HomeMy WebLinkAboutCDC/2005-45
NOTE: SEE COMPANION RESOLUTION NO. 2005-414
RESOLUTION NO. CDC/2005-45
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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 INTERIM 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
(CENTRAL CITY SOUTH REDEVELOPMENT PROJECT AREA)
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency")
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is a public body, corporate and politic existing under the laws of the State of California, Healt
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and Safety Code 33101, and is charged with the mission of redeveloping blighted an
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underutilized land; and
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WHEREAS, the Agency has determined that the Property is no longer necessary for th
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Agency's use; and
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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
(the "Property") in the Central City South Redevelopment Project Area ("Project Area"); and
WHEREAS, an updated MAl appraisal of the Property has been completed by Smother
Appraisal (the "Appraisal"); and
WHEREAS, said Appraisal has confirmed the fair market value of the Property to be On
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Million Eight Hundred Ninety Thousand Dollars ($1,890,000); and
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WHEREAS, the Agency is entering into a 2005 Disposition and Development Agreemen
(the "DDA") with Arrowhead Central Credit Union, a California Corporation (the "Developer"
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pursuant to which the Agency will sell the Property to the Developer for a purchase price of On
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Million Eight Hundred Ninety Thousand Dollars ($1,890,000) which is considered to be the fai
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market value of the Property, less a land write-down in the amount of $1,400,000 to cove
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necessary mitigations to the Property, including, but not limited to relocation of high voltag
powerlines, acquisition of additional properties for ingress/egress and additional right of wa
improvements; and
WHEREAS, fair market value of the property is $1,890,000, however, the dollar amoun
that is to be received by the Agency is less than the fair market value of the Property by reason 0
the expectation of the parties that the Developer will most likely comply with the provision 0
the Purchase Price Promissory Note which will provide an adjusted purchase price of $490,000;
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
145,000 square feet, to contain the central billing, personnel and training facilities for Arrowhea
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 November 21 and 28, 2005, regarding th
consideration and approval of the DDA and also published a Notice of Intent to adopt
Mitigated Negative Declaration related to the Project in accordance with Californi
Environmental Quality Act ("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
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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 to the Staff Report was circulated on lun
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
WHEREAS, based on the potential significant affects on the environment, the Mitigatio
Monitoring and Reporting Program (the "Monitoring Program"), Attachment to the Staff Repo
relative to the DDA between the Agency and the Developer to mitigate the potentially significan
affects on the environment, and the Developer has agreed to implement such mitigation measure
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 December 5, 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 December 5, 2005 meeting of the Commission shal
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include a record of all communication and testimony submitted to the Commission by intereste
persons relating to the public hearing and the approval of the DDA and the adoption of th
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.
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 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 Project Area Redevelopment Plan, the Five Yea
Implementation Plan and the City's General Plan and that the consideration payable by th
Developer to the Agency as the purchase price for the Property, pursuant to the DDA, is
amount that is less than the fair market value of the Property by reason of the expectation of th
parties that the Developer will most likely comply with the provisions of the Purchase Pric
Promissory Note in order to mitigate the extraordinary conditions present at the Propert
including relocation and undergrounding of overhead high voltage power lines, public right-of
way improvements and extraordinary site development costs that may be incurred by th
Developer due to the prior use of the Property as a railroad switching yard and petroleu
products transfer station.
Section 4. The Commission hereby approves the DDA. The Interim Executiv
Director is hereby authorized and directed to execute the DDA on behalf of the Agency togethe
with nonsubstantive and conforming changes as may be recommended by the Interim Executiv
Director and Agency Counsel. The Interim Executive Director is hereby authorized to take al
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appropriate actions to as set forth in the DDA to implement the disposition and redevelopment 0
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 determines 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 Determination with
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the County Clerk.
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Section 6.
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The Resolution shall become effective immediately upon its adoption.
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CDC/2005-45
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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 INTERIM 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
(CENTRAL CITY SOUTH REDEVELOPMENT PROJECT AREA)
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
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Community Development Commission of the City of San Bernardino at a j t. regular
10 meeting thereof, held on the 5th day of December, 2005, by the following vote to wit:
11 Commission Members:
Ayes
X
Abstain
Absent
Nays
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ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MC CAMMACK
-J@J~ 1s.=---
Secretar -
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X
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20 The foregoing resolution is hereby approved this tfh day of DeC'cmber
,2005.
