Resolution - 5634RESOLUTION N0. 5634
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA
APPROVING A PROPOSED LEASE AND DEVELOPMENT AGREEMENT BETWEEN
THE REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA AND
H. FRANK DOMINGUEZ DBA VANIR RESEARCH COMPANY FOR THE PROPOSED
• LEASE OF REAL PROPERTIES IN THE WEST COVINA CENTRAL BUSINESS
DISTRICT REDEVELOPMENT PROJECT
WHEREAS, the Redevelopment Agency of the City of West Covina (the
"Agency") is engaged in activities necessary to carry out and implement the
Redevelopment Plan for the West Covina Business District Redevelopment
Project; and
WHEREAS, in order to carry out and implement such Redevelopment
Plan, the Agency staff has negotiated with representatives of Vanir Research
Company (the "Developer") for a proposed Lease and Development
Agreement for the lease of certain real properties in the Redevelopment
Project; and
WHEREAS, pursuant to the terms and conditions of such proposed
Agreement: the Agency shall acquire certain real properties in the Redevelop-
ment Project; the Agency shall lease such real properties to the Developer for
the development and construction by the Developer of no less than 15,000
square feet of gross leaseable area of restaurant facilities and improvements;
and
WHEREAS, the Developer has executed and submitted to the Agency
and the City Council copies of a proposed Disposition and Development
Agreement; (a copy of which Agreement is attached hereto and incorporated
herein by this reference as Exhibit "A"); and
WHEREAS, the Agency staff has made certain recommendations pertain-
ing to such proposed Agreement; and
WHEREAS, pursuant to Sections 33433 and 33434 of the California
Community Redevelopment Law (California Health and Safety Code, Section 33000
et seq.), the City Council authorized holding a public hearing on the proposed
Agreement for the proposed lease of real properties pursuant to such Agreement,
published notice of'such public hearing, and made copies of the proposed
Agreement, the Agency staff recommendations, and such other reports and docu-
ments (including the summary required pursuant to Section 33433) available
for public inspection and comment; and
WHEREAS, the Agency, after a public hearing held pursuant to Section
33431 of the California Community Redevelopment Law and subject to City Council
approval, approved such proposed Agreement for the lease of real properties
pursuant to such Agreement; and
WHEREAS, pursuant to said Sections 33433 and 33434 the City Council
held a public hearing on such proposed Agreement for the proposed lease of
real properties pursuant to such proposed Agreement; and
WHEREAS, a Negative Declaration has been duly prepared, certified,
and filed with respect to environmental impacts arising as a result of the
implementation of the development activities proposed in the Agreement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
West Covina as follows:
SECTION 1. The City Council recognizes that it has received and
heard all oral and written objections to the proposed Agreement, to the
recommendations of the Agency staff, to the proposed lease of real properties
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RESOLUTION NO. 5634
pursuant to the proposed Agreement, and to other matters pertaining to this
transaction, and that all such oral and written objections are hereby overruled.
SECTION 2. The City Council hereby finds and determines that the
yearly rental to be paid by the Developer for the real properties, the obli-
gation of the Developer to develop and construct no less than 15,000 square
feet of gross leaseable area of restaurant facilities and improvements, all
together constitute a total consideration which is not less than fair market
value in accordance with the covenants as set forth in the proposed Agreement.
The City Council hereby further finds and determines that the total considera-
tion to be paid and provided by the Developer under the proposed Agreement is
necessary to effectuate the purposes of the Redevelopment Plan for the West
Covina Central Business District Redevelopment Project.
SECTION 3. The City Council hereby approves the proposed Agree-
ment, and hereby authorizes the City Clerk to deliver a copy of this Resolution
to the Executive Director and Members of the Agency.
. SECTION 4. The City Clerk shall certify to the adoption of this
resolution.
ATTEST:
APPROVED and ADOPTED this 23rd day of January , 1978.
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City Cl e k
I HEREBY CERTIFY that the foregoing resolution was duly adopted by
the City Council of the City of West Covinaat a regular meeting thereof held
on the 23rd day of January 1978, by the following vote of the
Council:
AYES: Councilmen: Miller,
NOES: Councilmen: None
ABSENT: Councilmen: None
APPROVED AS TO FORM:
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• ity ttorney 6
Chappell, Browne, Tice, Shearer.
City Cle
Agency Spef6ial Counsel
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WEST COVINA CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
WEST COVINA, CALIFORNIA
LEASE AND DEVELOPMENT AGREEMENT
THIS AGREEMENT is entered into on _ January 25 _, 1978,
by and between the REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA
(hereinafter referred to as the "Agency") and I1. FRANK DOMINGUEZ
dba VANIR RESEARCH COMPANY (hereinafter referred to as the
".Developer"). The Agency and the Developer agree as follows:
I. (Section 100) SUBJECT OF AGREEMENT
A. (Section 101) Purposes of the Agreement
The purpose of this Agreement is to effectuate the Redev-
elopment Plan for the West Covina Central Business District Redev-
elopment Project (the "Project") by providing for the lease and
redevelopment of a portion of the Project designated and referred
to herein as the ".Site". The lease and redevelopment of the Site
by the Developer.pursuant to this Agreement, and the fulfillment
generally of the Agreement, are in the vital and best interests
of the City of West Covina (the "City") and the health, safety,
morals, and welfare of its residents, and in accord with the
public purposes and provisions of applicable federal, state and
local laws and requirements.
B. (Section 102) The Redevelopment Plan
.The'Redevelopment Plan was approved and adopted by the
City Council by Ordinance No. 1180 on December 20, 1971, and was
amended by the City Council by Ordinance No. 1342 on May 23, 1977
(The Redevelopment Plan as so approved, adopted, and amended is
hereinafter referred to as the "Redevelopment Plan".) This
Agreement shall be subject to the provisions of the Redevelopment
Plan, which is incorporated herein by this reference and made a
Part hereof as though fully set forth herein.
C. (Section 103) The Project Area
The "Project area" is located in the City of West Covina,
California, the exact boundaries of which are specifically des-
cribed in the Redevelopment Plan and in an instrument recorded
December 28, 1971, as Document No. M-3935, Official Records of
Los Angeles County, California, which instrument is incorporated
herein by reference and made a part hereof.
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D. (Section 104) The Site
The "Site" is that portion of the Project area illustrated
on the "Site Map" (which is incorporated herein and attached to
this Agreement as Attachment No. 1) and legally described in
Attachment No. 2. The Agency is the owner of the Site and, in
accordance with the terms and conditions of this Agreement and
within the time set forth herein, shall lease the Site to the
Developer.
E. (Section 105) Parties to the Agreement
1. (Section 106) Agency
The Agency is a'public body, corporate and politic, exer-
cising governmental functions and powers, and organized and exist-
ing under Chapter 2 of the Community Redevelopment Law of the
State of California.
The principal office of the Agency is located at City Hall,
1444 W. Garvey Avenue, West Covina, California, 91790.
2. (Section 107) Developer
The Developer is H. FRANK DOMINGUEZ dba VANIR RESEARCH
COMPANY. The principal office of the Developer is located in
the Vanir Tower, City hall Plaza, P.O. Box 310, San Bernardino,
California, 92402.
Notwithstanding any other provisions hereof,.all of the terms,
covenants, and conditions of this Agreement shall be binding on
and shall inure to the benefit of the Developer's heirs, executors,
and administrators and the permitted successors and assigns of the
Developer. Wherever the term "Developer" is used herein, such
term shall include any such heirs, executors, and administrators
and any such permitted successors and assigns as herein provided.
F. (Section 108) Prohibition Against Change in
Identity of the Developer
The qualifications and identity of the Developer are of par-
ticular concern to the Agency. It is because of these qualifica-
tions and this identity that the Agency has entered into this
Agreement with the Developer. No voluntary or involuntary suc-
cessor in interest of the Developer shall acquire any rights or
powers under this Agreement except as expressly provided in
the second paragraph of Section 107 and in the thirdiparagraph
of Section 502 of this Agreement. If there is any such change
.(voluntary or involuntary) in the identity of the Developer, the
Agency may terminate this Agreement as provided in subparagraph
(c) of this Section 612.
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I.I. (Section 200) LEASE OF THE SITE
A. (Section 201) Lease
in accordance with and subject to all the terms, covenants,
and conditions of this Agreement, the Agency hereby leases the
Site to the Developer, and the Developer hereby leases the Site
from the Agency and shall construct (or shall cause to be con-
structed) the buildings and other improvements (hereinafter
sometimes collectively referred to as the "premises") described
in this Agreement within the times and .in the manner set forth
herein.
B. (Section 202) Lease Term
1. (Section 203)
Initial Term
The term of the lease of the Site shall commence on the date
of recordation of the memorandum of lease referred to in Section
801 of this Agreement, and shall expire at midnight on the date
that is the thirtieth (30th) year anniversary of the date of
commencement, unless sooner terminated as provided for in this
Agreement. When the date of commencement of the term is ascer-
tained, the Agency and the Developer shall immediately execute
an amendment to this Agreement stating the date of commencement
of the term. The term shall be for a period of thirty (30)
years.
2. (Section 204) Option to Extend
The Developer, at its option and in the manner provided in
this Section 204, may extend the initial term of the lease of the
Site for three (3) additional periods of five (5) years each, sub-
ject to all the provisions of this Agreement, except for the
increase in the amount of percentage rent provided in Section 208.
The option to extend shall be exercised by giving written notice
to the Agency at least 180 days, bu-� not mote than 360 days, before -
the expiration of the term or any extension of the term. The
failure of the Developer to exercise the option for any period shall
nullify the option or options for any subsequent period or periods,
and the lease of the Site shall expire at the end of the initial
term or at the end of any previous extension of the term for
which the option was exercised.
The Developer's right to exercise the option to extend is
subject to and predicated upon the following conditions:
(a) This Agreement shall be in effect at the time
that the notice to exercise is given and on the last day of the
term or any extension of the t&rm.
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(b) The Developer shall not be in default under any
provision of this Agreement at the time that the notice to exer-
cise is given and on the last day of the term or any extension of
the term.
(c) If the premises are totally or partially destroyed
on or before the date that the Developer exercises the option to
extend, then the exercise of such option, following such destruction
and before any reconstruction and restoration, shall be conclusive-
ly construed as an agreement to reconstruct and restore the pre-
mises. If the premises are totally or partially destroyed after
the date that the Developer exercises the option to extend, then
the Developer shall_. reconstruct and restore the premises pursuant
to Section 320 or 321 of this Agreement, unless this Agreement
terminates as a result of such destruction pursuant to Section 320
or 321. If the Agreement terminates, the option to extend shall
also terminate.
(d) Within thirty (30) days prior to the commencement
of any extension of the term, the Developer and the Agency shall
endorse on the three (3) duplicate originals of this Agreement,,the
date that the option was exercised and the words "option exercised".
In addition, the Developer and the Agency shall execute an appro-
priate memorandum evidencing the exercise of the option and the
extension of the term of the lease of the Site. Such memorandum
shall be in a recordable form mutually acceptable to the Developer
and the Agency and shall be recorded by the Agency after exec..utinn
within the 30-,day period. I
C. (Section 205) Rent
• 1. (Section 206) Minimum Monthly Net Rent
During the initial term of the lease of the Site and during any exten-
sions of such term, the Developer shall pay to the Agency as minimum monthly
net rent, without deduction, setoff, prior notice, or demand, the sum of
TWO THOUSAND FIVE HUNDRED DOLLARS AND NO CENTS ($2,500.00) per month in
advance commencing on March 1, 1978 and continuing thereafter on the
first day of each calendar month during the term and any extension of such
term, or upon recordation of Memorandum of Lease and delivery of possession
of Site to the Developer pursuant to Attachment 5, whichever shall last occur.
If this agreement is terminated prior to the date of expiration for
reasons other than the default of the Developer, any minimum monthly net rent
paid by the Developer for the month in which the termination occurs shall be
pro -rated to the date of termination and the Agency shall repay to the
Developer its pro-rata share of such rental payment.
All rent shall be paid to the Agency at the address to which notices
to the Agency are to be given.
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2. (Section 207) Percentage Rent
• a. (Section 208) Percentage Rent Rate; Payment
In addition to the payment of the minimum monthly net rent, the
Developer shall pay to the Agency, without deduction, offset, prior notice,
and demand, a sum equal to 25% of all percentage rentals actually received
by the Developer from any sublessee or subtenant occupying the Site. It
is understood that said percentage rent is a minimum of 6% of gross sales
derived from the premises (as defined in any written agreement between
the Developer and any sublessee or subtenant) during each lease year (as
defined in Section 209 of this Agreement) during the initial term of the
lease of the Site. In the event that the term is extended, the percentage
rent to be paid during any extension of the term shall be the same as that
payable during the initial term, unless the Developer enters into a new
sublease with a new subtenant or sublessee for the sublease of the Site and
the premises and a different percentage rental is fixed by mutual agree-
ment of the Developer and Agency. In no event, however, shall the percen-
tage rental to be paid by the Developer to the Agency during any extension
of the term be less than twenty-five percent (25%) of the percentage
rental actually received by the Developer during the extended term.
The Developer shall pay the percentage rent to the Agency in twelve
(12) equal monthly installments commencing on the thirtieth (30th) day
of the first calendar month immediately following the close of each
lease year and continuing thereafter on the first day of each successive
calendar month.
b. (Section 209) Definition of Lease Year
A "lease year" is a calendar year, except that the first lease year
shall commence on the date of commencement of the term and shall end on
the thirty-first (31st) day of December of that year and except that
the last.lease year shall end on the date of expiration or termination of
the term or any extension of the term.
Derived from the Premises
"Gross sales derived from the premises" means the gr selling price D.
of all merchandise, food, beverages, and services so , eased, licensed, E
or delivered in or from the premises by the Dev er and its permitted
subtenants and sublessees, and their respe a licensees and conces- L
sionaires, whether -for -cash or on cre wheter.collected or not) and
whether made by employees on the ises or vending machines. Gross E
sales shall also include any s that the Developer.and its permitted.
subtenants and sublesse eceive from "cover" charges for entry into ttfe T
premises and from elephones, stamp machines, music machines, amuse-
ment machines, ghing machines, public toilet locks, and any other E
coin-oper machines and devices located on the premises if any sums
recei from such machines and devices shall become more than a minor
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(but only to the extent they have been included), the following:
1. Any guaranteed minimum rental paid to the Developer by
sublessee or subtenant.for the use of the site and the premises
2. Any amounts paid by any subtenant or sublessee the site
and premises for real property taxes and assessments agai t the site
and the improvements thereon but not the personal prop y located on the
site.
3. Any tips paid to employees on the prOises.
4. Any sums received from telephon ,stamp machines, music
machines, amusement machines, weighing ma Ines, public toilet locks, and
any other coin -operated machines and d ces located on the premises
which remain a minor activity incideDtal to the use of the premises.
5. Gift certificates or imilar vouchers, until such time as
they shall have been converte,44 nto a sale by redemption.
6. Promotional mils, charity meals, and meals for employees.
7. Sales an use taxes, so-called luxury taxes, consumers' excise
taxes, gross recei s taxes, and other similar taxes now or in the future
imposed on the s e of merchandise, food, beverages, or services, but
only if such xes are added to the selling price, separately stated,
collected s arately from the selling prices of such merchandise, food,
beverages or services, but only if such taxes are added to the selling
price, eparately stated, collected separately from the selling prices
of s merchandise, food, beverages, or services, and collected from
c omers.
