,
unless otherwise granted by the Grantor. ,
West Covina Heights S.C., LLC, A California Limited Liability (:@@pany
011304
3. The covenant contained in paragraph 2, above, shall remain in
effect for a period of ten (10) years from the recordation of the Certificate of
Compliance for the Property. The other covenants contained in this Grant Deed
shall remain in effect in perpetuity; provided, however, that if the state law
requiring such covenants changes such that such covenants are not required to
remain in effect in perpetuity, such covenants shall terminate at such earlier date
as may be permitted by state law.
4. The Grantee covenants by and for itself and any successors in
interest that the use of the Property shall be consistent with the terms set forth in
the Prospective Purchaser Agreement, dated , 2003. (A copy has
been provided to the Developer by the CDC.)
5. The covenants in this Grant Deed shall be binding for the benefit of
the Grantor, the City of West Covina and, if applicable, any successor in interest
to said parties.-. Such covenants shall run in favor of the Grantor and such
aforementioned parties for the entire period during which such covenants shall
be in force and effect, without regard to whether the Grantor is or remains an
owner of any land or interest therein to which such covenants relate. The right to
exercise all of the rights and remedies, and to maintain any actions at law or suits
in equity or contained in this Grant Deed shall be for the benefit of and shall be
enforceable only by the Grantor and such aforementioned parties.
6. No amendment to the Redevelopment Plan, which changes the use
or development permitted on the Property or changes the restrictions or controls
that apply to the Property or otherwise affects the Property, shall become
effective as to the Property without the written consent of the Grantee, its
successors, or any then fee owner of all or any portion of the Property.
7. The covenants contained in this Grant Deed shall be deemed to be
covenants running with the land and shall bind and benefit future purchasers,
encumbrances, lessees and transferees.
Executed on , 2004, in ,
California.
COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF WEST COVINA
By:
Executive Director
ATTEST:
Secretary
West Covina Heights S.C., LLC, A California Limited Liability (Z@*pany
011304
II
APPROVED AS TO FORM:
CDC Counsel
West Covina Heights S.C., LLC, A California Limited Liability C@Lhpany
011304
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On this day of , 200_, before, -me,
Notary Public, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence to
be the person(s) whose names is/are subscribed to this instrument, and
acknowledged to. me that he/she/they executed the same in his/her/their
authorized capacities, 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.
WITNESS my hand and official seal.
Notary Public in and for said
County and State
West Covina Heights S.C., LLC, A California Limited Liability Ga@pany
011304
9
GRANTEE'S ACCEPTANCE OF CONDITIONS AND COVENANTS
The provisions of this Grant Deed are hereby approved and accepted.
West Covina Heights S.C., LLC, a California
Limited Liability Company
By:
Its:
APPROVED AS TO FORM:
Attorney for West Covina Heights S.C.,
LLC
West Covina Heights S.C., LLC, A California Limited Liability C@t*pany
011304
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On this day of , 200 , before me,
Notary Public, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence to
be the person(s) whose names is/are 'subscribed to this instrument, and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacities, 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.
WITNESS my hand and official seal.
Notary Public in and for said
County and State
West Covina Heights S.C., LLC, A California Limited Liability C@fypany
011304
E
EXHIBIT D
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN
TO
Community Development Commission
of the City of West Covina
1444 West Garvey Avenue
West Covina, CA 91793
AND
West Covina Heights S.C., LLC, a
California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
MAIL TAX STATEMENTS TO:
West Covina Heights S.C., LLC, a
California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
THE AREA ABOVE IS RESERVED FOR
RECORDER'S USE
No recording fee required; this document
exempt from fee pursuant to Section 6103 of
the California Government Code
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
This Memorandum of Disposition and Development Agreement (the
"Memorandum") is recorded to give notice of that certain Disposition and
Development Agreement dated January 20, 2004, (the "Agreement") by and
between the Community Development Commission of the City of West Covina
("CDC") and West Covina Heights S.C., LLC, a California limited liability
company ("Developer").