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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 ''E' 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 Aereement: 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 Aereement to the Aeencv: This section
outlined the proposed Agreement costs to the Agency.
III Estimated Value of the Interests to be Conveyed bv the Disposition and
Development Aereement Determined at the Hiehest 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 Blieht Alleviation: This section describes the existing 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.
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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
145,000 square feet 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 feet to be built on the Property and the
smaller, 25,000 square feet 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. Land write-down of the purchase price to the Developer in the amount of $1,400,000,
which is equivalent to 60% of the net tax increment that will be generated by the
development of the property, annually, for the next 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 less
the deposit already received and the land write down as described in I. B(2) above.
2. The Developer will construct the Project.
3. The Project will be constructed at prevailing wage.
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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 total consideration at the close of escrow in the forms
described in Section 2.02 of the DDA. (i.e., an initial deposit of $15,000 already on deposit,
$475,000 in cash and a $1.4 million Promissory Note).
Pursuant to Section 3.08 (b) of the DDA, in the event that the value of the Project is less than $30
million, then the Developer will reimburse the Agency $46.6667 for every $1,000 of assessed
valuation below $30 million. (For example, should the project only be assessed at $20 million upon
completion, the Developer will reimburse the Agency $466,667). In the event that the valuation of
the Project equals or exceeds the $30 million, the Promissory Note in the amount of $1.4 million will
be deemed to have been paid in whole.
While the fair market value of the Property is $1,890,000 the dollar amount that is to be received by
the Agency is less than the fair market value of the Property by reason of the expectation of the
parties that the Developer will most likely comply with the provision of the Purchase Price
Promissory Note which will provide an adjusted purchase price.
In addition, the Agency will realize an additional $3 million in tax increment revenues, (which
includes $600,000 in Low and Moderate Income Housing funds, from this Project over the next ten
(10) years assuming a new assessed value of$30 million.
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 (2) 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.
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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 99~
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 extending the improvements down "E"
Street which is the City's main surface arterial.
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 underdeveloped 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.
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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/LOCA TION:
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 145,000 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
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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 (ErR)
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 145,000 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 of E 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-1)
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 145,000 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
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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 25,000 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.
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REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
INITIAL STUDY
Insert Exhibit 1 - Project Location
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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.
0 Aesthetics 0 Agriculture Resources [3J Air Quality
0 Biological Resources 0 Cultural Resources [3J Geology/Soils
0 Hazards & Hazardous 0 Hydrology/Water Quality 0 Land Use/Planning
Materials 0 Noise 0 Population/Housing
0 Mineral Resources 0 Recreation [3J T ransportation/T raffic
0 Public Services [3J Mandatory Findings of
0 Utilities/Service Systems Significance
On the basis of this Initial Study, the City of San Bernardino Environmental Review Committee finds:
o I find that the proposed project COULD NOT have a significant effect on the environment, and a
NEGATIVE DECLARATION will be prepared.
[3J 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.
o I find that the proposed project MAY have a significant effect on the environment, and an
ENVIRONMENTAL IMPACT REPORT is required.
o I find that the proposed project MA Y have a "potentially significant impact" or "potentially
significant unless mitigated" impact on the environment, but at least one effect I) has been
adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been
addressed by mitigation measures based on the earlier analysis as described on attached sheets. An
ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that
remain to be addressed.
o 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
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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\05~12.05 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 [g]
II. AGRICULTURE RESOURCES:
b) Other:
D
D
D
[g]
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 AUachments\Exhibits\2005\05-12-05 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 [gJ
applicable air quality plan? (South Coast Air
Basin)
b) Violate any air quality standard or contribute D [gJ 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 [gJ 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 [gJ
pollutant concentrations?
e) Create objectionable odors affecting a D D D [gJ
substantial number of people based on the
information contained in Project Description
Form?
t) Other: D D D [gJ
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 Attachments\Exhibits\200S\05-12-05 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)
Total No. Vehicle Trips/Day
1,721
x
Ave. Trip Total
Length (miles) miles/day
15 = 25,815
PMlO PMlO
PMlO Tire Brake
NO Exhaust Wear Wear
19.38 0.57 0.57
100 150
Pollutant ROC CO
Pounds at 40 mph 6.27 131. 64
SCAQMD Daily Threshold
(Lbs.!day) 75 550
Based on California Air Resources Board's EMF AC7G Emissions Model. Assumes Year 2005
summertime running conditions at 75"F, 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 PMlO
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 Attachments\Exhibits\2005\05-12-05 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.lday)
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 (PM10) 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 Attachments\Exhibits\2005\05-12-05 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 Atlachments\Exhibits\2005\05-12-0S 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 Attachments\Exhibits\2005\05-12-0S 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?
