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Home My WebLink AboutR35-Economic Development Agency ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Maggie Pacheco Deputy Director DATE: August 26, 2005 SUBJECT: 2005 Disposition and Development Agreement - Arrowhead Central Credit Union, a California Corporation (Central City South Redevelopment Project Area) +--------------------------------------------------------------------------------------------------------------.----------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s}: On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the Community Development Commission consider this action for approval. On July 18,2005, the Community Development Commission voted to continue this matter to September 6,2005. ----------------------------------------------------------------________________n__________________________h_________---------------------------------------------------------------------------------------- Recommended Motion(s}: Open/Close Public Hearing A: (Mavor and Common Council) Resolution of the Mayor and Common Council of the City of San of San Bernardino approving the 2005 Disposition and Development Agreement ("DDN') by and between the Redevelopment Agency of the City of San Bernardino ("Agency") and Arrowhead Central Credit Union, a California Corporation ("Developer") (Agency Property located north of Mill Street, west of "E" Street (APN 0136-111-22) - 8.2 acres in the City of San Bernardino) ("Property") and making certain findings thereto related to the development of the Project B: (Communitv Development Commission) Resolution of the Community Development Commission of the City of San of San Bernardino approving the 2005 Disposition and Development Agreement ("DDN') by and between the Redevelopment Agency of the City of San Bernardino ("Agency") and Arrowhead Central Credit Union, a California Corporation ("Developer") and authorizing the Agency Executive Director to execute said DDA relating to the sale and development of Agency Property located north of Mill Street, west of "E" Street (APN 0136-111-22) - 8.2 acres in the City of San Bernardino ("Property") and making certain findings thereto related to the development of the Project -_____________________nu__n____n_n_____~_____n______________________________n_n__n_____n_____n_____n_n_n__________H___n_n________________________n___________________n_____n_______________ Contact Person(s): Project Area( s) Gary Van asdel/Maggie Pacheco Central City South Redevelopment Project Area Phone: (909) 663-1044 Ward(s): Supporting Data Attached: III Staff Report III Resolution(s) III Agreement(s)/Contract(s) 0 Map(s) 0 Letters See Fiscal FUNDING REQUIREMENTS Amount: $ Impact Source: Tax Increment Budget Authority: See Fiscal Impact S:~~:E_&:-L~~?:~__'~~~fkJ~~':m~ com~ion/counc~ Notes: _PL;WU~Jc :fq4if/ gto~fs- ----------_______________________________________n_n_______n_n_n_n_____________________________________n___________________n___________n________________~_______~______n__n__n__________~_________ P:\Agendas\Comm De\' C'ommission\CDC 2005\05-09-06 Arrowhead Credit Union SRI ,doc COMMISSION MEETING AGENDA Meeting Date: /(J.'1'7-0S- Agenda Item Number: R3 S- . ECONOMIC DEVELOPMENT AGENCY ST AFF REPORT --------------------------------------------________________________n_____u_____n_______n______________________n____________.-------------------.-------------------------------------------------------- 2005 DISPOSITION AND DEVELOPMENT AGREEMENT - ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION (CENTRAL CITY SOUTH REDEVELOPMENT PROJECT AREA) BACKGROUND: On February 4, 2004, the Redevelopment Agency (the "Agency") received a proposal from an agent acting on behalf of the Arrowhead Central Credit Union, a California Corporation ("ACCU") relative to the acquisition and development of an 8.2 acre Agency owned parcel in the Central City South Redevelopment Project Area (the "Property") (See Map). According to this proposal, ACCU intended to form a single asset company that would acquire the Property, as well as certain privately owned adjacent parcels, and develop a 60,000 square foot, two story office complex on the Property as well as additional buildings on the privately owned land adjacent to the site as they came under the ownership of ACCU (the "Project"). On or about February 15,2004, the Agency received notice that the single asset company had been formed and would be known as Mill Street Development, LLC (the "Developer") On February 17,2004, the Agency Executive Director, after consultation with the City Administrator, advised the Developer of what Project assistance City! Agency Staff would be willing to recommend for Council/Commission consideration. The five points of the assistance package were as follows: · That the Agency sell the subject Property to Mill Street Development, LLC for the current market value as determined by Smothers Appraisal. · That the City fast track the entitlement and permitting process for the proposed development of the subject Property. · That the City participates with Mill Street Development, LLC in funding the off-site infrastructure improvements associated with the extension of Birch Court easterly from "G" Street to the Property. · That the Agency share with Mill Street Development, LLC, 60% of the net tax increment generated by the development ofthe Property annually for ten years. · That the City assist in negotiating the necessary access and parking easement agreements related to joint use of the Arrowhead Credit Union Stadium parking lot. On February 19, 2004, the Redevelopment Committee reviewed the Project assistance proposal and recommended that it be moved on for full Commission consideration. On March 15, 2004, the Commission considered the Project assistance proposal and recommended that Staff initiate negotiations with the Developer pursuant to said proposal. P:\Agendas\Comm Dev Commission\CDC 2005\05-09-06 Arrowhead Credit Union SR I doe COMMISSION MEETINC Af:FNOA Meeting Date: /(J-I'I'05" Agenda Item Number: R. 36 - , Economic Development Agency Staff Report Arrowhead Credit Union DDA Page 2 On July 23, 2004, Mill Street Development, LLC and the Agency entered into a Redevelopment Project Study and Redevelopment Assistance Agreement ("Agreement") to enable land assemblage, preliminary design work and the securing of certain entitlements to commence under the terms of an exclusive right agreement. Pursuant to this Agreement, the Agency and the Developer undertook the necessary determinations to ensure the overall feasibility of the proposed development. CURRENT ISSUE: The Developer and the Agency have completed the preliminary work as defined in the Redevelopment Project Study and Redevelopment Assistance Agreement and are now desirous of formalizing a Disposition and Development Agreement (DDA) for the transfer of the Property under the following major conditions: · Arrowhead Central Credit Union has dropped the name "Mill Street Development, LLC" and is desirous of entering into the DDA under the name of Arrowhead Central Credit Union, a California corporation (ACCU). · The Agency has had the Property appraised, as of February 3, 2005 at $5.25 per square foot totaling $1,890,000. The Agency shall dispose of the Property to ACCU at the appraised market value. · The proposed office building to be developed on the Property has increased in size from 60,000 square feet, as originally contemplated, to 120,000 square feet. · The improvements identified in the DDA totals 135,000 square feet; this consist of a two- story, 120,000 square foot building to be built on the Property and a second building of 15,000 square foot to be built on the adjoining property already owned by ACCD. Together these two buildings comprise the Project per the DDA. · Initially, approximately 250 employees will be employed at the center, rising to 400 in three (3) years after the date of completion of the Project. · The projected total development cost of the Project is estimated to be $30 million. · The Agency pledges sixty percent (60%) of the Net Tax Increment based upon one percent (1 %) general property taxes of the Project for the purpose of reimbursing the Developer for the costs associated with the relocation and under grounding of overhead high voltage power lines, the acquisition of additional properties adjacent to the Project for ingress and egress to and from the Project from "0" Street, construction of additional public right-of-way improvements as shall be required by the City, including streets, median strip dividers and public right-of-way landscaping, street lighting and traffic signals, and extraordinary site development costs that may be incurred by the Developer due to the prior use of the Property as a railroad switching yard and a petroleum products transfer station. · The Project will be completed within two hundred seventy (270) days from the opening of escrow. P:\Agendas\Comm Dev Commission\COC 2005\05-09-00 AITowhead Credit Union SR] doc COMMISSION MEETING AGENDA Meeting Date: 10-/7- 00- Agenda Item Number: /(P Economic Development Agency Staff Report Arrowhead Credit Union DDA Page 3 ENVIRONMENTAL IMPACT: The Initial Study (IS) (Attachment I) was prepared for the proposed Project and distributed for comment to affected agencies in accordance with CEQA, and said IS determined that although the proposed Project could have a significant effect on the environment, there will not be significant effects because revisions have been made to the project description to mitigate those impacts; thus it is proposed that a Mitigated Negative Declaration be prepared for the Project. The IS was circulated on June 20, 2005 and no comments were received. The Environmental Consultant has prepared the Mitigation Monitoring and Reporting Program (Monitoring Program) (Attachment II) which outlines the responsibilities and duties of the Developer with regard to the monitoring and reporting of those measures or conditions imposed on the project to mitigate or avoid adverse effects on the environment in accordance with CEQA Section 21081.6. Because the majority of the mitigation measures deal with air quality, geology and soils and traffic and circulation, the City's Development Service Department will review, inspect and monitor the Developer's compliance with said Monitoring Program. FISCAL IMPACT: Agency will realize market value land sales proceeds of One Million Eight Hundred Ninety Thousand Dollars ($1,890,000.00) at close of escrow, less its share of customary escrow fees. Based upon the estimated value of the Project to be placed on the tax rolls (approximately $30 Million), the Developer will receive an amount equal to 60% of the Net Tax Increment derived from the 1 % general property taxes (exclusive of any override taxes, special taxes, ad valorem taxes for general obligations bonded indebtedness or other special assessments) paid by the Developer and received by the Agency as tax increment revenues as specifically provided for in Section 3.08 of the DDA. This could equate to $144,000 per year over the ten (10) year period of the Agreement (Refer to Summary Report attached to this Staff Report). The Agency will gross an additional $96,000 per year in additional tax increment from the Project, which together with the sales proceeds totals an additional $2,850,000 to the Agency over the life of the Agreement. Moreover, the Agency will receive approximately $60,000 annually from the gross tax increment generated from the Project for deposit to the 20% Housing Set Aside Fund. RECOMMENDATION: That the Mayor and Common Council and the Community Development Commission adopt the attached Resolutions. '::rAl~ Maggie Pacheco, Deputy Director P:\Agendas\Comm Dev Commisslon\CDC' 2005\05-09-06 Arrowhead Credit Union SR I.doc COMMISSION MEETING AGENDA Meeting Date: 10-17' 0) Agenda Item Number: - f{-3?" I I /,~ ~-'V ~C~M.'~n't,''' ' I '"" j,,/.. D'uY,v.,.,r.~I/V.U ~I' I ~"/ I _"". "', r .-" " '). "", V"_'-L' /r'/'IIL,'YU,,"v \ IJF'-;7S"<J/I.! " v ~- --'' - I l .1. ! ;,,' -' - ___J 1 , ,.- [' . !!-- :~il~ \J. RlAlTO AVE ..! 4 .}~. S/if}J"5'.J.; 1Y ~S'jl.?l28' ;(' \ d 21 /91 ~ \,. ~ ~f VELARD( 5T ::: -... <t: ~ I ~ >-~CT,' , ~ ~ ~ ~ ~.~. '1 ~ P"'fEL t,', LEGEND ~ ~ EXISTING PARCEL ~ ~ I BOUNDARY 1.2,3 L a ~ POB V) NEW PARCEL PARCEL A :~ J BOUNDARY A.B.C . 0 400 800 I I i 589"587J ~ I I 11 J6o.76' -11.25" SCALE IN FEET . llllS PLAT IS SOLELY AN AID IN LOCATING lllE PARCEL(S) DESCRIBED IN lllE AITACHED DOCUMENT. IT IS NOT PART OF lllE WRITTEN qBCRIPTlON THEREIN., S89JO '.J./ fy 2_70. 00 ' ;1!00l70 00 'if' 19800' ---- ;1/89:5J0.9 ';'j/ ,J5.9. 90' .;:c ",,' t'''-.. j,.>V 1 ) ~ --------- -.,/ .......... . OR 1514/419 OR 186/231 OR 30001387 ~ POB PARCEL 2 \. \ CONGRES5-.SI~I' ~ J ~ N ~ ~ " VALLEY 5lf'J ;:; /'v'OOl7fl/ fy J92X' iV8.9:58?5t I~ .... ,-... t'\, ~ ~ '" '<:: 1 POB PARCEL C _-.J -I- I 4/25' ~I ~ I 500i/2 '58 t ~ 1- ",' ~ /./J ~ POB PARCEL B , POB PARCEL 1 589:5J09 t: 28/00' IrATHOl ST 510.69' PARCEL B 589'';9'457f' 28/00 ' 19700' r') l-<-. INSTRUMENT # 89-074770 ~ fAST LINE or II- SOLlllfERN PACIfiC en RAILROAD RIClfT or H/AY Al8 16/1J. OR JI2/J25, OR JJ5/98-99 l_ , Hernandez. Kroone , Asaockrtes.~c - CONSULTING ENG I NEERS - H I'UHN 1 NG - llC;. QI - SURVt:Y I NG . Z3-4 EAST ORAICE: DR I lIE ~. SAIl lIERNARO 11<<1. CA R_ 'I~' ....-SZ22 FAX I..,,' "3-'5" J E_,L____ CITY OF SAN BERNARDINO LOT LINE ADJUSTMENT SCAlE: 1.=400' DATE: 06/24/05 DRAWN BY: JAF CHECKED BY: RRH WORK ORDER: 04-1007 SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW REGARDING THE PROPOSED DEVELOPMENT AND DISPOSITION OF AGENCY OWNED PROPERTY BEING THE SOUTHERN PORTION OF 280 SOUTH ''R' STREET IN THE CENTRAL CITY SOUTH PROJECT AREA PURSUANT TO THE TERMS OF THE PROPOSED 2005 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION INTRODUCTION This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code. This summary report sets forth certain details of the proposed 2005 Disposition and Development Agreement ("DDA") between the Agency and Arrowhead Central Credit Union, a California Corporation a.k.a. Mill Street Development, LLC, (the "Developer") regarding the sale of a portion of the Agency owned property situated at 280 South "E" Street in the City of San Bernardino (the "Property") This Summary Report is organized into the following five (5) sections. I Salient Points of the Proposed Disposition and Development Al!reement: This section includes a description of the Project and the major responsibilities assumed by the Agency and the Developer. II Cost of the Disposition and Development Al!reement to the Al!encv: This section outlined the proposed Agreement costs to the Agency. III Estimated Value of the Interests to be Conveyed bv the Disposition and Development Al!reement Determined at the Hil!hest and Best Use Permitted Under the Redevelopment Plan: This section summarizes the value of the Property to be conveyed by the Agreement to the Developer at the highest use permitted. IV Blil!ht Alleviation: This section describes the eXIstmg blighting conditions around the Property that is the subject of the Agreement and an explanation of how the proposed Agreement will assist in alleviating the blighting conditions. V Conformance with the AB 1290 Implementation Plan: This section identifies how the proposed Agreement will result in a development activity that fulfills the goals and objectives established in the Agency's AB 1290 Five-Year Implementation Plan. 1 P:\Agendas\Agenda Attachmc:nls\Summary Repons\2005\05-09-06 Arrowhead Summary Repon.doc I SALIENT POINTS OF THE PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT. A Description of the Proposed Project. The purpose of the proposed DDA is to facilitate the development of a new office complex for Arrowhead Central Credit Union. This will comprise of two (2) Class A buildings totaling 135,000 square foot in size and accommodate the central billing office for the credit union as well as their training facility, central mail sorting facility and an Arrowhead store (the "Project"). The larger of the two (2) buildings will be 120,000 square foot to be built on the Property and the smaller, 15,000 square foot building to be built on adjacent property already owned by Arrowhead Central Credit Union. Initially, 250 people will be employed at the facility rising to over 400 in 3 years time. The buildings will incorporate the highest standards of architecture and the Project includes all landscaping, under grounding of overhead electric cables, sewers, and gutter. The original Exclusive Right to Negotiate agreement was entered into with Mill Street Development, LLC, a wholly owned subsidiary of Arrowhead Central Credit Union and some early entitlements are in the name of Mill Street Development, LLC. The Project is located in the Central City South Project Area. B Agency Responsibilities 1. Disposition of the Property totaling 8.2 acres to the Developer for the purpose of developing the Project as described in point A above. 2. Reimbursement of 60% of the net Tax Increment that will accrue from the Project for a period of ten (10) years to help offset the cost of relocation and under grounding of overhead high voltage power lines, the acquisition of additional properties adjacent to the Property for ingress and egress to and from the Project from "G" Street, construction of additional public right-of-way improvements as shall be required by the City, including streets, median strip dividers and public right of way landscaping, street lighting and traffic signals, and extraordinary Project development costs that may be incurred by the Developer due to the prior use of the Property as a railroad switching yard and a petroleum products transfer station as described in item # II - Cost of the Disposition and Development Agreement to the Agency. C Developer Responsibilities 1. The Developer will pay the Agency market value for the Property of $1,890,000.00. 2. The Developer will construct the Project. 3. The Project will be constructed at prevailing wage. 2 P:\Agendas\Agenda Attachments\Summary Repons\2005\OS.09-06 AlTOwhead Summary Report,doc 4. The Project will be constructed in compliance with the City's General Plan and Municipal Development code. 5. The Developer will comply with all the covenants of the Agreement. II COST OF THE AGREEMENT TO THE AGENCY. The Agency will receive $1,890,000 in sale proceeds at the close of escrow less $15,000 already on deposit. Based upon the estimated value of the Project upon completion ($30 Million) to be placed on the tax rolls, the Agency will receive an additional $300,000 per year in tax increment revenues. The Agency has pledged 60% of the net tax increment back to the Developer, which will amount to approximately $144,000 per year over the ten (10) year period of the Agreement. The Agency will gross approximately $1,890,000 out of sale proceeds plus 40 % of the net umestricted tax increment, which amounts to approximately $96,000 per year totaling $2,850,000 to the Agency over the life of the Agreement. In addition, the Agency will receive 20% of the gross tax increment (about $60,000) per year for its Low/Mod Housing Fund. III ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED DETERMINED AT THE HIGHEST AND BEST USES PERMITTED UNDER THE REDEVELOPMENT PLAN. The Property is zoned CCS-l which allows for retail and office use with a maximum height of two stories. This Property is being sold at market value and the Project will be constructed on the Property at a cost of $210.00 per square foot as opposed to retail, which costs approximately $125.00 per square foot. The interest conveyed to the Developer has been determined to be the highest and best use permitted under both the CCS-l Zoning and the Central City South Redevelopment Plan and holds true for the reuse value, considering the Agency sale of the Property is subject to conditions, covenants and restrictions per the proposed DDA. IV BLIGHT ALLEVIATION. Central City South is an area immediately south of the inner urban core and is therefore one of the oldest areas of town. This area is characterized by many old buildings, which are not compatible with modem retail and office uses and are therefore vacant or underutilized as 99c stores and automobile stereo outlets. A significant improvement was made to "E" Street in 1995 with the construction of the Arrowhead Credit Union Park Baseball Stadium and the Arrowhead Central Credit Union Project which will further eradicate blight in this area, not only by improving the vacant land to the south of the stadium on Mill Street with a new office structure but also by acquiring a vacant plumbing supply building on "E" Street, demolishing it and building a second new smaller office building on that site, so extending the improvements down "E" Street which is the City's main surface arterial. 3 P:\Agendas\Agenda Attachments\Summary Reports\200S\OS-09-06 Arrowhead Summary Report.doc V CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN. The Five-year Implementation Plan adopted by the Agency contains several broad operational goals and objectives. Among these are the following: · Eliminate blighting influences including deteriorating buildings, uneconomic land uses, obsolete structures and other environmental, economic and social deficiencies · Improve the appearance of existing buildings, streets, parking areas and other facilities · To facilitate land assembly to prevent piecemeal development that would leave economic potential underachieved · To re-plan, redesign and develop un'derdeveloped areas that are stagnant or improperly utilized · To encourage cooperation and participation of residents, businesspersons, public agencies and community organizations in revitalizing the area The proposed DDA will assist the Agency in meeting the objectives and goals of its Five- Year Implementation Plan in the following ways: 1. To facilitate land assembly to prevent piecemeal development that would leave economic potential underachieved 2. Eliminate blighting influences including deteriorating buildings, uneconomic land uses, obsolete structures and other environmental, economic and social deficiencies 3. To re-plan, redesign and develop underdeveloped areas that are stagnant or improperly utilized Based upon the preceding factors, the proposed DDA is consistent with the adopted Five- Year Implementation plan. 4 P:\Agendas\Agenda Attachments\Summary Reports\2005\05-09-06 Arrowhead Summary Report,doc ATTACHMENT I REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY FOR 2005 Disposition and Development Agreement between Mill Street Development, LLC and the Redevelopment Agency of the City of San Bernardino PROJECT DESCRIPTION/LOCATION: The project site is an irregularly shaped parcel located on the north side of Mill Street, with adjacent and included lands fronting on E Street on the west, and Birch Court on the east (please see Exhibit 1, Project Location). The Agency-owned property consists of approximately 8.2 acres. In addition, Mill Street Development, LLC has secured properties east and west of the Agency parcel. The total project area consists of approximately 11.5 acres. The Redevelopment Agency of the City of San Bernardino is entering into a 2005 Disposition and Development Agreement (DDA) with Arrowhead Central Credit Union, a California Corporation, for the ultimate development of the site for office uses within approximately 135,000 square feet of office space. This Initial Study addresses all known issues associated with the DDA, the development of the office space, and the overall impacts of the project to the extent they have been identified. DATE: June 16,2005 PREPARED BY Nicole Sauviat Criste, Consulting Planner Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 (909) 663-1044 PREPARED FOR Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 (909) 663-1044 P:\Agendas\Agcnda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS.doc IS 1 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY The California Environmental Quality Act (CEQA) requires the preparation of an Initial Study when a proposal must obtain discretionary approval from a governmental agency and is not exempt from CEQA. The purpose of the Initial Study is to determine whether or nor a proposal, not exempt from CEQA, qualifies for a Negative Declaration or whether or not an Environmental Impact Report (EIR) must be prepared. 1. Project Title: 2005 Disposition and Development Agreement between Mill Street Development, LLC and the Redevelopment Agency of the City of San Bernardino for the construction of an approximately 135,000 square foot office complex. 2. Lead Agency Name: Address: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 3. Contact Person: Phone Number: Colin Strange (909) 663-1044 4. Project Location (Address/Nearest cross-streets): North side of Mill Street, approximately 310 feet west ofE Street. 