In said Agreement, the CDC agrees to convey fee simple title to the
Parcels as shown on Exhibit "A" attached hereto and more specifically described
in Exhibit "B" attached hereto (the "Property"). The Agreement provides for the
CDC's options to reacquire the Property under certain conditions. Developer
agrees to accept conveyance of fee simple title to and develop and use the
West Covina Heights S.C., LLC, A California Limited Liability C9@pany
011304
Property in accordance with the terms, covenants and conditions set out in the
Agreement.
Further, the Agreement imposes certain conditions upon the use of the
Property, as follows:
1. The Developer covenants and agrees to use, occupy and maintain
the Property only for the construction and operation of uses permitted by the
Redevelopment Plan, the applicable zoning of the City of West Covina, and
related on- and off -site improvements, as set forth in the Agreement.
2. The Developer covenants and agrees to use, operate and maintain
the Property only for the construction and operation of uses permitted by the
Scope of Development as set forth in the Agreement.
3. In the, event that Developer or any subsequent purchasers of
Developer changes the use of the Property, or any parcel thereof, to any use
other than as a retail -commercial center, as set forth in this Agreement, the CDC
shall have the additional right, at its option to repurchase any and all Property, as
applicable, with all improvements thereon.
The right of the CDC under the Agreement shall be applicable
independently to the parcel resulting in the change to the prohibited use, and
shall not give the CDC rights as to any other parcel. Such right to repurchase
shall be subordinate and subject to and shall not defeat, render invalid or limit
any mortgage; deed of trust or other security instrument permitted by this
Agreement. The rights of repurchase are more particularly defined in Section IV.
C. of the -Agreement, and shall terminate as defined therein at 5:00 p.m. Pacific
Standard Time, on the date which is ten (10) years after the recordation of the
Certificate of Completion, as defined in the Agreement (the date the Certificate of
Completion is recorded in the Official Records of the County of Los Angeles).
4. The covenants set forth in this Memorandum, shall remain in effect
until the date which is ten (10) years after the Certificate of Completion is
recorded in the Official Records of the County of Los Angeles as defined in the
Agreement. The time restrictions or requirements for all other covenants not set
forth in this Memorandum shall be governed by those terms defined in the
Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this
Memorandum on the same date as that of the Agreement first written above.
West Covina Heights S.C., LLC, A Califomia Limited Liability C@Q�pany
011304
�i
i
"DEVELOPER"
Its
STATE OF CALIFORNIA
"CDC"
Executive Director
) ss.
COUNTY OF )
On this day of , 200_, before me,
Notary Public, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence to
be the person(s) whose names is/are subscribed to this instrument, and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacities, 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.
WITNESS my hand and official seal.
Notary Public in and for said
County and State
West Covina Heights S.C., LLC, A California Limited Liability C@@pany
011304
EXHIBIT E
SCOPE OF DEVELOPMENT
Developer is purchasing a 47-acre parcel for the development of a commercial retail
shopping center of not less than 240,000 square feet and not more than 375,000 square
feet of retail -commercial space.
Developer is responsible for all necessary improvements on the 47 acre parcel relating
to the development of the commercial retail shopping center including, but not limited
to, grading and all necessary improvements, as required in this agreement,
subsequent Precise Plan, and EIR, and SEIR mitigations.
a
West Covina Heights S.C., LLC, A California Limited Liability Compz@Q
011304
EXHIBIT F
SCHEDULE OF PERFORMANCE
Submission of Disposition
and Development Agreement.
Developer shall submit to the CDC a
copy of the Disposition and
Development Agreement duly
executed by the Developer.
2. CDC Approval of
Disposition and Development
Agreement. CDC shall approve or
disapprove the Disposition and
Development Agreement.
3. Submission of Precise Plan.
Developer shall submit the Precise
Plan to the City. Developer shall
complete due diligence and title
review.
January 20, 2004
January 20, 2004
Within 30 days of CDC -approval of
DDA.
4. Developer and City Developer will respond to any
Response. Developer shall respond request within 14 days. City will
to all requests by the City for respond to any submission within 14
additional information and/or days.
revisions to plans.
5. Submission of Construction
Drawings for Improvements.
Developer shall submit to the City
complete Construction Drawings for
the Improvements.
6. Development Services
Review of Construction Drawings.
The City Development Services
department shall approve or
disapprove the Construction
Drawings for the Improvements.