D
D
D
b) Cause a substantial adverse change in the
significance of an archaeological resource
pursuant to 915064.5 ofCEQA?
D
D
D
c) Cause a substantial adverse change in the
significance of a historical resource as defined
in 915064.5 ofCEQA?
D
D
D
d) Directly or indirectly destroy a unique
paleontological resource or site or unique
geologic feature?
D
D
D
e) Disturb any human remains, including those
interred outside of formal cemeteries?
D
D
D
f) Other:
D
D
D
No
Impact
[g]
[g]
[g]
[g]
[g]
[g]
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 AUachments\Exhibits\200S\05-12-0S 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 AUachments\Exhibits\200S\OS-12-0S Arrowhead Credit Union IS,doc
IS 14
o
o
~
o
~
o
o
o
~
o
~
o
o
~
o
o
o
o
D
D
[SJ
D
D
D
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 AUachments\Exhibits\2005\05-12-05 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 [g]
environment through the routine transport, use,
or disposal of hazardous materials?
b) Create a significant hazard to the public or the D D D [g]
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 [g]
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 [g]
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 [g]
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 [g]
with an adopted emergency response plan or
emergency evacuation plan?
g) Expose people or structures to a significant risk D D D [g]
of loss, injury or death involving wildland fires,
including where wildlands are adjacent to
urbanized areas or where residences are
intermixed with wildlands?
P:\Agendas\Agenda Anachments\Exhibits\2005\05-12-05 Arrowhead Credit Union IS doc IS 16
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
- Continued
h) Other: 0 0 0 ~
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 acresl. 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 Attachments\Exhibits\2005\05-12-05 Arrowhead 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 ~ 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 ~ 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 ~ 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 0
exceed the capacity of existing or planned
stormwater 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 Attachments\Exhibits\2005\05-12-05 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
[gJ
g) Place housing within a 1 DO-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 1 DO-year flood hazard area
structures which would impede or redirect
flood flows?
D
D
D
i) Expose people or structures to a significant
risk ofloss, 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
[gJ
[gJ
[gJ
[gJ
[gJ
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 AUachments\Exhibits\2005\05-12-05 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? D D D ~
b) Conflict with any applicable land use plan, D D D ~
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 D D D ~
conservation plan or natural community
conservation plan?
d) Be developed within the Hillside Management D D D ~
Overlay District?
e) Be developed within Foothill Fire Zones A, B, D D D ~
or C as identified in the City's General Plan?
f) Be developed within the Airport Influence Area D D D ~
as adopted by the San Bernardino International
Airport Authority?
g) Other: D D D ~
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 Altachmenls\Exhibils\2005\05-12-05 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\05~12-05 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 [g] 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 [g]
excessive groundborne vibration or
groundborne noise levels?
c) A substantial permanent increase in ambient D D [g] D
noise levels in the project vicinity above levels
existing without the project?
d) A substantial temporary or periodic increase in D D [g] 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 [g]
plan or Airport Influence Area, would the
project expose people residing or working in the
project area to excessive noise levels?
f) Other: D D D [g]
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 groundborne vibration or noise. The project site is not
located within an area of influence for an airport.
P:\Agendas\Agenda Attachments\Exhibits\2005\05-12-0S 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) ?
D
D
~
D
b) Remove existing housing and displace
substantial numbers of people, necessitating the
construction of replacement housing elsewhere?
D
D
D
~
c) Other:
D
D
D
~
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:\Agenclas\Agenda Attachments\Exhibits\2005\05-12-05 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? D D D [gJ
Police protection? D D D [gJ
Schools? D D D [gJ
Parks or other recreational facilities? D D D [gJ
Other governmental services? D D D [gJ
b) Other: D D D [gJ
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 AUachments\Exhibits\2005\05-12-05 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 ~
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 ~
or require the construction or expansion of
recreational facilities which might have an
adverse physical effect on the environment?
c) Other: D D D ~
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 AUacnments\Exhibits\2005\05-12-05 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. TRANSPORTATlON/TRAFFIC - Would the
project:
a) Cause an increase in traffic which is substantial 0 0 [2J 0
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 0 [2J 0 0
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, 0 0 0 [2J
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 0 [2J 0 0
feature (e.g., sharp curves or dangerous
intersections) or incompatible uses (e.g., farm
equipment)?