8. Any refunds or credits for returned merchandise, food,
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d.. (Section 211) Annual Statement of Gross
Sales; Records; Audit
The Developer and its permitted subtenants and sublessees
shall furnish to the Agency an annual statement of the gross sales
derived from the premises for each lease year on or before the thir-
tieth (30th) day of the first calendar month immediately following
the close of each such lease year. Each annual statement shall
be signed and certified to be correct by an officer of the Devel-
oper and its permitted subtenants and sublessees.
The Developer and its permitted subtenants and sublessees
shall keep at their respective business offices full and accurate
books of accounts, records, cash receipts, and other pertinent
data showing the gross sales derived from the premises. The
Developer and its permitted subtenants and sublessees shall install
and maintain accurate receipt -printing cash registers and shall
record on the cash registers every sale and other transaction
made in or from the premises. The Developer and its permitted
subtenants and sublessees shall also furnish to the Agency copies
of its quarterly California sales and use tax returns at the
time each is filed with the State of California. Such books of
account, records, cash receipts, and other pertinent data shall
be kept for a period of three (3) years after the end of each
lease year. The receipt by the Agency of any statement, or any
. payment of percentage rent for any period, shall not bind the
Agency as to the correctness of the statement or the payment.
The Agency shall be entitled during the term (or during,any
extension of the term) and within three (3) years after expiration
or termination of the term (or any extension of the term) to
inspect and examine all such books of account, records, cash
receipts, and other pertinent data, so the Agency can ascertain
the gross sales derived from the premises. The Developer and its
permitted subtenants and sublessees shall cooperate fully with
the Agency in making the inspection. The Agency shall also be
entitled, once during each lease year and once after expiration
or termination of the term (or any extension of the term) to
an independent audit of such books of account, records, cash
receipts, and other pertinent data to determine such gross sales,
by a certified public accountant to be designated by the Agency.
The audit shall be limited to the determination of gross sales
and shall be conducted during i;sual business hours at the business
offices of either the Develope, or its permitted subtenants or
sublessees.
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If the audit shows that there is a deficiency in the payment
of any percentage rent, the deficiency shall become immediately
due and payable. The costs of the audit shall be paid by the
Agency unless the audit shows that such gross sales were under-
stated by more than two percent (2%), in which case the costs of
the audit shall be paid by the Developer and its permitted sub-
tenants and sublessees.
The Agency shall keep any information gained from such state-
ments, inspection, or audit confidential and shall not disclose
it other than to carry out the purposes of this Agreement, except
that the Agency shall be permitted to divulge the contents of any
statements in connection with any financing arrangements or sale
of the Agency's interest in the Site and the premises.
D. (Section 212.) Negation of Partnership
The Agency shall not become or be deemed a partner or a
joint venturer with the Developer by reason of the provisions of
this Agreement.
E. (Section 213) Possession; Condition of the Site
The Agency shall deliver possession of the Site to the
Developer, and the Developer shall accept and enter into posses-
sion of the Site, concurrent with the recordation of the memo-
randum of lease referred to in Section 801 of this Agreement.
The Developer has examined the Site and acknowledges that it has
received a copy of the Preliminary Title Report for the Site.
The Developer hereby accepts possession of the Site in its
"as is" condition and in the condition set forth in the Prelimi-
nary Title Report, subject to the Agency's completion of demolition and
rough grading pursuant to Attachment No. 5.
All oil, gas, hydrocarbon substances, and minerals of'every
kind and character and all rights pertaining thereto are expressly
reserved from the lease of the Site; provided, however, that
there shall be no right of entry or right to use either the sur-
face of the Site or any portion thereof within 500 feet of the
surface for any and all purposes for or incidental to the
exploration for, extraction of, or production of such oil, gas,
hydrocarbon substances, and minerals from the Site.
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F. (Section 214) Taxes and Assessments
1. (Section 215) Payment by Developer
The Developer shall pay all real and personal property taxes,
general and specific assessments, license fees, and.all other
charges of every description levied on or assessed against the
Site, the premises, personal property located on or in the Site
or the premises, and the Developer's leasehold estate, to the
full extent of installments falling due during the term (or any
extension of the term), whether belonging to or chargeable against the
Agency or the.Developer. The Developer shall make all such payments
directly to the charging authority at least ten (10) days before any
fine, interest, or penalty shall become due or be imposed by operation
of law for its nonpayment. If, however, the law expressly permits
the payment of any or all of such taxes, assessments, fees, and
charges in installments (whether or not interest accrues on the
unpaid balance), the.Developer may, at its option, utilize the
permitted installment method, but shall pay each installment
with any interest thereon at least ten (10) days before
delinquency.
2. (Section 216) Developer's Right to Contest
The Developer, at its sole cost, shall have, the right, at
any time, to seek a reduction in the assessed valuation of the
Site, the premises, or the Developer's leasehold estate, or to
contest any such taxes, assessments, fees, or charges which are
to be paid by the Developer under this Agreement. If the Devel-
oper seeks such a reduction or contests such taxes, assessments,
fees, or charges, the failure of the Developer to pay such taxes,
assessments, fees, or charges,shall not constitute a default,
provided that the Developer does so by formal written notice
delivered to the charging authority (with copies sent to the
Agency) at least ten (10) days before delinquency, and provided
further that, before the commencement of any proceeding or con-
test permitted hereunder, the Developer shall furnish to the
Agency a surety bond issued by an insurance company qualified to
do business in California. The amount of the surety bond shall
equal one hundred percent (10V.) of the total amount of such taxes,
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assessments, fees, or charges in dispute plus any fines, interest,
or penalties imposed thereon. The surety bond shall hold the
Agency, the Site, and the premises harmless from any damage
arising out of such proceeding or contest and shall insure the
payment of any judgment which may be rendered.
The Agency shall not be required to join in any proceeding
or contest brought by the Developer and permitted under this
Section 216 unless -the provisions of any law require that such
proceeding or contest be brought by or in the name of the Agency
or any owner of the Site or interests in the premises. In such
event, the Agency shall join in such proceeding or contest or
permit it to be brought in the Agency's name provided the Agency
is not required to bear any cost. The Developer, on final deter-
mination of such proceeding or contest, shall immediately pay or
discharge any decision or judgment rendered, together with all
costs, charges, interest, and penalties incidental to such deci-
sion or judgment.
3. (Section 217) Substitute Taxes
The Developer shall not be required to pay any municipal,
county, state, or federal income or franchise taxes of the
Agency, or any municipal, county, state, or federal estate, suc-
cession, inheritance, or transfer taxes of the Agency. If at any
time during the term (or any extension of the term), the laws
concerning the methods of ad valorem taxation prevailing at the com-
mencement of the term are changed so that a tax or excise on rents
ior any other such tax, however described, is levied or assessed against
the Agency as a direct substitution in whole or in part for any such
taxes, assessment, fees, or charges, the Developer shall oav at least
ten (10) days before delinquency (but only to the extent that it can be
ascertained that there has been a substitution and that as a result
the Developer has been relieved from the payment of such taxes,
assessments, fees, or charges that it would otherwise have been
obligated to pay) the substitute tax or excise on rents. The
Developer's share of any tax or excise on rent shall be substan-
tially the same as, and a substitute for, the payment of such taxes,
assessments, fees, or charges as provided in this Agreement.
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4. (Section 218)' Proof of Compliance
The Developer shall furnish to the Agency, at least ten (10)
days before the date when any tax, assessment, fee, or charge
would become delinquent, receipts or other appropriate evidence
establishing payment or the fact that the Developer is seeking to
contest any such tax, assessment, fee, or charge. The Developer
may comply with this requirement by retaining a tax service to
notify the Agency whether or not such taxes, assessments, fees,
and charges have been paid.
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G. (Section 219) Exculpation; Indemnity; Insurance
• 1. (Section 220) Exculpation of Agency and the
City
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The Agency and the City shall not be liable to the Developer
or its permitted subtenants and sublessees.for any damage to the
Developer and its permitted subtenants and sublessees, and any
personal property of the Developer and its permitted subtenants
and sublessees from any cause whatsoever.. The Developer and
its permitted subtenants and sublessees hereby waive any and all
claims against the Agency and the City for any such damage except
for damage resulting from the acts or omissions of the Agency,
the city, or their respective authorized representatives.
2. (Section 221)• Indemnity -
During the term of this Agreement and any extension thereof, the
Developer agrees to -and shall indemnify and hold the Agency and the
City harmless from and against all liability, loss, damage, costs, or
expenses (including reasonable attorneys' fees and court costs) aris-
ing from or as a result of the death of any person or any accident,
injury, loss, or damage whatsoever caused to any person or to the
property of any person which shall occur on or adjacent to the Site
and the premises on the Site and which shall, be directly or
indirectly caused by any acts done thereon or any errors or
omissions of the Developer or its agents, servants, employees,
or contractors. The Developer shall not be responsible for
(and such indemnity shall not apply to) any acts, errors, or
omissions of the Agency or the City, or their respective agents,
servants, employees, or contractors.
3.. (Section 222) Insurance
a. (Section 223). Builder's Risk Insurance
® During periods of construction of the premises, alterations
to the premises, and additional improvements on the Site, and
until such time as the Agency has issued a certificate of com-
pletion pertaining to such construction, the Developer shall
procure, keep, and maintain (or shall cause to be procured, kept,
and maintained) "all risks" builder's risk insurance with van-
dalism and malicious mischief endorsements. Such builder's
risk insurance shall cover improvements in place and all.materials
and equipment located on the SJ.te and furnished under contract
except for contractor's, subcontractors', and construction mana-
ger's tools and equipment and E�roperty owned by contractor's
or subcontractors' employees. The policy limits.o.f such
insurance shall be in the amount of at least $100',000 per loss
for all work of construction ci alteration on the Site.
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b. (Section 224) Public Liability, Property
Damage, and Products Liability
Insurance
During the term of the lease of the Site (and any extension
of such term), the Developer shall procure, keep, and maintain
(or shall cause to be procured, kept, and maintained) public lia-
bility, property damage, and products liability insurance with
liability limits of not less than $500,000 for personal injury or
death to any one person and $1,000,000 for any one occurrence,
and property damage limits of not less than $100,000 for any one
occurrence, with an aggregate coverage of $1,000,000, insuring
against all claims and liability arising out of or in connection
with the use, occupancy, disuse, or condition of the Site, the
premises, and adjacent areas or ways. All public liability, pro-
perty damage, and products liability insurance shall insure per-
formance of the indemnity provisions of Section 221 of this
Agreement.
Not more frequently than each five (5) years, if, in the
opinion of the Agency and its insurance broker, the amount of
public liability, property damage, and products liability insurance
at that time is not adequate, the insurance coverage shall be
increased as reasonably determined by the Agency, its insurance broker,
and the Developer.
c. (Section 225) Dram Shop Liability Insurance
The indemnification obligations of the Developer under
Section 221 of this Agreement shall extend to.damage resulting
from risks insurable by so-called dram shop liability insurance.
The public liability insurance required in Section 224 shall
include such dram shop liability insurance.
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d. (Section 226) Fire and Extended Coverage
Insurance
During the term of the lease of the Site (and any extension of
such term), the Developer shall procure, keep, and maintain (or shall
cause to be procured, kept, and maintained) on the building and other
improvements which constitute or are part of the premises, and on the,
contents located in, on, or about the premises, a policy of standard
fire and extended coverage insurance, with vandalism and malicious
mischief endorsements., to the extent of at least the'full
replacement value of such building and other improvements and
at least the actual cash value of such contents.
The "full replacement value" of the building and other
improvements to be insured under this Section 226 shall be deter-
mined by the company issuing the insurance policy at the time the
policy is initially obtained. Not more frequently than once
every five (5) years, either party shall have the right to notify
the other party that it elects to have the replacement value
redetermined by an insurance company. The redetermination shall
be made promptly and in accordance with the rules and practices
of the Board of Fire Underwriters, or a like board recognized
and generally accepted by the insurance company, and each party
shall be promptly notified of the results of the company. The
insurance policy shall be adjusted according to the redetermina-
tion.
• During the term of the lease of the Site an ex ( tension of
E such term), the Developer shall procure, ke nd maintain business
interruption insurance insuring that inimum monthly net rent
referred to in Section 206 and percentage rent for the previous
lease year referred to i ion 208 will be paid to the Agency for
E period of up to t years if the premises are destroyed or ren-
dered inacc a by a risk insured against by a policy of standard
T fire extended coverage insurance, with vandalism and malicious
m 61
E f. (Section 228) Workmen's Compensation
Insurance
During the term of the lease of the Site (and any extension of
such term), the Developer shall procure, keep, and maintain (or shall
cause to be procured, kept, anti maintained) workmen's compensation
insurance covering all persons working on, at, or about the Site and
the premises. The limits of s-ich workmen's compensation insurance
shall be in amounts required b,,, law.
0 -13-
a
_40
c1. (Section 229) Other Insurance Matters
All insurance R
required under this Agreement shall:
i
(1) Be issued by insurance companies authorized to do busi-
ness in the State of California with a financial rating of at
least an A + 3A status as rated in the most recent edition of
Best's Insurance Reports.
(2) Name the Agency and the City as additional insureds.
(3) Release and waive the right of the insurance company
of subrogation against the Agency and the City in connection
with any damage caused by or resulting from risks insured against
under any insurance policies carried by'the Agency and the City
and in force at the time of any such damage.
(4) Be issued as a primary policy and noncontributing
with any insurance policies carried by the Agency and the City.
(5) Contain an endorsement requiring at least thirty (30)
days' prior written notice from the insurance company to both the
Developer and the Agency before cancellation or change in the
coverage, scope, or amount of any such insurance policy.
Each insurance policy required under this Agreement, or a
certificate of such policy, together with evidence of the payment
of premiums, shall be deposited with the Agency at the commence-
ment of the term of the policy and on the renewal of the policy
not less than twenty (20) days before expiration of the term of
such policy.
With respect to insurance required under Section 226
of this Agreement, the insurance policies shall provide that
any proceeds shall be made payable to the person or persons desig-
nated in Section 322 or 324 of this Agreement and shall be paid
in the amounts and in the manner respectively set forth therein.
In the event that this Agreement is terminated prior to the
expiration of the term (or any extension of the term), such
insurance policies and all rights under them or any insurance
proceeds shall be assigned to the Agency at the Agency's election.
If there is a failure or refusal to procure, keep, or main-
tain or insurance required under this Agreement, or if there is
a failure or refusal to furnisi, the Agency with required proof
that such insurance has been procured, is in force, and is paid
for., the Agency shall have the right, at its election and without
prior notice, to procure, keep, and maintain such insurance.
The premiums paid by the Agenc,', shall be treated as added rent
due from the Developer with interest at the rate of eight percent
(8 6) per year, to be paid on t Ise first day of the first month
-14-
following the date on which such premiums were paid. The Agency
• shall give prompt written notice of the payment of such premiums,
stating the amounts paid and the names of the insurer or insurers,
and interest shall accrue from the date of such notice.