West Covina Heights S.C., LLC, A Califomia Limited Liability Compgo
011304
Within 60 days after City approval of
the proposed Precise Plan
Within 30 days after submittal.
u
EJ
7. Revisions of Construction
Drawings By the Developer.
Developer shall prepare revised
Construction Drawings for the
Improvements Facility as necessary,
and resubmit them to the
Development Services department
for review.
8. Final Review of Complete
Construction Drawings. The City
Development Services department
shall approve or disapprove the
revisions submitted by Developer for
the Improvements, and the
Developer shall be ready to obtain
grading and building permits,
provided that the revisions
necessary to accommodate the
Department's comments have been
made.
9. Opening of Escrow for Site
The CDC shall open Escrow with
Escrow Agent.
10. Developer -shall commence
installation of 84' storm drain, inlet,
and junction structure.
11. Developer shall complete
installation of 84' storm inlet and
junction structure in order that the
Agency can complete its grading
activities in accordance with the
grading plan as illustrated in Exhibit I
12. Conditions Precedent to
Closing. Developer and CDC shall
satisfy (or waive) all of their
respective Conditions Precedent to
Closing.
13. Close of Escrow. CDC shall
convey site to the Developer.
Within 30 days after receipt of
Development Services comments.
Within 30 days after submittal by the
Developer.
Within 10 days after execution of
Agreement.
Within 15 days after City gives
Notice that Site is prepared for
installation of 84" storm line.
Within 120 days of commencement
of installation of storm drain.
Not later than 15 days prior to
scheduled date of escrow closing.
As soon as possible after the
satisfaction of all Conditions
Precedent to the Closing has
occurred (within 15 days thereafter
West Covina Heights S.C., LLC, A California Limited Liability C]gipany
011304
•
•
14. Completion of Construction
of Improvements. Developer shall
complete construction of the
Improvements.
Within 18 months following
commencement of construction of
the Improvements.
West Covina Heights S.C., LLC, A California Limited Liability g0pany
011304
FY141RIT [.
CERTIFICATE OF COMPLIANCE
. RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
West Covina Heights S.C., LLC, a
California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
MAIL TAX STATEMENTS TO:
West Covina Heights S.C., LLC, a
California Limited Liability Company
17802 Skypark Circle, Suite 200
Irvine, CA 92614
THE AREA ABOVE IS RESERVED FOR
RECORDER'S USE
No recording fee required; this document
exempt from fee pursuant to Section 6103 of
the California Government Code
CERTIFICATE OF COMPLIANCE
WHEREAS, on or about January 20, 2004, COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF WEST COVINA, a public body corporate and politic,
hereinafter referred to as "CDC" and West Covina Heights S.C., LLC, hereinafter
referred to as "Developer" entered into that certain Disposition and Development
Agreement (the "Agreement"), providing for the development of certain real property
(the "Site") situated in the City of West Covina, California; and
WHEREAS, the Agreement requires that the CDC furnish the Developer with a
Certificate of Compliance (or partial Certificate of Compliance) upon completion of
094/023022-0007
466916.01 a01/15104 73
development of the Site, or portion thereof, and that such Certificate of Compliance be
in such form as to permit recordation in the Los Angeles County Recorder's Office; and
WHEREAS, such Certificate of Compliance shall be conclusive determination of
satisfactory completion of all of the improvements on the Site, or portion thereof, as
required by the Agreement; and
WHEREAS, the CDC has conclusively determined that all of the improvements
have been satisfactorily completed;
NOW, THEREFORE,
1. As provided in the Agreement, the CDC hereby certifies that the
construction of all of the Improvements has been satisfactorily performed
and completed.
2. After recordation of this Certificate of Compliance, any person or entity
then owning or thereafter purchasing, leasing or otherwise acquiring any
interest in the Site will not (because of such ownership, purchase, lease or
acquisition) incur any obligation or liability under the Agreement.
3. After recordation of this Certificate of Compliance, the CDC's right to re-
enter, repossess or otherwise revest title to the Site (or any portion thereof
or the improvements located thereon), shall be null and void and no longer
of force or effect, except as provided in the Agreement
4. This Certificate of Compliance shall not constitute evidence of compliance
with, or satisfaction of any obligation of the Owner to any holder of a
mortgage, or any insurer of a mortgage securing money loaned to finance
Improvements to the Site, nor any part thereof. This Certificate of
Compliance is not notice of completion as referred to in Section 3093 of
the California Civil Code.