e) Result in inadequate emergency access? 0 0 [2J 0
f) Result in inadequate parking capacity? 0 0 0 [2J
g) Conflict with adopted policies, plans, or 0 0 0 [2J
programs supporting alternative transportation
(e.g., bus turnouts, bicycle racks)?
h) Other: 0 0 0 [2J
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\200S\OS-12-0S 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 Attachmenls\Exhibits\1005\05-12-0S 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\200S\OS-12-05 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 [8J
the Santa Ana Regional Water Quality
Control Board?
b) Require or result in the construction of new D D D [8J
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 [8J
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 [8J
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 [8J
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 [8J
permitted capacity to accommodate the
project's solid waste disposal needs?
g) Comply with federal, state, and local statutes D D D [8J
and regulations related to solid waste?
h) Other: D D D [8J
P:\Agendas\Agenda Attachments\Exhibits\2005\05-12-05 Arrowhead Credit Union IS.doc 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:\Agendas\Agenda Attachments\Exhibits\2005\05-12.05 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 [8J
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 [8J
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 [8J 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:\Agendas\Agenda Attachments\Exhibits\2005\OS-12-05 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\05-12-05 Arrowhead Credit Union IS.doc IS 32
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:
1. 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:\Agendas\Agenda Attachments\Exhibits\2005\05-12-05 Arrowhead Credit Union MMRP.doc
MITIGATION MEASURES
Air Quality
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 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\Exhibils\2005\05-12.0S Arrowhead Credit Union MMRP.doc
MITIGATION MEASURES
Geology and Soils
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 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 Attachments\Exhibits\2005\05-12-05 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 AUachments\Exhibits\2005\05-12-05 Arrowhead Credit Union MMRP.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: Interim 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 of the Property. ........................................................................2
Section 2.02. Deposit and Payment of Purchase Price. ............................................................... 3
Section 2.03. Opening and Closing of Escrow. ........................................................................... 4
Section 2.04. Escrow Instructions. ............................................................................................... 4
Section 2.05. Conveyance of Title. .............................................................................................. 5
Section 2.06. Additional Closing Obligations of Agency. ........................................................... 5
Section 2.07. Closing Obligations of Developer. ........................................................................6
Section 2.08. Inspections and Review. ........................................................................................6
Section 2.09. Due Diligence Investigation ofthe Property By the Developer. ........................... 8
Section 2.10. Due Diligence Approval Certificate. ..................................................................... 9
Section 2.11. Books and Records. ...............................................................................................9
Section 2.12. Condition ofthe Property-Developer's Release. ...................................................9
Section 2.13. Review and Approval of Condition of Title by the Developer. ........................... 10
Section 2.14. Survey. ................................................................................................................. 11
Section 2.15. Extension of Due Diligence Period. ..................................................................... 11
Section 2.16. Developer's Conditions Precedent to Close Escrow. .......................................... 12
Section 2.17. The Agency's Conditions Precedent to Close Escrow. ....................................... 12
Section 2.18. Distribution of Documents, Purchase Price Promissory Note Secured by
Recorded Deed of Trust and UCC Filing, and Purchase Price after Closing
Date by Escrow Holder. ....................................................................................... 13
Section 2.19. Satisfaction of Conditions. ................................................................................... 13
Section 2.20. [RESERVED - NO TEXT]. ................................................................................ 13
Section 2.21. Prorations, Closing Costs, Possession. ................................................................ 14
Section 2.22. Breach of Article 11 by the Agency; Specific Performance Remedy of
Developer............................................... ............................................ ................... 15
Section 2.23. Breach by the Developer of Article 11; Liquidated Damages Payable by the
Developer to the Agency. .................................................................................... 15
Section 2.24. Representations and Warranties. .......................................................................... 15
Section 2.25. Damage, Destruction and Condemnation. ............................................................ 18
Section 3.01. Development of the Project by Developer. .......................................................... 19
Section 3.02. [RESERVED - NO TEXT]. ................................................................................24
Section 3.03. Taxes, Assessments, Encumbrances and Liens. ..................................................24
Section 3.04. Change in Ownership Management and Control ofthe Developer
Assignment and Transfer. ....................................................................................24
Section 3.05. Security Financing; Right of Holders. .................................................................26
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Section 3.06. Right of the Agency to Satisfy Other Liens on the Property after Conveyance