5. Project Sponsor: Address: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 6. General Plan Designation: Commercial General (CCS-l) 7. Description of Project (Describe the whole action involved, including, but not limited to, later phases of the project and any secondary, support, or off-site feature necessary for its implementation. Attach additional sheets, if necessary): The project consists of a 2005 Disposition and Development Agreement (DDA) between Mill Street Development, LLC, and the Redevelopment Agency of the City of San Bernardino (Agency). The site will ultimately be developed for approximately 135,000 square feet of office space. The salient terms of the DDA include: 1. The Agency will sell 8.2 acres ofland to Mill Street Development, LLC. 2. Mill Street Development, LLC will construct an office complex on the property P:lAgendas\Agenda Auachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS.doc IS 2 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY The project site is an irregularly shaped parcel located in the central portion of the City of San Bernardino. The project site includes approximately 360 feet of frontage on the north side of Mill Street, with a lot depth of approximately 987 feet at this location. In addition, there are westerly and easterly extensions of the project area, owned by Mill Street Development, LLC, one occurring approximately 250 feet south of the northerly property line on the east boundary, extending to E Street to the east, and one occurring approximately 325 feet south of the northerly property line on the west side, to Birch Court. Altogether, the site totals approximately 11.5 acres. That portion of the project site occurring on Mill Street is currently vacant. A driveway occurs along the western property line connecting the parking lot located immediately north of the project site to Mill Street. Lands with frontage on E Street are currently occupied by a plumbing supply company. Lands with access to Birch Court, the western extension of the site, are currently vacant. Mill Street Development, LLC proposes the construction of up to 120,000 square feet of office space on the site, as well as the reconstruction of the plumbing company building adjacent to accommodate an additional 15,000 square feet of space. Development will occur immediately following completion of the sale of the property. Mill Street Development, LLC will be required to secure Development Permits from the City of San Bernardino for development of the site, which will include a two-story office structure, and associated parking area. 450 parking spaces are proposed. This Initial Study has been prepared based on information and plans available at this time. 3. Surrounding Land Uses and Setting: Lands located to the north are occupied by Arrowhead Credit Union Park Stadium and associated parking facilities. Lands to the east are primarily in industrial land uses. Lands to the west are vacant in the northern portion of the site, and occupied by office commercial land uses in the southern portion of the site. Lands to the south across Mill Street, are occupied by commercial uses. 9. Other agencies whose approval is required (e.g., permits, finance approval, or participation agreement): City of San Bernardino: Development Permit. P:\Agendas\Agenda Attachmenls\Exhibits\2005\05-09-06 Arrowhead Credit Union IS_doc IS 3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Insert Exhibit 1 - Project Location P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 AlTowhead Credit Union IS,doc IS 4 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED: The environmental factors checked below would be potentially affected by this project, involving at least one impact that is a "Potentially Significant Impact" as indicated by the checklist on the following pages. D Aesthetics D Agriculture Resources [g] Air Quality D Biological Resources D Cultural Resources [g] Geology/Soils D Hazards & Hazardous D Hydrology/Water Quality D Land Use/Planning Materials D Noise D Population/Housing D Mineral Resources D Recreation [g] Transportation/Traffic D Public Services [g] Mandatory Findings of D Utilities/Service Systems Significance On the basis of this Initial Study, the City of San Bernardino Environmental Review Committee finds: D I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. [g] I find that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because revisions in the project have been made by or agreed to by the project proponent. A MITIGATED NEGATIVE DECLARATION will be prepared. D I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. D I find that the proposed project MAY have a "potentially significant impact" or "potentially significant unless mitigated" impact on the environment, but at least one effect 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets. An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. D I find that although the proposed project could have a significant effect on the environment, because all potentially significant effects (a) have been analyzed adequately in an earlier EIR or NEGATIVE DECLARATION pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that EIR or NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project, nothing further is required. Signature Date Printed Name For P:\Agendas\Agenda AUachmenls\Exhibits\2005\05.09.(}6 Arrowhead Credit Union IS.doc IS 5 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY a) Have a substantial adverse effect on a scenic vista as identified in the City's General Plan? Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation D D ~ D D D ~ D I. AESTHETICS - Would the project: b) Substantially damage scenic resources, including but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? c) Substantially degrade the existing visual character of quality of the site and its surroundings? D D ~ D d) Create a new source of substantial light or glare which would adversely affect day or nighttime view in the area? D D ~ D e) Other: D D D ~ Discussion: The proposed DDA will not, in and of itself, have any impact on aesthetics, light or glare. The development of the site for a 2-story office building will have little impact on aesthetics in the vicinity. The site is located in a commercial/industrial area of the City, much of which has developed with building types similar to those proposed for the project site. The site is not located adjacent to a scenic vista, insofar as the area is flat, and some distance from the mountains which occur to the north. The scale of development will have no impact on scenic vistas, since a two-story office building is proposed. There are no single family homes located adjacent to the project site, whose views might be blocked by the proposed project. There are no scenic resources located on the project site. Impacts associated with aesthetics are expected to be less than significant. The proposed project site will result in an increase in the amount of lighting in the area, since the site is primarily vacant at this time. The project will generate light from landscaping lighting and from vehicle headlights through the parking lot area. The project will be required to conform to the City's standards for on-site lighting, which limit the amount of light, which can be generated in parking lots and from landscaping lighting. Any security lighting proposed for the building will be similarly regulated. The surrounding land uses, being primarily commercial in nature, will not be significantly impacted by the increase in light generated at the project site. Impacts associated with light and glare are expected to be less than significant. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS.doc IS 6 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to a non- agricultural use? Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation D D D ~ II. AGRICULTURE RESOURCES: b) Other: D D D ~ Discussion: Neither the proposed DDA nor the development of the project will have any impact on agricultural resources. The site is located in the urban core of the City, and has been designated for commercial development for some time. There are no agricultural lands in the vicinity of the project site, nor are any lands designated for agriculture in the area. There will be no impacts to agricultural resources as a result of the proposed project. P:\Agendas\Agenda Attachments\Exhibits\2005\05.09-06 Arrowhead Credit Union IS. doc IS 7 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation III. AIR QUALITY - Would the project: a) Conflict with or obstruct implementation of the D D D ~ applicable air quality plan? (South Coast Air Basin) b) Violate any air quality standard or contribute D ~ D D substantially to an existing or projected air quality violation based on the thresholds in the SCAQMD's "CEQA Air Quality Handbook?" c) Result in a cumulatively considerable net D ~ D D increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)? d) Expose sensitive receptors to substantial D D D ~ pollutant concentrations? e) Create objectionable odors affecting a D D D ~ substantial number of people based on the information contained in Project Description Form? f) Other: D D D ~ Discussion: The proposed DDA will not, in and of itself, have any impact on air quality. The development of the site will result in air quality impacts associated with construction, particularly the generation of fugitive dust, and in impacts associated with operation of the site, particularly the generation of chemical pollutants associated with vehicle trips to and from the site. The development of the site will result in approximately 1,721 average daily trips. Table 1, below, illustrate the vehicular emissions generated by the proposed project at buildout of the project site. P:\Agendas\Agenda Attachmenls\Exhibits\2005\05-09.06 Arrowhead Credit Union IS,doc IS 8 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Table 1 Moving Exhaust Emissions Phase I (pounds per day) Ave. Trip Total Total No. Vehicle Trips/Day Length (miles) miles/day 1,721 x 15 = 25,815 PMIO PMIO PMIO Tire Brake Pollutant ROC CO NO Exhaust Wear Wear Pounds at 40 mph 6.27 131.64 19.38 0.57 0.57 SCAQMD Daily Threshold (Lbs./day) 75 550 100 150 Based on California Air Resources Board's EMF AC7G Emissions Model. Assumes Year 2005 summertime running conditions at 750F, light duty autos, catalytic. As demonstrated in the Tables, buildout of the project site will not exceed SCAQMD thresholds of significance for any criteria pollutant. Impact are therefore expected to be less than significant. The grading of the site also has the potential to generate two types of emissions. First, those chemical emissions generated by the operation of heavy equipment, and second those emissions of fugitive dust generated by ground disturbance. Tables 2 and 3 illustrate those potential emissions. Table 2 Grading Equipment Emissions - Diesel powered (pounds per day) # # Equipment Pieces hrs/day CO ROC Nox Sox PM 10 Fork Lift - 50 hp 0 0 Fork Lift - 175 hp 0 0 Trucks - Off-Highway 1 8 14.400 1.520 33.360 3.600 2.080 Tracked Loader 1 8 1.608 0.760 6.640 0.608 0.472 Tracked Tractor 0 0 Scraper 1 8 10.000 2.160 30.720 3.680 3.280 Motor Grader 1 8 1.208 0.312 5.704 0.688 0.488 Miscellaneous 1 8 5.400 1.200 13.600 1.144 1.120 Total: 32.616 5.952 90.024 9.720 7.440 SCAQMD Thresholds of Significance 550.00 75.00 100.00 150.00 150.00 P:\Agendas\Agenda AUachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 9 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Table 3 Calculations of Fugitive Dust Potential Total Acres to be Factor Total Potential Dust Disturbed at Buildout* (lbs.lday/acre) Generation (lbs./day) 11.5 26.4 303.6 Source: Table A9-9, "CEQA Air Quality Handbook," prepared by South Coast Air Quality Management District, April 1993. As demonstrated in the Tables above, grading equipment will not exceed SCAQMD thresholds, but site grading may exceed fugitive dust (PMIO) thresholds during the construction of the site. The project proponent will be required by the City to implement a dust management plan during on-site grading. In addition, in order to assure that the potential impacts are mitigated to less than significant levels, mitigation measures, as listed below, shall be implemented. 1. The contractor will ensure that all construction equipment IS properly serviced and maintained. 2. Portions of the site that are actively being graded shall be watered regularly to ensure that a crust is formed on the ground surface, and shall be watered at the end of each work day. 3. All trucks leaving the site shall be washed off to reduce fugitive dust being tracked onto local roadways. 4. Any portion of the site to be graded shall be pre-watered to a depth of three feet prior to the onset of grading activities. 5. Any area which remains undeveloped for a period of more than 30 days shall be stabilized using either chemical stabilizers or hydroseed on the affected portion of the site. 6. SCAQMD Rule 403 shall be adhered to, insuring the clean-up of construction-related dirt on approach routes to the site. 7. All grading activities shall be suspended during first and second stage ozone episodes or when winds exceed 25 miles per hour. Implementation of these mitigation measures will reduce potential impacts to less than significant levels. P:\Agendas\Agenda Anachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 10 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation IV. BIOLOGICAL RESOURCES - Would the project: a) Have a substantial adverse effect, either directly D D D ~ or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or US Fish and Wildlife Service? b) Have a substantial adverse effect on any D D D ~ riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations or by the California Department of Fish and Game or US Fish and Wildlife Service? c) Have a substantial adverse effect on federally D D D ~ protected wetlands as defined by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? d) Interfere substantially with the movement of D D D ~ any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? e) Conflict with the provisions of an adopted D D D ~ Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? b) Other: D D D ~ P:\Agendas\Agenda AUachments\Exhibits\2005\05-09-Q6 Arrowhead Credit Union IS,doc IS 11 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Discussion: The proposed DDA will not, in and of itself, have any impact on biological resources. The ultimate development of the site will result in the construction of office space. The eastern extension of the site is currently occupied by a plumbing company, and is fully developed. The central and western portions of the site have been significantly impacted by past grading activities, and the development of an access road to the stadium located to the north of the site. No significant vegetation occurs on the site at this time, and it is unlikely to support wildlife either for nesting or for forage. The site is not located within the boundaries of the San Bernardino Kangaroo Rat habitat area. The development of the site will not impact the implementation of a habitat conservation plan. There are not expected to be any impacts to biological resources. P:\Agendas\Agenda Attachmenls\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 12 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Potentially Significant Impact Less Than Significant With Mitigation Incorporation Less Than Significant Impact V. CULTURAL RESOURCES - Would the project: a) Be developed in a sensitive archaeological area as identified in the City's General Plan? o o o b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to ~15064.5 ofCEQA? o o o c) Cause a substantial adverse change in the significance of a historical resource as defined in ~15064.5 ofCEQA? o o o d) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? o o o e) Disturb any human remains, including those interred outside of formal cemeteries? o o o t) Other: o o o No Impact ~ ~ ~ ~ ~ ~ Discussion: The proposed DDA will not, in and of itself, have any impact on cultural resources. The proposed project occurs in a highly urbanized area of the City, and in any area of low sensitivity for cultural resources. No structures of potential historic significance occur on the site. There are no ethnographic markers on the site. The area is not in an area of potential paleontological resources. There are no known remains buried on the site. Should such remains be uncovered during site grading, the contractor is required by law to cease operations and report the finding to law enforce. This requirements will assure that any such remains would be handled in an appropriate manner. No impacts to cultural resources are expected. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS_doc IS 13 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY VI. GEOLOGY AND SOILS - Would the project: a) Involve earth movement (cut and/or fill) based on information included in the Project Description Form? b) Expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death? c) Be located within an Alquist-Priolo Earthquake Fault Zone? d) Result in substantial soil erosion or the loss of topsoil? e) Be located within an area subject to landslides, mudslides, subsidence, or other similar hazards as identified in the City's General Plan? f) Be located within an area subject to liquefaction as identified in the City's General Plan? g) Modify any unique physical feature based on a site survey/evaluation? h) Result in erosion, dust, or unstable soil conditions from excavation, grading, fill, or other construction activities? i) Other: Potentially Significant Impact Less Than Significant With Mitigation Incorporation Less Than Significant Impact No Impact o o o o o o ~ o ~ Discussion: The approval of the DDA will not, in and of itself, have any impact on geology and soils. o o ~ The project site is not located within the boundaries of an Alquist-Priolo Earthquake Fault Zone. However, the site is located in the immediately vicinity of the presumed location of the Glen Helen Fault, and within about one half mile of the San Jacinto Fault. The Alquist-Priolo zone for the Glen Helen Fault occurs both to the northwest and southeast of the site. Although a designated zone has not been identified for the property, the proximity to the inferred location of the Glen Helen Fault could result in significant impacts without mitigation. In order to assure that the site is not located on the Glen Helen Fault, an Alquist-Priolo geotechnical investigation is required. P:\Agendas\Agenda Attachments\Exhibils\2005\05-09-06 Arrowhead Credit Union IS,doc IS 14 o o ~ o ~ o o o ~ o ~ o o ~ o o o o o o ~ o o o REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY The site implements the most stringent building code standards for seismic zones, and will require the proposed project to be constructed to those standards. The City further will not allow construction on an earthquake fault, should one occur on the site, without adequate setbacks and other provisions, as recommended by a qualified geotechnical engineer. The project site is identified as having a high potential for both liquefaction and subsidence in the General Plan. The potential impacts associated with these hazards could be significant without mitigation. The City implements standards for foundation construction and footings when structures are built in higher groundwater areas to mitigate the potential for both liquefaction and subsidence. In order to assure that the proposed project does not result in significant impacts associated with liquefaction and subsidence, mitigation is required. The project site is not located in a high wind hazard area. In addition, the project site has been required, under Air Quality, above, to provide mitigation for fugitive dust impacts resulting from site grading. Impacts associated with wind erosion are expected to be less than significant. The project site will be required to implement water erosion requirements as part of the grading permit process. The City's NPDES standards will be applied to this property when construction occurs. These standards assure that potential impacts associated with water erosion on the site are less than significant (please also see Hydrology section, below). In order to assure that potential impacts associated with fault rupture, liquefaction and subsidence are reduced to less than significant levels, the following mitigation measures shall be implemented: 1. Prior to the issuance of grading permits, the project proponent shall submit, for review and approval, a fault hazard study, performed to the standards of the Alquist-Priolo Act, for the project site. The recommendations of the geotechnical engineer shall be incorporated into all grading and building plans for the proposed project, as necessary. 2. Prior to the issuance of grading permits for the project site, a site-specific liquefaction analysis shall be completed by a qualified geologist or geological engineer, and submitted to the City for review and approval. The analysis shall include a complete report on liquefaction and subsidence potential for the site, and recommendations for construction of structures, footings, etc., as needed. The report's recommendations shall be implemented in site preparation plans and building designs. Implementation of these mitigation measures will assure that impacts associated with geology and soils are reduced to less than significant levels. P:\Agendas\Agenda Attachments\Exhibils\2005\05-Q9-06 Arrowhead Credit Union IS,doc IS 15 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation VII. HAZARDS AND HAZARDOUS MATERIALS - Would the project: a) Create a significant hazard to the public or the D D D ~ environment through the routine transport, use, or disposal of hazardous materials? b) Create a significant hazard to the public or the D D D ~ environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? c) Emit hazardous emissions or handle hazardous D D D ~ or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? d) Be located on a site which is included on a list D D D ~ of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? e) For a project located within an airport land use D D D ~ plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? f) Impair implementation of or physically interfere D D D ~ with an adopted emergency response plan or emergency evacuation plan? g) Expose people or structures to a significant risk D D D ~ ofloss, injury or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? P:\Agendas\Agenda Attachments\Exhibits\2005\05-Q9-06 Arrowhead Credit Union IS_doc IS 16 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Potentially Significant Impact Less Than Significant With Mitigation Incorporation Less Than Significant Impact No Impact VII. HAZARDS AND HAZARDOUS MATERIALS - Continued h) Other: D D D [8J Discussion: The DDA, in and of itself, will have no impact on hazardous materials. The development of the site for office uses will not result in the transport, storage or use of hazardous materials, and therefore will not impact persons in the area to these materials. Any use contemplated for the building which would utilize or store hazardous materials would require review and permitting by the City and County, including additional review under CEQA, should it be necessary. The site is not on the Cortese list of sites which have previously been identified for having a hazardous materials issue. The site has, however, previously been remediated. The investigation into the site's potential for hazardous materials was begun with a Phase I Environmental Site Assessment prepared for a previous land owner for the subject property and additional adjacent property totaling 34 acres 1. The Phase I assessment found that the site, which had been used as a railroad yard, had both existing structures and remnants of structures at the time of the assessment. The assessment also found that lands surrounding the site had been found to have contaminated groundwater in the area. Further analysis was recommended, including the removal of the above ground storage tank, searching for a previously documented underground storage tank, and soil sampling, among other activities and recommendations. These follow-up activities were undertaken, and a remediation plan was developed in order to remediate 10,500 cubic yards of petroleum impacted soils, and 4,750 cubic yards oflead and arsenic impacted soil. The remediation plan received approval from the Regional Water Quality Control Board, and was implemented by the City of San Bernardino when it purchased the property. The remediation effort was completed, no additional activities which could generate hazardous materials have occurred on the site since that time, and no additional impacts associated with hazardous materials are expected. The proposed project is not within the boundaries of an airport land use plan, or in a wildland fire hazard area. The project area will not affect emergency response plans. Implementation of the proposed project will have no impact on hazardous materials. "Phase I Environmental Site Assessment San Bernardino Yard," The Earth Technology Corporation, October 1989. P:\Agendas\Agenda Anachments\Exhibits\2005\05-09-06 AlTowhead Credit Union IS.doc IS 17 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation VIII. HYDROLOGY AND WATER QUALITY - Would the project: a) Violate any water quality standards or waste 0 0 0 0 discharge requirements? b) Substantially deplete groundwater supplies or 0 0 [8] 0 interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? c) Substantially alter the existing drainage 0 0 [8] 0 pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation on- or off-site? d) Substantially alter the existing drainage 0 0 [8] 0 pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding on- or off-site? e) Create or contribute runoff water which would 0 0 0 [8] exceed the capacity of existing or planned storm water drainage systems or provide substantial additional sources of polluted runoff, such as from areas of material storage, vehicle or equipment maintenance (including washing or detailing), waste handling, hazardous materials handling or storage, delivery areas, loading docks, or other outdoor areas? P:\Agendas\Agenda AUachmenls\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 18 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Potentially Significant Impact Less Than Significant With Mitigation Incorporation Less Than Significant Impact VIII. HYDROLOGY AND WATER QUALITY- Continued f) Otherwise substantially degrade water quality? D D ~ g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? (Panel No. ) D D D h) Place within a 100-year flood hazard area structures which would impede or redirect flood flows? D D D i) Expose people or structures to a significant risk of loss, injury, or death involving flooding, including flooding as a result of the failure of a levee or dam? D D D j) Inundation by seiche, tsunami, or mudflow? D D D D D D k) Other: No Impact D ~ ~ ~ ~ ~ Discussion: The DDA will not, in and of itself, have any impacts on hydrology or water resources. The development of the site will be governed by the City's standards relating to storm water. These standards include the requirement that the site retain the 100 year 24 hour storm on-site. The City is also a co-permittee with the County of San Bernardino in the implementation of the NPDES program, which implements standards for water quality associated with surface water. These standards will assure that the construction of the project will not degrade storm water, and will not release storm water into the City's storm drainage system in an improper or unsafe manner. The site will utilize domestic water for landscaping and for office uses, which are not significant users of domestic water. The proposed project will not result in any activity that could affect the quality of groundwater, insofar as office uses do not have the potential to release materials, which might seep into the aquifer. The project site is not located in a 100 year flood plain. The project site is not subject to tsunami, seiche or mudflows. Impacts associated with hydrology and water quality are expected to be less than significant. P:\Agendas\Agenda Anachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 19 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation IX. LAND USE AND PLANNING- Would the project: a) Physically divide an established community? 0 0 0 ~ b) Conflict with any applicable land use plan, 0 0 0 ~ policy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? c) Conflict with any applicable habitat 0 0 0 ~ conservation plan or natural community conservation plan? d) Be developed within the Hillside Management 0 0 0 ~ Overlay District? e) Be developed within Foothill Fire Zones A, B, 0 0 0 ~ or C as identified in the City's General Plan? f) Be developed within the Airport Influence Area 0 0 0 ~ as adopted by the San Bernardino International Airport Authority? g) Other: 0 0 0 ~ Discussion: The DDA will not, in and of itself, have any impact on land use planning. Construction of the proposed project is consistent with the General Plan and Zoning designations imposed on the property. The site is vacant and surrounded by commercial and industrial development, and there is no existing established community in the area. The proposed project will have no impact on an existing habitat conservation plan, is not within a Foothill Fire Zone, and is not within the area of influence of the San Bernardino International Airport. P:\Agendas\Agenda Anachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 20 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation x. MINERAL RESOURCES - Would the project: a) Result in the loss of availability of a known D D D ~ mineral resource that would be of value to the region and the residents of the state? b) Result in the loss of a locally-important mineral D D D ~ resource recovery site delineated on a local general plan, specific plan or other land use plan? c) Be located in a Mineral Resource Zone as D D D ~ adopted by the State Mining and Geology Board and identified in the City's General Plan? Discussion: The DDA will not, in and of itself, result in any impacts to mineral resources. The project site is not located in an area of known mineral resources. Implementation of the proposed project will have no impact on mineral resources. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS.doc IS 21 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation XI. NOISE - Would the project result in: a) Exposure of persons to or generation of noise D D [8J D levels in excess of standards established in the City's General Plan or Development Code, or applicable standards of other agencies? b) Exposure of persons to or generation of D D D [8J excessive groundbome vibration or groundbome noise levels? c) A substantial permanent increase in ambient D D [8J D noise levels in the project vicinity above levels existing without the project? d) A substantial temporary or periodic increase in D D [8J D ambient noise levels in the project vicinity above levels existing without the project? e) For a project located within an airport land use D D D [8J plan or Airport Influence Area, would the project expose people residing or working in the project area to excessive noise levels? 1) Other: D D D [8J Discussion: The DDA will not, in and of itself, affect noise levels in the project area. The development of office space on the project site will not significantly increase noise levels in the area. Furthermore, there are no sensitive receptors in the area of the project site, since land uses are developed in commercial and industrial uses. Impacts associated with operational noise are expected to be less than significant. Construction of the proposed project will temporarily increase noise levels in the area. However, the City regulates construction to the less sensitive day time hours, and the surrounding land uses occur within enclosed structures. Impacts associated with construction noise are therefore expected to be less than significant. The construction of office space will not generate groundbome vibration or noise. The project site is not located within an area of influence for an airport. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 22 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Potentially Significant Impact Less Than Significant With Mitigation Incorporation Less Than Significant Impact No Impact XII. POPULATION AND HOUSING - Would the project: a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? o o lZJ o b) Remove existing housing and displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? o o o lZJ c) Other: o o o lZJ Discussion: The DDA will have no impact on population and housing. The development of the project site will generate employment, but not at levels which will exceed those envisioned in the General Plan, since the proposed project is consistent with the General Plan. The site is currently vacant, and will not remove any existing housing or displace anyone. P:\Agendas\Agenda AUachments\Elthibits\2005\05-09-Ob Arrowhead Credit Union IS.doc IS 23 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation XIII. PUBLIC SERVICES a) Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public servIces: Fire protection, including medical aid? 0 0 0 C8J Police protection? 0 0 0 C8J Schools? 0 0 0 C8J Parks or other recreational facilities? 0 0 0 C8J Other governmental services? 0 0 0 C8J b) Other: 0 0 0 C8J Discussion: The DDA will have no impact on the provision of public services. The development of office uses on the site will have a negligible impact on public services, since the site is located in a heavily urbanized area already served by these services. The construction of the building will generate property tax, which will offset any increase in the provision of public services. The office building will be required to pay school fees as mandated at the time of issuance of building permits. The construction of office space will have no significant impact on parks or recreational facilities within the City. Impacts associated with the provision of public services are expected to be insignificant. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS.doc IS 24 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation XIV. RECREATION a) Would the project increase the use of existing D D D [8J neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? b) Does the project include recreational facilities D D D [8J or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? c) Other: D D D [8J Discussion: The DDA will have no impact on recreation facilities in the City. The development of office space will have no impact on neighborhood parks, and will not require the construction or expansion of recreational facilities. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS,doc IS 25 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation XV. TRANSPORTATION/TRAFFIC - Would the project: a) Cause an increase in traffic which is substantial D D [gI D in relation to the existing traffic load and capacity of the street system (i.e., result in a substantial increase in either the number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections)? b) Exceed, either individually or cumulatively, a D [gI D D level of service standard established by the county congestion management agency for designated roads or highways? c) Result in a change in air traffic patterns, D D D [gI including either an increase in traffic levels or a change in location that results in substantial safety risks? d) Substantially increase hazards due to a design D [gI D D feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? e) Result in inadequate emergency access? D D [gI D t) Result in inadequate parking capacity? D D D [gI g) Conflict with adopted policies, plans, or D D D [gI programs supporting alternative transportation (e.g., bus turnouts, bicycle racks)? h) Other: D D D [gI Discussion: The DDA, in and of itself, will have no impact on traffic and circulation in the City. The development of the site will generate traffic, and therefore has the potential to impact the City's circulation system. P:\Agendas\Agenda Attachments\Exhibits\2005\05409-06 Arrowhead Credit Union IS_doc IS 26 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY The applicant has prepared a Traffic Impact Analysis, as required by the City of San Bernardino for development projects. The analysis included the study of six intersections surrounding the project, including: H Street at Mill Street; G Street at Rialto Avenue, Birch Court and Mill Street; and E Street at Rialto Avenue and Mill Street. The analysis found that all studied intersections operate at acceptable levels during the peak hour, under current conditions. The analysis estimated that buildout of the proposed project will result in 1,721 daily trips, of which 240 will occur in the morning peak hour, and 233 during the evening peak hour. The analysis then estimated the impacts of this traffic at opening year (2007), and at year 2030. The analysis found that the studied intersections will operate at Level of Service C or better in 2007 without the project, and that studied intersections will operate at Level of Service D or better in 2007 with implementation of the proposed project, during the peak hour. In 2030, project area intersections are forecast to operate at Level of Service D or better with or without the project. The project entrances at E Street and Mill Street were also included in the analysis of both 2007 and 2030 traffic impacts. It was found that in order to maintain adequate Levels of Service, improvements, in the form of an eastbound left turn lane at the project entrance and Mill Street, and a northbound left turn lane on E Street at that project entrance were required. Mitigation measures are included below to assure that the impacts associated with project traffic are reduced to less than significant levels. The project proponent has indicated that the primary project access may be modified to Birch Court, rather than either Mill or E Streets. The traffic analysis included Birch Court, but as a secondary access point only. The change in the access location may have a significant impact on traffic at this alternate location, and must be mitigated. The City has identified that adequate sight distance may not occur at Birch Court and G Street to assure safe traffic operations. The final site design must consider this potential impact to assure that vehicles can safely enter the flow of traffic. This is a potentially significant impact which requires mitigation. The proposed project will be required to implement the City's Zoning standards relating to parking. The site is within the transit system's service area, and will be integrated into that system when constructed. In order to assure that the proposed project does not have a significant impact on levels of service or turning movements in the project area, the following mitigation measure shall be implemented: 1. The project proponent shall install, at their expense, an eastbound left turn lane at Mill Street and the project entrance. 2. The project proponent shall install, at their expense, a northbound left turn lane at E Street and the project entrance. 3. A line of sight study shall be completed, to the satisfaction of the City Engineer, to assure that adequate sight distance is part of the final design of Birch Court and G Street. 2 "City of San Bernardino Mill Street Office Project Traffic Impact Analysis," prepared by Kunzman Associates, May 2005. P:\Agendas\Agenda AUachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS_doc IS 27 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY 4. Should the project proponent change the primary site access to Birch Court, the traffic analysis shall be modified, to the satisfaction of the City Engineer, to demonstrate that levels of service will be maintained at acceptable levels, and whether traffic signals are warranted at the intersection of Birch Court and G Street. Implementation of these mitigation measures will assure that impacts associated with traffic and circulation are reduced to a less than significant level. P:\Agendas\Agenda Anachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS. doc IS 28 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Less Than Potentially Significant Less Than No Significant With Significant Impact Impact Mitigation Impact Incorporation XVI. UTILITIES AND SERVICE SYSTEMS - Would the project: a) Exceed wastewater treatment requirements of D D D ~ the Santa Ana Regional Water Quality Control Board? b) Require or result in the construction of new D D D ~ water or wastewater treatment facilities or expansion of existing facilities, the construction of which would cause significant environmental effects? c) Require or result in the construction of new D D D ~ storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? d) Have sufficient water supplies available to D D D ~ serve the project from existing entitlements and resources, or are new or expanded entitlements needed? e) Result in determination by the wastewater D D D ~ treatment provider which serves or may serve the project that it has adequate capacity to serve the project's projected demand in addition to the provider's existing commitments? f) Be served by a landfill with sufficient D D D ~ permitted capacity to accommodate the project's solid waste disposal needs? g) Comply with federal, state, and local statutes D D D ~ and regulations related to solid waste? h) Other: D D D ~ P:\Agendas\Agenda Anachments\Exhibils\200.5\05-Q9-Q6 Arrowhead Credit Union IS.OOc IS 29 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Discussion: Implementation of the DDA will not, in and of itself, have any impact on utilities. The development of the proposed project will require utilities. The site is served by all utilities and service providers at this time. The development of the site will result in an increase in usage from that currently occurring, since the majority of the site is vacant. The City implements energy conservation measures through the standards of the Building Code, and these will be applied to the office development. The operator of the office building will pay connection and usage fees to the individual service providers for each utility. The utility connection and usage charges are designed to integrate both current and future service needs and upgrades into the rate structure. These rates are therefore self-mitigating, insofar as the future needs of each utility has been factored into the rates paid by each customer. The use of the site for office space will not significantly impact domestic water. The project will connect to the City's sanitary sewer system, which has sufficient capacity to accommodate project buildout. The land uses on the proposed project will be required to comply with the recycling programs in place at the City's Public Services Department, which will lower the total refuse generated at the site in conformance with the requirements of AB939. Overall impacts associated with utilities are expected to be insignificant. P:lAgendas\Agenda Anachmenls\Exhibits\2005\05.09.06 Arrowhead Credit Union IS_doc IS 30 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY Potentially Less Than Less Than No Significant Significant Significant Impact Impact With Impact Mitigation Incorporation XVII. MANDATORY FINDINGS OF SIGNIFICANCE a) Does the project have the potential to degrade 0 0 0 ~ the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of major periods of California history or prehistory? b) Does the project have impacts that are 0 0 0 ~ individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects.) c) Does the project have environmental effects 0 ~ 0 0 which will cause substantial adverse effects on human beings, either directly or indirectly? Discussion: The proposed project will have no impact on either biological or cultural resources. The proposed project is consistent with both the General Plan and Zoning Ordinance, and is within the level of development envisioned in the General Plan. No cumulative impacts are expected. The implementation of the proposed office building has the potential to impact human beings in the areas of air quality and traffic. However, the mitigation measures included in this Initial Study will reduce those potential impacts to less than significant levels. P:lAgendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union IS.doc IS 31 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO INITIAL STUDY REFERENCES. The following references cited in the Initial Study are on file in the Development Services Department. 1. City of San Bernardino General Plan 2. City of San Bernardino General Plan Land Use Plan/Zoning Districts Map 3. City of San Bernardino Development Code (Title 19 of the San Bernardino Municipal Code) 4. City of San Bernardino Historic Resources Reconnaissance Survey 5. Alquist-Priolo Earthquake Fault Zones Map 6. South Coast Air Quality Management District, CEQA Air Quality Handbook 7. Federal Emergency Management Agency, Flood Insurance Rate Maps 8. Public Works Standard Requirements - Water 9. Public Works Standard Requirements - Grading 10. City of San Bernardino Mill Street Office Project Traffic Impact Analysis, Kunzman Associates, May 2005. 11. Phase I Environmental Site Assessment San Bernardino Yard, The Earth Technology Corporation, October 1989. P:\Agendas\Agenda Attachments\Exhibits\2005\05-09.06 Arrowhead Credit Union IS_doc IS 32 ATTACHMENT II MITIGATION MONITORING AND REPORTING PROGRAM FOR THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN MILL STREET DEVELOPMENT, LLC AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO This Mitigation Monitoring and Reporting Program has been prepared to implement the mitigation measures outlined in the Environmental Assessment for the Disposition and Development Agreement between Mill Street Development, LLC and the Redevelopment Agency of the City of San Bernardino. This program has been prepared in compliance with the California Environmental Quality Act (CEQA) and the State and City of San Bernardino CEQA Guidelines. CEQA Section 21081.6 requires adoption of a monitoring and/or reporting program for those measures or conditions imposed on a project to mitigate or avoid adverse effects on the environment. The law states that the monitoring or reporting program shall be designed to ensure compliance during project implementation. The Mitigation Monitoring and Reporting Program contains the following elements: I. The mitigation measures are recorded with the action and procedure necessary to ensure compliance. The program lists the mitigation measures contained within the Initial Study. 2. A procedure for compliance and verification has been outlined for each mandatory mitigation action. This procedure designates who will take action, what action will be taken and when, and to whom and when compliance will be reported. 3. The program contains a separate Mitigation Monitoring and Compliance Record for each action. On each of these record sheets, the pertinent actions and dates will be logged, and copies of permits, correspondence or other data relevant will be retained by the City of San Bernardino. 4. The program is designed to be flexible. As monitoring progresses, changes to compliance procedures may be necessary based upon recommendations by those responsible for the program. If changes are made, new monitoring compliance procedures and records will be developed and incorporated into the program. The individual measures and accompanying monitoring/reporting actions follow. P:lAgendaslAgenda Anachments\Exhibits\2005\05-09-06 Arrowhead Credit Union MMRP_doc MITIGATION MEASURES Air Quality I. The contractor will ensure that all construction equipment is properly serviced and maintained. 2. Portions of the site that are actively being graded shall be watered regularly to ensure that a crust is formed on the ground surface, and shall be watered at the end of each work day. 3. All trucks leaving the site shall be washed off to reduce fugitive dust being tracked onto local roadways. 4. Any portion of the site to be graded shall be pre-watered to a depth of three feet prior to the onset of grading activities. 5. Any area which remains undeveloped for a period of more than 30 days shall be stabilized using either chemical stabilizers or hydroseed on the affected portion of the site. 6. SCAQMD Rule 403 shall be adhered to, insuring the clean-up of construction-related dirt on approach routes to the site. 7. All grading activities shall be suspended during first and second stage ozone episodes or when winds exceed 25 miles per hour. IMPLEMENTATION AND VERIFICATION Public Works Division shall conduct site inspections during grading process. COMPLIANCE RECORD Inspection records on file in the Public Works Department. WRITTEN VERIFICATION PREPARED BY: DATE PREPARED: 2 P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union MMRP.doc MITIGATION MEASURES Geology and Soils I. Prior to the issuance of grading permits, the project proponent shall submit, for review and approval, a fault hazard study, performed to the standards of the Alquist-Priolo Act, for the project site. The recommendations of the geotechnical engineer shall be incorporated into all grading and building plans for the proposed project, as necessary. 2. Prior to the issuance of grading permits for the project site, a site-specific liquefaction analysis shall be completed by a qualified geologist or geological engineer, and submitted to the City for review and approval. The analysis shall include a complete report on liquefaction and subsidence potential for the site, and recommendations for construction of structures, footings, etc., as needed. The report's recommendations shall be implemented in site preparation plans and building designs. IMPLEMENTATION AND VERIFICATION City Geologist shall review and approved geotechnical study and deliver written approval to Planning Department. COMPLIANCE RECORD Approved report on file in the Planning Department. WRITTEN VERIFICATION PREPARED BY: DATE PREPARED: 3 P:\Agendas\Agenda Anachments\Exhjbits\2005\05.09~06 Arrowhead Credit Union MMRP,doc MITIGATION MEASURES Traffic and Circulation 1. The project proponent shall install, at their expense, an eastbound left turn lane at Mill Street and the project entrance. 2. The project proponent shall install, at their expense, a northbound left turn lane at E Street and the project entrance. IMPLEMENTATION AND VERIFICATION Public Works Division and Building and Safety Division shall conduct inspections during the construction process. COMPLIANCE RECORD Copies of inspection records to be on file in the Public Works and Building and Safety Division. WRITTEN VERIFICATION PREPARED BY: DATE PREPARED: 3. A line of sight study shall be completed, to the satisfaction of the City Engineer, to assure that adequate sight distance is part of the final design of Birch Court and G Street. 4. Should the project proponent change the primary site access to Birch Court, the traffic analysis shall be modified, to the satisfaction of the City Engineer, to demonstrate that levels of service will be maintained at acceptable levels, and whether traffic signals are warranted at the intersection of Birch Court and G Street. IMPLEMENTATION AND VERIFICATION Public Works Division shall review and approve studies prior to installation of street improvements COMPLIANCE RECORD Approved study to be on file in the Public Works Division. WRITTEN VERIFICATION PREPARED BY: DATE PREPARED: 4 P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead Credit Union MMRP.doc RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN OF SAN BERNARDINO APPROVING THE 2005 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION ("DEVELOPER") (AGENCY PROPERTY LOCATED NORTH OF MILL STREET, WEST OF "E" STREET (APN 0136-111-22) - 8.2 ACRES IN THE CITY OF SAN BERNARDINO) ("PROPERTY") AND MAKING CERTAIN FINDINGS THERETO RELATED TO THE DEVELOPMENT OF THE PROJECT 3 4 5 6 7 8 9 WHEREAS, the City of San Bernardino, California (the "City"), is a mumclpa 10 corporation and charter city, duly organized and existing pursuant to the provisions of th 11 constitution of the State of California; and 12 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a public body, corporate and politic existing under the laws of the State of California, Healt 13 and Safety Code 33101, and is charged with the mission of redeveloping blighted an 14 underutilized land; and 15 WHEREAS, the Agency is the current owner of that certain real property consisting 0 approximately 8.2 acres (APN: 0136-111-22) located north of Mill Street, west of "E" Street 16 17 (the "Property"); and 18 WHEREAS, an updated MAl appraisal of the Property and the Property has bee completed by Smothers Appraisal (the "Appraisal"); and WHEREAS, said Appraisal has confirmed the fair market value of the Property to be On 19 20 21 Million Eight Hundred Ninety Thousand Dollars ($1,890,000); and 22 WHEREAS, the Agency is entering into a 2005 Disposition and Development Agreemen (the "DDA") with Arrowhead Central Credit Union, a California Corporation (the "Developer" pursuant to which the Agency will sell the Property to the Developer for a purchase price of On Million Eight Hundred Ninety Thousand Dollars ($1,890,000) which is considered to be the fai 23 24 25 -1- P:\A&tndas\ResolutJons\ResolutioDs\2005\OS-09-06 Arrowhead MCC Reso1.doc 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 market value of the Property; and WHEREAS, the DDA provides for the development of the Property, and adjacen property already owned by the Developer, to be developed into two (2) office buildings totalin 135,000 square foot, to contain the central billing, personnel and training facilities fo Arrowhead Central Credit Union (the "Project"); and WHEREAS, the Agency has prepared and published a notice of joint public hearing i The San Bernardino County Sun Newspaper on July 4 and 11,2005, regarding the consideratio and approval of the DDA and also published a Notice of Intent to adopt a Mitigated Negativ Declaration related to the Project in accordance with California Environmental Quality Ac ("CEQA"); and WHEREAS, pursuant to Health and Safety Code Section 33433( c), the Agency ma transfer the Property to the Developer subject to the Mayor and Common Council an Community Development Commission adopting a Resolution authorizing the Agency to transfe the Property in light of the findings set forth herein, pursuant to Health and Safety Code Sectio 33433; and WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety Code Section 33433 that describes the salient points of the DDA and identifies the cost of the DDA to the Agency; and WHEREAS, the Agency is the "lead agency" for the Project, under the California Environmental Quality Act, California Public Resources Code Sections 21000, et seq. ("CEQA"), in accordance with Public Resources Code Section 21067 and Title 14 California Code of Regulations Sections 15050 and 15051; and WHEREAS, the Initial Study (IS), Attachment I to the Staff Report was circulated 0 June 20, 2005 and no public comments were received; and WHEREAS, the IS identified potentially significant effects on the environment connection with the proposed Project; and -2- P:\Ae;endas\llnob.tloa.