H. (Section 230) Maintenance of the Site and the
Premises
During and throughout the term of the lease of the Site (and any
extension of such term), the Developer shall continuously maintain (or
shall cause the continuous maintenance of), the Site and the buildings
and other improvements which constitute or are a part of the premises,
and shall keep (or shall cause to be kept) the Site and the premises
free from any accumulation of debris or waste materials. Except to
the extent provided in Section 321 of this Agreement pertaining to
the restoration and reconstruction of the premises following an un-
insured risk, the Developer shall keep the premises (or shall cause
the premises to be kept) in good condition and repair, and shall
promptly and diligently make repairs (or shall cause prompt and
diligent repairs to be made) to the premises as required in this
Agreement. In addition, the Developer shall also maintain (or
shall also cause the maintenance of) the parking areas and the
landscaping on the Site at a level (as determined by the Agency)
not less than that existing in the parking and landscaped areas
of the West Covina Fashion Plaza Shopping Center.
The Agency shall not have any responsibility for the mainte-
nance of the Site and the premises and all such maintenance shall
• be made at no cost or expense to the Agency.
In the event that the Agency shall at any time, or from time
to time, be dissatisfied with the performance of the maintenance
obligations and duties pertaining to the Site and the premises,
the Agency shall give the Developer written notice of such dis-
satisfaction, specifying why such performance is deemed to be
unsatisfactory and giving the Developer ten (10) days from the
date of such notice to remedy (or to cause the remedy of) such
performance. If such performance has not been so remedied within
such 10-day period, or if such performance has been commenced to
be remedied within such 10-day period but continues to be unsatis-
factory, the Agency shall so notify the Developer and the Agency
may, at its option, either extend the time in which the Developer
shall remedy such performance or, without notice to the Developer,
remedy such performance itself or by employment of a maintenance
firm. The expenditures, expenses, and costs incurred by the
Agency in remedying the performance of the maintenance obligations
and duties of the Developer and to otherwise maintain the Site
and the premises shall be.trea►.ed as added rent due from the
40 -15-
Developer with interest at the rate of eight percent (8%) per
year. The amount of such expenditures, expenses, and costs
• (together with interest) shall be paid on the first day of the
first month following the date on which such.amount was paid.
The Agency shall give prompt written notice to the Developer
specifying the amount and nature of such payment and to whom
such payment was made. Interest shall accrue from the date of
such notice.
I. (Section 231) Utilities and Services
The Developer (or its permitted subtenants and sublessees)
shall make all arrangements for and shall pay for all utilities
and services furnished to or used in the buildings and.other
improvements which constitute'or are a part of the premises,
including (without limitation) sewer and storm drains, gas,
electricity, water, telephone service, cable television, and
trash collection. The Developer (or its permitted subtenants and
sublessees) shall also make arrangements for and shall pay for all
connection charges pertaining to such utilities and services.
J. (Section 232) Use of the Site and the Premises
1. (Section 233) Uses
The Developer (and its permitted subtenants and sublessees)
shall use the premises for restaurant purposes, which shall include
• the sale and serving of alcoholic beverages and conducting live
and recorded music and dancing, and for any other permitted use for
the Site designated in the Redevelopment Plan. The Developer and its
permitted subtenants and sublessees) shall comply with all laws, rules,
and regulations of any federal, state, regional, and local government-
al body having jurisdiction over the use of the premises and shall
obtain all necessary and required permits pertaining to such use. The
premises and the Site shall not be used in any manner that will con-
stitute waste, nuisance, or unreasonable annoyance (including,without
limitation, the use of loud speakers or sound or light apparatus that
can be heard or seen outside the premises to owners or occupants of
adjacent properties.
2. (Section 234) Obligation to Refrain from
Discrimination.
There shall be no discrimination against or segregation of
any person, or group of person:;, on account of sex, marital status,
race, color, religion, creed, national origin or ancestry in the
sublease, transfer, use, and occupancy of the Site and in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment
of the premises on the Site, nor shall the Developer itself or any
person claiming under.or through it establish or perTnit any such
0 -16-
practice or practices of discrimination or segregation with
• reference to the selection, location, number, use or occupancy
of subtenants, transferees, users, and occupants of the Site and
of purchasers, tenants, lessees, subtenants, sublessees, trans-
ferees, users, occupants, or vendees of the premises on the Site.
3. (Section 235) Form of Nondiscrimination and
Nonsegregation Clause
•
The Developer shall refrain from restricting the subrental,
sublease, or use of the Site and the sale, rental, lease, sub -
rental, sublease, transfer, or use of the premises on the basis
of sex, marital status, race, color, religion, creed, ancestry
or national origin of any person. All such deeds, leases, sub-
leases, or contracts shall contain or be subject to substantially
the following nondiscrimination and nonsegregation clauses:
a. In deeds: "The grantee herein covenants by and for
itself, its successors and assigns, and all persons
claiming under or through them, that there shall be
no discrimination against or segregation of, any
person or group of persons on account of sex, marital
status, race, color, religion, creed, national ori-
gin or ancestry in the sale, lease, sublease, trans-
fer, use, occupancy, tenure or enjoyment of the pro-
perty herein conveyed, nor shall the grantee itself
or any persons claiming under or through it, establish
or permit any such practice or practices of discrimi-
nation or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the property here-
in conveyed. The foregoing covenants shall run with
the property."
b. In leases and subleases: "The lessee (or sublessee)
herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through
them, and.this lease (or sublease) is made and accepted
upon and subject to the following conditions: That
there shall be no discrimination against or segrega-
tion of any person or group of persons, on account
of sex, marital status, race, color, religion, creed,
national origin, or ancestry, in the leasing, sub-
leasing, transferring; use, occupancy, tenure or
enjoyment of the property herein leased (or subleased),
nor shall the lessee (or sublessee) itself, or any
person claiming under or through it, establish or
permit such practice or practices of discrimination
or segregation with reference to the selection, loca-
tion, number, use or occupancy of tenants,,lessees,
sublessees, subtenarts, or vendees in the property
herein leased (or subleased)."
-17-
C. In contracts: "There shall be no discrimina-
tion against or segregation of, any persons,
or group of persons, on account of sex, marital
status, race, color, religion, creed, national
origin or ancestry in the use, occupancy, tenure
or enjoyment of the property, nor shall the
transferee itself or any person claiming under
or through it, establish or permit any such prac-
tice or practices of discrimination or segrega-
tion with reference to the selection, location,
number, use or occupancy of users, occupants, or
vendees of the property."
4. (Section 236) Rights of Access - Public
Improvements and Facilities
The Agency for itself, and for the City and other public
agencies, at their sole risk and expenses, reserves the right to
enter the Site or any part thereof at all reasonable times and
with as little interference as possible, for the purposes of
construction, reconstruction, maintenance, repair or service of
any public improvements or public facilities located on the Site.
Any such entry shall be made only after reasonable notice to the
Developer, and the Agency, the City, or other public agency shall
indemnify and hold the Developer harmless from any claims of lia-
bilities pertaining to any entry. Any damage or injury to the
Site resulting from such entry shall be promptly repaired at the
• sole expense of the public agency responsible for the entry.
K. (Section 237) Ownership of the Premises
1. (Section 238) Ownership of the Premises During
the Term
All buildings and improvements, which constitute or are a
part of the premises and which are constructed on the Site by the
Developer (or the Developer's permitted subtenants or sublessees)
as permitted by this Agreement, shall be owned by the Developer
(or the Developer's permitted subtenants or sublessees) until
expiration of the term of the lease of the Site (or any extension
of such term) or sooner termination of this Agreement. Any such
buildings and improvements shall not, however, be removed from
the Site nor wasted, destroyed, or modified, except as permitted
by this Agreement. The parties•::; to this Agreement hereby covenant
for themselves and all persons claiming under them that such
bu:i.ldi.ngs and improvements are real property.
-• 18-
•
2. (Section 239) Ownership of the Premises on
• Expiration or Terminatio o
the Term
On the expiration of the term of the lease of the Site (or any
extension of such term) or on the termination of this Agreement, all
buildings and improvements, which constitute or are a part of the pre-
mises, shall (without the payment of compensation to the Developer or.
others) become the property of the Agency free and clear of all claims
and encumbrances on such buildings and improvements by the Developer
or others. The Developer agrees to and shall defend, indemnify
and hold the Agency harmless from and against all liability and
loss which may arise from the assertion of any such claims and
any encumbrances on such buildings and improvements or from the
exercise of the rights conferred under this Section 239 by the
Agency.
3. (Section 240) Right to Remove Trade Fixtures
At the expiration of the term of the lease of the Site (or any
extension of such term), provided that the Developer is not then in
default, the Developer (or its permitted subtenants and sublessees)
shall have the right to remove any or all trade fixtures from the
premises; provided that such trade fixtures be removed within thirty
(30) calendar days after the date of expiration. If such trade fixtures
are not removed from the premises within such 30-day period, it
is hereby agreed that such trade fixtures shall (without the
payment of compensation to the Developer or others) become the
• property of the Agency free and clear of all claims and encum-
brances on such trade fixtures.
All .resulting damages and injuries to the premises caused
by the removal of such trade fixtures shall be completely and
promptly remedied and the Agency's reasonable requirements con-
cerning the resulting appearance of the premises after such removal
shall be fully complied with.
For the purposes of this Section 240, the term "trade fixtures"
shall include all machinery, furniture, furnishings, special light-
ing fixtures, exterior and interior business signs and signings, .
and other equipment and personal property installed or placed in or
on the premises (whether or not permanently attached to the pre-
mises) which can be removed without substantially damaging or
injuring the premises.
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•
L. (Section 241) Surrender of the .Site and the
• Premises; iioldinq Over.
1. (Section 242) Surrender On Expiration or
Termination of the Term
On the expiration of the term of the lease of the Site (or any
extension of such term), or within thirty (30)'days after termina-
tion of this Agreement, the Developer and its permitted subtenants
and sublessees shall surrender to the Agency the Site and the premises.
in good condition (except for ordinary wear and tear ,occurring after
the last necessary maintenance made or caused to be made by the Devel-
oper pursuant to Section'230 and except for destruction to the premises
covered under Sections 320 and 321 of this Agreement), except for the
trade fixtures which the Developer has the right to remove under the
provisions of Section 240. in the event that the Developer and/or
its permitted subtenants and sublessees shall fail to surrender
the Site and the premises to the Agency within the time and in the
manner set forth in this Section 242, the Developer and its per-
.mitted subtenants and sublessees shall defend, indemnify and hold
the Agency harmless from all damages, liabilities, and expense
resulting from the timely and proper surrender of the Site and the
premises, including (without limitation) claims made by any suc-
ceeding lessee or tenant founded on or resulting from .the Developer's
and/or such subtenants' and sublessees' failure to so surrender the
Site and the premises.
2. (Section 243) Holding Over; Month -to -Month
. Tenancy
If the Developer and its permitted subtenants and sublessees,
with the Agency's written consent, remain in possession of the
Site and the premises after the expiration of the term of the
lease of the Site (or any extension.of such term), such possession
shall be deemed to be a month -to -month tenancy terminable on thirty (30)
days' prior written notice given at any time by either the Agency or
the Developer. During any such month -to -month tenancy, the Developer
shall pay all rent (including any percentage rent) requirement by this
.Agreement prorated on a monthly basis and in advance on or before
the tenth (loth) day of each month. All provisions of this Agree-
ment except those pertaining to the term, the option to extend, and
the option to purchase shall apply to such month -to -month tenancy.
M. (Section 244) Good Faith Deposit
The Developer has, prior to or simultaneously with the execution of
this Agreement by the Agency, delivered to the Agency a good faith deposit
in the amount of TWO THOUSAND FIVE HUNDRED DOLLARS AND NO CENTS ($2,500.00)
as security for the performance of those obligations of the Developer to be
performed pursuant to this Agreement prior to the return of the deposit to the
Developer, or its retention by the agency as liquidated damages in accordance
• with the provisions of this Agreement.
-20-
•
The good faith deposit, at the option of the Developer, may
be in the form of: (i) cash; (ii) cashier's or certified check;
or (iii) negotiable certificates of deposit issued by a federal
or state bank. The Developer may, at its option, change the form
of the deposit from time to time to any other of the permitted
forms of deposit. The deposit, if cash or certified or cashier's
check, shall be deposited in an account of the Agency in a bank
or trust company selected by it.
The Agency shall be under no obligation to pay or earn interest
on the deposit, but if interest shall accrue or be payable thereon,
such interest, when received by the Agency, shall be the property
of the Developer, and shall.be promptly paid to the Developer.
If the Developer is in default with respect to any provision
of this Agreement, the Agency may use the deposit, or any portion
of the deposit, to cure such default or to compensate the Agency
for any expense or damage sustained by the Agency and resulting
from such default. On written demand of the Agency, the Developer
shall immediately pay to the Agency a sum equal to the -portion of
the deposit expended or applied by the Agency as provided in this
paragraph so as to maintain the deposit in the sum initially
deposited with the Agency.
On termination of this Agreement by the Agency because of a
default of the Developer, pursuant to sub -paragraph (c), (d),
(e) , (f) , (g) , (h) , (i) , or ;j) of Section 612 of this Agreement,
the deposit, including all interest payable thereon after such
termination, may be retained by the Agency as provided therein.
On termination of this Agreement by reason of default of the
Agency or otherwise pursuant to Section or sub -paragraph (a) or
(b) of Section612 of this Agreement, the deposit shall be returned
to the Developer by the Agency. If the Agreement is not earlier
terminated, the deposit shall be returned to the Developer on the
expiration of the term of the lease of the Site (or any extension
of such term) .
al' -21-
III. (Section 300) DEVELOPMENT OF THE SITE
• A. (Section 301) Construction and Development
of•the Premises on the Site
1. (Section 302) Scope of Development
The Site shall be developed in accordance with and within
the limitations established in the "Scope of Development" (which
is incorporated herein and attached to this Agreement as Attach-
ment No. 4). The Developer shall develop and construct (or shall
cause the development and construction of) the buildings and
;mprovements which constitute the premises to the full extent and
in the manner 'set forth in the Scope of Development (Attachment
No. 4) and in the approved plans and drawings and within the time
established in.the Schedule of Performance (Attachment No. 3).
2. (Section 303) Demolition, Site Clearance,
and Site Preparation
The Agency shall perform all work pertaining to the demolition and/or
removal of existing improvements on the Site, and rough grading of the entire
Site as per Attachment No, 5.
3. (Section 304) Basic Concept Drawings
The Developer shall prepare and submit -Basic Concept Drawings
• and related documents for the development of the Site to the
Agency for review and written approval within the time established
in the Schedule of Performance (Attachment No. 3). The Site shall
be developed as established in the Basic Concept Drawings and
related documents, except as changes may be mutually agreed upon
between the Developer, the lessees of the approximately 15,000
square -foot restaurant facilities to be constructed on the Site, acid
the Agency. Any such changes shall be within the limitations of the
Scope of Development (Attachment No. 4).
4. (Section 305) Landscaping and_Finish Grading
Plans
The landscaping and finish grading plans shall be prepared
by a professional landscape architect, who may be the same firm
as the Developer's architect. The Developer and the lessees of
the approximately 15,000 square -foot restaurant facilities to be con-
structed on the Site shall prepare and submit to the Agency staff for
its approval preliminary and final landscaping and finish grading
plans for the Site. These plans shall be prepared and submitted
within the times established in the Schedule of Performance (Attach-
ment No. 3) and shall be sufficient in form and detail to conform
with the City's precise plan process.