of Title. ................................................................................................................. 28
Section 3.07. Certificate of Completion. ...................................................................................28
Section 3.08. Procedures for Repayment of Purchase Price Promissory Note by Developer. .. 29
Section 4.01. Uses. .....................................................................................................................32
Section 4.02. Maintenance of the Property. ............................................................................... 32
Section 4.03. Obligation to Refrain from Discrimination. .........................................................32
Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. .................................. 33
Section 5.01. Defaults - General. ............................................................................................... 34
Section 5.02. Legal Actions. ...................................................................................................... 34
Section 5.03. Rights and Remedies are Cumulative. .................................................................35
Section 5.04. Damages. .............................................................................................................. 35
Section 5.05. Specific Performance Prior to Close of Escrow. ................................................. 35
Section 5.06. Agency Rights of Termination Following Close of Escrow. ............................... 35
Section 5.07. Right to Reenter, Repossess and Revest. .............................................................36
Section 6.01. Notices, Demands and Communications between the Parties. ............................ 38
Section 6.02. Conflict of Interest. ..............................................................................................39
Section 6.03. Warranty Against Payment of Consideration for Agreement. .............................39
Section 6.04. Nonliability of Agency Officials and Employees. ............................................... 39
Section 6.05. Enforced Delay: Extension of Time of Performance. .......................................... 39
Section 6.06. Inspection of Books and Records. .......................................................................40
Section 6.07. Approvals. ............................................................................................................40
Section 6.08. Real Estate Commissions. .................................................................................... 40
Section 6.09. Indemnification. ........................................... ........................................................ 41
Section 6.10. Release of Developer from Liability. ................................................................... 41
Section 6.11. Attorneys' Fees. ................................................................................................... 41
Section 6.12. Effect. ...................................................................................................................41
Section 7.01. Entire Agreement. ................................................................................................ 41
Section 8.01. Execution and Recordation. .................................................................................42
EXHIBIT A-I LEGAL DESCRIPTION OF THE PROPERTY ............................................A-l-l
EXHIBIT A-2 DESCRIPTION OF ADJOINING PROPERTY ............................................A-2-1
EXHIBIT B PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT ....................... B-1
EXHIBIT C AGENCY GRANT DEED .................................................................................... C-l
EXHIBIT D SCHEDULE OF PERFORMANCE ..................................................................... D-l
EXHIBIT E CERTIFICATE OF COMPLETION ......................................................................E-l
EXHIBIT F-l PURCHASE PRICE PROMISSORY NOTE ..................................................F-l-l
EXHIBIT F-2 DEED OF TRUST WITH UCC FILING .........................................................F-2-1
4818-3703-9616.1- 111] 5/05 jmm 11
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2005
DISPOSITION AND DEVELOPMENT AGREEMENT
(Arrowhead Central Credit Union)
THIS 2005 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement")
is entered into as of December 5, 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 25,000 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.
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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 of the 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 Interim 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 ofthis 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 ofthe right, title and interest of the 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.
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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 fair market value sum of $1,890,000
in cash and otherwise in the manner as provided below (the "Purchase Price") of an amount equal to
the cash price of $490,000 which, if the hereinafter defined Purchase Price Promissory Note has been
paid in whole or in part through the Developer having complied with the provisions of Section 3.08
hereof to provide a minimum of $30,000,000 of assessed valuation for the Project, shall be considered
to be a dollar amount that is less than the fair market value of the Property by reason of the expectation
of the parties that the Developer will most likely comply with the provisions of the Purchase Price
Promissory Note, as herein defined, which will effectively provide a final adjusted purchase price to
the Developer for the Property. The Purchase Price shall be paid to the Agency in the following
manner and in the following dollar amounts: (i) $15,000 representing the Deposit as defined in
Section 2.02(a) which is presently being held by the Agency, (ii) $475,000 additional cash to be
deposited to the Escrow by the Developer as provided in this Article II, and (iii) the Purchase Price
Promissory Note secured by recorded Deed of Trust and UCC Filing (the "Purchase Price Promissory
Note") payable to the Agency in a principal amount equal to $1,400,000 as further provided in Section
2.02(b) and Section 3.08 hereof.