\IlesolutlollJ\1005\05-09-06 Arrowhead MCC ReIOI.doc 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WHEREAS, based on the potential significant affects on the environment, the Mitigatio Monitoring and Reporting Program (the "Monitoring Program"), Attachment II to the Staf Report relative to the DDA between the Agency and the Developer to mitigate the potentiall significant affects on the environment, and the Developer has agreed to implement suc mitigation measures pursuant to said Monitoring Program; and WHEREAS, the Agency has prepared the Mitigated Negative Declaration with respect t the Project in accordance with the provisions of CEQA and the CEQA Guidelines develope thereunder and the Mayor and Common Council will consider adoption thereof; and WHEREAS, it is appropriate for the Mayor and Common Council to take action wit respect to the disposition of the Property to the Developer by the Agency and to approve th DDA as set forth in this Resolution. NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: Section 1. On September 6, 2005, the Mayor and Common Council (the "Council" conducted a full and fair joint public hearing with the Community Development Commission, a the governing board of the Agency (the "Commission"), relating to the disposition of th Property from the Agency to the Developer and the development thereof pursuant to the DDA. The minutes of the City Clerk for the September 6, 2005 meeting of the Council shall include record of all communication and testimony submitted to the Council by interested person relating to the public hearing and the approval of the DDA and the adoption of the Mitigate Negative Declaration. Section 2. The Council hereby receives and approves the 33433 Report and the othe written materials submitted to the Council at the meeting at which this Resolution is adopted. The 33433 Report contains information required under Health and Safety Code Section 33433. -3- P:\At:end.,\Relolutions\Rtsolutionl\2005\O~09-06 Arrowhnd MCC Resol.doe 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 Section 3. Prior to the opening of the joint public hearing at which this Resolution i adopted, the Council received the IS, and the Mitigation Monitoring and Reporting Program fo the Project. The Council finds and determines that there are no other significant environmenta effects or any differences in the severity of environmental effects associated with th implementation of the DDA from those assessed in the IS that would require additiona environmental review and the Council hereby adopts the Mitigated Negative Declaration and th Mitigation Monitoring Program. Section 4. This Resolution is adopted in satisfaction of the provisions of Health an Safety Code Section 33433 relating to the disposition and the sale of the Property by the Agenc to the Developer on the terms and conditions set forth in the DDA. A copy of the DDA in th form submitted at this joint public hearing is on file with the City Clerk. The Council hereb finds and determines that the disposition and redevelopment of the Property by the Developer i accordance with the DDA is consistent with the City's General Plan and that the consideratio payable by the Developer to the Agency as the purchase price for the Property, pursuant to th DDA, is an amount which is not less than fair market value at its highest and best use, as se forth in the 33433 Report and the disposition of the Property to the Developer on the terms se forth in the DDA shall assist in the elimination of blight on the Property. The Resolution shall become effective immediately upon its adoption. -4- P:\Ar;endls\ResolutioDs\Resolutions\Z005\Os.-09-06 Arrowhead MCC Resol.doc 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN OF SAN BERNARDINO APPROVING THE 2005 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION ("DEVELOPER") (AGENCY PROPERTY LOCATED NORTH OF MILL STREET, WEST OF "E" STREET (APN 0136-111-22) - 8.2 ACRES IN THE CITY OF SAN BERNARDINO) ("PROPERTY") AND MAKING CERTAIN FINDINGS THERETO RELATED TO THE DEVELOPMENT OF THE PROJECT 3 4 5 6 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 8 Common Council of the City of San Bernardino at a meeting thereof, held 9 on the day of 10 Council Members: Ayes 11 ESTRADA 12 LONGVILLE 13 MCGINNIS 14 DERRY 15 KELLEY 16 JOHNSON MC CAMMACK 17 18 , 2005, by the following vote to wit: Nays Abstain Absent Rachel G. Clark, City Clerk 19 20 The foregoing resolution is hereby approved this day of ,2005. 21 22 Judith Valles, Mayor City of San Bernardino 23 Approved as to form and Legal Content: 24 . By ./~J$# /?7City Atto I 25 -5- P:\Ae;end8.\Rtlolutionl\Ruolutions\2005\05-09-06 Arrowhud MCC Reso1.doc RESOLUTION NO. 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN OF SAN BERNARDINO APPROVING THE 2005 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION ("DEVELOPER") AND AUTHORIZING THE AGENCY EXECUTIVE DIRECTOR TO EXECUTE SAID DDA RELATING TO THE SALE AND DEVELOPMENT OF AGENCY PROPERTY LOCATED NORTH OF MILL STREET, WEST OF "E" STREET (APN 0136-111-22) - 8.2 ACRES IN THE CITY OF SAN BERNARDINO ("PROPERTY") AND MAKING CERTAIN FINDINGS THERETO RELATED TO THE DEVELOPMENT OF THE PROJECT 3 4 5 6 7 8 9 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") 10 is a public body, corporate and politic existing under the laws of the State of California, Healt 11 and Safety Code 33101, and is charged with the mission of redeveloping blighted an 12 underutilized land; and 13 WHEREAS, the Agency has determined that the Property is no longer necessary for th 14 Agency's use; and 15 WHEREAS, the Agency is the current owner of that certain real property consisting 0 16 approximately 8.2 acres (APN: 0136-111-22) located north of Mill Street, west of "E" Street (the "Property"); and WHEREAS, an updated MAl appraisal of the Property has been completed by Smother Appraisal (the "Appraisal"); and 17 18 19 20 WHEREAS, said Appraisal has confirmed the fair market value of the Property to be On 21 Million Eight Hundred Ninety Thousand Dollars ($1,890,000); and 22 WHEREAS, the Agency is entering into a 2005 Disposition and Development Agreemen (the "DDA") with Arrowhead Central Credit Union, a California Corporation (the "Developer" pursuant to which the Agency will sell the Property to the Developer for a purchase price of On Million Eight Hundred Ninety Thousand Dollars ($1,890,000) which is considered to be the fai 23 24 25 market value of the Property; and -1- P:\Acendas\Resolutions\Resolutions\200S\05-09-06 Arrowhead CDC Reso1.doc 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WHEREAS, the DDA provides for the development of the Property, and adjacen property already owned by the Developer, to be developed into two (2) office buildings totalin 135,000 square foot, to contain the central billing, personnel and training facilities fo Arrowhead Central Credit Union (the "Project"); and WHEREAS, the Agency has prepared and published a notice of joint public hearing i The San Bernardino County Sun Newspaper on July 4 and 11,2005, regarding the consideratio and approval of the DDA and also published a Notice of Intent to adopt a Mitigated Negativ Declaration related to the Project in accordance with California Environmental Quality Ac ("CEQA"); and WHEREAS, pursuant to Health and Safety Code Section 33433( c), the Agency ma transfer the Property to the Developer subject to the Mayor and Common Council an Community Development Commission adopting a Resolution authorizing the Agency to transfe the Property in light of the findings set forth herein, pursuant to Health and Safety Code Sectio 33433; and WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety Code Section 33433 that describes the salient points of the DDA and identifies the cost of the DDA to the Agency; and WHEREAS, the Agency is the "lead agency" for the Project, under the California Environmental Quality Act, California Public Resources Code Sections 21000, et seq. ("CEQA"), in accordance with Public Resources Code Section 21067 and Title 14 California Code of Regulations Sections 15050 and 15051; and WHEREAS, the Initial Study (IS), Attachment I to the Staff Report was circulated 0 June 20, 2005 and no public comments were received; and WHEREAS, the IS identified potentially significant effects on the environment connection with the proposed Project; and -2- P:\AltDdal\Resolutiom\Resolutions\Z005\OS-09-06 Arrowhead CDC Ruol.dlK 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WHEREAS, based on the potential significant affects on the environment, the Mitigatio Monitoring and Reporting Program (the "Monitoring Program"), Attachment II to the Staf Report relative to the DDA between the Agency and the Developer to mitigate the potentiall significant affects on the environment, and the Developer has agreed to implement suc mitigation measures pursuant to said Monitoring Program; and WHEREAS, the Agency intends on adopting a Mitigated Negative Declaration wit respect to the Project in accordance with the provisions of CEQA and the CEQA Guideline developed thereunder; and WHEREAS, it is appropriate for the Community Development Commission to tak action with respect to the disposition of the Property to the Developer by the Agency and t approve the DDA as set forth in this Resolution. NOW, THEREFORE, COMMUNITY DEVELOPMENT COMMISSION OF THE CITY 0 SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: Section 1. On September 6,2005, the Mayor and Common Council (the "Council" conducted a full and fair joint public hearing with the Community Development Commission, a the governing board of the Agency (the "Commission"), relating to the disposition of th Property from the Agency to the Developer and the development thereof pursuant to the DDA. The minutes of the Agency Secretary for the September 6, 2005 meeting of the Commissio shall include a record of all communication and testimony submitted to the Commission b interested persons relating to the public hearing and the approval of the DDA and the adoption 0 the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program. Section 2. The Commission hereby receives and approves the 33433 Report and th other written materials submitted to the Commission at the meeting at which this Resolution i adopted. The 33433 Report contains information required under Health and Safety Code Sectio 33433. -3- r:\Acendas\Resolutions\ResolutioRs\2005\05-09-06 Arrowhud CDC Relo1.dot 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Section 3. This Resolution is adopted in satisfaction of the provisions of Health an Safety Code Section 33433 relating to the disposition and the sale of the Property by the Agenc to the Developer on the tenns and conditions set forth in the DDA. A copy of the DDA in th fonn submitted at this joint public hearing is on file with the Agency Secretary. Commission hereby finds and detennines that the disposition and redevelopment of the Propert by the Developer in accordance with the DDA is consistent with the City's General Plan and tha the consideration payable by the Developer to the Agency as the purchase price for the Property pursuant to the DDA, is an amount which is not less than fair market value at its highest and bes use. as set forth in the 33433 Report and the disposition of the Property to the Developer on th tenns set forth in the DDA shall assist in the elimination of blight on the Property. Section 4. The Commission hereby approves the DDA. The Executive Director is hereby authorized and directed to execute the DDA on behalf of the Agency together with nonsubstantive and confonning changes as may be recommended by the Executive Director and Agency Counsel. The Executive Director is hereby authorized to take all appropriate actions to as set forth in the DDA to implement the disposition and redevelopment of the Property. Section 5. Prior to the opening of the joint public hearing at which this Resolution is adopted, the Commission received the IS and the Mitigation Monitoring and Reporting Program for the Project. The Commission finds and detennines that there are no other significant environmental effects or any differences in the severity of environmental effects associated with the implementation of the DDA from those assessed in the IS and that the Property will not require additional environmental review, and the Commission hereby adopts the Mitigated Negative Declaration and authorizes and directs the filing of the Notice of Detennination with 22 the County Clerk. Section 6. 23 /II 24 /II 25 The Resolution shall become effective immediately upon its adoption. -4- P:\Agendas\Resolutions\Resolution,\200S\05-09-06 Arrowhead CDC Kesol.doc 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN OF SAN BERNARDINO APPROVING THE 2005 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION ("DEVELOPER") AND AUTHORIZING THE AGENCY EXECUTIVE DIRECTOR TO EXECUTE SAID DDA RELATING TO THE SALE AND DEVELOPMENT OF AGENCY PROPERTY LOCATED NORTH OF MILL STREET, WEST OF "E" STREET (APN 0136-111-22) - 8.2 ACRES IN THE CITY OF SAN BERNARDINO ("PROPERTY") AND MAKING CERTAIN FINDINGS THERETO RELATED TO THE DEVELOPMENT OF THE PROJECT 3 4 5 6 7 8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 9 Community Development Commission of the City of San Bernardino at a 10 meeting thereof, held on the , 2005, by the following vote to wit: day of 11 Commission Members: Abstain Absent Ayes Nays 12 ESTRADA LONGVILLE MCGINNIS DERRY KELLEY JOHNSON MC CAMMACK 13 14 15 16 17 18 19 Secretary 20 The foregoing resolution is hereby approved this day of ,2005. 21 22 23 Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 24 Approved as to form and Legal Content: , Sl ,F' By: ~ "v', ,~,~- 'fI..,/" ,j' Agency COlJnsel ".,; 25 -5- P:\Ar;endls\Rflolutionl\Ruolutlonll\2005\05-09-06 Arrowhead CDC Relol.doc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attention: Executive Director (Space Above Line for Use By Recorder) Recording Fee Exempt Pursuant to Government Code Section 6103 2005 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND ARROWHEAD CENTRAL CREDIT UNION, A CALIFORNIA CORPORATION TABLE OF CONTENTS Section 1.01. Purpose of Agreement............................................................................................. 1 Section 1.02. The Property and the Project................................................................................... 1 Section 1.03. Parties to the Agreement. ....................................................................................... 1 Section 1.04. Restrictions Against Change in Ownership, Management and Control of Developer and Assignment of Agreement.............................................................. 2 Section 1.05. Benefit to Project Area............................................................................................ 2 Section 2.01. Purchase and Sale ofthe Property.......................................................................... 2 Section 2.02. Deposit and Payment of Purchase Price ................................................................. 3 Section 2.03. Opening and Closing of Escrow ............................................................................. 3 Section 2.04. Escrow Instructions ................................................................................................ 4 Section 2.05. Conveyance of Title ............................................................................................... 4 Section 2.06. Additional Closing Obligations of Agency............................................................ 5 Section 2.07. Closing Obligations of Developer .......................................................................... 5 Section 2.08. Inspections and Review .......................................................................................... 6 Section 2.09. Due Diligence Investigation of the Property By the Developer ............................. 7 Section 2.10. Due Diligence Approval Certificate ....................................................................... 8 Section 2.11. Books and Records ................................................................................................ 8 Section 2.12. Condition of the Property-Developer's Release ..................................................... 9 Section 2.13. Review and Approval of Condition of Title by the Developer............................. 10 Section 2.14. Survey ................................................................................................................... 10 Section 2.15. Extension of Due Diligence Period....................................................................... 11 Section 2.16. Developer's Conditions Precedent to Close Escrow............................................ 11 Section 2.17. The Agency's Conditions Precedent to Close Escrow......................................... 12 Section 2.18. Distribution of Documents and Purchase Price After Closing Date by Escrow Holder................................................................................................................... 12 Section 2.19. Satisfaction of Conditions..................................................................................... 12 Section 2.20. [RESERVED - NO TEXT]. ................................................................................. 13 Section 2.21. Prorations, Closing Costs, Possession .................................................................. 13 Section 2.22. Breach of Article II by the Agency; Specific Performance Remedy of Developer ...............................................................................................................................14 Section 2.23. Breach by the Developer of Article II; Liquidated Damages Payable by the Developer to the Agency ...................................................................................... 14 Section 2.24. Representations and Warranties............................................................................ 14 Section 2.25. Damage, Destruction and Condemnation .............................................................. 17 Section 3.01. Development of the Project by Developer............................................................ 18 Section 3.02. [RESERVED - NO TEXT] .................................................................................. 22 Section 3.03. Taxes, Assessments, Encumbrances and Liens .................................................... 23 Section 3.04. Change in Ownership Management and Control of the Developer - Assignment and Transfer ..........................................................................................................23 Section 3.05. Security Financing; Right of Holders ................................................................... 25 Section 3.06. Right of the Agency to Satisfy Other Liens on the Property after Conveyance of Title ......... ..... ..... ........... ..... ..................... .............................................. ................. 27 Section 3.07. Certificate of Completion ..................................................................................... 27 Section 3.08. Pledge of Tax Increment Revenues to Developer. ............................................... 28 Section 4.0 I. Uses....................................................................................................................... 29 Section 4.02. Maintenance of the Property................................................................................. 30 Section 4.03. Obligation to Refrain from Discrimination........................................................... 30 Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses.................................... 30 Section 5.01. Defaults - General.................................................................................................31 Section 5.02. Legal Actions ........................................................................................................ 32 Section 5.03. Rights and Remedies are Cumulative................................................................... 32 Section 5.04. Damages ....... ....................................................... .................................................. 32 Section 5.05. Specific Performance Prior to Close of Escrow ................................................... 33 Section 5.06. Agency Rights of Termination Following Close of Escrow................................. 33 Section 5.07. Right to Reenter, Repossess and Revest............................................................... 34 Section 6.01. Notices, Demands and Communications Between the Parties ............................. 35 Section 6.02. Conflict of Interest ................................................................................................36 Section 6.03. Warranty Against Payment of Consideration for Agreement............................... 36 Section 6.04. Nonliability of Agency Officials and Employees................................................. 36 Section 6.05. Enforced Delay: Extension of Time of Performance............................................ 37 Section 6.06. Inspection of Books and Records ......................................................................... 37 Section 6.07. Approvals .............................................................................................................. 37 Section 6.08. Real Estate Commissions...................................................................................... 38 Section 6.09. Indemnification ..................................................................................................... 38 Section 6.10. Release of Developer from Liability..................................................................... 38 Section 6.11. Attorneys' Fees ..................................................................................................... 38 Section 6.12. Effect.....................................................................................................................38 Section 7.0 I. Entire Agreement .................................................................................................. 38 Section 8.01. Execution and Recordation................................................................................... 39 EXHIBIT A-I LEGAL DESCRIPTION OF THE PROPERTY......................................4I EXHIBIT A-2 DESCRIPTION OF ADJOINING PROPERTY......................................42 EXHIBIT B PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT...... ......... ...43 EXHIBIT C AGENCY GRANT DEED...............................................................44 EXHIBIT D SCHEDULE OF PERFORMANCE... ............................................. ....45 EXHIBIT E CERTIFICATE OF COMPLETION....................................................46 2005 DISPOSITION AND DEVELOPMENT AGREEMENT (Arrowhead Central Credit Union) THIS 2005 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of September 6, 2005, by and between the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency") and Arrowhead Central Credit Union, a California corporation (the "Developer"). The Agency and the Developer hereby agree as follows: Section 1.01. Purpose of Agreement. The purpose of this Agreement is to implement the Redevelopment Plan for the Central City South Redevelopment Project by providing for the purchase and redevelopment of certain unimproved lands by the Developer. The lands, which are subject to this Agreement and are intended to be transferred from the Agency to the Developer, are referred to herein as the "Property". As of the date of this Agreement, the Property is owned by the Agency and the Property is more particularly described in Exhibit "A-I" attached hereto. The redevelopment of the Property pursuant to this Agreement is in the vital and best interests of the City of San Bernardino (the "City") and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the development and use of the Property contemplated by this Agreement is consistent with the Redevelopment Plan for the Central City South Redevelopment Project Area. Section 1.02. The Property and the Proiect. The Property includes approximately 8.2 acres of land, more or less, and is generally situated north of Mill Street and immediately south of the Arrowhead Credit Union Park Baseball Stadium site within the City of San Bernardino, California, and referred to as Assessor's Parcel Number 0136-111-22. Promptly following the purchase of the Property from the Agency the Developer shall undertake the redevelopment, improvement, and use of the Property as an office complex together with additional parcels previously acquired by the Developer with one such parcel fronting on "E" Street for development purposes and an additional number of parcels to the west to provide for alternate vehicular access to "G" Street which additional parcels are further described on Exhibit "A-2" and referred to herein as the "Adjoining Property". The development of the Property and the Adjoining Property are collectively referred to herein as the "Project". The Developer represents to the Agency that the Project shall consist of one building of approximately 120,000 square feet on the portion of the Property to be acquired from the Agency and an additional 15,000 square feet of new building construction to occur on the Adjoining Property. The Developer represents that it has submitted the necessary applications to the City and has commenced the process for the City review and approval of the development of both of said aforementioned buildings. The Developer further intends to commence the development and construction of both buildings at the same time as a single integrated site development constituting the Project. Section 1.03. Parties to the Agreement. (a) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000, et seq.) The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The City of San Bernardino is not a party to this Agreement. 1 P:\Agendas\Agenda Attachments\Agnnts-Amend 2005\05-09-06 AlTOwhead DDA I_doc Section 1.04. Restrictions Against Change in Ownership. Management and Control of Developer and Assignment of Agreement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Prior to the issuance of a Certificate of Completion as set forth in Section 3.07, no voluntary or involuntary successor in interest ofthe Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. Except as set forth in Section 3.04, the Developer shall not assign all or any part of this Agreement or any rights hereunder prior to the issuance of the Certificate of Completion with respect to the Project without the prior written approval of the Executive Director of the Agency, which approval shall not be unreasonably withheld or delayed. The Developer shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the business entities and individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such party, of which information the Developer or any of its partners or officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency prior to the Close of the Escrow as set forth in Section 2.03 if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the Agency prior to the time of such change or the Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and prior to issuance of the Certificate of Completion such a change in the ownership, or control of the Developer occurs with respect to the Project; provided, however, that (i) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following its receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory to the Agency, in its reasonable discretion. Section 1.05. Benefit to Proiect Area. The Agency has determined that the development of the Property and the Adjoining Property in accordance with this Agreement will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Central City South Redevelopment Project Area. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Property. Subject to all of the terms, conditions and provisions of this Agreement and for the consideration of the Purchase Price as herein set forth, the Agency hereby agrees to sell to the Developer merchantable lien free fee simple title and the Developer hereby agrees to purchase the following: all of the right, title and interest ofthe Agency in the Property as more fully described in Exhibit "A," including all right, title and interest of the Agency in and to any land lying in the right-of-way of any existing or proposed highway, street, road, avenue or alley abutting or adjoining the Property. 