40
• The landscaping plans shall provide for the installation
of landscaping of a quality and size at least equal to what
which exists in the common areas of the West Covina Fashion
Plaza Shopping Center.
5. (Section 306) Construction Drawings and
Related Documents
The Developer shall prepare and submit construction drawings
and related documents for the development of the Site to the
Agency staff for review (including, but not limited to, archi-
tectural review) and written approval as and at the times esta-
blished in the Schedule of Performance (Attachment No. 3). The
construction drawings and related documents shall be sufficient
in form and detail to conform with the City's precise plan process
and shall be submitted in two stages, preliminary and final draw-
ings, plans, and specifications. Final drawings, plans, and
specifications are hereby defined as those in sufficient detail
to obtain a building permit.
During the preparation of all drawings and plans, the Agency
staff and the Developer shall hold regular progress meetings to
coordinate the preparation of, submission to, and review of con-
struction plans and related documents by the Agency. The Agency
staff and the Developer shall communicate and consult informally
as frequently as is necessary to insure that the formal submittal
of any documents to the Agency can receive prompt and speedy con-
sideration.
If any revisions or corrections of plans approved by the Agency
staff shall be required by any government official, agency, depart-
ment or bureau having jurisdiction, or any lending institution
involved in financing the development of the Site, the Developer
and the Agency shall cooperate in efforts to obtain waiver of such
requirements or to develop a mutually acceptable alternative. If
no such alternative is developed, the Agency shall b6 bound by
such revisions or corrections if they are not inconsistent with
approved construction drawings and related documents.
The lessees of the restaurant facilities to be constructed
on the Site shall be involved in the process established in this
Section 304 and in Section 305 for the preparation,.submittal,
and revision (if necessary) of such construction drawings and
related documents relating to the development of the Site.
6. (Section 307) Agency Approval of Plans, Drawings
and Related Documents
d
As referred to in Section 306 of this Agreement, the Agency
shall have the right of reasonable review (including„ but not
limited to, architectural review) of all plans, drawings, and
CJ
related documents for the development of.the Site, including any
• proposed changes therein. The Agency staff shall approve or dis-
approve such plans, drawings, and related documents referred to
in this Agreement (and any proposed changes therein) within the
times established in the Schedule of Performance (Attachment No. 3).
Failure by the Agency staff to either approve or disapprove with-
in the times established in the Schedule of Performance shall be
deemed a written approval. Any disapproval shall state in writing
the reasons for disapproval. The Developer, upon receipt of a
disapproval based upon powers reserved by the Agency hereunder,
shall revise such portions in a manner that is a logical evolu-
tion of previously approved plans, drawings, and related documents,
and shall resubmit such revised portions to the Agency staff as
soon as possible after receipt of the notice of disapproval. The
Agency staff shall approve or disapprove such revised portions in
the same manner and within the same times as provided in the.
Section 307 for approval or disapproval of plans, drawings, and
related documents (and any proposed changes therein) initially
submitted to the Agency.
7. (Section .308) Cost of Construction
The cost of developing the Site and construction of all
improvements thereon shall be borne by the Developer, except for
the work expressly set forth in this Agreement to be performed
by the Agency or others. The Agency and the Developer shall each
pay the costs necessary to administer and carry out their res-
pective responsibilities and obligations under this Agreement.
• 8. (Section 309) Construction Schedule
•
The Developer shall begin and complete all construction
and development within the times specified in the Schedule of
Performance (which is incorporated herein and attached to this
Agreement as Attachment No. 3), or within such.reasonable exten-
sions of such times as may be granted by the Agency or as provided
for in Section 805 of this Agreement. The Schedule of Performance
is also subject to revision from time to time as mutually agreed
upon in writing by and between the Developer and the Agency.
During periods of construction, the Developer shall submit
to the Agency written progress reports when and as requested
by the Agency. The reports shall be in such form and detail as
may reasonably be required by the Agency, and shall include a
reasonable number of construction photographs (if.any) taken
since the last report submitted by the Developer.
9. (Section 310) Security for Completion of
of Development
In addition to and exclusive of the deposit made by the
-') 4 -
• Developer to the Agency pursuant to Section 244 of this Agreement, the. Develo
per shall (concurrent with the commencement of construction) furnish
the Agency with a bond to insure the completion of the construction
and development of the premises on the Site. The bond shall be
issued by an insurance or surety company authorized to do busi-
ness in the State of California with a financial rating of at
least an A+3A status as rated in the most recent edition of
Best's Insurance Reports. The bond shall be in an amount not
less than $1,000,000 and shall remain in effect. until the entire
cost of the premises shall have been paid in full and until the
premises shall have been fully insured as provided in this Agree-
ment. The bond shall state the following:
(a) That it is conditioned to secure the completion of
the proposed construction of the premises free from all
liens and claims of contractors, subcontractors,
mechanics, laborers and materialmen for 360 days fol-
lowing commencement of construction.
(b) That the construction work shall be.effected by the
Developer, the general contractor or, on their default,
the surety under the bond. In the event that construc-
tion is not effected by said parties,.such part of the
amount of the bond as shall be required to complete the
work shall be paid to the Agency as liquidated and
agreed damages for the nonperformance of the Developer's
agreements, it being agreed that the exact amount of the
Agency's damages is difficult and impractical to ascertain:
(c) That the surety under the bond will defend and indemnify
the Agency against all loss, cost, damage, expense, and
liability arising out of or connected -with the work of
improvement. The Agency staff may, but shall not
unreasonably, disapprove the bond. The bond shall be
deemed approved unless notice of disapproval is given
within ten (10) working days after receipt of the pro-
posed bond.
10. (Section 311) Rights is of Accesi During
Construction
Representatives of the Agency and the City shall have the
reasonable right of access to the Site without charges or fees,
at normal construction hours during the period of construction
for the purposes of this Agreement, including, but not limited
0
to, the inspection of the work being performed in constructing
• the premises. Such representatives of the Agency or the City
shall be those who are so identified in writing by the Executive
Director of the Agency. Such rights of access shall not be deemed
or construed to make the Developer responsible or liable for any
injury or damage caused to or by such representatives by their
own negligent acts (except to the extent otherwise established
by law).
11. (Section 312) Zoning of the Site
The Agency warrants and agrees that the zoning of the Site
at the time that the Developer takes possession shall be such
as to permit the development of the Site, and the construction,
use, and operation of premises thereon, in accordance with the
provisions of this Agreement and the Scope of Development (Attach-
ment No. 4).
12. (Section 313) Soil Conditions of the Site
As referred to in Section 213 of this Agreement, the Developer
accepts possession of the Site in an "as is" condition. It shall
be the sole responsibility of the Developer at the Developer's
expense, to investigate and determine the soil conditions of the
Site for the premises to be constructed by the Developer. The
Developer shall obtain the permission of the Agency to enter upon
the land and conduct soil tests.
• If the soil conditions are not in all respects entirely
suitable for the use or uses to which the Site will be put, i_t is
the sole responsibility and obligation of Developer to take such
action as may be necessary to place the soil conditions of the
Site in a condition entirely suitable for the development of the
Site.
13. (Section 314) Antidiscrimination During
Construction
The Developer for itself and its successors and assigns
agrees that in the construction of the premises.provided for in
this Agreement,the Developer will not discriminate against any
employee or applicant for employment because of sex, marital
status, race, color, religion, creed, national origin, or.ancestry.
14. (Section 315) Local, State, and Federal Laws
The Developer shall carry out the construction of the premises
provided for in this Agreement .in conformity with all applicable
laws, including all applicable Federal and State labor standards.
0
15. (Section 316) City and Other Governmental
• Agency Permits; Environmental
Impact Report
Before commencement of construction or development of any
buildings, structures or other work of improvement by the Devel-
oper, the Developer shall, at its own expense, 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 con-
struction, development, or work. The Agency shall provide all
proper assistance to the Developer in securing these permits.
A Negative Declaration of Environmental Impact has been pre-
pared, certified, approved, and adopted by the Agency for the
Project. To the extent that a supplemental environmental impact
report or other environmental document is required with respect to
the development under this Agreement, the Agency shall prepare
such report or document. The Developer shall provide all informa-
tion, assistance, and cooperation necessary to prepare such report
or document.
16. (Section 317) Certificate of Completion
Promptly after completion of all construction and development
to be completed by the Developer pursuant to this Agreement, the
Agency shall furnish the Developer with a Certificate of Comple-
tion upon written request therefor by the Developer.: The Agency
• shall not unreasonably withhold any such Certificate of Comple-
tion. Such Certificate of Completion shall be, and shall so state,
conclusive determination of satisfactory completion of the con-
struction required by this Agreement upon the Site, and of full
compliance with the terms hereof with respect to the Site. The
Agency may also furnish the Developer with a Certificate of Com-
pletion for portions of the premises constructed on the Site as
are properly completed and ready to use if the Developer is not
in default under this Agreement.
A Certificate of Completion of construction for the entire
improvement and development of the Site shall be in such form as
to permit it to be recorded in the Recorder's Office. of Los
Angeles County. Certificates of Completion of construction for
less than the completed improvement and development of the Site
shall not be recorded.
If the Agency refuses or .fails to furnish a Certificate of
Completion for the Site after written request from the Developer,
the Agency shall, within ten (10) days of .the written request,
provide the Developer with a written statement of the reasons the
Agency refused or failed to furnish a Certificate of Completion.
The statement shall also contain the Agency's opiniop:of the action
the Developer must take to obtain a Certificate of Completion.
•
If the reason for such refusal is confined to the immediate avail-
ability of specific items or materials for landscaping, the
Agency will issue its Certificate of Completion upon the posting
of a bond by the Developer with the Agency in an amount represent-
ing a fair value of the work not yet completed. If the Agency
shall have failed to provide such written statement within said
10-day period, the Developer shall -be deemed entitled to the
Certificate of Completion.
Such Certificate of Completion shall not constitute evidence
of compliance with or satisfaction of any obligation of the Devel-
oper 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 Completion. is not a notice of com-
pletion as referred to in Section 3093 of the California Civil
Code.
B. (Section 318) Alterations of the Premises
Except as provided in Section 230 with respect to the mainte-
nance of the premises, the Developer and its permitted subtenants
and sublessees shall not make any structural or exterior altera-
tions to the premises without the Agency's written consent. The
Developer and its permitted subtenants and sublessees shall have
the right to make, without the Agency's consent but however with
prior written notice to the Agency, nonstructural alterations to
the interior of the premises which are required to conduct the
business on the premises. In making any such alterations, the
Developer and its permitted subtenants and sublessees shall comply
with the various provisions set forth in this Agreement for the
construction of the premises provided however that the performance
and completion bond shall be in the.sum equal to the cost of the
alterations (as determined by the contract between the .contractor
and the Developer or its permitted subtenants and sublessees).
C. (Section 319) Reconstruction -and Restoration
of the Premises
1. (Section 320) Destruction Due to Risk'Covered
by Insurance
If, during the term of the lease of the Site (and any extension
of such term), the premises are totally or partially destroyed from.a
risk covered by the insurance described in Section 226 (hereinafter some-
times referred to as an "insured risk"), renderincr the premises totally
or partially inaccessible or unusable, the Developer shall recon-
struct and restore the premises (or shall cause the premises to
be reconstructed and restored) to substantially the same condition
• as they were in immediately before destruction, whether or not
the insurance proceeds (including any proceeds from business
interruption insurance) are sufficient to cover the actual cost
of reconstruction and restoration. Such destruction shall not
terminate this Agreement. If the existing laws do not permit
the reconstruction and restoration, either party can terminate
this Agreement immediately by giving written notice to the other
party.
2. (Section 321) Destruction.Due to Risk Not
Covered by Insurance
If during the term of the lease of the Site (and any extension .
of such term), the premises are totally or partially destroyed from .'a
risk not covered by the insurance described in Sectioh.226 (hereinaf-
ter sometimes referred to as an "uninsured risk"), rendering the pre-
mises totally or partially inaccessible or unusable, and if the cost of
reconstruction and restoration of the premises does not exceed twenty
percent (20%) of the then replacement value of the premises des-
troyed, the Developer shall reconstruct.and restore the premises
(or shall cause the premises to be reconstructed and restored) to
substantially the same condition as they were immediately before
destruction. Such destruction shall not terminate this Agreement.
If the cost of reconstruction and restoration of the premises
exceeds twenty percent (20%) of the then replacement value of the
premises destroyed, the Developer may elect to so reconstruct and
restore the premises (or to so cause such reconstruction and res-
toration of the premises) or to terminate this Agreement by giving
written notice thereof to the Agency within fifteen (15) days after
determining the reconstruction and restoration cost and the replace-
ment value of the premises destroyed.
If the existing laws do not permit reconstruction and resto-
ration of the premises, either party can terminate this Agreement
immediately by giving written notice to the other party.
3. (Section 322) Obligation to Reconstruct and
Restore the Premises.
In all instances pursuant to Sections 320 and '321 of this
Agreement in which the premises are required to be reconstructed
and restored, the Developer and its permitted subtenants and sub-
lessees shall comply with the various provisions set forth in this
Agreement.for the construction of the premises; provided however
that the performance and completion bond shall be in the sum
equal to the cost of reconstruction and restoration (as deter-
mined by the contract between the contractor and the.Developer
or its permitted subtenants and sublessees).
r
--9-
If the premises are destroyed from an insured risk in which
•i the total amount of the loss does not exceed $20,000 (hereinafter
sometimes referred to a "minor loss"), the Developer shall make
the.loss adjustment with the insurance company insuring the loss.
The proceeds (including proceeds from business interruption insu-
rance) from such minor loss shall be paid directly to the Devel-
oper for the sole purpose of making the reconstruction and res-
toration of the premises.
If the premises are destroyed from an insured risk in which
the total amount of the loss exceeds $20,000 (hereinafter some-
times referred to as a "major loss"), the Developer shall make the
loss adjustment with the insurance company insuring the loss.
The proceeds (including proceeds from business interruption insu-
rance) from such major loss shall be paid directly into.a trust
fund with a bank or title insurance company agreed upon by the
Acencv and the Developer (the "insurance trustee").
If the premises are destroyed by an uninsured risk in which the
Developer is obligated to reconstruct and restore the premises
destroyed as provided in Section 321, the sum equal to the cost
of reconstruction and restoration (as determined by the contract
between the contractor and the Developer or its permitted sub-
tenants and sublessees) shall be deposited into the trust fund with
the insurance trustee.
All sums deposited with the insurance trustee,shall be held
for the following purposes and the insurance trustee.,.shall have
the following powers and duties:
• (a) The sums shall be paid in installments by the
insurance trustee to the contractor retained by
the Developer as construction progresses, for pay-
ment of the cost of reconstruction and restora-
tion. A ten percent (10%) retention fund shall
be established that will be paid to the contractor
on completion .of such reconstruction and restora-
tion, payment of all costs, expiration of all
applicable lien periods, and proof that the pre-
mises are free of all mechanics' liens and lien -
able claims.
40
(b) Payments shall be.made on presentation of certi-
ficates or vouchers from the architect or engineer
retained by the Developer showing the amount due.