Section 2.02. Deposit and Payment 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) Payment of Balance of Purchase Price. Developer shall tender to Escrow
Holder on the Closing Date (as hereinafter defined) additional cash funds in an amount equal to
$475,000, which funds when combined with the Deposit shall equal the $490,000 cash portion of the
Purchase Price. The parties acknowledge that as of the date of this Agreement the balance of the
Purchase Price shall be payable in the form of the Purchase Price Promissory Note substantially in the
form of Exhibit "F" as attached hereto, including therewith the Deed of Trust and the UCC Financing
Statement (in addition to the cash portion of the Purchase Price less the Deposit, but without
deductions for other charges, credits or lien releases), is equal to $1,400,000. The Deed of Trust shall
be recorded by the Escrow Holder in a subordinate position to any construction or permanent financing
for the Project and the UCC Financing Statement shall be duly filed by the Escrow Holder with
evidence of such recording and filing being delivered to the Agency as of the Close of Escrow.
(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
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(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
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,
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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 standard 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:
(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 ofthe 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;
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(2) two (2) duplicate original copies of the Closing Statement described in Section
2.21, duly executed by the Agency;
(2) 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
(3) 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.
(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, including those funds and documents as required by
Section 2.02(b) hereof.
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:
(l) 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.
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(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 300f et 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 11001 et
seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the
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 EP A, or any successor agency, as hazardous
substances [40 CFR Part 302]; and
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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 Property By 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.
(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
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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.
Section 2.12. Condition of the Propertv-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, and except as expressly set forth in
Section 2.24(a)(ll), 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
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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 ofthe 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 KNOW
OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM, MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
The undersigned, being aware of this Code Section, hereby expressly waives any rights it may
have thereunder, as well as under any other statute or c mon 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 CL T A
standard 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
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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. Survev. 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 California 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
(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.
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(b) In the event that the Interim Executive Director makes a finding that the
Developer has undertaken substantial work to complete the Due Diligence Implementation of the
Project, the Interim 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:
(l) 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;
(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:
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(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;
(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); and
(5) the Developer shall have executed the documents and made the deposit of funds
as required by Section 2.02(b) hereof in such form as to allow for the
recordation of the Deed of Trust and the filing of the DCC Financing Statement
together with the deliver to the Escrow Holder of the Purchase Price Promissory
Note for the benefit ofthe Agency.
Section 2.18. Distribution of Documents. Purchase Price Promissory Note Secured
by Recorded Deed of Trust and DCC Filing. and Purchase Price after Closing Date bv Escrow Holder.
The Escrow Holder shall deliver to the Developer within three (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
cash portion of the Purchase Price, less sums paid to discharge any liens, less Escrow costs, expenses
and the various prorations chargeable to the Agency hereunder in addition to the delivery to the
Agency of the fully executed Purchase Price Promissory Note secured by recorded Deed of Trust and
DCC Filing and evidence of recordation of the Deed of Trust and appropriate filing of the DCC
Financing Statement.
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.
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]
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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 CLTA 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 (Y2) 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) the
additional premium for an AL T A extended coverage policy (if elected by the Developer) 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 (Y2) 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
and prorations made pursuant to this Agreement. The Developer and the Agency shall assist the
Escrow Holder in determining the amount of all prorations.
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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 S CTION AND EACH AGREES TO BE BOUND BY ITS
TERMS.
Initia~
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
instruments and documents referenced herein, and to consummate the
transactions contemplated hereby.
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(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) Enforceability 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.
(9) Development of Proiect. Although the Agency makes no representation or
warranty that the Property is suitable for the development or operation of the
Project, the Agency has no present knowledge of any condition of the Property
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which would prevent its development III 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 ofthe Developer to undertake as set forth in Section 3.01(aa).
(II) 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 Interim 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.
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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 ofthis 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 of loss 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
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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.
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 bv Developer.
(a) Scope of Development. It is the intent of the parties that promptly following the
Close ofthe Escrow the Developer shall redevelop the Project. The Project consists of the elements set
forth in Exhibit "B" (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 "B" 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.
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(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.
(t) 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.
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(1) 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
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 3.0l(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 3.01 (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.
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(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.
(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 thirty (30) days following the issuance of building permits for the Project 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 five hundred forty (540) 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
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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
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 Interim 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 ofthis 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 with 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
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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]
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).
(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
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(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.
(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 of law 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 of this 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
acquisition of the Property or any financing for the construction and
improvement ofthe 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.
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(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 unreasonably withheld or delayed.
(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 Financings: 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 acquisition or
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 acquiring the Property or 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 ofthe Project or to guarantee such construction or completion.
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( 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
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:
(I) 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.
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(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
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 thereof) prior to the issuance of a
Certificate of Completion for the Project (or any portion thereof), 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 thereof) 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.