2 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDAI.doc The purchase price which the Agency agrees to accept from the Developer and which the Developer agrees to pay to the Agency for the Property is the sum of $1,890,000 in United States currency (the "Purchase Price") which is considered to be a dollar amount that is not less than the fair market value of the Property. Section 2.02. Deposit and Pavrnent of Purchase Price. (a) Within five (5) days following the execution of this Agreement by both parties, the Agency shall deliver to the Escrow Holder (as hereinafter defined) the sum of $15,000.00 which is presently being held by the Agency as received from the Developer pursuant to that certain agreement entitled "Redevelopment Project Study and Redevelopment Assistance Agreement" dated as of July 19,2004, and executed on July 26,2004, between the parties. This sum upon its receipt by the Escrow Holder is referred to in this Agreement as the "Deposit". Upon receipt of the Deposit together with a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened as provided in Section 2.03, and the Escrow Holder shall place the Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow (as hereinafter defined), the Deposit shall be applied as a credit to the Purchase Price. (b) Pavrnent of Balance of Purchase Price. The Purchase Price, less the Deposit, shall be tendered by the Developer to the Escrow Holder on the Closing Date (as hereinafter defined) for disbursement to the Agency at the Close of Escrow. The parties acknowledge that as of the date of this Agreement the balance of the Purchase Price payable in cash (net of the Deposit, but without deductions for other charges, credits, or lien releases) is equal to $1,875,000. (c) The Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer in the event that: (i) the Agency or the Developer terminates this Agreement pursuant to Section 2.03(b); or (ii) the Developer does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03(c) and this Agreement is terminated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (3), (4) or (5) are not satisfied (unless satisfaction has been waived by the Developer) and this Agreement is terminated; or (iv) the Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity with respect to the Property prior to the Close of Escrow, and the Developer elects to terminate this Agreement pursuant to Section 2.25. Section 2.03. Opening and Closing of Escrow. (a) The transfer and sale of the Property shall take place through an Escrow (the "Escrow") to be administered by Commonwealth Land America Title Insurance Company: Escrow Department or such other escrow or title insurance company mutually agreed upon by the Seller and 3 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I ,doc the Agency (the "Escrow Holder"). The Escrow shall be deemed open ("Opening of Escrow") upon the receipt by the Escrow Holder of a fully executed copy of this Agreement and the Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Developer has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within one hundred twenty (120) days from the Opening of Escrow (as such date may be extended pursuant to Section 2.15) for any reason, then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Developer, whereupon the Deposit shall be returned by the Escrow Holder to the Developer (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. (c) Provided that the Developer has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), then the Closing Date of the Escrow shall occur within sixty (60) days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related Escrow documents of the parties and the Escrow Holder is in a position to comply with the final written escrow closing instructions of the parties and cause the Agency Grant Deed for the Property to be recorded and the policy of insurance for the Property to be delivered to the Developer. Section 2.04. Escrow Instructions. This Agreement also constitutes escrow instructions of the parties to the Escrow Holder. Additionally, the Developer and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Developer shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder, the Escrow Holder shall forthwith return all monies (as provided in this Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Conveyance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "c" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free of the right, title and interest of the Agency in the Property to the Developer. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of San Bernardino County, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties as set forth herein and can obtain for the Developer a CL T A owner's extended coverage policy of title insurance ("Title Policy") issued by Commonwealth Land America Title Insurance Company or such other title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Purchase Price together with such endorsements to the policy as may be reasonably requested by the Developer, insuring that the Property with fee title to the Property vested in the Developer is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances and subject only to: 4 P:\Agendas\Agenda Attachmems\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I ,doc (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Developer pursuant to Section 2.13 below; (3) applicable provisions of the parcel map/subdivision map for the Property as approved by the Developer; (4) the effect of the Redevelopment Plan for the Central City South Redevelopment Project Area; (5) the effect of any conditions imposed by the City as part of the development plan approvals for the Project as approved by the Developer; (6) the provision of the Agency Grant Deed; (7) the applicable provisions of this Agreement; and (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closing Obligations of Agencv. On or before 12:00 noon on the business day preceding the Closing Date (unless indicated otherwise), the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Developer) copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (3) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (4) any other documents, instruments, funds and records required to be delivered to the Developer under the terms of this Agreement, which have not been previously delivered. Section 2.07. Closing Obligations of Developer. On or before 12:00 noon on the business day preceding the Closing Date, the Developer shall deliver to the Escrow Holder copies of the following documents and other items: (1) an acknowledgment and acceptance of the Agency Grant Deed, duly executed and acknowledged by the Developer. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Developer. (3) evidence of the existence, organization and authority of the Developer and of the authority of persons executing documents on behalf of the Developer reasonably satisfactory to the Escrow Holder and the Title Company. 5 P:\Agendas\Agenda Anachments\Agnms-Amend 2005\05-09-06 Arrowhead DDA I.doc (4) any other documents, instruments or funds required to be delivered by the Developer under the terms of this Agreement or as otherwise required by Escrow Holder or Title Company in order to close Escrow, which have not previously been delivered. Section 2.08. Inspections and Review. (a) Due Diligence Items. Within five (5) days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Developer: (1) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys (including, but not limited to, any Property Environmental Site Assessments), surveys, relating to the Property if any, in the possession or control of the Agency. (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Property within the Agency's possession or control. (3) disclosure of any legal matters affecting the use or condition of the Property within the knowledge of the Agency. (4) a copy of the Redevelopment Plan for the Central City South Redevelopment Project Area. (b) Certain Definitions. For the purpose of this Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300fet seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 1100 I et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the 6 P:\Agendas\Agenda Attachmenls\Agrmts-Amend 2005\05-09-06 Arrowhead DDAl ,doc California Underground Storage of Hazardous Substances Act [H & S C Section 25280 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 25249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (1) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, or (6) a radioactive material. Section 2.09. Due Diligence Investigation of the Propertv Bv the Developer. (a) Within one hundred twenty (120) days from and after the Opening of Escrow, and subject to the extensions of time set forth below in Section 2.15, the Developer shall have the right to examine, inspect and investigate the Property (the "Due Diligence Period") to determine whether the condition of the Property is acceptable to the Developer and to obtain such development project approvals from the City for the improvement of the Project as the Developer may require in its sole and absolute discretion. 7 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 AlTOwhead DDA1.doc (b) During the Due Diligence Period, the Agency shall permit the Developer, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Property as the Buyer deems prudent with respect to the physical condition of the Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous substances, if any. (c) Any such investigation work on the Property may be conducted by the Developer and/or its agents during any normal business hours upon seventy-two (72) hours prior notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Developer on the Property. Upon the Agency's request, the Developer will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws, which relate to the use and development and improvement of the Property. The Developer may submit an application to the City and any other regulatory agency with jurisdiction for any and all necessary development project approvals for the improvement of the Project. The Agency hereby consents to the submission of such development project approval applications by the Developer. (e) The Agency shall cooperate fully to assist the Developer in completing such inspections and investigations of the condition of the Property. The Agency shall have the right, but not the obligation, to accompany the Developer during such investigations and/or inspections. The Developer shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation including the cost of submitting any development project approval application as relates to the Project to any regulatory jurisdiction. Section 2.10. Due Diligence Approval Certificate. Within one hundred twenty (120) days following the Opening of Escrow, the Developer shall complete its investigation of the Property (subject to the extensions of time set forth in Section 2.15) and deliver a due diligence approval certificate signed by the Developer (the "Due Diligence Approval Certificate") to the Escrow Holder which either: (i) indicates that the Developer accepts the condition of the Property; or (ii) contains a description of the matters or exceptions relating to the condition of the Property, which the Developer was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.11. Books and Records. As part of the Developer's due investigations during the Due Diligence Period, the Developer shall be afforded full opportunity by the Agency to examine all books and records, which relate to the Property in the possession of the Agency and/or the Agency's agents or employees, including the reasonable right to make copies of such books and records. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Developer with obtaining access to information relating to the Property, which is in the possession or control of the Agency. 8 P:\Agendas\Agenda Anachmems\Agnms-Amend 2005\05-09-06 Arrowhead DDA I.doc Section 2.12. Condition of the Property-Developer's Release. The Developer acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Property during the Due Diligence Period. The Developer shall accept the delivery of possession to the Property on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Developer shall have conducted and completed (or waived the completion) of all of its independent investigation of the condition of the Property which the Developer may believe to be indicated. The Developer hereby acknowledges that it shall rely solely upon its own investigation of the Property and its own review of such information and documentation, as it deems appropriate for the purpose of accepting the condition and possession of the Property. The Developer is not relying on any statement or representation by the Agency relating to the condition of the Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representations or warranties as to whether the Property presently complies with environmental laws or whether the Property contains any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Developer with information relating to the condition of the Property, including information and reports prepared by or on behalf of the City of San Bernardino, the Agency makes no representation or warranty with respect to the accuracy, completeness or methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of itself and its successors and assigns, waives and release the Agency and its successors and assigns from any and all costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Property, the condition of the soils, the suitability of the soils for the improvement of the Project as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, under or about the Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Developer expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know of suspect to exist in his or her favor at the time the release is agreed to, which, if known to such creditor, would materially affect a settlement. By execution of this Agreement, the Developer acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWN OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." 9 P:\Agendas\Agenda Attachments\Agrmts~Amend 2005\05-09-06 Arrowhead DDA I ,doc The undersigned, being aware of this Code Section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of Developer: The provisions of this Section 2.12 shall survive the Close of Escrow. Section 2.13. Review and Approval of Condition of Title by the Developer. (a) Within fifteen (15) days following the Opening of Escrow, the Agency shall cause to be delivered to the Developer a preliminary title report or title commitment for a CLTA extended coverage policy of title insurance issued by the Title Company, describing the state of title of the Property, together with copies of all exceptions specified therein and with all easements plotted, but excluding matters disclosed on a survey (the "Preliminary Title Report"). The Developer shall notify the Agency in writing of any objections the Developer may have to the title exceptions contained in the Preliminary Title Report ("Developer's Title Objection Notice") prior to the expiration of the Due Diligence Period. The Agency shall have a period of five (5) days after receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer ("Agency's Title Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) days after the Developer's receipt of the Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. (b) The Agency covenants not to further encumber and not to place any further liens or encumbrances on the Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Developer which consent may be withheld by the Developer at the sole discretion of the Developer. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions (including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined), the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Developer to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period or ten (10) days from receipt of the amendment or supplement) and Escrow shall be deemed extended by the amount of time necessary to allow such review and approval in the time and manner set forth above. Section 2.14. Survey. The Developer may at its sole cost and separate expense obtain a survey of the Property prepared by a land surveyor duly licensed by the State of Cali fomi a and in compliance with ALTAI ASCM standards ("Survey"). The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without the addition of further exceptions unless the same are acceptable to the Developer in its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period to complete and examine the Survey and to notify Agency in writing of any objections the Developer has to the Survey ("Developer's Survey Objection Notice"). The Agency shall have a period of five 10 P:\Agcndas\Agenda Altachments\Agnnts-Amend 2005\05-09-06 Arrowhead DDA 1 doc (5) days after receipt of the Developer's Survey Objection Notice in which to deliver written notice to the Developer ("Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the Agency notifies the Developer of its intention to not remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) days after the Developer's receipt of Agency's Survey Notice, to agree to accept the Property subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall accept the Property at the Close of Escrow subject to such objectionable items. Prior to the Closing, the Survey shall be recertified to the Developer and the Title Company. The Survey will be performed at the Developer's sole cost and expense. Section 2.15. Extension of Due Diligence Period. (a) In the event Agency fails to provide to the Developer the documents and other information required by Sections 2.08 and 2.13 by the date(s) set forth therein, the Due Diligence Period for such information shall be extended by one (1) day for each day of the delay by the Agency to permit the Developer to perform an adequate due diligence review (but not to exceed a total of one hundred twenty (120) such days). The Developer will use its best efforts to notify Agency of any documents the Agency has failed to deliver to the Developer within the time periods provided in Sections 2.08 and 2.13. (b) In the event that the Executive Director makes a finding that the Developer has undertaken substantial work to complete the Due Diligence Implementation of the Project, the Executive Director shall upon the written request of the Developer authorize an extension of the Due Diligence Period for up to an additional sixty (60) days. Section 2.16. Developer's Conditions Precedent to Close Escrow. The Developer's obligation to complete the purchase of the Property and Close the Escrow shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (1) only, a representation that is limited to the Agency's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Developer's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; (3) the Developer's approval of the contents of all Due Diligence Items, and the other investigations of the Property made by the Developer and/or its designees pursuant to Sections 2.08 and 2.09 herein on or before the expiration of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.15. The Developer shall be deemed to have disapproved such Due Diligence Items unless they are approved on or before 5:00 p.m. on the day of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.15 herein; 11 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I doc (4) the Developer has submitted to the Agency a written certification duly executed by an authorized officer of the Developer stating that the Developer has either (i) obtained independent sources of third-party financing or (ii) intends to apply equity funds of the Developer for the commencement of the development of the Project immediately after the Close of Escrow, and that such financing or other equity funds will be in a principal amount and upon such terms and conditions sufficient to complete the construction of the Project as described in this Agreement; (5) the Developer's approval of any notice of change in representation or warranty given by the Agency pursuant to Section 2.24(a) hereof; and (6) the Title Company has committed to issue the policy of title insurance, in favor of the Developer in the form described in Section 2.05. Section 2.17. The Agency's Conditions Precedent to Close Escrow. The Agency's obligation to convey the Property to the Developer shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) the Developer has accepted the condition of the Property and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in this Agreement; (2) the Developer has accepted the condition of title of the Property on or before the date set forth in Section 2.13; (3) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct; and (4) the Developer shall be satisfied (or waive satisfaction) of each of the conditions precedent set forth in Section 2.16 and the Escrow is in a condition to close within one hundred and eighty (180) days following the Opening of Escrow (subject to Section 2.15, if applicable). Section 2.18. Distribution of Documents and Purchase Price after Closing Date by Escrow Holder. The Escrow Holder shall deliver to the Developer within the (3) business days following the Closing Date a conformed copy of the Agency Grant Deed, as recorded and the policy of title insurance issued by the Title Company in favor of the Developer. The Escrow Holder shall deliver to the Agency the Purchase Price, less sums paid to discharge any liens, less Escrow costs, expenses and the various prorations chargeable to the Agency hereunder. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. 12 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA 1 ,doc Either party may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. [RESERVED -- NO TEXT] Section 2.21. Prorations. Closing Costs. Possession. (a) Real and personal property taxes for the Property shall be prorated by the parties to the Closing Date on the basis of a three hundred sixty-five (365) day year on the basis that the Agency is responsible for (i) all such taxes (if any) for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 11 :59 p.m. on the Closing Date, whether or not the same shall be payable prior to the Closing Date. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Closing occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Closing Date, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Closing Date when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Developer upon demand for any real or personal property taxes payable following the Closing Date applicable to any period of time prior to the Closing Date as a result of any change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) The Developer shall be entitled to exclusive posseSSIOn of the Property immediately upon the Close of Escrow. (c) The Agency shall pay the cost of the premium for a CL T A owner's standard coverage policy of title insurance on the Property in the amount of the Purchase Price, together with all title charges (including endorsements reasonably requested by the Developer to remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above). The Agency shall pay one-half ('h) of the customary and reasonable escrow fees which may be charged by the Escrow Holder in connection with the close of Escrow. The Developer shall pay the additional cost of the Survey and requested CL T A survey policy endorsements (to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above) which exceeds the premium for a CL T A owner's standard coverage policy of title insurance on the Property, plus the cost of recording the Agency Grant Deed, together with one-half ('h) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. The Developer shall pay any documentary or other transfer taxes payable on account of the conveyance of the Property to the Developer. Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the manner customary in San Bernardino County, California. No later than three (3) business days prior to the Closing Date, the Escrow Holder shall prepare for approval by the Developer and the Agency a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all liens secured by the Property 13 P:\Agendas\Agenda Anachmenls\Agnnls-Amend 2005\05-09-06 Anuwhead DDA I ,doc and prorations made pursuant to this Agreement. The Developer and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. Breach of Article II by the Agency; Specific Performance Remedy of Developer. In the event that the Agency commits a material breach of its obligations under this Article II prior to the close of escrow and fails to transfer the Property to the Developer as agreed herein, the Developer shall have the right to file an appropriate court action in the Superior Court, County of San Bernardino, for specific performance to require the Agency to transfer the Property as agreed herein. The Developer shall not seek any other damages or remedies against the Agency for any such failure to transfer the Property. Section 2.23. Breach by the Developer of Article II; LiQuidated Damages Payable by the Developer to the Agency. IN THE EVENT THAT THE DEVELOPER COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE DEVELOPER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEFAULT BY THE DEVELOPER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE DEVELOPER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS WHICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Developer Initials of Agency Section 2.24. Representations and Warranties. (a) Warranties and Representations by the Agency. The Agency hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Developer has been made and the acquisition by the Developer of the Property will have been made in material reliance by the Developer on such covenants, representations and warranties: (1) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects at the Closing as though they were made at the time of Closing. (2) Due Organization. The Agency is a community redevelopment agency, duly formed and operating under the laws of California. The Agency has the legal power, right and authority to enter into this Agreement and to execute the 14 P:\Agc:ndas\Agenda Attachments\Agrmts-Amend 2005\05.09.06 Arrowhead DDAI ,doc instruments and documents referenced herein, and to consummate the transactions contemplated hereby. (3) Requisite Action. The Agency has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (4) Enforceabilitv of Agreement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewith will, when executed, be valid and enforceable against the Agency in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by the Agency. (5) Title. Prior to the Closing, the Agency will be the owner of (and the Developer will acquire hereunder) the entire right, title and interest in the Property to effectively vest in the Developer good and marketable fee simple title to the Property, that the Developer will acquire the Property free and clear of all liens, encumbrances, claims, rights, demands, easements, leases or other possessory interests, agreements, covenants, conditions, and restrictions of any kind or character (including, without limiting the generality of the foregoing, liens or claims for taxes, mortgages, conditional sales contracts, or other title retention agreement, deeds of trust, security agreements and pledges and mechanics liens) except: (i) the matters described in Section 2.05, and (ii) the exceptions to title approved by the Buyer pursuant to Section 2.13. (6) No Litigation. There are no pending or, to the best of the Agency's knowledge, threatened claims, actions, allegations or lawsuits of any kind, whether for personal injury, property damage, property taxes or otherwise, that could materially and adversely affect the value or use of the Property or prohibit the sale thereof, nor to the best of the Agency's knowledge, is there any governmental investigation of any type or nature pending or threatened against or relating to the Property or the transactions contemplated hereby. (7) Operation and Condition Pending Closing. Between the date of this Agreement and the Close of Escrow, the Agency will continue to manage, operate and maintain the Property in the same manner as existed prior to the execution of this Agreement. (8) Contracts. There are no contracts or agreements to which the Agency is a party relating to the operation, maintenance, development, improvement or ownership of the Property, which will survive the Close of Escrow except as may be set forth in the Agency Grant Deed or in the Deed of Trust. (9) Development of Proiect. Although the Agency makes no representation or warranty that the Property is suitable for the development or operation of the 15 P:\Agendas\Agenda Attachments\Agmw:s-Amend 2005\05-09-06 Arrowhead DDAI ,doc Project, the Agency has no present knowledge of any condition of the Property which would prevent its development in accordance with the Scope of Development. (10) Special Studies Zone. The Property has been identified in the Initial Study (the "IS") as undertaken by the Agency in accordance with CEQA for the approval of this Agreement to be in the immediate vicinity of the presumed location of the Glen Helen Fault and within approximately one-half mile of the San Jacinto Fault. However, except as identified in the IS, the Property is not located within a designated earthquake fault zone pursuant to California Public Resources Code Section 2621.9 and is not located in a designated area that is particularly susceptible to ground shaking, liquefaction, landslides or other ground failure during an earthquake pursuant to California Public Resources Code Section 2694; provided, however, the Property is in fact located within a City defined liquefaction zone together with most other properties as generally located in other areas of the City. The IS as identified above imposes certain mitigation requirements upon any development of the Property which shall further be the obligation of the Developer to undertake as set forth in Section 3.01 (aa). (11) Hazardous Substances. To the best of the Agency's knowledge, the prior environmental contamination contained within the Property caused by the previous use of the Property as a railroad switching yard and a petroleum products transfer station has been adequately remediated in accordance with an approved work plan (the "Approved Work Plan") that was prepared and implemented at the time of the development of the areas north of the Property as a municipal baseball stadium in 1996; provided, however, that in the event the Property is found to contain either (i) hazardous substances as defined in Section 2.08(b)(ii) hereof that were not remediated or removed in accordance with the Approved Work Plan or (ii) underground storage tanks previously used for the storage of petroleum products ("USTs"), the Agency shall at its sole cost and expense complete the environmental remediation of such hazardous substances to the levels and standards identified in the Approved Work Plan and/or remove such USTs, as applicable. The Developer shall be solely responsible for any other environmental remediation of the Property to levels of remediation and removal of hazardous substances that may later be required or requested at the option of the Developer that are more stringent than the levels identified in the Approved Work Plan. (12) The Agency's Knowledge. For purposes of this Section 2.24, the terms "to the best of the Agency's knowledge" or "to the Agency's knowledge" shall mean the actual knowledge of Executive Director of the Agency. If the Agency becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Agency under this Agreement, whether as of the date given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon the Agency's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the Developer, but such notice shall not release the Agency of its liabilities or obligations with respect thereto. 16 P:\Agendas\Agenda Anachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDAI.doc All representations and warranties contained in this Section 2.24(a) are true and correct on the date hereof and on the Closing Date and the Agency's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow. (b) Warranties and Representations bv the Developer. The Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Agency has been made in material reliance by the Agency on such covenants, representations and warranties: (1) The Developer is a duly organized and validly existing California corporation. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant that such persons have the power, right and authority to bind the Developer. (2) The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (3) This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by and are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer or to the Property. All representations and warranties contained in this Section 2.24(b) are true and correct on the date hereof and on the Closing Date and the Developer's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Section 2.25. Damage. Destruction and Condemnation. Prior to the Agency's delivery of possession of the Property to the Developer at the Close of Escrow, the risk ofloss or damage to the Property shall remain upon the Agency. If the Property suffers damages as a result of any casualty prior to the Close of Escrow, which may materially diminish its value, then the Agency shall give written notice thereof to the Developer promptly after the occurrence of the casualty. The Developer can elect to either: (i) accept the Property in its damaged condition or (ii) the Developer may terminate this Agreement and recover the Deposit as set forth in Section 2.02. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency. 17 P:\Agendas\Agenda ^nachments\Agrmts.Amend 2005\05-09-06 Arrowhead DDALdoc In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Property, the Agency shall give prompt written notice thereof to the Developer, and the Developer shall have the option either: (i) to elect not to acquire the Property, terminate this Agreement and recover the Deposit as set forth in Section 2.02; or (ii) the Developer may complete the acquisition of the Property under this Agreement, in which case the Developer shall be entitled to all the proceeds of such taking; provided however, that the Agency agrees that it shall not settle or compromise the proceedings before the Close of Escrow without the Developer's prior written consent, which consent will not be unreasonably withheld or delayed). The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency. ARTICLE III DEVELOPMENT OF THE PROJECT Section 3.01. Development of the Proiect by Developer. (a) Scope of Development. It is the intent of the parties that promptly following the Close of the Escrow the Developer shall redevelop the Project. The Project consists of the elements set forth in Exhibit "BOO (Scope of Development). (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the Project. The Developer acknowledges that any change in the plans for development for the Project as set forth in the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No action by the Agency or the City with reference to this Agreement or related documents shall be deemed to constitute a waiver of any City requirements which are applicable to the Project or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Project, except by modification or variance approved by the City consistent with this Agreement. (c) The Scope of Development set forth in Exhibit "BOO is hereby approved by the Agency upon its execution of this Agreement. The Project shall be developed and completed in conformance with the approved Scope of Development and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency. The Agency agrees to approve preliminary and construction plans and preliminary and landscaping plans, if reasonably consistent with the approved Scope of Development. (d) The approval of the Scope of Development by the Agency hereunder shall not be binding upon the City Councilor the Planning Commission of the City with respect to any approvals of the Project required by such other bodies. If any revisions of the Scope of Development as approved by the Agency shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Project, the Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or to obtain approvals of any such revisions which have been made by the Developer and have thereafter been approved by the Agency. The Agency shall not unreasonably withhold or delay approval of such revisions. (e) Notwithstanding any provision to the contrary in this Agreement, the Developer agrees to accept and comply fully with any and all reasonable conditions of approval applicable to all permits and other governmental actions affecting the development of the Project and consistent with this Agreement. 18 P:\Agendas\Agenda Anachmems\Agrmls-Amend 2005\05-09-06 Arrowhead DDAI.doc (f) The Developer shall cause landscaping plans in connection with development of the Project to be prepared by a licensed landscape architect. The Developer shall prepare and submit to the City for its approval, preliminary and landscaping plans for the Project, which are consistent with City Code requirements. These plans shall be prepared, submitted and approved within the times respectively established therefore in the Schedule of Performance as shown on Exhibit "D" attached hereto and incorporated herein by reference and shall be consistent with the Scope of Development. (g) The Developer shall prepare and submit development plans, construction drawings and related documents for the development of the Project consistent with the Scope of Development to the City. The development plans, construction drawings and related documents shall be in the form of drawings, plans and specifications. Drawings, plans and specifications are hereby defined as those, which contain sufficient detail necessary to obtain a building permit from the City. (h) During the preparation of all drawings and plans in connection with the development of the Project, the Developer shall provide to the Agency regular progress reports to advise the Agency of the status of the preparation by the Developer, and the submission to and review by the City of construction plans and related documents. The Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any such plans and related documents submitted by the Developer to the City are being processed in a timely fashion. (i) The Agency shall have the right of reasonable architectural review and approval of building exteriors and design of the structures to be constructed on the Property and the Adjoining Property. The Agency shall also have the right to review all plans, drawings and related documents pertinent to the development of the Project in order to ensure that they are consistent with this Agreement and with the Scope of Development. (j) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related documents pertinent to the development of the Project, as required by the City. The Agency shall cooperate with and shall assist the Developer in order for the Developer to obtain the approval of any and all development plans, construction drawings and related documents submitted by the Developer to the City consistent with this Agreement within thirty (30) calendar days following the City's receipt of said plans. Any failure by the City to approve any of such plans or to issue necessary permits for the development of the Project within said thirty (30) calendar day period shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that period of time beyond said thirty (30) calendar day period in which the City approves said plans; provided, however, that in the event that the City disapproves of any of such plans, the Developer shall within thirty (30) calendar days after receipt of such disapproval revise and resubmit such plans in a manner that addresses the City's requirements and thereafter negotiate in good faith to obtain the City's approval thereof. (k) The Agency shall in good faith use its best efforts to cause the City to approve in a timely fashion, any and all plans, drawings and documents submitted by the Developer, which are consistent with the Scope of Development. (I) The Agency shall approve any modified or revised plans, drawings and related documents to which reference is made in this Agreement within the times established in the Schedule of Performance as long as such plans, drawings and related documents are generally consistent with the Scope of Development and any other plans, which have been approved by the Agency. Upon any disapproval of plans, drawings or related documents, the Agency shall state in writing the reasons for 19 P:\Agendas\Agenda Attachments\Agrmts.Amend 2005\05.09.06 Arrowhead DDAl.doc such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved portions of the plans, drawings or related documents in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and related documents to the Agency as soon as possible after its receipt of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or disapprove such revised plans, drawings and related documents in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings and related documents initially submitted to the Agency. (m) If the Developer desires to make any change in the construction drawings, plans and specifications and related documents after their approval by the Agency and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within thirty (30) calendar days after submission to the Agency. This thirty (30) calendar day period may be extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof submitted by the Agency to the Developer, setting forth in detail the reasons therefore, and such rejection shall be made within said thirty (30) calendar day period unless extended as permitted herein. The Agency shall use its best efforts to cause the City to review and approve or disapprove any such change as provided in Section 3.01(b) hereof. (n) The Developer, upon receipt of a notice of disapproval by the Agency and/or the City, may revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the City for approval in the manner provided in Section 3.0 I (b) hereof. (0) The Developer shall have the right during the course of construction to make changes in construction of structures and "minor field changes" without seeking the approval of the Agency; provided, however, that such changes do not affect the type of use to be conducted within all or any portion of a structure. Said "minor field changes" shall be defined as those changes from the approved construction drawings, plans and specifications which have no substantial effect on the improvements and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this Section shall be deemed to constitute a waiver of or change in the City's Building Code requirements governing such "minor field changes" or in any and all approvals by the City otherwise required for such "minor field changes". (P) The cost of constructing the Project, including all off-site public improvements shall be borne by the Developer which, if any, are required by the City as a condition of approval for the Project, and the Developer shall comply with all applicable State laws relative to the payment of prevailing wages with respect to the Project and the off-site improvements and provide written verification of such compliance to the Agency upon written request from the Agency to the Developer. (q) The Developer shall at its expense cause to be prepared, and shall pay any and all fees pertaining to the review and approval of the development project approvals by the City, including the cost and preparation of all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development of the Project hereunder including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and design review documents. 20 P:\Agendas\Agenda Attachments\Agrms.Amend 20()5\05.09.(}6 Arrowhead DDAl.doc (r) The Developer shall pay for any and all costs, including but not limited to the costs of design, construction, relocation, and securing of permits for utility improvements and connections, which may be required in developing the Project. The Developer shall obtain any and all necessary approvals prior to the commencement of applicable portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. (s) The Developer shall commence the work of improvements of the Project on the Property within ninety (90) days following the Close of Escrow and thereafter shall diligently prosecute such construction to completion. All construction and development obligations and responsibilities of the Developer as related to the Project shall be initiated and completed within the times specified in the Schedule of Performance attached hereto, or within such reasonable extensions of such times as may be granted by the Agency or as otherwise provided for in this Agreement. The Developer shall substantially complete the improvements of the Project within the two hundred seventy (270) days following the commencement of the work of improvements. The Schedule of Performance shall be subject to revision from time to time as mutually agreed upon in writing by and between the Developer and the Agency. Any and all deadlines for performance by the parties shall be extended for any times attributable to delays, which are not the fault of the performing party and are caused by the other party, other than periods for review and approval or reasonable disapprovals of plans, drawings and related documents, specifications or applications for permits as provided in this Agreement. (t) During the period of construction of the Project, the Developer shall submit to the Agency written progress reports when and as reasonably requested by the Agency but in no event more frequently than every four (4) weeks. 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 taken since the last such report submitted by the Developer. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (u) Prior to the commencement of any construction, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability insurance in the amount of One Million Dollars ($1,000,000.00) combined single limit, naming the Agency and the City as additional insureds. Said insurance shall cover comprehensive general liability including, but not limited to, contractual liability; acts of subcontractors; premises-operations; explosion, collapse and underground hazards, if applicable; broad form property damage, and personal injury including libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles, combined single limit in the amount of One Million Dollars ($1,000,000.00) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+: XII in Best's Insurance Guide. All said insurance policies shall provide that they may not be canceled unless the Agency and the City receive written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance policies governing the Property as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by the Agency Counsel consistent with the foregoing. Any and all insurance required hereunder shall be maintained 21 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA] .doc and kept in force until the Agency has issued the Certificate of Completion in connection with the development of the Project. (v) The Developer for itself and its successors and assigns agrees that in the construction of the Project, 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. Notwithstanding the foregoing, the Developer will use best efforts to offer employment opportunities to local residents and will seek to acquire goods and services from local vendors. (w) The Developer shall carry out its construction of the Project in conformity with all applicable laws, including all applicable state labor standards and requirements. (x) The Developer shall, at its own expense, secure or shall cause to be secured, any and all permits, which may be required for such construction, development or work by the City or any other governmental agency having jurisdiction thereof. The Agency shall cooperate in good faith with the Developer in the Developer's efforts to obtain from the City or any other appropriate governmental agency any and all such permits and, upon applicable to the development of the Project. (y) Officers, employees, agents or representatives of the Agency shall have the right of reasonable access to the Project, without the payment of charges or fees, during normal construction hours during the period of construction of the Project for the purpose of verifying compliance by the Developer within the terms of this Agreement. Such officers, employees, agents or representatives of the Agency shall be those persons who are so identified by the Executive Director. Any and all officers, employees, agents or representatives of the Agency who enter the Project pursuant hereto shall identify themselves at the job site office upon their entrance onto the Project and shall at all times be accompanied by a representative of the Developer while on the Project; provided, however, that the Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours upon reasonable notice from the Agency. The Agency shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the Agency and/or the City of this right of access, other than injury, property damage or liability relating to the negligence of the Developer or its officers, agents or employees. (z) The Agency shall inspect relevant portions of the construction site prior to issuing any written statements reflecting adversely on the Developer's compliance with the terms and conditions of this Agreement pertaining to development of the Project. (aa) The Developer shall comply with all obligations imposed under State law in connection with the development of the Project in accordance the requirements of any supervisory agency having jurisdiction over the Project. The Developer acknowledges that it is not the responsibility of the Agency to monitor or enforce any such requirements and the Developer agrees to hold harmless from and indemnify the Agency against any liability, cost or claim resulting from the Developer's breach of the requirements of any such supervisory agency, as such requirements may be amended or interpreted from time to time as applicable to the Project. Such obligations to be assumed by the Developer include, but are not limited to, compliance with the mitigation monitoring plan approved by the Agency as part of the environmental review and approval in connection with the approval of this Agreement by the governing body of the Agency. Section 3.02. [RESERVED -- NO TEXT] 22 P:\Agendas\Agenda Auachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDAI.doc Section 3.03. Taxes. Assessments. Encumbrances and Liens. The Developer shall pay prior to the delinquency all real property taxes and assessments assessed and levied on or against the Property subsequent to the Close of Escrow. The Developer shall not place and shall not allow to be placed on the Project any mortgage, trust deed, deed of trust, encumbrance or lien not otherwise authorized by this Agreement. The Developer shall remove, or shall have removed, any levy or attachment made on the Project, or shall assure the satisfaction thereof. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. The covenants of the Developer set forth in this Section relating to the placement of any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien, shall remain in effect only until the Certificate of Completion has been recorded with respect to redevelopment of the Project. Section 3.04. Change in Ownership Management and Control of the Developer -- Assignment and Transfer. (a) Transfer as used in this Section 3.04, the term "Transfer" means: (1) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form, by the Developer of more than a 49% interest (or series of such sales, assignments and the like which in the aggregate exceed a disposition of more than a 49% interest) with respect to its interest in this Agreement, the Property, or the Project, or any part thereof or any interest therein or of the improvements constructed thereon, or any contract or agreement to do any of the same; or (2) Any total or partial sale, assignment, conveyance, or transfer in any other mode or form, of or with respect to any ownership interest of the Developer (or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest); or (3) Any merger, consolidation, or sale of all or substantially all of the assets of the Developer in this Agreement, the Property or the Project (or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest); or (b) This Agreement is entered into solely for the purpose of the redevelopment of the Project and the improvement of the Project and the subsequent operation and use of the Project by. the Developer in accordance with the terms hereof. The Developer recognizes that the qualifications and identity of the Developer are of particular concern to the Agency, in view of: (1) the importance of the redevelopment of the Project to the general welfare of the community; and (2) the fact that a Transfer is for all practical purposes a transfer or disposition of the responsibilities of the Developer, as applicable, with respect to the redevelopment of the Project. The Developer further recognizes and acknowledges that it is because of the qualifications and identity of the Developer that the Agency is entering into this Agreement with the Developer, and, as a consequence, Transfers are permitted only as provided in this Agreement. 