5. The Recitals above are incorporated in full as part of the substantive text
of the Certificate of Compliance.
094/023022-0007
466916.01 a01/15/04 74
EXHIBIT H
(TO BE ATTACHED)
094/023022-0007
466916.01 a0l/15/04 75
IN WITNESS WHEREOF, the CDC has executed this certificate this
day of , 200_.
COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF WEST COVINA, a public
body corporate and politic
Executive Director of Community Development
Commission of the City of West Covina
ATTEST:
CDC Secretary
094/023022-0007
466916.01 a01/15/04
76
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CONSULTING
S
ATTACHMENT NO.2
CITY OF WEST COVINA
PLANNING ■ DESIGN ■ CONSTRUCTION
COMMERCIAL DEVELOPEMENT
1472PARKWAY SITE MAP EXHIBIT
IRVINE, CALIFORNIA
ORNIARNIA 92618-2027
949.472.3505 • FAX 949.472.8122 • www.RBF.com
SCALE: 1 " =300 GATE: 1 1-13-04
•
ATTACHMENT NO. 3
BEGAN REALTY ADVISORS, INC.
Real Estate and Economic Consulting
C/o 1990 S. Bundy Drive, Suite 500
Los Angeles, CA 90025
Telephone: 310-979-3854
Fax: 310-979-3851
SUMMARY REPORT
PURSUANT TO SECTION 33433 OF THE
CALIFORNIA HEALTH AND SAFETY CODE
on the
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF WEST COVINA
and ,
WEST COVINA HEIGHTS S.C., LLC
January 6, 2004
REGAN REALTY ADVISORS, INC.
33433 Report -Amar/Azusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 2
INTRODUCTION
Pursuant to Section 33433 of the California Health and Safety Code, this report concerns
the proposed sale of land under a Disposition and Development Agreement (the
"Agreement") by and between the Community Development Commission of the City of
West Covina (the "CDC") and West Covina Heights S.C., LLC (the "Developer"). The
Agreement provides for the redevelopment of certain property located in the Eastland
Amendment (1) Plan Area in the City of West Covina.
The report describes the cost of the Agreement to the CDC; the purchase price to be paid
for the CDC property interest to be conveyed ("CDC Property"); the estimated value of
the CDC Property to be conveyed; other CDC costs and revenues pertaining to the
Agreement; and other pertinent information regarding the Agreement. The report
contains the following five sections:
I. DESCRIPTION OF THE PROPOSED AGREEMENT. This section contains a
description of the proposed Development and the CDC Property interest to be
conveyed, and the major responsibilities of both the CDC and the Developer.
II. ESTIMATED COST OF THE AGREEMENT TO THE CDC. This section describes the
total cost of the Agreement to the CDC including interest on bonds and loans to
finance the Agreement, and the net costs to the CDC including CDC expenditures
on the CDC Property and other expenditure obligations; the value of the purchase
of CDC Property and other obligations of the Developer; and estimated tax
increment revenues resulting from Developer's required obligations.
III. ESTIMATED VALUE OF CDC PROPERTY TO BE CONVEYED. This section
summarizes the estimated value of the CDC Property interest to be conveyed
determined (1) in its highest and best use under the Redevelopment Plan; and (2)
with the conditions and covenants required by the Agreement (the "reuse value").
IV. PURCHASE PRICE OF CDC PROPERTY TO BE CONVEYED. This section describes
the price to be paid by the Developer for the CDC Property. It also contains a
comparison of price to be paid to the CDC and the estimated value of the CDC
Property both at its highest and best use as permitted under the Redevelopment
Plan at its estimated reuse value.
V. ALLEVIATION OF BLIGHT AND CONFORMANCE WITH IMPLEMENTATION PLAN.
This section describes how the conveyance of the property will assist in the
alleviation of blighting conditions in the Redevelopment Project Area and is in
conformance with the goals established in the CDC's Five -Year Implementation
Plan.
i
REGAN REALTY ADVISORS, INC.