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(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 ofthe County where the Project is located.
(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". The
issuance of a Certificate of Completion by the Agency pursuant to this Section 3.07 shall not in any
manner terminate any of the other obligations or responsibilities of the Agency which are not
specifically stated to terminate as of the date of issuance of a Certificate of Completion but are
intended to remain in full force and effect pursuant to this Agreement, including, but not limited to,
those as set forth in Section 3.08 below.
Section 3.08. Procedures for Repayment of Purchase Price Promissory Note by
Developer.
(a) The Agency hereby agrees that as of a date not later than five hundred forty
(540) days after the commencement of the work of the improvements, or sooner upon the issuance of
certificate of occupancy for the Project by the City (the "Assessed Value Determination Date"), which
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is the time period for the Developer to complete the improvements upon the Property and the
Adjoining Property and for the Office of the Assessor to add the value of the completed improvements
on the Property, the Agency shall determine the assessed valuation of the Project based upon the then
current assessed valuation information available from the Office of the Assessor of the County of San
Bernardino ("Office of the County Assessor"). In lieu of such procedure, the Developer may elect to
provide a written statement to the Agency which shall include assessed value information as previously
furnished by the Developer to the Office of the County Assessor (the "Developer Assessed Value
Certificate") to the effect that the Developer has in fact furnished such attached information to the
Office of the County Assessor stating the assessed value of the Property and the Adjoining Property as
determined by the Developer in good faith based upon the costs as paid or incurred by the Developer
as of the Assessed Value Determination Date. Such figure as set forth by the Developer shall then be
used by the Agency for proposes of this Agreement as the assessed value of the Property and the
Adjoining Property unless the Office of the County Assessor determines within twenty-four (24)
months after the Assessed Value Determination Date that the assessed value for the Project is different
than that figure as set forth in the Developer Assessed Value Certificate. In the event that the Office of
the County Assessor should so determine that the assessed value of the Property and the Adjoining
Property as of the Assessed Value Determination Date was in fact different than the amount set forth in
the Developer Assessed Value Certificate, the payment required. by the Developer under the Purchase
Price Promissory Note shall be recalculated utilizing the formula set forth in subsection (b) below and
any overpayment will be refunded by the Agency to the Developer and any additional amounts owed
will be paid by the Developer to the Agency. The Purchase Price Promissory Note shall be deemed to
have been paid in whole if as of the Assessed Value Determination Date the assessed value for the land
and improvements constituting the Project upon both the Property and the Adjoining Property are
equal to not less than $30,000,000.
(b) In the event that the assessed value of the Proj ect as of the Assessed Value
Determination Date is less than $30,000,000, then the principal amount of the Purchase Price
Promissory Note that the Developer shall be required to pay to the Agency shall be an amount equal to
$46.6667 for each $1,000 that the assessed valuation is less than $30,000,000 (e.g., if the final assessed
valuation is $20,000,000 as of the Assessed Value Determination Date, then 10,000 x $46.6667 =
$466,667.00). Except as provided in (a) above for the recalculation of the amounts to be paid by the
Developer to the Agency, such payment shall be deemed payment in full of the Purchase Price
Promissory Note after the two-year period of time set forth in (a) above and all remaining principal
balance there under shall be forgiven and constitute financial assistance to the Project. Unless the
Developer otherwise elects to provide the Developer Assessed Value Certificate pursuant to (a) above,
the Agency shall provide a written Notice and Request for Payment to the Developer at anytime after
the Assessed Value Determination Date together with supporting information obtained from the
Assessor of the County of San Bernardino verifying the assessed valuation of the Project as of the
Assessed Value Determination Date and providing the calculation of the amount due, if any, from the
Developer to the Agency pursuant to the Purchase Price Promissory Note. Such amount shall be due
and payable within thirty (30) calendar days after receipt by the Developer of such Notice and Request
for Payment and supporting information from the Agency.