23 P:\Agendas\Agenda Anachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDAI ,doc (c) The limitations on a Transfer as set forth in this Section 3.04 shall apply until such time as a Certificate of Completion is approved by the Agency and filed for recordation as provided in Section 3.07. Except as expressly permitted in this Agreement, the Developer represents and agrees that it has not made nor shall it create or suffer to be made or created, any Transfer, either voluntarily or by operation oflaw without the prior written approval of the Agency until such time as a Certificate of Completion has been recorded. After the date of recordation of a Certificate of Completion, certain other provisions of this Agreement shall nonetheless be applicable to subsequent conveyances of interest in the Project, or portions thereof, as provided in Article IV of this Agreement. Any Transfer made in contravention ofthis Section 3.04 shall be voidable at the election of the Agency and shall then be deemed to be a default under this Agreement. (d) The following types of a Transfer shall be permitted and approved by the Agency and are referred to herein as a "Permitted Transfer": (1) Any Transfer by the Developer creating a security interest in the Project for any financing for the construction and improvement of the Project, which conforms to the provisions of Section 3.05; (2) Any Transfer directly resulting from the foreclosure of a Security Financing Interest created by the Developer in the Project or the granting of a deed in lieu of foreclosure of a Security Financing Interest; (3) Any Transfer of stock or equity of the Developer, which does not change management, or operational control of the Property or the Project; (4) Any Transfer of any interest in the Developer, irrespective of the percentage of ownership: (A) to members of the family (i.e. spouse, brother, sister, nephew, niece, parent, child and/or issue of any of the same) of the Developer or; (B) to a trust for the benefit of any such family member; or (C) to any affiliate of or other entity controlled by the Developer, or (D) to any other entity in which the Developer owns a controlling interest. (e) No Permitted Transfer of this Agreement or any interest in the Property or the Project, by the Developer (other than a Permitted Transfer created pursuant to a Security Financing Interest) shall be effective unless, at the time of the Permitted Transfer, the person or entity to which such Transfer is made, shall expressly assume the obligations of the Developer under this Agreement and such person also agrees to be subject to the conditions and restrictions to which the Developer is subject under this Agreement. Such an assumption of obligation shall be evidenced by a written instrument delivered to the Agency in a recordable form, which is satisfactory to the Agency. (f) Provided the particular transaction satisfies the applicable provisions of Section 3.04(d), the Developer is not required to give the Agency advance notice of such a Permitted Transfer. The Agency may, in its reasonable discretion, approve in writing any other Transfer as requested by the Developer, provided such proposed transferee can demonstrate successful and satisfactory experience in the ownership, operation, and management of an operation similar to the Project. Any such transferee for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer to the Agency under this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such other Transfer; and the approval or disapproval of the Agency shall be provided to the Developer in writing within thirty (30) days of receipt by the Agency of Owner's or the Operator's request, and the Agency approval of a transfer and shall not be umeasonably withheld or delayed. 24 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I doc (g) Following the issuance of a Certificate of Completion, the Developer shall be released by the Agency from any liability under this Agreement which may arise from a default of a successor in interest occurring after the date of such a Transfer; provided, however that the covenants of the Developer as set forth in Article IV of this Agreement shall run with the land for the term as provided in Article IV. Section 3.05. Secured Financing;s; Right of Holders. (a) Notwithstanding any provision of Section 3.04 to the contrary, mortgages, deeds of trust, or any other form of lien required for any reasonable method of financing the acquisition of the Property and/or the construction and improvement of the Property are permitted before the recordation of the Certificate of Completion (referred to in Section 3.07 of this Agreement). The Developer shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of lien for financing if the Developer proposes to enter into the same before the recordation of any Certificate of Completion. The Developer shall not enter into any such conveyance for construction financing without the prior written approval of the Agency, which approval the Agency will not unreasonably withhold if: (i) any such conveyance is given to a responsible financial or lending institution including, without limitation, banks, savings and loan institutions, insurance companies, real estate investment trusts, pension programs and the like, or other acceptable persons or entities for the purpose of constructing the Project on the Property. (b) The Developer shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the improvements of the Project whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien. (c) The words "mortgage" and "deed of trust" as used herein shall be deemed to include all other customary and appropriate modes of financing real estate construction and land development. (d) The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to construct or complete the improvement of the Project or to guarantee such construction or completion. (e) Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in the completion of construction of the improvements, or any breach or default of any other obligations which, if not cured by the Developer, entitle the Agency to terminate this Agreement or exercise its right to re-enter the Property, or a portion thereof under Section 5.07, 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 Agreement 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, to commence the cure or remedy of any such default and to diligently and continuously proceed with such cure or remedy, within one hundred twenty (120) calendar days after the receipt of the notice; and to add the cost thereof to the security interest debt and the lien of 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 one hundred twenty (120) calendar days after obtaining possession; provided that in the case of a default which cannot with 25 P:\Agendas\Agenda Attachments\Agrmts-Amcnd 2005\05-09.06 Arrowhead DDA I.doc diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within such one hundred twenty (120) calendar day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such 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 improvements (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations by written agreement satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates and must submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder completing such improvements in accordance herewith shall be entitled, upon written request made to the Agency, to be issued Certificate of Completion by the Agency. (f) In any case where, one hundred eighty (180) calendar days after default by the Developer the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Property or any portion thereof has not exercised the option to construct the applicable portions of the Project, or has exercised the option but has not proceeded diligently and continuously with construction, the Agency may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between holder and the Developer. If the ownership of the Property has vested in the holder, the Agency, if may at its option but not its obligation be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (1) The unpaid mortgage, deed of trust or other security interest debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between the holder and the Developer, at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings). (2) All expenses, if any, incurred by the holder with respect to foreclosure. (3) The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent ownership or management of the Property or the Property, such as insurance premiums and real estate taxes. (4) The cost of any improvements made by such holder. (5) An amount equivalent to the interest that would have accrued on the aggregate on such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. (6) After expiration of the aforesaid one hundred eighty (180) calendar day period, the holder of any mortgage, deed of trust or other security affected by the option created by this Section, may demand, in writing, that the Agency act pursuant to 26 P:\Agendas\Agenda Attachmems\Agnr4s-Amend 2005\05-09-06 Arrowhead DDAI ,doc the option granted hereby. If the Agency fails to exercise the right herein granted within sixty (60) calendar days from the date of such written demand, the Agency shall be conclusively deemed to have waived such right of purchase of the mortgage, deed of trust or other security interest. (g) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Project (or any portion thereot) prior to the issuance of a Certificate of Completion for the Project (or any portion thereot), and the holder has not exercised its option to complete the development, the Agency may cure the default but is under no obligation to do so prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as may arise under this Section 3.05(g) upon the Project (or any portion thereot) to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments executed by the Developer for the purpose of obtaining the funds to construct and improve the Property as authorized herein. Section 3.06. Right of the Agency to Satisfy Other Liens on the Property after Conveyance of Title. After the conveyance of title to the Property by the Agency to the Developer and prior to the recordation of the Certificate of Completion (referred to in Section 3.07 of this Agreement), and after the Developer has had a reasonable time to challenge, cure or satisfy any unauthorized liens or encumbrances on the Property, the Agency shall after one hundred twenty (120) calendar days prior written notice to the Developer have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require the Developer to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Property, or any portion thereof, to forfeiture or sale. Section 3.07. Certificate of Completion. (a) Following the written request therefore by the Developer and the completion of construction of the Project, excluding any normal and minor building "punch-list" items to be completed by the Developer, the Agency shall furnish the Developer with a Certificate of Completion for the Project substantiated in the form set forth in Exhibit "E" attached hereto. (b) The Agency shall not unreasonably withhold the issuance of a Certificate of Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive determination of satisfactory completion of all of the Developer's obligations under this Agreement, except for the provisions of Article IV which by their terms are intended to run with the land. After the recordation of the Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by any covenants contained in the grant deed or other instrument of transfer which grant deed or other instrument of transfer shall include the provisions of Section 4.01 through 4.04, inclusive, of this Agreement. (c) Any Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of the County where the Project is located. 27 P:\Agendas\Agenda Attachmenls\Agrmts-Amend 2005\05.09-06 Arrowhead DDA l.doc (d) If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within fifteen (15) calendar days of the written request or within three (3) calendar days after the next regular meeting of the Agency, whichever date occurs later, provide to the Developer a written statement setting forth the reasons with respect to the Agency's refusal or failure to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and obtained by the Developer in an amount representing a fair value of the work not yet completed as reasonably determined by the Agency. If the Agency shall have failed to provide such written statement within the foregoing period, the Developer shall be deemed conclusively and without further action of the Agency to have satisfied the requirements of this Agreement with respect to the Project as if a Certificate of Completion had been issued therefore. ( e) A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the improvements described herein, or any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants or conditions subsequent contained in the Agency Grant Deed attached hereto as Exhibit "c", Section 3.08. Pledge of Tax Increment Revenues to Developer. (a) The Agency hereby pledges to the Developer an amount equal to sixty percent (60%) of the Net Tax Increment Revenues derived from the one percent (1 %) general property taxes, exclusive of any override taxes, special taxes, ad valorem taxes for general obligation bonded indebtedness or other special assessments, paid by the Developer and received by the Agency as tax increment revenues attributable to (i) the increase in the assessed value of the Project (which term includes the Property and the Adjoining Property as said properties are located within the Central City South Redevelopment Project Area) in excess of that value as existing immediately prior to the Developer's acquisition of the Property and Adjoining Property, and (ii) the increase in assessed value from the development of all improvements on the Property and Adjoining Property that shall occur and for which property taxes are payable by the Developer (the "Pledged Tax Increment"). As used herein, the term "Net Tax Increment Revenues" shall mean those tax increment revenues remaining for use by the Agency from the property tax payments of the Developer attributable to the Property and the Adjoining Property after the following items have either been paid or deducted from the tax increment revenues as received by the Agency from the County of San Bernardino: (i) the required deposit of the twenty percent (20%) of the tax increment revenues into the Low and Moderate Income Housing Fund of the Agency, and (ii) the payment of any and all ERAF and pass-through payments, whether pursuant to statute or agreement or otherwise, to taxing entities receiving property taxes within the Central City South Redevelopment Project Area. (b) The payments of the Pledged Tax Increment shall commence in the fiscal year next succeeding the fiscal year in which the Developer receives a separate certificate of occupancy for either or both of the developments upon the Property and the Adjoining Property, and continuing for a total of ten (10) fiscal years after the fiscal year in which the first certificate of occupancy is so issued for such development upon the Property and/or the Adjoining Property. The payments of the Pledged Tax Increment shall be deemed to be for the purpose of reimbursing the Developer for the 28 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc extraordinary costs associated with certain site improvement costs to be incurred by the Developer for the development of the Project upon the Property and the Adjoining Property which includes, but is not limited to, the following: (i) relocation and under grounding of overhead high voltage power lines, (ii) acquisition of additional properties adjacent to the Property for the efficient and safe ingress and egress to and from the Property to adjoining public streets, (iii) construction of additional public right-or-way improvements as shall be required by the City, including streets, median strip dividers and public right- of-way landscaping, (iv) street lighting and traffic signals as may be required for the Project to be developed upon the Property and the Adjoining Property, and (v) extraordinary site development costs that may be incurred by the Developer due to the prior use of the Property as a railroad switching yard and a petroleum products transfer station and in recognition of the acceptance of the obligations by the Developer for further remediation as set forth in Section 2.24(a)(1l) hereof. In addition, the Agency recognizes that the Developer will be retaining within the City upwards of 250 employment opportunities on the Property and the Adjoining Property and generating as many as 400 new employment opportunities within three (3) years after the date of completion of the Project. (c) The Agency shall remit the Pledged Tax Increment to the Developer on a semi- annual basis within thirty (30) calendar days after the following events shall have occurred with respect to each payment of the County one percent (1 %) property taxes: (i) the Developer has duly paid the applicable property taxes on a timely basis on or before December 10 and April 10, or any other delinquency date for the payment of any supplemental property taxes for the first fiscal year of the ten-year period, (ii) the Developer has provided to the Agency copies of the applicable property tax bill and copies of a canceled check or other official receipt from the County indicating that the payment has been made by the Developer and received by the County, and (iii) payment of the tax increment revenues has been verified by the Agency as having been received from the County for the property tax payment for which the Pledged Tax Increment payment is then intended to be made by the Agency to the Developer based upon the Agency calculation of the Net Tax Increment Revenues, and (iv) as of the date of each payment to the Developer of the Pledged Tax Increment, the Developer continues to be the owner of the Project, and there has been no Transfer, assignment or sale or other conveyance of the Project or any interest in this Agreement not otherwise permitted herein. (d) Notwithstanding anything herein to the contrary, upon the issuance of a Certificate of Completion for the Project any of the following transactions shall not be deemed a "Transfer" under Section 3.08(c)(iv) above: (i) the transfer of fee title to the Property or the Adjoining Property to an entity in which the Developer is the general partner or managing member or partner, or (ii) a transfer of fee title to the Property or the Adjoining Property in a transaction which the Developer enters into a lease for the Project pursuant to which it is obligated to pay all property taxes, or (iii) a transfer to any other entity in which the Developer owns or controls fifty-one percent (51 %) or more of the outstanding interests therein. ARTICLE IV USE OF THE SITE Section 4.01. Uses. (a) The Developer covenants and agrees for itself, its successors, and assigns that the Project to be constructed upon the Property and the Adjoining Property shall consist of and be used solely for general office purposes. The covenant of this Section 4.01(a) shall run with the land for the terms as set forth in the Agency Grant Deed. 29 P:\Agendas\Agenda Anachments\Agrmts~Amend 2005\05-09-06 Arrowhead DDA I_doc (b) The Developer further covenants and agrees for itself, its successors and assigns that the Property and the Adjoining Property shall be improved and developed in accordance with the Scope of Development. The Developer covenants to develop the Project in conformity with all applicable laws. The covenants of this Section 4.01(b) shall also run with the land until the earlier date on which the Certificate of Completion is recorded or the fifth (5th) anniversary date of recordation of the Agency Grant Deed. (c) It is understood and agreed by the Developer that neither the Developer, nor its assigns or successors shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Project or any portion thereof to any entity or party, or for any use of the Project, that is partially or wholly exempt from the payment of real property taxes pertinent to the Project, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. The covenant of this Section 4.0l(c) shall run with the land for the term as set forth in the Agency Grant Deed. Section 4.02. Maintenance of the Property. The Developer covenants and agrees for itself, its successors, and assigns to maintain the Project in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted in accordance with the Scope of Development. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Project and undertake, such maintenance activities. In such event, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities as set forth in the Agency Grant Deed. The covenant of this Section 4.02 shall run with the land for the term as set forth in the Agency Grant Deed. Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Project or any part thereof, 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 origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project; nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the Project. The covenant of this Section 4.03 shall run with the land for the term as set forth in the Agency Grant Deed with respect to the Property. Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Project, or any part thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Project (or any part thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (l) 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 race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, 30 P:\Agendas\Agenda Anachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land". (2) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring~. use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased". (3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 4.04 shall run with the land in perpetuity. ARTICLE V DEFAULTS. REMEDIES AND TERMINATION Section 5.01. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II of this Agreement. (b) From and after the Close of Escrow and subject to the extensions of time set forth in Section 6.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. (c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. 31 P:\Agendas\Agenda Attachmenls\Agrmts-Amend 2005\05-09-06 Arrowhead DDAI.doc (d) Any failure or delays 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. Delays by either party in asserting any of its rights and remedies shall not 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. Section 5.02. Legal Actions. (a) 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 purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chair of the Agency, or in such other manner as may be provided by law. (d) 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 personal service on Maria Rosino- Miracco as an authorized corporate officer of the Developer (or such other Agent for service of process and at such address as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in or otherwise restricted by the provisions of Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow, the rights and remedies of the parties as set forth in this Article V following the close of Escrow 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. Section 5.04. Damages. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default after service of the notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for default), after the service of written notice of such a default. In the event that a default relates to a matter arising after the Close of Escrow, the defaulting party shall be liable to the other party for damages caused by such default. In the event that a default relates to a matter arising before the Close of Escrow, the remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of this Agreement. 32 P:\Agendas\Agenda Auachments\Agrm:s-Amend 2005\05.09-06 Arrowhead DDA I_doc Section 5.05. Specific Performance Prior to Close of Escrow. Except as otherwise provided in Section 2.22 hereof, prior to the Close of Escrow neither party shall have or assert the equitable remedy of specific performance in the event of a default or breach, and the remedies of the parties with respect to such a breach or default prior to the Close of Escrow shall be limited to the termination rights and liquidated damage amounts or as set forth in Article II of this Agreement. Prior and after the Close of Escrow if either party defaults under any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon such defaulting party. If the defaulting party does not commence to cure the default and diligently and continuously proceed with such cure within thirty (30) calendar days after service of the notice of default, and such default is not cured within a reasonable time thereafter (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), the nondefaulting party, at its option, may institute an action for specific performance of the terms of this Agreement, except as otherwise provided in Section 5.04 hereof. Section 5.06. Agencv Rights of Termination Following Close of Escrow. (a) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer in breach of this Agreement assigns or attempts to assign this Agreement, or any right therein, or attempts to make any total or partial sale, transfer or conveyance of the whole or any part of the Project or the improvements to be developed thereon in violation of the terms of this Agreement, and the Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such notice. (b) Subject to written notice of default, which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer: (a) does not within the time limits set forth in this Agreement or as specifically provided in the Schedule of Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise, submit development plans, construction drawings and related documents acceptable to the Planning Department and Building Division of the City for plan check purposes and in order to obtain building permits for the Project, together with applicable fees therefore, all prepared to the minimum acceptable standards as required by the Planning Department and Building Division of the City for commencement of formal review of such documents and as required by this Agreement, or (b) does not carry out its other responsibilities under this Agreement or in accordance with any modification or variance, precise plan, design review and other environmental or governmental approvals and such default is not cured or the Developer does not commence and diligently and continuously proceed with such cure within thirty (30) calendar days after the date of receipt of written demand therefore from the Agency. (c) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if upon satisfaction of all conditions precedent and concurrent therefore under this Agreement, the Developer does not take title to the Property under tender of conveyance by the Agency, and such breach is not cured within thirty (30) calendar days after the date of receipt by the Developer of written demand therefore from the Agency. 