33433 Report -Amar/Azusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 3
I. DESCRIPTION OF THE PROPOSED AGREEMENT
I.A. CDC Property to be Conveyed and Proposed Development Scope
The CDC Property to be conveyed consists of approximately 43.05 gross acres (33.67 net
usable acres) located in the northeast quadrant of the intersection of Amar Road and
Azusa Avenue.' The CDC Property is part of a larger property acquired by the CDC from
The BKK Corporation ("BBK") in July, 2003, and is being replatted as a separate parcel
(Tentative Parcel Map No. 60193). Together with another parcel of 4.03 acres
("Developer Parcel"), the entire project occupies 47.08 gross acres (rounded) and 37.7 net
usable acres (the "Site"). 1 -
The CDC Property is vacant undeveloped land adjacent to a closed landfill formerly
operated by BBK. The Site has varying topography and will require substantial grading
and soil export to be usable for the proposed development. As per other agreements,
BKK will be grading the majority of the site and exporting soil to the landfill site as part
of the landfill closure work and the CDC also will be grading the site and will be
exporting soil to another portion of CDC property for development of a golf course.
The CDC Property is located in an area of with no existing development. Proposals are
being considered by the City for development of adjacent property for a sports complex.
The Developer is planning to purchase the Site for development of a major retail center
with a maximum buildout of 375,000 square feet of retail space (the "project" or
"development"). Preliminary plans indicate parking for over 2,000 cars; attractive
landscaped areas including non -usable portions of the site, traffic mitigation
improvements and significant offsite improvements to Azusa Avenue.
I.B. Developer Responsibilities
The obligations of the Developer under the terms of the. proposed Agreement are as
follows:
Developer agrees to acquire the Developer Parcel at its cost as a condition for
CDC transfer of CDC Property to Developer consistent with the terms of the
Agreement.
1 The CDC shall retain ownership of a small portion of the unusable slope area near the northeast corner of
the property for potential future development.
REGAN REALTY ADVISORS, INC.
33433 Report -Amar/Azusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 4
2. Developer agrees to purchase the CDC Property from the CDC for a price of
$8.75 per net square foot of land area ($12,833,320 based on 33.67 net acres)
subject to a 120-day due diligence period -for Developer investigations and
inspections as set forth in the Agreement. If Developer determines during the due
diligence period that it cannot satisfy one or more conditions set forth in the
Agreement, Developer has the right to terminate the Agreement.
3. Developer agrees to provide a total of $125,000 as a deposit to the CDC within
five days after execution of the Agreement, which shall be applied against the
purchase price at close of escrow and fulfillment of all conditions in the
Agreement required by and of the parties prior to closing. Developer further
agrees to pay its share of escrow costs and fees including title insurance.
4. Developer agrees to construct a retail shopping center with a maximum of
375,000 square feet of retail space in the manner, scope and in the time periods
describedin the Scope of Development contained in the Agreement. Developer
agrees to prepare at Developer's sole expense and submit to the CDC and the City
of West Covina for approval all plans, construction drawings and all other
documents set forth in the Agreement required for approvals and issuance of
building permits for the Development. Developer further agrees to (1) construct
certain other improvements as part of the development including an 84" storm
drain and pay the actual costs of under grounding of utilities along Azusa Avenue
contiguous to Ahe Site; (2) participate in a maintenance district for the gnatcatcher
habitat located north of the Site; (3) pay traffic mitigation and road paving fees of
$425,000 for Azusa Avenue and Amar Road; (4) purchase power and reclaimed
water from the City if competitively available; (5) construct at Developer cost a
sidewalk and turnout along Azusa Avenue; and (6) use commercially reasonable
efforts to assure that the minimum value of all property and improvements in the
project is $30,000,000 as of the date of issuance of the Certificate of Compliance.
5. Developer agrees to pay the CDC $86,119 to apply to the cost of the preparation
of a Supplemental Environmental Impact Report (SEIR).
6. Developer agrees to fulfill all mitigation measures related to the proposed retail
development and required by the Certified SEIR approved by the City and shall
be responsible to implement at Developer cost environmental remedies or other
actions required by various agreements related to the site including but not limited
to the EPA and DTSC Prospective Purchaser Agreements, the BKK Purchase and
Sale Agreements, the existing EIR and other agreements. Developer also agrees
to, operate, maintain and pay for all mitigation associated with the approved use
of the site including methane gas recovery systems as required by regulatory
0
Ll
REGAN REALTY ADVISORS, INC.