If the insurance trustee, in its reasonable dis-
cretion, determines that the certificates or.
vouchers are being improperly approved by such,
architect or engineer, the insurance trustee shall
have the right to appoint an architect or an engi-
neer to supervise construction and to make payments
on certificates or vouchers approved by the archi-J
- ;n-
tect or engineer retained by the insurance.
trustee. The reasonable expenses and charges
�- of the architect or engineer retained by the
insurance trustee shall be paid by the insurance
trustee out of the trust fund.
(c) If the sums held by the insurance trustee are not
sufficient to pay the actual cost of -reconstruc-
tion and restoration, the Developer or its per-
mitted subtenants and sublessees shall deposit the
amount of the deficiency with the insurance trustee
within ten (10) days after request by the insurance
trustee indicating the amount of the deficiency.
(d) Any sums not disbursed by the insurance trustee
after reconstruction and restoration have been
completed and final payment has been made to the
contractor shall be delivered within ten (10) days
by the insurance trustee to the Developer or its per-
mitted subtenants and sublessees.
7.11 actual costs and charges of the insurance trustee -'_:^?.1 be
pridd Ly the Developer and its permitted subtenants and sub --
If the insurance trustee resigns or for any reason is unwillinq
to act or continue to act, the Agency and the Developer__:shall sub-
stitute a new trustee in the place of the designated insurance
. trustee.
Both parties shall promptly execute all documents and perform
all acts reasonably required by the insurance trustee to perform
its obligations under this Section 322.
4. (Section 323) Abatement,or Reduction of Rent
In case of destruction of the premises .and this Agreement con-
tinues, there shall be no abatement or reduction of rent.
5. (Section 324) Major Loss During Last Five Years
of the Initial Term
If the destruction to the premises resulting in a major loss
occurs during the last five (5) years of the initial term of the
lease of the Site, the Developer can terminate this Agreement by viving
written notice to the Agency within ten (10) days after the
destruction. If such major loss is an insured risk, the proceeds
from insurance shall be paid directly to the Agency, less payment. to
lender of the balance remaining on the permanent financing for the improve-
ments as defined in Section 501.
-31-
/--� 6. (Section 325) Waiver..of Civil -Code Sections
• With respect to any destruction of the premises, the Devel-
oper hereby waives the provisions of Civil Code Sections 1932(2)
and 1933(4).
D. (Section 326) Mechanics' Liens
The Developer shall pay (or shall cause to be paid) all
costs and expense:! of all "works of improvement" (as that phrase
is defined in the Mechanics' Lien Law in effect at time of com-
mencement of construction) done by it and caused to be done by
it on the Site and in, on, and upon the premises. No such pay-
ment shall be construed as rent.
The Developer shall keep the Site and the premises free and
clear of all mechanics', materialman's, contractor's, or subcon-
tractor's liens resulting or arising from any such work of improve-
ment done on the Site or in, on, and upon the premises. The
Developer, however, shall have the right to contest the validity
or the correctness of any such lien or any such asserted lien or
claim, if the Developer procures and records a lien release bond
issued by a corporation authorized to issue surety bonds in
California (other than the corporation which issued the original
bond) in an amount equal to the amount of the claim of such lien.
The bond shall meet the requirements of Civil Code Section 3143
(or any successor statute) and shall provide for the payment of any
. sum that the claimant may recover on the claim (together with any
costs of suit, if the claimant recovers in the action.)
The Developer shall, in all respects, defend, indemnify,
and hold the Agency, the Site, and the premises harmless from
and against all liability and loss (or claims of liability and
loss) resulting or arising from any work of improvement performed
(or caused to be performed) on the Site and in, on, and upon the
premises by the.Developer; together with reasonable attorneys'
fees and all other costs and expenses incurred by the Agency in
negotiating, settling, defending, or otherwise protecting against
such liens and claims.
If a lien release bond has not been recorded, if a final
judgment has been rendered for the foreclosure of a mec..hanics',
materialman's, contractor's, or subcontractor's lien, and if the
Developer shall fail to stay the execution of such judgment or
to pay such judgment, the Agency shall have the right to pay or
otherwise discharge, stay, or prevent the execution of any such
judgment or lien or both. All sums paid by the Agency under this
paragraph, together with all reasonable attorneys' fees and costs,
;Is
shall be treated (but shall not be construed) as added rent due
• from the Developer with interest at the rate of eight percent
(8%) per year, to be paid within ten (10) days following the
date on which such sums, fees, and costs were paid. The Agency
shall give prompt written notice to the Developer of the payment
of such sums, fees, and costs, and interest shall accrue from
the date of such notice.
r:
•
E. (Section 327) Agency Construction of Improvements
Without lien or assessment against the Site or the premises
on the Site or against the Developer and its permitted subtenants
and sublessees, the Agency shall perform (or shall cause the per-
formance of) the work of construction of a portion of a proposed
new roadway and entrance to the Site and the West Covina Fashion
Plaza from Sunset Avenue. Such roadway.and entrance are illus-
trated on the plans incorporated herein and attached to this
Agreement as Attachment No. 5. Such work of construction shall
be completed within the time established therefor in the
Schedule of Performance (Attachment No.'3).
0
__ 3 3 -
IV. (Section 400) CONDEMNATION
•
A. (Section 401) Definitions
1. (Section 402) Condemnation
"Condemnation" means: (a) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a condemnor;
and (b) a voluntary sale or transfer by the Agency to any con-
demnor, either under threat of condemnation or while legal pro-
ceedings for condemnation are pending.
2. (Section 403) Date of Taking
"Date of taking" means the date the condemnor has the right
to possession of the property being condemned.
3. (Section 404) Award
"Award" means all compensation, sums, or anything of.value
awarded, paid, or received on a total or partial condemnation.
4. (Section 405) Condemnor
"Condemnor" means any public or quasi -public authority, or
private corporation or individual, having the power of condemna-
tion.
• B. (Section 406) Parties' Rights and Obligations To
Be Governed by This Agreement:
If, during the term of the lease of the Site or during the
period of time between the execution of this Agreement and the
date the term commences, there is any taking of all or any part
of the Site, any building and improvements.which constitute or
are a part of the premises, or any interests in this Agreement
,by condemnation, the rights and obligations of the parties shall
be determined pursuant to the provisions of Sections 401 through
413 (inclusive).
C. (Section 407) Total Taking
If the Site or the premises are totally taken by condemna-
tion, this Agreement shall terminate on the date of taking. Any
taking of the premises in excess of fifteen percent (15%) of the
gross floor area shall be presumed to.constitute a total taking
of the premises.
D. (Section 408) Partial Taking
1. (Section 409) Effect on Agreement '
If any portion of the Site or .the premises are taken by con-
demnation, this Agreement shall remain in effect, except that the
• Developer can elect to terminate this Agreement if the remaining
portions of the Site, or the remaining portions of the buildings
or other improvements or the parking areas which are respectively
parts of the premises, are rendered unsuitable for the.Developer's
continued use of the premises. If the Developer elects to termi-
nate this Agreement, the Developer must exercise its right to termi-
nate pursuant to this Section 409 by giving notice .to the.Agency
within thirty (30) days after the nature and the extent of the
taking have been finally determined. If the Developer elects to
terminate this Agreement as provided herein, the Developer also
shall notify the Agency of the date of termination, which date
shall not be earlier than thirty (30) days nor later than sixty
(60) days after the Developer has notified the Agency of its
election to terminate; except that this Agreement shall terminate
on the date of taking if the date of taking falls on a date before
the date of termination as designated by the Developer. If the
Developer does not terminate this Agreement within the 30-day period,
this Agreement shall continue in full force and effect, except that
minimum monthly net rent shall be reduced pursuant to Section 410.
2. (Section 410) Effect on Rent
If any portion of the Site or the premises is taken by con-
demnation and this Agreement remains in full force and effect, on
the date of taking the minimum monthly net rent shall be reduced
by an amount that is in the same ratio to minimum monthly net rent
as the value of the area of the portion of the Site or the premises
• taken bears to the total value of the Site or the premises imme-
diately before the date of taking.
3. (Section 411) Restoration of the Premises;
Abatement of Rent
If there is a partial taking of the Site or the premises and
this Agreement remains in full force and effect, the Developer
shall reconstruct, restore, alter, or construct substitute improve-
ments on the Site (or shall cause such reconstruction, restoration,
alteration, or new construction) within the time and in the man-
ner established in Section 322 pertaining.to reconstruction and
restoration following an insured or uninsured risk.
Rent, except for any percentage rent, shall be partially
abated or reduced during the period from the date of taking until
the completion of reconstruction, restoration, alteration, or new
construction, but all other obligations of the Developer.under
this Agreement shall remain in full force and effect. The.
amount of such abatement or reduction of rent shall be based on
the extent to which the reconstruction, restoration, alteration,
or new construction interferes with use of the premises.
40
E. (Section 412) Apportionment and Distribution
• of 'Award
Except to the extent provided in Section 413, all sums,
including damages and interests, awarded for the fee, the
leasehold, or the reversionary interests in the Site or the
premises shall be distributed and disbursed in the following
order of priority:
(1) To pay and discharge all taxes, assessments, fees,
and charges constituting a lien on the Site or the premises.
(2) To pay the balance due under any note and mortgages
encumbering the fee but not having priority over the lease of
the Site, provided that the amount so paid shall be deducted from
any amounts otherwise due to the Agency.
(3) To the Agency, a sum equal to the capitalized value of
the land rent computed at an interest rate equal to that which com-
parable properties earn at the time of the taking, plus or minus
the discounted differences between the fair market value of the
reversion at the normal expiration date of this Agreement and the
capitalized value of the land rent, subtracting from that sum or dif-
ference the value of any option given in this Agreement to pur-
chase the Site.
(4) To the Agency, any expenses or disbursements reason-
ably paid or incurred by or on behalf of the Agency for or in con-
nection with the condemnation proceedings.
(5) To the Agency, the value of the reversionary interest
in the premises..
(6) To the Developer, the balance of the award.
Notwithstanding the foregoing, any portion of the award to be
paid for or attributable to any trade fixtures (which may be re-
moved at the expiration of the term of the lease of the Site or at
the expiration of any extension of such term, as Provided in gectinr
240 of this Agreement) shall be distributed and disbursed to the
Developer or the owner of such trade fixtures at the time of the
taking; and any portion of.the award to be paid for or attributable
to any loss of goodwill shall be distributed and disbursed to the
Developer or to the owner of the business conducted on�the premises.
F.. (Section 413) Temporary Taking
The taking of the Site, the premises, or any part thereof by
military or other public authority shall constitute a taking by
condemnation only when the use and occupancy'by the taking autho-
rity has continued for longer than one hundred-eighty.(180) ton-
-:6
• secutive days. During the 180-day period, all the provisions of
this Agreement shall remain in full force and effect, except that
rent, except for any percentage rent, shall be abated or reduced
during such period of taking based on the extent to which the
taking interferes with use of the premises, and the Agency shall
be entitled to whatever award may be paid for the use and occu-
pation of the premises for the period involved.
V. (Section 500) SUBORDINATION AND ASSIGNMENT
A. (Section 501) Subordination
This Agreement and the lease of.the.Site are and shall be
prior to any encumbrance now of record and any encumbrance recorded
after the date of this Agreement affecting the Site, the premises,
and any buildings and improvements which constitute or are a part
of the premises. Notwithstanding the preceding sentence, the
interests of the Agency in the Site and in the premises, the lease-
hold interest created by this Agreement, and the rights and inte-
rests of the Agency established under this Agreement shall be
subordinated to the lien of a first encumbrance represented by a
mortgage, deed of trust, conveyance and leaseback, or.,.any other
form of conveyance required for financing and obtaining funds to be
used for the construction of the premises on the Site and for any
other expenditures necessary and appropriate to develop the Site
under this Agreement (hereinafter sometimes referred to as the
"interim financing") and/or to be used for long-term financing
. (hereinafter sometimes referred to as the "permanent financing"),
the proceeds of which, in whole or in part, shall repay and dis-
charge the interim financing. The Agency shall execute all docu-
ments reasonably and customarily required to establish such subor-
dination upon the receipt of a written request by the Developer to
the Agency if the'interim or permanent financing satisfy the fol-
lowing conditions:
(1) The arrangement for such interim or permanent
financing is entered into between the Developer and its lender
not later than five (5) years after the date of this.Agreement.
(2) The note secured by the lien -of -the first encum-
brance is for a principal amount which shall not exceed seventy-
five percent (75%) of the economic value of both the Site and the
premises constructed or to be constructed on the Site,,as deter-
mined by an appraisal made by the lender of the interim or per-
manent financing.
(3) The note shall bear interest at a rate not to exceed
three percentage points above the lowest rate at which commercial
•
• banks may borrow money from the Federal Reserve Bank on the date
that the note is executed, and any "points", discounts, or loan
fees on such financing shall not exceed three percent (3%) of the
principal amount of the note.
(4) The term of any interim financing shall not exceed
eighteen (18) months and the term of any permanent financing (or
combination of interim and permanent financing) shall not exceed
thirty (30) years.
(5) The note and the document evidencing the lien of
the first encumbrance shall expressly provide that there can be
no extensions of the term of the financing, no additions to the
balance of the loan, no alterations of the provisions of the
financing and subordination documents, and norefinancing of the
unpaid principal balance, without the Agency's prior written
approval.
(6) Prior to subordination to the lien of the first
encumbrance representing the interim financing, the Developer
shall present evidence satisfactory to the Agency that the Developer
has obtained a firm, binding, and enforceable commitment for the
permanent financing.
The subordination by the Agency pursuant to this Section 501
to the document evidencing the lien of the first encumbrance is
limited to one such document. For this purpose, the.document
• securing separate interim and permanent financing shall be consi-
dered to be one document, but nothing in Section 501 shall be
construed to require the Developer to divide its financing into
interim and permanent financing instead of obtaining permanent
financing only.
0
:3H-
B. (Section 502) Prohibition Against Assignment
Except as expressly provided elsewhere in this Agreement,
the Developer shall not assign this Agreement or any right, inte-
rest, obligation, or duty herein, shall not assign or encumber
its interest in the lease of the Site or in the premises, shall
not sublease all or any part of the Site and the premises, and
shall not allow any other person or entity (except the Developer's
authorized representatives) to occupy or use all or any part of
the Site and the premises, without first obtaining the Agency's
written consent. Any assignment, encumbrance, or sublease made
without the Agency's consent shall be voidable and, at the Agency's
election, shall constitute a default. No consent to any assign-
ment, encumbrance, or sublease shall constitute a further waiver
of this provisions of this paragraph.
For the purposes of this Section 502, any dissolution,
merger, consolidation, or other reorganization of the -Developer,
or the sale or other transfer of a controlling percentage of the
capital stock of the Developer, or the sale of fifty-one percent.
(51%) of the value of the assets of the Developer, shall be deemed
to be an assignment.