33 P:\Agendas\Agenda Attachments\Agrmts~Arnend 2005\05-09-06 AlTOwhead DDA I_doc Section 5.07. Right to Reenter, Repossess and Revest. (a) The Agency shall, upon thirty (30) calendar days notice to the Developer which notice shall specify this Section 5.07, have the right, at its option, to re-enter and take possession of all or any portion of the Property, together with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after conveyance of title, the Developer (or its successors in interest) shall: (1) Fail to commence construction of all or any portion of the improvements as required by this Agreement for a period of ninety (90) calendar days after written notice to proceed from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled pursuant to Section 6.05 hereof; or (2) Abandon or substantially suspend construction of all or any portion of the improvements for a period of ninety (90) calendar days after written notice of such abandonment or suspension from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled to pursuant to Section 6.05 hereof; or (3) Assign or attempt to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer, of the Project or any part thereof, in violation of this Agreement, and such violation shall not have been cured within thirty (30) calendar days after the date of receipt of written notice thereof from the Agency to the Developer. (b) The thirty (30) calendar day written notice specified in this Section shall specify that the Agency proposes to take action pursuant to this Section and shall specify which of the Developer's obligations set forth in Subsections (1) through (3) herein have been breached. The Agency shall proceed with its remedy set forth herein only in the event that the Developer continues in default of said obligation(s) for a period of thirty (30) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. (c) The right of the Agency to reenter, repossess, terminate, and revest shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (1) Any mortgage, deed of trust or other security interest permitted by this Agreement; (2) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages, deeds of trust or other security interests; (3) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents applicable to the Project. (d) The grant deed to the Property or to any portion thereof conveyed by the Developer to another party shall contain appropriate references and provisions to give effect to the Agency's right, as set forth in this Section under specified circumstances prior to the recordation of a Certificate of Completion with respect to such portion, to reenter and take possession of such portion, 34 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 AlTOwhead DDA I_doc or any part thereof, with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer. (e) Upon the revesting in the Agency of title to the Property, or any part thereof, as provided in this Section, the Agency shall, pursuant to its responsibilities under State law, use its best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law, to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligations of making or completing the improvements, or such other improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for the Property, or any part thereof. Upon such resale of the Property, or any part thereof, the proceeds thereof shall be applied: (1) First, to make any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred with respect to the making or completion of the agreed improvements or any part thereof on the Property or any portion thereof; next to reimburse the Agency on its own behalf or on behalf of the City for all actual costs and expenses incurred by the Agency and the City, including but not limited to customary and reasonable fees or salaries to third party personnel engaged in such action (but excluding the Agency's or the City's general overhead expense), in connection with the recapture, management and resale of the Property or any portion thereof; all taxes, assessments and water and sewer charges paid by the City and/or the Agency with respect to the Property or any portion thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee; and (2) Second, to the extent that any and all funds which are proceeds from such resale are thereafter available, to reimburse the Developer, or its successor transferee, up to the amount equal to the sum of: (1) the Purchase Price paid by the Developer for the Property (or allocable to the applicable part thereof); and (2) the costs incurred for the development of the Property, or applicable part thereof, or for the construction of the improvements thereon including, but not limited to, costs of carry, taxes and items set forth in the Developer's cost statement which shall be submitted to and approved by the Agency. (3) Any balance remaining after the foregoing application of proceeds shall be retained by the Agency. (f) Notwithstanding anything herein to the contrary, all rights of the Agency to re-enter the Property under this Section 5.07 shall terminate upon the issuance of a Certificate of Completion for the Project. ARTICLE VI GENERAL PROVISIONS Section 6.01. Notices, Demands and Communications between the Parties. (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Developer, as 35 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I doc applicable, as designated in Section 1.03(a) and Section 1.03(b) hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail as heretofore provided. (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Developer: Arrowhead Central Credit Union Attention: Mr. Steve Skaggs 202 East Airport Drive, Suite 195 San Bernardino, CA 92402 With copy to: Mirau, Edwards, Cannon & Lewin Attention: Mr. Michael J. Lewin P.O Box 9058 Redlands, California 92375 (909) 793-0200 the Agency: Redevelopment Agency of the City of San Bernardino Attention: Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 FAX: (909) 663-2294 with copy to: Lewis, Brisbois, Bisgaard & Smith, LLP Attention: Mr. Tim Sabo 650 Hospitality Lane, Suite 600 San Bernardino, California 92408 FAX: (909) 387-1138 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Project shall participate in any decision relating to this Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, brokers, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. Section 6.04. Nonliability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the 36 P:\Agendas\Agenda Allachments\Agrmts-Amend 200~\05-09-06 Arrowhead DDA I.doc Developer or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather- caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of the City or Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of this Agreement, and the like). An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Project or to satisfy any other condition of this Agreement relating to the redevelopment of the Project shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion ofthe existence of a delay under this Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 6.06. Inspection of Books and Records. The Agency shall have the right at all reasonable times at the Agency's cost and expense to inspect the books and records of the Developer pertaining to the Project and/or the development thereof as necessary for the Agency, in its reasonable discretion, to enforce its rights under this Agreement; provided, however, that the Agency shall give the Developer at least twenty-four (24) hours' prior written notice of such exercise of the right to inspect said books and records. Matters discovered by the Agency shall not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of the Agency hereunder. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Project and/or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. Approvals. (a) Approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or 37 P:\Agendas\Agenda Attachmenu\Agrmts-Amend 2005\05-09-06 Arrowhead DDA1.doc disapproval shall be given within the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement, which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any other real estate commissions, brokerage fees or finder fees, which may arise from or related to this Agreement. Section 6.09. Indemnification. The Developer agrees to indemnify and hold the City and the Agency, and their officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Developer in performing its obligations hereunder. The Agency agrees to indemnify and hold the Developer and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Agency in performing its obligations hereunder. Section 6.10. Release of Developer from Liability. Notwithstanding any provision herein to the contrary, the Developer shall be relieved of any and all liability for the obligations of the Developer hereunder with regard to the Project when a Certificate of Completion has been issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided by the grant deed by which the Property are conveyed to the Developer hereunder. Section 6.11. Attorneys' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement shall be considered as "attorneys' fees" for purposes of this Section. Section 6.12. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. ARTICLE VII ENTIRE AGREEMENT. WAIVERS AND AMENDMENT Section 7.01. Entire Agreement. (a) This Agreement shall be executed in three (3) duplicate originals each of which is deemed to be an original. This Agreement includes forty-six (46) pages and six (6) Exhibits lettered "A-I" and "A-2" through "E", inclusive, which constitute the entire understanding and Agreement of the parties. 38 P:\Agendas\Agenda Attachmenls\Agrmts+Amend 2005\05-09-06 Arrowhead DDA 1 ,doc (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Project and the development thereof. (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and this Agreement shall continue in full force and effect before and after such conveyance until issuance of the Certificate of Completion. (d) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION Section 8.01. Execution and Recordation. (a) In the event that the Developer has not approved, executed and delivered this Agreement to the Agency within forty-five (45) calendar days after approval hereof by the governing body of the Agency, then no provision of this Agreement shall be of any force or effect for any purpose and the Agency shall have no further authorization to execute and deliver this Agreement thereafter. The date of this Agreement shall be the date when this Agreement shall have been approved by the Agency. (b) The Developer and the Agency agree to permit recordation of this Agreement or a notice of agreement in customary form, concurrently upon the Close of Escrow in the Office of the County Recorder for the County where the Property is located. 39 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Gary Van Osdel, Executive Director APPROVED AS TO FORM: Agency Counsel DEVELOPER Arrowhead Central Credit Union, a California Corporation Date: By: Title: [All Signatures Must Be Notarized] 40 P:\Agendas\Agenda Attachmenls\Agrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Gary Van Osdel, Executive Director APPROVED AS TO FORM: Agency Counsel DEVELOPER Arrowhead Central Credit Union, a California Corporation Date: By: Title: [All Signatures Must Be Notarized] 40 P:\Agendas\Agenda Attachments\Agrmts-Amend 2005\05-09-06 Arrowhead DDAI ,doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date; By: Gary Van Osdel, Executive Director APPROVED AS TO FORM: Agency Counsel DEVELOPER Arrowhead Central Credit Union, a California Corporation Date: By: Title: [All Signatures Must Be Notarized] 40 P:\Agendas\Agenda Attachmenls\Agnrts-Amend 2005\05-09-06 Arrowhead DDAI_doc EXHIBIT "A-I" LEGAL DESCRIPTION OF THE PROPERTY Portions of Lots 7, 8, 9 of Block 1, Rancho San Bernardino, in the City of San Bernardino, County of San Bernardino, State of California, as shown per Map recorded in Book 7, Page 2 of Maps in the Office of the County Recorder of said County described as follows: BEGINNING at the southwest comer of said lot as shown on said map; Thence North 00001' 16" West along west lines of said lots 9, 8 and 7, 989.75 feet to a line parallel with and 1,031.00 feet north of the centerline of Mill Street; thence north 89058'23" East along said parallel line, 360.36 feet to the east line on the Southern Pacific Railroad Right-of-way as shown per Map recorded in Book 16, Page 31 of Maps, Records of said County; thence South 00002'40 East along said east line, 989.75 feet to the south line of said Lot 9; thence South 89058'23" West along said south line 360.76 feet to the southwest comer of said Lot 9 and the POINT OF THE BEGINNING 41 P:\Agendas\Agenda Attachmems\Agrmls-Amend 2005\05-09-06 Arrowhead DDA I_doc EXHIBIT "A-2" DESCRIPTION OF ADJOINING PROPERTY The adjoining property consists of four parcels APN: 0136-171-07, 10, 30, 32 located at 348 South "E" Street and consisting of approximately 80,000 square feet of land. The property is improved with a 22,000 square feet metal retail warehouse, which will be demolished. 4820-3167-3600.1 42 P:lAgendaslAgenda AttachmentslAgrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc EXHIBIT "B" PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT The Developer shall cause the Project to be constructed consisting of two components, which are both covered in the Initial Study. The first component only refers to the improvements, the 8.2 acres currently owned by the Agency, a 120,000 square foot, two-story office building will be constructed on the Property. The building will be to the highest architectural design standards reflecting the status of Arrowhead Credit Union. The second lot adjacent the Property currently houses a 22,000 square foot metal retail building. This building will be demolished and a second building of approximately 15,000 square feet will be constructed on this Adjoining Property. The entire Project will total 135,000 square feet and will initially employ 250 persons, and this number is anticipated to increase to 400 within three years. The Developer will provide parking on site for 450 vehicles with access to Mill Street, "E" Street and "G" Street. Enhanced landscaping will be provided and the two-story building will prominently feature the Arrowhead Logo, which will be visible from the 1-215 freeway. All improvements to be constructed by the Developer shall be constructed or installed ill accordance with the technical specifications, standards and practices of the City and ill accordance with plans and specifications approved by the City. The complex will house Arrowhead Credit Union's Accounting, Construction, Human Resources, Marketing, Card Services, Loan processing and Information Technology functions as well as their Corporate Closet - a retail outlet. The Developer shall cause the proper documents to be filed and fees paid to all governmental or regulatory agencies, including utilities for applications for all required permits and approvals. The Developer shall at its cost and expense be responsible for the design and construction of off- site improvements in accordance with any and all standards and requirements of the City, utilities or other governmental authorities. 4820-3167-3600.] 43 P:lAgendaslAgenda AttachmentslAgrmts-Amend 2005\05-09-06 Arrowhead DDA] .doc EXHIBIT "B" - Il'l! E srm:Er ~~~~({~~~ ~~~*~~~ r:~Il(G-.30 5INfS~ ~~-orv ~ l$b ~~ ~~~ .'~~. I;j ~ 1- <n j :c Nf \m@~~m~ e@~.~ 6~rJ ~J QATE': 10' 8wl)4 MASTER PLAN CONCEPT 3 Page 4 J I EXHIBIT "c" AGENCY GRANT DEED 4820-3167-3600.\ 44 P:lAgendaslAgenda AttachmentslAgrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Arrowhead Central Credit Union Attention: Steve Skaggs 202 East Airport Drive, Suite 195 San Bernardino, CA 92402 GRANT DEED Space above this line for Recorder's Use THE UNDERSIGNED GRANTOR DECLARES: Documentary Transfer Tax is: o unincorporated area 181 City of San Bernardino Assessor's Parcel No. 0134-111-22 o computed on full value of interest or property conveyed, or o computed on full value of liens or encumbrances remaining at time of sale; FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic ("Grantor"), hereby GRANTS to Arrowhead Central Credit Union, a California Corporation ("Grantee"), the following described real property (the "Property") in the City of San Bernardino, County of San Bernardino, State of California: See Attached Exhibit "A". SUBJECT TO: 1. Nondelinquent general, special and supplemental real property taxes and assessments which are a lien not yet payable. 2. Covenants, conditions, restrictions, easements, reservations, rights, rights-of-way and other matters of record or discoverable by inspection or survey. 3. The following covenants, conditions and restrictions: 3.1. Covenants Appurtenant. Grantee, by acceptance and recordation of this Grant Deed, expressly accepts, covenants and agrees, on behalf of itself, its lessees, mortgagees, successors and assigns, to be bound by, and to assume performance of, all of the provisions and requirements set forth in this Grant Deed to be performed by Grantee, all of which provisions and requirements are acknowledged to be reasonable. Every person or entity which now or hereafter acquires any right, title, estate or interest in the Property shall be conclusively deemed to have consented and agreed to every covenant, condition and restriction contained herein to be performed by Grantee, whether or not reference to these restrictions is contained in the instrument by which such person or entity acquired an interest in the Property. All such covenants, conditions and restrictions shall run with the Property; shall be binding upon and inure to the benefit of Grantor, Grantee and any person or entity having or acquiring any interest in any portion of the Property; shall be binding upon and inure to the benefit of the Property and, any portion thereof or interest therein. 4828-2466-3296.1 I P:\Agendas\Agenda Altachments\Exhibils\2005\05-09-06 Arrowhead DDA Grant Deed (Exhibit C),doc 3.2. Use of Property. The Grantee herein covenants and agrees for itself, its successors and assigns that upon completion of construction, the Grantee shall cause to be opened on the Property structures suitable for office use. 3.3. Scope of Development. The Grantee herein covenants and agrees for itself, its successors and assigns that the Property shall be improved and developed in accordance with the Scope of Development as set forth in that certain Disposition and Development Agreement by and between the Grantor and Grantee dated September 6, 2005, (the "Agreement"). The covenant set forth in this section 3.3 shall run with the land until the earlier to occur of (i) the recordation of a Certificate of Completion (as defined in the Agreement) or, (ii) the tenth (loth) anniversary of the recordation of this Grant Deed. 3.4. Mortgagees. A breach of any of the covenants, conditions or restrictions herein shall not defeat nor render invalid the lien or charge of any mortgage or deed of trust made in good faith and for value covering the Property or any part thereof; however, such covenants, conditions and restrictions shall be binding upon and effective against any new owner of the Property, or any portion thereof, whose title thereto is acquired by foreclosure, trustee's sale or otherwise. No mortgagee shall be subject to any reimbursement obligation, which accrues prior to the date such mortgagee takes title to the property. 3.5. Nondiscrimination. The Grantee herein covenants by and for itself, its successors and assign, and all person claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation withy reference to the selection, location, number, use or occupancy of tenant lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. 3.6 Form of Nondiscrimination and Nonsegregation Clauses. The Grantee covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any part thereof, that the Grantee, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (l) 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 race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 4828-2466-3296.1 2 P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-{)6 Arrowhead DDA Grant Deed (Exhibit C),dOC (2) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." (3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 3.6 shall run with the land in perpetuity. 3.7. Maintenance. The Grantee herein covenants and agrees for itself, its successors, and assigns to maintain the Property in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted. In the event the Grantee or its successors or assigns, fails to perform the maintenance as required herein, the Grantor shall have the right, but not the obligation, to enter the Property and undertake such maintenance activities. In such event, Grantee shall reimburse the Grantor for all reasonable sums incurred by it for such maintenance activities. Notwithstanding the foregoing, Grantee, its successors and assigns shall have no maintenance obligation as described herein with respect to the Property or any portion thereof that shall be incorporated into a Landscape Maintenance Assessment District from and after the date of formation of and/or date the Property or relevant portions thereof becomes subject to such Landscape Maintenance Assessment District. 3.8 Property Taxes. The Grantee covenants and agrees for itself, its successors, and assigns that neither the Grantee nor its successors and assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback, or hypothecate the Property or any portion thereof to any entity or party, or for any use of the Property, that is partially or wholly exempt from the payment of real property taxes pertinent to the Property, or any portion thereof, or which could cause the exemption of the payment of all or any portion of such real property taxes. 3.9. Severability. Invalidation of any provision contained herein by judgment of court or otherwise shall in no way affect any of the other provisions, which shall remain in full force and effect. 4828-2466-3296.1 . 3 P:\Agendas\Agenda AUachments\Exhibils\2005\05-09-06 Arrowhead DDA Grant Deed (Exhibit C),dOc ENFORCEMENT Grantor shall have the right to enforce the covenants, conditions, and restrictions contained in this Grant Deed notwithstanding any transfer of the Property or any portion thereof. Grantor has caused this Grant Deed to be duly executed on ,2005. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic GRANTOR: By: Gary Van Osdel, Executive Director (NOTARY ACKNOWLEDGEMENT) 4828-2466-3296.1 . 4 P:\Agendas\Agenda Auachments\Exhibits\2005\OS-09.Q6 Arrowhead DDA Grant Deed (Exhibit C).doc ACCEPTANCE OF GRANT DEED BY ARROWHEAD CENTRAL CREDIT UNION The undersigned, on behalf of Arrowhead Central Credit Union hereby acknowledges the delivery of the subject Property from the Redevelopment Agency of the City of San Bernardino. Arrowhead Central Credit Union a California Corporation Date: By: Its: (NOTARY ACKNOWLEDGEMENT) 4828-2466-3296.\ . 5 P:\Agendas\Agenda Attachments\Exhiblts\2005\0.5-09-06 Arrowhead DDA Grant Deed (Exhibit C),doc EXHIBIT "A" LEGAL DESCRIPTION Portions of Lots 7, 8, 9 of Block 1, Rancho San Bernardino, in the City of San Bernardino, County of San Bernardino, State of California, as shown per Map recorded in Book 7, Page 2 of Maps in the Office of the County Recorder of said County described as follows: BEGINNING at the southwest comer of said lot as shown on said map; Thence North 00001' 16" West along west lines of said lots 9, 8, and 7, 989.75 feet to a line parallel with and 1,031.00 feet north of the centerline of Mill Street; thence north 89058'23" East along said parallel line, 360.36 feet to the east line on the Southern Pacific Railroad Right-of-way as shown per Map recorded in Book 16, Page 31 of Maps, Records of said County; thence South 00002'40 East along said east line, 989.75 feet to the south line of said Lot 9; thence South 89058'23" West along said south line 360.76 feet to the southwest comer of said Lot 9 and the POINT OF THE BEGINNING 4828-2466-3296.1 6 P:\Agendas\Agenda Attachments\Exhibits\2005\05-09-06 Arrowhead DDA Grant Deed (Exhibit C). doc EXHIBIT "D" SCHEDULE OF PERFORMANCE (Days shall be calendar days, and all dates herein are subject to change due to force majeure in accordance with Section 5.06 of the Agreement) Agency approval ofDDA September 6,2005 The Developer shall commence the following after receipt of the relevant governmental approvals and permits: (a) Developer will open escrow and Agency will deposit deeds in escrow. (b) Escrow will close and Developer will pull permits within one hundred twenty (120) days. (c) Mass grade the entire Property area (as appropriate) within sixty (60) days after approval of the master grading plan. (d) The offsite water shall commence within ninety (90) days after grading starts. (e) Storm drain improvements will commence upon completion of the grading. (f) Sewer and water installation will commence upon the completion of the storm drain. The development of sewer and water will be based upon construction phasing of the two buildings. (g) Street improvements will commence upon completion of the sewer and water. The development of street improvements will be based upon construction phasing. (h) Landscaping will commence upon completion of the street improvements. (i) Installation of dry utilities, as appropriate, for the development plan. (j) Commence construction within 90 days of the close of escrow. (k) The Project will be completed 270 days after the opening of escrow. 4820-3167-3600.1 45 P:lAgendaslAgenda AtlachmentslAgrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc EXHIBIT "E" WHEN RECORDED, MAIL TO: (Space Above Line For Use By Recorder) CERTIFICATE OF COMPLETION I, , the Secretary of the Redevelopment Agency of the City of San Bernardino (the "Agency") hereby certify as follows: Section 1. The improvements required to be constructed in accordance with that certain Disposition and Development Agreement (the "Agreement") dated September 6, 2005, by and between the Agency and Arrowhead Central Credit Union, a California Corporation (the "Developer"), on Assessor's Parcel Number 0136-111-22 and Assessor's Parcel Numbers 0136- 171-07,10,30, and 32 (collectively, the "Property") more fully described in Exhibit "A-I" and Exhibit "A-2" attached hereto and incorporated herein by this reference, have been completed in accordance with the provisions of said Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct and develop the Project, excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the Project and its use and occupancy on the Property, whether or not said improvements are on the Property or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's obligations under the Agreement with respect to the Property and the dates for the beginning and completion of construction of improvements thereon under the Agreement; provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the Agency Grant Deed pursuant to which the Property was conveyed under the Agreement. Said Agreement is an official record of the Agency and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency of the City of San Bernardino located at 201 North "E" Street, Suite 301, San Bernardino, California, during regular business hours. 4820-3167-3600.1 46 P:lAgendaslAgenda AttachmentslAgrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc Section 3. The Property to which this Certificate of Completion pertains is more fully described in Exhibit "A-I" and Exhibit "A-2" attached hereto. DATED AND ISSUED this day of ,200_. By: Gary Van Osdel, Executive Director Redevelopment Agency of the City of San Bernardino 4820-3167-3600.1 47 P:lAgendaslAgenda AttachmentslAgrmts-Amend 2005\05-09-06 Arrowhead DDA I.doc