33433 Report -Amar/Aiusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 5
agencies, onsite storm drainage, slope landscaping, membrane structures
underneath building footprints and building monitoring devices, and related items.
7. Developer agrees to indemnify the CDC and City as of the close of escrow from
any and all obligations and liabilities raised through the approval process of the
Agreement or related CEQA approvals.
8. Developer agrees to indemnify the CDC and City as of the close of escrow from
any and all claims, losses, and so on resulting from or in connections with site
contamination, but only contamination arising from actions of Developer, its
contractors, agents or employees.
9. Except for conveyances permitted in the Agreement, Developer agrees not to
assign all or any part of the Agreement prior to issuance of a Certificate of
Compliance without the prior approval of the CDC, and agrees not to sell, assign,
lease or otherwise transfer all or any portion of the project prior to recordation of
a Certificate of Compliance without prior approval of the CDC. Developer agrees
to various other obligations including: (1) maintenance of minimum insurance
requirements; (2) indemnification of the City, CDC and related parties relating to
the subject matter of the Agreement; and (3) compliance with non-discrimination
provisions of the Agreement.
10. Develop agrees that, in the event of certain continuous vacancy or cessation of
operating conditions described in the Agreement, the CDC shall have the right for
a period of 10 years to repurchase any and all land parcels and improvements
thereon on terms and conditions described in the Agreement.
I.C. CDC Responsibilities
1. CDC agrees to convey CDC Property to Developer in cleared and graded
condition including removal of all hazardous materials and solid wastes, as
specified in the Agreement and to deliver the CDC Property at a sales price of
$8.75 per defined net square foot of land area. If the CDC determines at its sole
discretion that the cost to remove any solid wastes and hazardous materials is
prohibitive, CDC may terminate the Agreement.
2. CDC warrants that, to the best of its knowledge, title to CDC Property will not be
encumbered by any easements, claims or other rights not disclosed in public
records and/or in the title report.
REGAN REALTY ADVISORS, INC.
33433 Report -Amax/Azusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 6
3. CDC agrees to process and to assist in seeking the City's timely processing of all
Developer plans and construction document submittals and all discretionary
entitlements in an expeditious manner.
4. CDC agrees that Developer uses of the Site as described in the Agreement are
consistent with current zoning and General Plan designations, or as amended.
5. CDC agrees to provide copies of all biological, wetlands, environmental,
engineering, soils and other documents and reports concerning the physical
condition of the CDC Property in possession of the CDC within 10 days from
execution,of the Agreement.
6. CDC acknowledges that Developer shall have the right to approve the condition
of title in developer's reasonable discretion subject to the terms of the Agreement.
7. CDC agrees to obtain approval of the tentative parcel map for the property and to
satisfy all conditions of approval required prior to recordation of the parcel map.
8. CDC agrees to seek various agreements with BKK related to relocation of utility
easements on the Site.
9. CDC agrees to review and approve, within the time established in the Schedule of
Performance, which approval shall not be unreasonable withheld, preliminary
drawings and other related documents pertaining to the Development and the
Schedule of Performance.
II. ESTIMATED COST OF THE AGREEMENT TO THE CDC
The cost of the Agreement to the CDC is defined as the net cost, equal to the costs less
the benefits from the Agreement. Since expenditures and revenues occur over many
years, an analysis is made of the costs (expenditures) and the future benefits (revenues) in
terms of the present value of CDC net costs.
II.A. Estimated CDC Costs
1. Cost of CDC Property — The CDC Property is part of a 101.2-acre property that
was purchased in July 2003. The total CDC prorated cost for the CDC Property
including the cost of gas monitoring was $1,379,131. In addition, the CDC is
incurring approximately $1,200,000 in grading, related costs and soil export to
•
REGAN REALTY ADVISORS, INC.
33433 Report -Amar/Azusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 7
adjacent CDC property planned for development of a golf course.2 Total CDC
costs are $2,579,131.
II.B. Estimated CDC Revenues
The CDC will receive revenues from two sources: (1) consideration paid by the
Developer for the CDC Property; (2) tax increment revenues generated by Development
net of other CDC obligations.