• Irrespective of the prohibition established in the first para-
graph of this Section 502, the Developer shall be permitted to
assign this Agreement or any right, interest, obligation or duty
.herein, or to assign its interest in the lease of the Site or in
the premises, after the recordation of the Certificate.of.Com-
pletion referred to in Section 317 of this j4areement, if the
assignee executes an agreement required by the Agency assuming
the obligations of the Developer under this Agreement;.. In addition,
the Developer shall be permitted to assign this Agreement or any'
right,. interest, obligation or duty herein, or to assign its
interest in the lease of the Site or in the premises,'to: (1) a
general or limited partnership in which the Developer'is a
general partner and owns at least fifty -one -percent (51%) of the
partnership for a period of not less than five (5) years following
the assignment; or (2) a corporation in which the Developer owns
at least fifty-one percent (51%) of the outstanding sto'ck.of the
corporation for a period of not less than five (5) years following
the assignment'; if the partnership or the corporation.exec'utes an
agreement required by the Agency assuming the obligations of the
Developer under this Agreement. In addition, the Developer shall
be permitted to assign this Agreement or any right, interest, obli-
gation, or duty herein, or to assign its interest in the lease of
the Site and in the premises, to a corporation with which'. -the
•
• Developer may merge or consolidate, or to any parent or subsidiary
of the Developer or subsidiary of the Developer's parent, or to a
purchaser of substantially all of the Developer's assets,•if the
assignee executes an agreement required by the Agency assuming the
obligations of the Developer under this Agreement.
C. (Section 503) Security Financing
1. (Section 504) No Encumbrances Except Mortgages,
Deeds of Trust, Conveyances.and
Leases -Back or Other Conveyance
for Financing for Development
Irrespective of the prohibition established in the first para-
graph of Section 502, mortgages, deeds of trust, conveyances and
leases -back, or any other form of conveyance required for any
interim and/or permanent financing, the: Developer shall notify the
Agency in advance of any mortgage, deed of trust, conveyances and
lease -back or other form of conveyance for financing if the
Developer proposes to enter into the same. The Developer shall
not enter into any such conveyance for financing without the prior
written approval of the Agency, which approval the Agency agrees
to give if any such conveyance is given to a responsible financial
or lending institution or other acceptable person or entity and
if the financing document contains the provisions set forth in
• Sections 505 through 507 (inclusive) of this Agreement., Such
lender shall be deemed approved unless rejected in writing by
the Agency within ten (10) days after notice thereof by the
Agency. Such lender approved by the Agency or pursuant to this
Section 504, shall not be bound by any amendment, implementation,
or modification to this Agreement subsequent to its approval
without such lender giving its prior written consent. The
Agency agrees that the terms of this Agreement shall be amended as
may be reasonably required by such lender.
•
In any event, the Developer shall promptly notify' the Agency
of any mortgage, deed of trust, conveyance, and lease -back or
other financing conveyance encumbrance or lien that has been
created or attached thereto whether by voluntary act of the
Developer or otherwise.
a
-40-
The words "mortgage" and "deed of trust" as used herein
• include all other appropriate modes of financing real estate
acquisition, construction, and land development.
a. (Section 505) Disposition of Insurance Proceeds
The financing documents shall provide that any insurance
proceeds from fire and extended coverage insurance shall be used
for the reconstruction and restoration of the premises and not to
repay any part of the outstanding indebtedness secured by the
mortgage, deed of trust, or other security interest.
b. (Section 506) Agency's Right to Cure Defaults
The financing documents shall contain provisions that all
notices of default under financing documents must be sent to the
Agency. The Agency shall have thirty (30) days in which to cure
any such default of ter'the time for the Developer to cure has
expired. Neither the Agency's right to cure any such default nor
the exercise of such right by the Agency shall constitute or be
construed to constitute an assumption of the Developer's- liability
under the financing documents. If any such default is non -
curable, such default shall not be grounds for foreclosure if
the Agency promptly performs all other provisions of the financing
documents.
In the event that the Agency shall cure any default of the
• Developer under the financing documents, any payments therefor
made by the Agency shall be treated as added rent due from the
Developer, with interest at the rate of eight percent (8%).per
year, to be paid on the first .day of the first month following
the date of payment. The Agency shall give prompt written notice
of such payment and interest shall accrue from the date.of such
notice.
C. (Section 507) . One Mortgage, One Debt
No permitted financing documents shall cover any interest in
any real property other than interests in the Site and the pre-
mises specifically subjected to mortgage by this Agreement. No
permitted financing documents shall cover more than one indebted-
ness.
2. (Section 508) Holder Not Obligated to Construct
Improvements
The holder of any mortgage, deed of trust or other security
interest authorized by this Agreement shall in no way be obligated
by the provisions of this Agreement to construct or complete the
premises or to guarantee such construction or completion; nor
0
• shall any covenant or any other provision in this Agreement be
construed so to obligate such holder. Nothing in this Agreement
shall be deemed to construe, permit, or authorize any such holder
to devote the Site to any uses, or to construct any improvements
thereon, other than those uses or improvements provided for or
authorized by this Agreement.
3. (Section 509) Notice of Default to Mortgage, Deed
of Trust, or Other Security Inte-
rest Holders; Right to Cure
Whenever the Agency shall deliver any notice or demand to the
Developer with respect to any breach or default by the Developer
in completion of construction of the premises, the Agency shall
at the same time deliver to each holder of record of any mortgage,
deed of trust or other security interest authorized by this Agree-
ment, a copy of such notice or demand. Each such holder shall
(insofar as the rights of the Agency are concerned) have the right,
at its option, within thirty (30) days after the receipt of the
notice, to cure or remedy or commence to cure or remedy any such
default and to add the cost thereof to the security interest debt
and the lien on its security interest. If such default shall be
a default which can only be remedied or cured by such holder upon
obtaining possession, such holder shall seek to obtain possession
with diligence and continuity through a receiver or otherwise,
and shall remedy or cure such default within thirty (3) days
after obtaining possession; provided that in the case of a default
• which cannot with.diligence be remedied or cured, or the remedy
or cure of which cannot be commenced, within such 30-day period,
such holder shall have such additional time as reasonably neces-
sary to remedy or cure such default with diligence and continuity;
and provided further that such holder shall not be required to.
remedy or cure any non -curable default of the Developer. Nothing
contained in this Agreement shall be deemed to permit or authorize
such holder to undertake or continue the construction.or completion
of the premises (beyond the extent necessary to conserve or pro-
tect the premises or construction already made) without first
having expressly assumed the Developer's obligations to the Agency,
by written agreement satisfactory to the Agency. The holder in
that event must agree to complete, in the manner provided in this
Agreement, the portion of the premises to which the lien or title
or such holder relates, and submit evidence satisfactory to the
Agency that it has the qualifications and financial responsibility
necessary to perform such obligations. Any such holder properly
completing such portion of the premises shall be entitled, upon
written request made to the Agency, to a Certificate of Completion
from the Agency.
L]
D. (Section 510) Subleases; Concessions; Licenses
• The provisions of the first paragraph of Section.502 shall
not prohibit the Developer from entering into subleases, conces-
sions, or licenses for the operation of any portion of the busi-
ness conducted on the premises. Each sublease, concession, or
license entered into by the Developer shall'.be subject and subor-
dinate to the provisions of this Agreement. The gross sales
derived from the premises (as referred to in Section 208 and as
defined in Section 210) of each such subtenant, sublessee,, con-
cessionaire, vendee, and licensee shall be part of the Developer's
gross sales for the purpose of determining any percentage rent
payable by the Developer to the Agency.
VI. (Section 600) DEFAULTS, REMEDIES AND TERMINATIONS
A. (Section 601)
Defaults - General
Failure or delay by either party to perform any term or pro-
vision of this Agreement constitutes a default under this Agree-
ment. The party who so fails or delays must immediately commence
to cure, correct, or remedy such failure or delay and shall com-
plete such cure, correction or remedy with reasonable diligence
or within the times specifically set forth in Section 608, 609,
611, or 612 of this Agreement.
The injured party shall give written notice of default to'the
• party in default, specifying the default complained of by the
injured party. Except as otherwise expressly provided in this
Agreement, any failure or delay by either party in asserting any
of its rights and remedies as to any default shall not operate as a
waiver of any default or of any such rights or remedies or deprive
either party of its right to institute and maintain any actions
or proceedings which it may deem necessary to protect, assert, or
enforce any such rights or remedies.
B. (Section 602) Legal Actions
1. (Section 603) Institution of Legal Actions
In addition to any other rights or remedies, either party may
institute legal action to cure, correct, or remedy any default,
to recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Such legal actions
must be instituted in the Superior Court of the County..of.,Los
Angeles, State of California, in any other appropriate court in
that County, or in the Federal District Court in the.Central
District of California.
C�
0
1
2. (Section 604) Applicable Law
The laws of the State of California shall govern the inter-
pretation and enforcement of this Agreement.
3. (Section 605) Acceptance of Service of Process
In the event that any legal action is commenced by the Devel-
oper against the Agency, service of process on the Agency shall be
made by personal service upon the Executive Director or Chairman
of the Agency, or in such other manner as may be provided by law.
In the event that any legal action is commenced by the Agency
against the Developer, service of process on the Developer shall
be made by a personal service upon the Developer or in such manner
as may be provided by law, and shall be valid whether made within
or without the State of California.
4. (Section 606) Attorneys' Fees
If either party becomes a party to any litigation concerning
this Agreement, the Site, the premises, or the building or other
improvements which constitute or are a part of the premises, by
reason of any act or omission of the other party or its authorized
representatives, and not by any act or omission of the party that
becomes a party to that litigation or any act or omission of its
authorized representatives, the party that causes the other party
to become involved in the litigation shall be liable to that
party for reasonable attorneys' fees and court costs incurred by
it in the litigation.
If either party commences an action against the other party
arising out of or in connection with this Agreement, the prevailing
party shall be entitled to have and recover from the losing party
reasonable attorneys' fees and costs of suit.
C. (Section 607) 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 for the same default or any other default by the -other
party.
D. (Section 608) Damages
If either party defaults with regard to any of the provisions
of this Agreement, the other party shall serve written notice of
such default upon such defaulting party. If the default is'not
commenced to be cured by the defaulting party within thirty (30)
• days after service of the notice of default and is not cured
promptly within a reasonable time after the commencement, the
defaulting party shall be liable to the other party for damages
caused by such default.
E. (Section 609) Specific Performance
If either party defaults under any of the provisions of
this Agreement, the other party shall serve written notice of such
default upon such defaulting party. If the default is not com-
menced to be cured by,the defaulting party within thirty (30)
days after service of the notice of default and is not cured
promptly within a reasonable time after the commencement, the
non -defaulting party, at its option, may institute an action
for specific performance of the terms of this Agreement.
F. (Section 610) Rights and Remedies of Termination
1. (Section 611) Termination by Developer
In the event that:
(a) The Developer shall furnish evidence to the Agency
that the.Developer, after and despite diligent efforts,
has been unable to obtain firm and binding commitments
for interim and permanent financing necessary for the
development of the Site, prior to the date established
therefor in the Schedule of Performance (Attachment
No. 3); or
(b) The Developer shall furnish evidence to the Agency
that the Developer, after and despite diligent efforts,
has been unable to obtain a firm and binding commitment,
for leasing of the premises to be constructed on the
Site, prior to the date established therefor in the
Schedule of Performance (Attachment No. 3); or
(c) The Agency shall fail to cor,�plete the construction of
a portion of the roadwc y and entrance to the Site and
the Uest Covina Fashion Plaza (as described'in tec-
tion 327 of this Agreement) within the time established
therefor in the Schedule of Performance (Attachment
No. 3); provided that the Agency shall not have ob-
tained an extension or postponement to which the Agency
may be entitled pursuant to Section, 805; and provided
further that the Developer is not in default in the
performance of its obligations and duties under this
Agreement;
then this Agreement may, at the option of the Developer, be
terminated by written notice thereof to the Agency. Except with
respect to the return of the deposit as provided in Section 244
of this Agreement and except with respect to the return of any
unearned rent as provided in Section 613 of this Agreement,
neither the Agency nor the Developer shall have any further
rights against or liability to the other under this Agreement.
2. (Section 612)
In the event that:
Termination by Agency
(a) The Developer shall furnish evidence'to the Agency
that the Developer, after and despite diligent
efforts, has been unable to obtain firm and
binding commitments for interim and permanent
financing necessary for the development of the
Site, prior to the date established therefor in
the Schedule of .Performance (Attachment No. 3); or
(b) The Developer shall furnish evidence to the Agency
that the Developer, after and despite diligent,
efforts, has been unable to obtain a firm and bind-
ing commitment for leasing of the improvements
to be constructed on the Site, prior to the date
established therefor in the Schedule of Performance
(Attachment No. 3); or
• (c) There is any voluntary or involuntary change in
the identity of the Developer prohibited by Sec-
tion 108 of this Agreement; and the Developer has
not cured such prohibition within thirty (30) days
after the date of written demand by the Agency to
the Developer; or
(d) The Developer shall assign (or attempt to assign)
this Agreement or any right, interest,'obligation, or
duty herein, or shall assign or encumber (or attempt
to assign or encumber) its interest in the lease of
the Site or in the premises, or shall subleasb Aor
attempt to sublease) all or any part of the Site and
the premises, or shall allow (or attempt to,allow)
any other person or entity (except the Developer's
authorized representatives) to occupy or use all or
any part of the Site and the premises, in violation
of the terms of this Agreement; and the Developer
has not cured such violation within thirty (30) days
after the date of written demand by the Agency to the
Developer; or
• (e) The Developer does not submit all plans, drawings,
specifications, and related documents as required
by this Agreement within the times respectively pro-
vided therefor in this Agreement; and the Developer
has not cured such default within thirty (30) days
after the date of written demand by the Agency to
the Developer; or
(f) The Developer shall fail to commence the construction
(or reconstruction and restoration) of the premises
as required by this Agreement within sixty (60) days
after the date of written demand by the Agency to
the Developer to commence such work, or the Developer
shall fail to complete the construction (or recon-
struction and restoration) of the premises within the
time established therefor in the Schedule of Perform-
ance (Attachment No. 3)'; provided that the Developer
shall not have obtained an extension or postpone-
ment to which the Developer may be entitled pursuant
to Section 805; or
(g) The Developer shall abandon or substantially suspend
the construction (or reconstruction and restoration)
of the premises as required by this Agreement for a
period of thirty (30) days after the date of written
notice of such abandonment or suspension by the Agency
• to the Developer, provided that the Developer shall not
have obtained an extension or postponement to which
the Developer may be entitled pursuant to Section 805;
(h) The Developer shall fail to pay rent when due_ and such
failure shall continue for a period of ten (10) days
after the date of written notice by the Agency to the
Developer to make such payment; or
(i) The premises shall be abandoned or vacant,.and the
business operated thereon shall not be in operation,
for a period of ten (10) consecutive business days; or.
(j) The Developer shall fail to perfor-m any other obli-
gation and citity provided in thin Agreement %;,ithin
the time for performance specified therefor or, if
no such.time is specified, within thirty.(30) days
after the date of written demand by the Agency to the
Developer to perform such obligation and duty;
then this Agreement may, at the option of the Agency, be terminated
by written notice to the Developer.
0
In the event of termination pursuant to this Section 612 any
• unearned rents shall be returned to the Developer as provided in
Section 613 of this Agreement, and neither the Agency nor the
Developer shall have any further rights against or liability to
the other under this Agreement.
In the event of termination pursuant to sub -paragraphs (a)
or (b),of this Section 612, the deposit shall be returned as pro-
vided in Section 244 of this Agreement. In the event of termina-
tion pursuant to sub -paragraphs (c), (d), (e), (f), (g), (h), (i) '
or (j) of this Section 612, the deposit set forth in Section 244
may be retained by the Agency as liquidated damages and as its
property without any deduction, offset, or.recoupment whatsoever.
The Agency and the Developer agree that it would be impractical
or extremely difficult to fix actual damages in case of the
Developer's default and that -the amount of said deposit is a
reasonable estimate of the damages which the Agency will suffer.
The right of retention of the deposit as liquidated damages shall be
in lieu of any other remedies which the Agency may have at law, in
equity, or .under this Agreement in the event of the Developer's
default or failure as provided in said sub -paragraphs.
3. (Section 613) Effect of Termination
Termination of this Agreement shall terminate the right of
• possession of the Developer pertaining to the Site and the premises
on the Site and each and every obligation and duty of the Devel-
oper provided herein and pertaining to the lease of the Site..
Any unearned rent shall be prorated to the date of termination and
shall be returned by the Agency to the Developer within five (5)
days after the surrender of the Site and the execution and deli-
very to the Agency of a quitclaim deed by the Developer to the
Agency.
The Agency and the Developer hereby agree that in the event
of termination, the Developer shall assign and hereby.assigns to
the Agency all subrents and other sums due and payable from sub-
tenants, sublessees, concessionaires, licensees, and vendees of
the Developer. On the assignment and payments of such subrents
and other sums to the Agency and on the acceptance of such assign-
ment and payments by the Agency, the right ,of possession of such
subtenants, sublessees, concessionaires, licensees, and vendees
shall continue.
is
G. (Section 614) Right of Agency to Cure Developer's
Defaults
As specifically provided in other sections of this Agreement
and as generally provided in this Section 614, after the expira-
tion of the.appl.icable period of time .for making any payment or
for performing or complying with any obligation and duty provided
under this Agreement or under any financing document pertaining to
the financing of the construction of the premises to be made,
performed, or complied with by the Developer, or after the expi-
ration of the applicable time to cure any default pertaining there-
to, the Agency, at its election, may (but is not obligated to)
make any such payment or perform or comply with any such obliga-
tion and duty on behalf of the Developer. The amount of any
such payment and the cost of any such performance or compliance
.shall be deemed to be and shall be treated as added rent due
from the Developer with interest at the rate of eight percent
(8%) per year. The amount of such payment or cost (together with
interest) shall be paid within the time specified provided in such
other sections of -this Agreement or, if no such period is speci-
fied, on the first day of the first month following the date
which such amount was paid. The Agency shall give prompt written
notice to the Developer of the payment of such amount, and interest
shall accrue from the date of such notice.
The payment, performance, or compliance by the Agency for
the Developer shall not constitute a waiver or remedy of the
Developer's default, shall not constitute a waiver of any remedy
• which the Agency may otherwise have to demand the Developer to
cure such default, and shall not under the Agency, be liable for
any loss or damage resulting from any such payment., performance,
or compliance.
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VII. (Section 700) OPTION TO PURCHASE THE SITE
A. (Section 701) Grant of Option to Developer
The Agency hereby grants to the Developer the option to purchase
the Site in accordance with the provisions of this Agreement as long as
the Developer is not in default at the time the option is to be or is
exercised.
B. (Section 702) Option Period
The Developer shall have the right to exercise the option to
purchase the Site at any time during the initial term of the lease of
the Site and during any extension of such term for which an option to
extend was exercised. The Developer shall also have the right to purchase
the Site as provided in Section 905 of this Agreement.
C. (Section 703) Method of Exercising Option
The Developer shall exercise the option by giving written notice
(hereinafter referred to as the "option notice") to the Agency.
D. (Section 704) Purchase Price
Commencing on March 1, 1978, or the date of the recordation of the
Memorandum of Lease, whichever occurs first, and continuing for a period
of 5 years thereof, the Agency agrees to sell the Site to the Developer
for a purchase price of $403,057.. In addition, if the option to purchase
is not exercised during the first year, there shall be added to the purchase
price an amount equal to 2;j% of the purchase price for each calendar year
• which has elapsed in the 5-year period.
After the first 5-year period, the purchase price for the Site shall
be determined in accordance with the provisions of Section 705 of this
Agreement, but in no instance shall the purchase price be less than:$403,057.
The purchase price shall be paid in cash to the Agency by the Dev*l"er at
the close of escrow for the purchase of the Site as -provided in.S;ecti.on 707.
E. (Section 705) Determination of Purchase'Pricp
The parties shall have thirty (30) days after -the date that
the Agency receives the option notice in which to agree on the
purchase price. If the parties are unable to agree on the purchase
price within such 30-day period, then within ten (10).;dayp there-
after each party, at its respective cost and by giving -notice to
the other party, shall appoint a qualified real estate.;appraiser
with at least five (5) years' full-time commercial appraisal
experience in the area in which the Site is located to appraise
and set the purchase price of the Site. If a party does not
appoint an appraiser within ten (10) days after the other party
has given notice of the name of its appraiser, the single
appraiser appointed shall be the sole appraiser and shall set the
purchase price of the Site. If the two appraisers are appointed
by the parties as stated in this paragraph, they shall meet
• promptly and attempt to set the purchase price of the.Site. If
they are unable to agree on the purchase price within thirty (30)
days after the second appraiser- has been appointed, they shall
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• attempt to elect a third appraiser meeting the qualifications
stated in this paragraph within ten (10) days after the last
day the two appraisers are given to set the purchase price. If
they are unable to agree on the third appraiser, either of the
parties to this Agreement by giving ten (10) days' notice to the
other party can apply to the then president of the county real
estate board of the county in which the Site is'located, or to the
presiding judge of the superior court of that county,.for the
selection of a third appraiser who meets the qualifications stated
in this paragraph. Each of the parties shall bear one half of the
cost of appointing the third appraiser and of paying the third
appraiser's fee. The third appraiser, however selected, shall be
a person who has not previously acted in any capacity for either
party.
.'
Within thirty (30). days after the selection of the third
appraiser, a majority of the appraisers shall set the purchase
price of the Site. If a majority of the appraisers are unable to
set the purchase price within the 30-day period, the three appraisals
shall be added together and their total divided by three; the
resulting quotient shall be the purchase price of the Site.
If, however, the low appraisal and/or the high appraisal are or
is more than five percent (5%) lower and/or higher than the middle
appraisal, the low appraisal and/or the high appraisal shall be
disregarded. If only one appraisal is disregarded, the remaining
two appraisals shall be added together and their total divided by
two; the resulting quotient shall be the purchase price of the
Site. If both the low appraisal and the high appraisal are dis-
regarded as stated in this paragraph, the middle appraisal shall
be the purchase price for the Site.
In appraising the site as provided in thi.s Section 705, the,
appraisers shall not take into consideration the existence of the lease
of the site.
After the purchase price for the Site has been set, the
appraisers shall immediately notify the parties. If the Developer
objects to the purchase price that has been set, the Developer
shall have the right to elect not to purchase the Site as long
as the Developer pays all the costs in connection with the
appraisal procedure that set the purchase price. The IDeveloper's
election not to purchase the Site must be exercised within ten
(10) days after receipt of notice from the appraisers of the
purchase price. If the,DeveloPer does not exercise its election
within the 10-day period, the Developer shall purchase the Site
from the Agency for the purchase price provided in this Section
705.
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• F. (Section 706) Title to the Site
The Agency shall deliver to the Developer an executed grant
deed in recordable form conveying the Site. Title to the Site
shall be conveyed free and clear of all liens, encumbrances, cove-
nants, conditions, restrictions, easements, and rights of way of
record, leases or other tenancy agreements, and other matters of
record, except for current taxes and current assessments not yet due
and payable and anything of record or not of record that in any
way affects title to the Site resulting from the acts or omissions
of the Developer..
G. (Section 707) Escrow
The sale shall be consummated through an escrow with a title
insurance company agreed upon by the parties (the "escrow -holder")
to be opened within thirty (30) days after the option notice has been
given to the Agency. The escrow shall be deemed to be opened under
this Section 707 on the date that both parties have executed the
escrow instructions. The parties shall execute all documents
required by escrowholder as long as they are consistent with the
provisions of this paragraph. Escrow shall close within ninety (90)
days after the purchase price of the Site has been set under
Section 705 of this Agreement. Escrow shall -be deemed to be closed
pursuant to this paragraph on the date the grant deed is recorded.
H. (Section 708) Title Insurance
• At the close of escrow, the escrow -holder must be prepared to
issue a CLTA Standard Coverage Policy of Title Insurance in the
amount of the purchase price insuring title to the Site vested in
the Developer subject only to the matters set forth in Section
706 of this Agreement.
I. (Section 709) Closing Costs
Transfer taxes and recording fees on the grant deed shall be
paid by the Developer. The cost of the title insurance policy
referred to in Section 708 shall be paid by the Agency. Charges
of escrow and all other closing costs shall be paid by the.Developer.
J. (Section 710) Destruction of the Premises
If the premises are totally or partially destroyed between
the date that the Developer exercises the option to purchase and
the date set for the close of' escrow, the Developer shall recon-
struct and restore the premises pursuant to Section 320 or 321
of this Agreement. The destruction shall not affect this option,
the date set for the close of escrow, or the purchase price of the
Site, unless this Agreement terminates as a result of, the destruct-
•
ion pursuant to Section 320 or 321.
option shall also terminate.
If the Agreement terminates, this
K. (Section 711) Nonassignability of Option
The Developer shall not assign its interest, or any portion
of its interest, in the option granted by Section 701 without the
Agency's written consent.
L. (Section 712) Close of Escrow - Termination of
Agreement
On close of escrow,this Agreement shall terminate, and the
parties shall be released from all liabilities and obligations
hereunder.
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• VIII.(Section 800) GENERAL PROVISIONS
A. (Section 801) Recordable Memorandum of Lease
This Agreement shall not be recorded, however the Developer
and the Agency shall execute a memorandum of lease in -a record-
able form mutually acceptable -to the Developer and the. Agency.
The memorandum of lease shall be executed and shall be recorded
by the Agency within the time established therefor in the Sched-
ule of Performance (Attachment No. 3).
B. (Section 802) Notices, Demands, and Communications.•',';
Between the Parties
Formal notices, demands, and communications between_.the Agency���
and the Developer shall be sufficientlygiven if dispatched by
registered or certified mail, postage prepaid, returnrecei'pt
requested, to the principal offices of the Agency and.the'Develop_gr,
as designated in Section 106 and 107 hereof. Such written notices,
demands, and communications may be sent in the same manner to.s.uch
other addresses as either party may from time to time.designate�b.y
mail as provided in this Section 802.
C. (Section 803) Conflict of Interests
No member, official or employee of the Agen'cy'shall have any
personal interest, direct or indirect, in this Agreement nor shall.
• any such member, official or employee participate,irl:�ariy`decision
relating to the Agreement which affects.his personalinteres.ts;ar
the interests of any corporation, partnership or ,,essoc ati:on. in'.! •'
which he is, directly or indirectly, interested.
The Developer warrants that it has not paid or.gven.;,and :
will not pay or .give, any third party any money or athe�:c;oxisi-
deration for obtaining this Agreement.
D. (Section 804) Nonliability of, Agency Offic s
and Employees ..
No member, official, or employee of the Agency `shall be.
personally liable to the Developer, or any successor_":nnterest,
in the event of any default or breach by the Agency''r;for any.
amount which may become due to. the Developer or succ6o,g_or":or:
on any obligations under the terms•of this Agreement.,';`
E. (Section 805) Enforced Delay; Extension' 0Ls lime
.of Performance "'''d
In addition to specific provisions of this Agz:eemcnt perms E .
formance by either party hereunder shall•not be.deem m:be.ln,:'.
f
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•
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default where delays or defaults are due to war; insurrection;
strikes, lock -outs; riots; floods; earthquakes; fires.,,casualties;•
acts of God; acts of the public enemy; epidemics; quarntn'e res-
trictions; freight embargoes; lack of transportation; govern-
mental restrictions or priority; litigation; unusually, severe
weather; inability to secure necessary labor; material'W or tools;
delays of any contractor; subcontractor, or supplies;. acts of the
other party; acts or failure to act of the City of West Covina
or any other public or governmental agency or entity-4other.than.,.
that act or failure to act of the Agency or the City..shall not
excuse performance by the Agency) or any other causes beyond the
control or without the fault of the party claiming,ari".extensio;.of:I
time to perform. An extension of time for any such cause,`'shall ,• be.,' ,,
for the period of the enforced delay and shall commeri;e. to run..
from the time of the commencement of the cause,:if notice by the,,'
party party claiming such extension is sent to the other party within.;.`:;`'
thirty (30) days of the commencement of the cause. T mes:4�of per-
formance under this Agreement may also be extended. in wr tdhg-by.;
the Agency and the Developer. ;
s
F. (Section 806) Inspection of Books and Reco`rt;'.. :
The Agency has the right at all reasonable .:times:-Hof"'inspect
the books and records of the Developer pertaining to_the Site>aS'..
pertinent to the purposes of this Agreement. The Develap6`r also'
has the right at all reasonable times to inspect•:. -the ``bo-6ki :and
records of the Agency pertaining to the Site as pert hent.to:.the:
purposes of the Agreement.
G. (Section 807) Approvals
Approvals required of the Agency or the Develop®r sia1 not
be unreasonably withheld. `-x;•
IX. (Section 900) SPECIAL PROVISIONS
A. (Section 901) Redevelopment Plan Amendment
Any amendments to the Redevelopment Plan which change the
uses or development permitted on the Site or otherwise change
the restrictions or controls that apply to the Site shall require
the written consent of the Developer. Amendments of the Redev-
elopment Plan applying to other property in the Project area
shall not require the consent of the Developer or its respective
successors or assigns.
B. (Section 902) Real Estate Commissions
The Agency shall not be liable for any real estate commis-
sions, brokerage fees, or finder's fees which may arise from
this Agreement.
C. (Section 903) Submission of Evidence of Financing
Commitments
Within the time set forth in the Schedule of Performance
(Attachment No. 3), the Developer shall submit to the Agency
staff a letter of commitment from a lending institution or insti-
tutional investor, or such other evidence, that the Developer has
obtained firm and binding commitments for interim and permanent
financing necessary for the development of the Site. The Agency
• staff shall approve or disapprove such evidence of financing
commitments within the time set forth in the Schedule of Perform-
ance (Attachment No. 3). Failure of the Agency staff to approve
or disapprove such evidence within such time shall be deemed an
approval. If the Agency staff shall disapprove such evidence
of*financing commitments, the Agency staff shall do so by written
notice'to the Developer stating the reasons for such disapproval.
The Developer shall promptly obtain and submit to the Agency
staff new evidence of financing commitments. The Agency staff
shall approve or disapprove such new evidence of financing com-
mitments in the szune manner and within the same time established
in this Section 903 for the approval or disapproval of the evidence
of financing commitments initially submitted to the Agency staff..
•
D. (Section 904) Submission of Evidence of Leasing
Commitments
Within the time set forth in the Schedule of Performance
(Attachment No. 3), the Developer shall submit to the Agency
staff written evidence that the Developer has obtained a firm and
binding commitment for leasing approximately 15,000 square feet of
gross leasable area of the premises to be constructed on the Site.
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The Agency staff shall approve or disapprove such evidence of
• leasing commitment within the time set forth in the Schedule
of Performance (Attachment No. 3). Failure of the Agency staff
to approve or disapprove such evidence within such time shall.be
deemed an approval. If the Agency staff shall disapprove such
evidence of leasing commitment, the Agency staff shall do so by
written notice to the Developer stating the reasons for such dis-
approval. The Developer shall promptly obtain and submit to the
Agency staff new evidence of leasing commitment. The Agency
staff shall approve or disapprove such new evidence of leasing
commitment in the same manner and within the same times
established in this Section 904 for the approval or disapproval
of the evidence of leasing commitment initially submitted to the
Agency staff.