1. Consideration Paid by Developer - Developer is paying $8.75 per net square foot
of usable area for the CDC Property or an estimated $12,833,320 based on a
current estimate of 33.67 net usable acres.
2. Property Tax Increment — CDC net property tax increment generated from the
Development is based on collection of tax increment through the December 21,
2038 Redevelopment Plan time limit. Net tax increment is based on estimated
assessed valuation of the completed development at a 1.0% tax rate less (1)
existing tax increment from the CDC Property; (1) statutory tax pass-throughs to
other agencies (Mount San Antonio Community college District and the Rowland
Unified School District); and (3) 20% housing set -aside funds. The net present
value (7% discount rate) of net tax increment over the Redevelopment Plan time
limit is estimated at $3,545,500 with an additional present value of $1,157,600 in
housing set -aside funds.
The total and present value of CDC revenues from the Development are estimated as
follows:
CDC Revenues
Total
Present Value
At 7.0%
Developer Consideration for CDC Property
$ 12,833,320
$ 12,833,320
Net Tax Increment (including 20% housing
set -aside funds)
$ 13,969,400
$ 4,703,100
Total CDC Revenues
$ 26,802,720
$ 17,536,420
. The effective cost of importing the required soil for the golf course from other sources exceeds the cost
of export from the CDC Property. Although it could be concluded that there is no effective cost to the
entire CDC given the savings inherent in this course of action, the grading/soil export costs related to CDC
Property are included as a net CDC cost of this development.
REGAN REALTY ADVISORS, INC.
33433 Report-Amar/Aiusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 8
II.C. Estimated Net Cost to CDC
The Agreement generates a present value benefit to the CDC of $14,957,289, the
difference between the present value of CDC revenues ($17,536,420) and CDC costs
($2,579,131).
III. ESTIMATED VALUE OF_ CDC PROPERTY TO BE CONVEYED
III.A. Highest and Best Use Value
Himes and Himes, Inc., Real Estate Appraisers, conducted an appraisal of the CDC
Property in October 2003. The valuation was based on the highest and best use of the
CDC Property based on site conditions and current zoning and not based on speculation.
The market value of the CDC Property on this basis as of October 8, 2003 was estimated
at $7.25 per square foot of usable land area, indicating a total value of $10,633,300
(rounded) based on 33.67 net acres.
III.B. Reuse Value
Regan Realty Advisors, Inc. conducted a reuse valuation in September 2003 of the CDC
Property to be conveyed for the proposed Development, determined at the uses and with
the covenants, conditions, and development . costs required in the Agreement. The
analysis concluded that the fair reuse value of the CDC Property is $11,595,700.
IV. PURCHASE PRICE OF CDC PROPERTY TO BE CONVEYED
The consideration received by the CDC from the Developer from the sale of CDC
Property is estimated at $12,833,320. The consideration exceeds the estimated reuse
value of the Site and the estimated fair market value of the Site under current zoning.
V. ALLEVIATION OF BLIGHT AND CONFORMANCE WITH
IMPLEMENTATION PLAN
The CDC's Implementation Plan for the Eastland Project Area Amendment (1) is aimed
at reversing identified deterioration and decline in eight sub areas identified as being
most in decline. The BKK landfill site was included in the Amendment area in view of
its scheduled close at that time. The CDC goals were to retain control over the site to
REGAN REALTY ADVISORS, INC.
33433 Report -Amar/Azusa Commercial Project
Community Development Commission of the City of West Covina
January 5, 2004
Page 9
ensure avoidance of environmental hazards and to ensure that the area was properly
prepared and planned for future reuse. The CDC goals as specified in the 1999 Five -Year
Redevelopment Implementation Plan include specific objectives relating to this CDC
Property including the elimination or amelioration of certain environmental deficiencies
and continued assistance with the cleanup and remediation of those properties that are
adversely. affected by contaminated soils and/or hazardous wastes. In addition, the
proposed development furthers other CDC goals including promotion new private
investment to prevent the loss and stimulate the recapture of commercial activity;
achievement of an environment reflecting a high level of concern for architectural,
landscape and urban design principles; creation and development of local job
opportunities; and redevelopment of areas that are stagnant or underutilized; among
others.