D. (Section 905) Construction of Additional
Improvements by Developer
At any time during the initial term of the lease of the Site,
or during any extension of such term, the Developer may construct
additional improvements on the Site, provided that the Developer
shall not be in default under any condition or provision of this
Agreement and provided further that such additional construction
shall be permitted under and shall comply with all applicable City
ordinances and code requirements and all applicable federal, state,
local, and Agency requirements [including provisions of Article II
of the Scope of Development (Attachment No. 4)]. The Developer
shall not commence any such additional construction until it has
notified the Agency in writing within at least sixty (60) days
prior to date scheduled for commencement of such construction and
until the Developer has complied with Sections 304, 305, 306, 307,
309, 310, and 316 of this Agreement. The right established in
this Section 905 permitting the Developer to construct additional
improvements on the Site shall be subject to and conditioned upon
the prior amendment of this Agreement with respect to, but not
limited to, -the. amount of the minimum monthly rent payable pur-
suant to Section 206 and the amount of the percentage rent payable
and determined pursuant to Sections 207 through 211 (inclusive).
If the Agency and the Developer cannot mutually agree upon the
provisions to be contained in suchamendment within a sixty-day
period following the date of receipt of the notice referred to'in
Section 905, then the Developer shall be permitted to construct
such additional. improvements on the Site only if the Developer
purchases the Site. The purchase of the Site shall be in accord-
ance with procedures established in Sections 704 through.709 (inclu-
sive) pertaining to the option to purchase the Site.
X. (Section 1000) ENTIRE AGREEMENT; WAIVERS; AMENDMENTS;
MISCELLANEOUS PROVISIONS
This Agreement shall be executed in three duplicate originals,
each of which is deemed to be an original. This Agreement con-
stitutes 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 nego-
tiations or previous agreements between the parties with respect
to all or any part of the Site.
All waivers of the provisions of this Agreement must be in
writing and signed by the appropriate authorities of the Agency or
the Developer, and all amendments hereto must be in writing and
signed by the appropriate authorities of the Agency and the Devel-
oper.
This Agreement and any provisions hereof may be amended by
mutual written agreement by the Developer and the Agency and such
amendment shall not require the consent of any other person or
entity having an interest in the Site; but shall require the
written consent of the subtenants and sublessees of the premises
• to be const.ruc:red on the Site to the extent that such amendments
are applicable to such premises or affect the rights of such sub-
tenants and sublessees under their subleases with the Developer.
Time is of the essence of each provision of this Agreement.
The captions of the Agreement shall have no effect on its
interpretat i.on.
The unenforceability, invalidity, or illegality of any
provision of this Agreement shall not render the other provisions
unenforceable, invalid, or illegal.
•
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XI., (Section 1100) DATE OF AGREEMENT
The date of this Agreement shall be the date when the Agree-
ment shall h�.ve been signed by the Agency.
REDEVELOPMENT AGENCY OF THE
CITY OF WEST COVINA
(Agency)
Date:
Date:
(Agency Neal)
Date:
APPROVED A;, Tk I k'OPPI:
George Wak L.ield ��!^
Agency Gen��i al_ Counsel
By:
Chairman
By:
Agency Secretary
H. FRANK DOMINGUEZ dba
VANIR RESEARCH COMPANY
(Developer)
By:
H. Frank Dominguez
APPROVED:
LAW OFFICES OF EUGENE B. JACOBS
By:
Date:
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PaR<:�%aY
ATTACHMENT NO. 2
LEGAL DESCRIPTION
The land referred to in this D.D.A. is situated in the State of California,
County of Los Angeles, City of West Covina and is described as follows:
Tentative Parcel Map No. 7430 being a division of:
,That portion of Lot 133 of E. J. Baldwin's 4th Subdivision,part of the
Rancho La Puente, as shown on the map recorded in Book 8, Page 186 of
Maps, in the office of the County Recorder of said County, together with
a portion of Sunset Avenue, also known as Sunset Place and a portion of
Garvey Avenue, described as a whole as follows:
Beginning at' the most northerly corner of Lot 143 of said Tract: thence
along the northwesterly prolongation of the northeasterly line of said
Lot 143 North 480 46' 34" West 15.85 feet to a point in the southeasterly
line of Sunset Avenue as established by resolution of the City Council of
the City of West Covina, a certified.copy of which recorded August 16, 1962
in Book D1725, Page 481 of official records: said point being on a non -
tangent curve northwesterly having a radius of 840.00 feet, a radial line
to said point bears South 590 55' 05" East; said point beingg the True Point
of Beginning: thence continuing North 480 46' 34' West 14.15 feet to the
center line of Sunset Avenue shown on the map of said subdivision as 60 feet
• wide; thence along said center line North 410 13' 52" East 60.08 feet.to a
point in the above mentioned southeasterly line of Sunset Avenue as
established by resolution of the City Council of,the City of West Covina, the.
radial line to said point bears South 640 07' 46" East; thence northeasterly
alongg said curve through a central angle of 90 04' 58" an arc distance of
133.16 feet, thence tangent to said curve North 160 47''16" East 321.45 feet
to the beginning of a tangent curve concave southeasterly and having a radius
of 25.00 feet, and which is tangent at its easterly.terminus to a line
parallel with and distant southerly 32.00 feet, measured at right angles,
from the northerly line of said Lot 133: thence northeasterly along said
curve through a central angle of 730 37' 54" an arc distance of 32.13 feet
to said parallel line; thencs alongg said parallel line North 890 34' 50 West
148.05 feet: thence South 45 25' 10" West 28.28 feet; thence South 00 25' 10"
West 7.50 feet to a line parallel with and distant southerly 59.50 feet,
measured at right angles from the northerly line of said Lot 133; thence
North 890 34' 50" West 54.58 feet to a line parallel with and distant easterly
32.00 feet, measured at right angles, from the centerline of Sunset Avenue as
shown on County Surveyor's Map No. B-2791, Sheet 6, filed in the office of
the County Engineer of said County; thence along said parallel line
South 180 34' 20" West 44.10 feet; thence South 150 51' 10" West 400.45 feet
to a line parallel with and distant easterly 51.00 feet, measured at right
• angles, from said centerline of Sunset Avenue; thence along said parallel
line South 180 34' 20" West 52.54 feet to the beginning of a tangent curve
concave northeasterly having'a radius of 29.00 feet; thence southeasterly
along said curve through a central angle of 900 00' 00" an arc distance of
45.55 feet; thence South 710 25' 40" East 5.00 feet; thence South 180 34' 20"
West 6.00 feet; thence South 710 25' 40" East 76.07 feet to the beginning of
a tangent curve concave southwesterly having a radius of 255.00 feet; thence
southeasterly along said curve through a central angle of 60 04' 33" an arc
distance of 27..04 feet to a point in the above mentioned southeasterly line
of Sunset Avenue established by the resolution of said City, a radial line to
said point bears South 530 38' 31" East; thence northeasterly along said
southeasterly line through a central angle of 6° 16' 34" an arc distance of
92.01 feet to the True Point of Beginning.
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Excepting from a portion of said land all minerals, oils, gases and other
hydrocarbon by whatever name known without, however, the right to drill,
dig or mine through the surface thereof, as reserved by the State of California,
by deeds recorded July 6, 1962 in Book D-1676, Page 189, Official Records, and
recorded December 12, 1963 in Book D-2287, Page 317, Official Records.
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•
ATTACHMENT NO. 3
SCHEDULE OF PERFORMANCE
Execution of the Agreement by th_e On or before January 23, 1978.
Agency. The Agency shall hold a pub-
lic hearing and authorize execution of
the Agreement and deliver Agreement
to the Developer.
Delivery of Good Faith Deposit.
The Developer shall deliver to the
Agency the good faith deposit.
Concurrent with execution of this
Agreement by the Developer.
Submission - Basic Concept Draw- Concurrent with execution of this
ings. The Developer shall prepare Agreement by the Developer.
and submit to the Agency for appro-
val basic concept drawings and
related documents for the develop-
ment of the Site.
Approval - Basic Concept Drawings.
The Agency shall approve or -dis-
approve basic concept drawings and
. related documents for the Site.
Submission - Evidence of Financing
Commitments. The Developer shall
submit to the Agency staff written
evidence that the Developer has
obtained firm and binding financing
commitments necessary for the
development of the Site.
Concurrent with execution of this
Agreement by the Agency.
Within 45 days after the approval
by the Agency of construction plans
and issuance of building permit.
Approval - Evidence of. Financing Within 10 days after receipt by
Commitments. The Agency staff shall the Agency staff.
approve or disapprove the evidence
of financing commitments submitted
by the Developer.
Submission -_Evidence of Leasinq
Commitment. The Developer shall
submit to the Agency staff evidence
that the Developer has obtained a firm
and binding commitment for leasing
approximately 1.5, 000 square feet of
gross leasable area of the premises
to be constructed on the Site.
Within 45 days after the execution
of this Agreement by the Agency.
•Approval - Evidence of Leasig Com- Within 10 days after receipt by
mitment. The Agency staff shall the Agency staff.
approve or disapprove the evidence
of leasing commitment submitted by
the Developer.
Submission of Precise Plan of Design
for the Project. The Developer shall
prepare and submit to the City Plan-
ning Department all drawings and
documents as set forth in the City's
precise plan procedures.
Approval of Precise Plan of Design.
Subject to approval by the City's
Planning Commission (Redevelopment
Agency) as set forth in the City's
precise plan procedure.
Submission of Final Construction
Drawings. The Developer shall
prepare and submit to the City's
Building Department final'con-
struction drawings and specifica-
tions, a final landscaping plan,
and a finish grading plan.'
• Approval of Final Construction
Drawings. Subject to approval by
the City's Building Department (and
Redevelopment Agency Staff) as set
forth in the City's precise plan
procedures.
Done.
Done.
Not later than January 15, 1978.
Not later than March 1, 1978.
Issuance of Building Permit. Within 10 days after approval of
The Developer shall be issued a plans by the Agency and Building
building permit for the development Department.
and construction of approximately
15,000 square feet of restaurant faci-
lities on the Site.
Agency Construction of Improvements.
The Agency shall perform (or shall
cause the performance of) all work
pertaining to the demolition and/or
removal of existing improvements on
the site, and rough grading of the
entire site as per Attachment No. 5.
Recordation of Memorandum of Lease;
andPossession of the Site. The
*memorandum of lease shall —be recorded
and possession of the Site shall be
delivered to the Developer.
Not later than March'l, 1978.
Not later than March 1, 1978.
• Commencement of Construction
The Developer shall commence construc-
tion on the Site.
Completion of Construction.
The Developer shall complete construc-
tion of the improvements on the Site
and the Agency shall complete construc-
tion of a portion of the roadway and
entrance to Site and the West Covina
Fashion Plaza from Sunset Avenue..
G
•
'Within 60 days after issuance of
building permit.
Within 360 days after commencement
of work on the Site by the Developer.
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ATTACHMENT NO. 4
• SCOPE OF DEVELOPMENT
I. GENERAL DESCRIPTION
The Site is comprised of certain real properties within one
parcel of land as shown on the Site Map (Attachment No. 1). The
Site contains approximately 103,237 square feet, or 2.37 acres.
. The Site shall be developed to include construction of res-
taurant facilities having a minimum of 15,000 square feet of gross
leasable area, and with a construction cost estimated to be at
least $1,000,000.00. The installation of fixtures are to be done
by the lessee of the restaurant facilities and are to he at a cost
estimated to be at least $ 400,000.00. The development shall
include the provision for landscaping and parking according to
the development standards set forth in Article II of this Scope
of Development.
The Agency shall perform, or shall cause to be performed, the demo-
lition and rough grading work set forth in Section 303 of this Agreement
and as per Attachment No. 5. The Developer shall be responsible for the
provision, construction and installation of all utilities for the develop-
ment and of all other on -site and off -site public improvements. Such
• public improvements shall include sidewalks, curbs, gutters, driveways,
street trees (1 per 40 lineal feet), fire hydrants, street lights and
standards, and such other items as are required by the precise plan
review and approval.
The Developer, its architect, engineer, and contractor shall
work closely with the Agency's staff in the preparation of the
construction drawings and landscaping and grading plans.
II. DEVELOPMENT STANDARDS
The Site shall be designed and developed according to the
following development standards:
A. Parcel Coverage. Not more than twenty-five percent
(25%) of a parcel of land shall be covered by build-
ings and structures.
B. Building Height. Buildings shall not exceed the
height limits established for the Regional -Commercial
(R-C) Zone as defined in the City's Municipal Code,
subject to modification pursuant to City Procedures.
C. Buildinq Setbacks. Minimum building and parking lot
• setbacks shafl be in conformance with the City's Muni-
cipal Code.
D. Building Construction. Buildings shall be con-
• structred in conformance with the City's Munici-
pal Code and in accordance with approved preli-
minary construction drawings, plans, and speci-
fications.
E. Signs. Signs shall be designed to contribute
positively to the aesthetic environment, and shall
be in conformance with the City's Municipal Code.
F. Screening. All outdoor storage of materials or equip-
ment shall be enclosed or screened by walls, land-
scaping, or enclosure to the extent and in the manner
required by the Agency and in the City's Municipal
Code.
G. Landscaping. The Developer shall provide and maintain
landscaping within the public rights -of -way, within
setback areas, and on the Site, in accordance with
preliminary construction and landscaping plans.
Landscaping shall consist of trees, shrubs, and
installation of an irrigation system adequate to main-
tain such plant material. The type and size of trees
to be planted, together with the landscaping plan,
shall be subject to Agency approval prior to planting.
• H. Utilities. All utilities on the Site shall be under-
ground or enclosed at the Developer's expense whenever
physically and economically feasible.
•
I. Vehicular Access. The placement of vehicular drive-
ways shall be coordinated with the needs of proper
street traffic flow. In the interest of minimizing
traffic congestion, the number and location of curb
breaks shall be in accordance with approved basic
concept drawings. All access driveways shall require
written approval of the Agency.
J. Loading. Loading and unloading space shall be pro-
vided as required by the City's Municipal Code.
Loading spaces shall be located in a manner to avoid
interference with public use of sidewalks and
streets, and shall be constructed so that storm and
surface waters will riot drain across public sidewalks.
Loading spaces visible from streets shall be land-
scaped or screened to prevent unsightly or barren
appearance. Loading areas shall not front or be within
parking areas fronting on streets.
__ 2-
K. Parking. On -site and/or off -site parking for the
development shall be in conformance with the City's
Municipal Code.
No parking space shall be located in a setback area,
except with prior written approval of the Agency.
Parking spaces shall be paved and drained so that
storm and surface waters draining from the'Site will
not cross public sidewalks. Parking spaces visible
from streets shall be landscaped as necessary to
prevent unsightly or barren appearance. Parking areas
shall be properly and adequately illuminated and all
such lighting shall be shielded from adjacent pro-
perties and adjoining streets.
L. Painting. All exterior walls shall
treated by the Developer with a color
colors subject to Agency approval.
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be painted or
scheme and