The CDC's disposition of the CDC Property to the Developer will assist in the continued
remediation of blight in the Project Area by adding new development adjacent to a Class
III landfill and proximate to a Class I hazardous landfill. By creating a new major retail
center with the introduction of two major retail operations and a complement of food
service tenants, the CDC is putting to productive use property that has limited use
potentials given restrictions on use related to its location. This Development supports the
CDC's goals as stated in thedniplementation Plan.
The Development supports the CDC's goals and objectives as set forth in the
Implementation Plan by eliminating blight conditions and by providing new development
on underutilized property. The Development will benefit the CDC and the City through
increased employment and fiscal revenues to both the City and the CDC.
Iapace oeww ror use vi a,ounry %AerK Unryi
0
SAN GABRIEL VALLEY TRIBUNE
affiliated with
SGV Newspaper Group
1210 N. Azusa Canyon Road
West Covina, CA 91790
STATE OF CALIFORNIA
County of Los Angeles
ro4 JAIL 19 P 2 53
W[-:°d' r G0VINA
c - &E DEFT.
/ZA4 JeAV~7U_r RECE#Ve
PROOF OF PUBLICATION
(2015.5 C.C.P.)
5
I am a citizen of the United States, and a resident
of the county aforesaid; I am over the age of
eighteen years, and not a party to or interested in
the above -entitled matter. I am the principal clerk of
the printer of SAN GABRIEL VALLEY TRIBUNE, a
newspaper of general circulation which has been
adjudicated as a newspaper of general circulation
by the Superior Court of the County of Los
Angeles, State of California, on the date of
September 10, 1957, Case Number 684891. The
notice, of which the annexed is a true printed copy,
has been published in each regular and entire issue
of said newspaper,and not in any supplement
thereof on the following dates, to wit:
1/6,13/04
I declare under penalty of perjury that the
foregoing is true and correct.
Executed at West Covina, LA Co. California
this 13_ day of JANUARY 20 04
signa,rure
19
JAN Z ,3 2004
CITY
CITY OF WEST COV,OFF'CIr
Proof of Publication of
-r NOTICE OF A JOINT PUBLIC —
HEARING BY THE CITY COUNCIL
AND THE COMMUNITY
DEVELOPMENT COMMISSION OF THE
CITY OF WEST COVINA ON THE'
PROPOSED DISPOSITION AND
;DEVELOPMENT AGREEMENT BY'.
AND BETWEEN THE COMMUNITY -
I DEVELOPMENT COMMISSION AND
i WEST COVINA HEIGHTS S.C., LLC.
NOTICE IS HEREBY GIVEN that the
City Council of the City of West Covina
(the "City") and the Community
Development Commission of the City of
West Covina (the "Commission") will hold
a joint public hearing on January 20, 2004
at the hour of 7:00 p.m., or as soon
thereafter as the matter can be heard, in ,
the City Council Chambers in West
Covina City Hall on the proposed
Disposition and Development Agreement`
by and between the Commission and West
Covina Heights S.C., LLC.
The hearing will be held to consider and
receive comments on:
The proposed Disposition and
Development Agreement by and between
the Commission and West Covina Heights
S.C., LLC, provides for the sale of the
property located at the northeast
quadrant of Amar Road and Azusa
Avenue (referred to as 43 acres of Parcel
1 of Parcel Map 24585) for the
development of a commercial retail
center and -related amenities.
The Commission has prepared a 334331
Summary Report, which describes the
financial transaction of the Disposition
and Development Agreement. A copy of
said 33433 Summary Report and the
proposed Disposition and Development
Agreement shall be available for' public
review Monday through Friday from 8:00
a.m. to 5:00 p.m. at the West Covina
Community Development Commission,
,1444 W. Garvey Avenue, Room 218, West
Covina, CA..91790. Further information
may be obtained by contacting
Commission staff at (626) 939-8417.
G
At any, time before the date and time set
forth in this Notice of Public Hearing, 3.
anyone wishing to comment on the
proposed Disposition and Development
Agreement may do so by submitting
written comments. to the City Clerk on or
before January 20, 2004. Interested
persons are also invited to testify at the
joint public hearing. If you challenge the I
item listed above in court, you may be!
limited to raising only those issues that
you or someone else raised at the public (,
hearing described in this _ notice or in