(c) In the event the Developer shall dispute any of the information contained in the
Notice and Request for Payment, the Developer shall pay to the Agency the amount thereof that is not
in dispute and if paid by the Developer to the Agency within the thirty (30) day period of time during
which the amounts are due and payable, such amount as paid shall not bear any interest for the benefit
of the Agency. In the event the Agency should prevail pursuant to an action filed by the Agency
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pursuant to Article V hereof, interest at the rate of five percent (5%) per annum shall be due and
payable by the Developer to the Agency for those amounts that were not previously paid by the
Developer in a timely manner. In the event that the Developer should prevail as to any amounts that
have been paid to the Agency which are later determined pursuant to an action filed by the Developer
pursuant to Article V to not have been validly due and owing to the Agency, the Agency shall return
such principal amounts to the Developer plus interest at the rate of five percent (5%) per annum. Such
interest rate calculations shall also be applicable for those amounts, if any, owed by either the Agency
or the Developer to the other party, as applicable, in the event the Developer elects pursuant to (a)
above to file the Developer Assessed Value Certificate with the Agency.
(d) The financial assistance as intended to be provided by the Agency to the Developer
pursuant to this Section 3.08 for the repayment in whole or in part of the Purchase Price Promissory
Note shall be deemed to be for the purpose of reimbursing the Developer for the 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)(lI) 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. The
financial assistance as set forth in this Section 3.08 shall be provided to the Developer to reduce the
principal amount of the Purchase Price Promissory Note so long as the Developer, as of the Assessed
Value Determination Date, 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.
(e) 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(d) 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.
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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.
(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 4.01(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.
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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:
(1) 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".
(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.
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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.
(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 Interim
Executive Director or Chair ofthe 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.
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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 the applicable party shall be deemed to be
in default under this Agreement. 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.
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. Agency 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
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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.
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.
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(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,
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
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(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
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
and:
Arrowhead Central Credit Union
Attention: Maria Rosino-Miracco
550 Hospitality Lane, Suite 200
San Bernardino, CA 92408
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with copy to:
Mirau, Edwards, Cannon & Lewin
Attention: Mr. Michael J. Lewin
P.O Box 9058
Redlands, CA 92375
(909) 793-0200
the Agency:
Redevelopment Agency
ofthe City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 92401
FAX: (909) 888-9413
with copy to:
Lewis Brisbois Bisgaard & Smith LLP
Attention: Mr. Timothy J. Sabo
650 Hospitality Lane, Suite 600
San Bernardino, CA92408
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
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
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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
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 Interim 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.
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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 Liabilitv. 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. Attornevs' 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-three (43) pages and eight (8) separate
Exhibits lettered "A-I" and "A-2" through "F-l and F-2", inclusive, which constitute the entire
understanding and Agreement of the parties.
(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.
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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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the dates set forth below.
AGENCY
Date:
Redevelopment Agency
:~~~~
Maggie Pacheco, Interim Executive Director
.
APP~VEDAS T7.
Ageney ~
DEVELOPER
[All Signatures Must Be Notarized]
Arrowhead Central Credit Union,
a California Corporation
~~~~
Title: 7~/Uo
~~~
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Date:_f)~. /~ ~P(').s-
4818-3703-96161-11/15/05jmm 43
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
County of San Bernardino
~
ss.
State of California
On December 12, 2005, before me, Wasana Chantha, Notary Public, personally appeared
Maggie Pacheco.
0' personally known to me
D proved to me on the basis of satisfactory
evidence
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execute the instrument.
WITNESS
Place Notary Seal Above
Signature of Notary Public
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Document
Title or Type of Document: 2005 Disposition and Development Agreement by and between
the Redevelopment Agency and Arrowhead Central Credit Union
Document Date: December 5, 2005
Number of Pages: 43 + 8 Exhibits
Signer(s) Other Than Names Above: None.
Capaclty(ies) Claimed by Signer
Signer's Name: Maggie Pacheco
D Individual
D Corporation Officer- Title(s):
D Partner - D Limited D General
D Attorney in Fact
D Trustee
D Guardian or Conservator
0' Other: Interim Executive Director
RIGHT THUMBPRINT
OF SIGNER
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Signer is Representing: Redevelopment Agency of the
City of San Bernardino
CALlFORNIA ALL.PURPOSE ACKNOWLEDGMENT
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Prod. No. 5907
Reorder: Call Toll-Free 1-800-876-6827
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
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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 ofland.
The property is improved with a 22,000 square feet metal retail warehouse, which will be
demolished.
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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 25,000 square feet will
be constructed on this Adjoining Property.
The entire Project will total 145,000 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 "0" 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 III
accordance with the technical specifications, standards and practices of the City and III
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.
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EXHIBIT "C"
AGENCY GRANT DEED
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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 II
Space above this line for Recorder's Use
THE UNDERSIGNED GRANTOR DECLARES:
Documentary Transfer Tax is:
0_ unincorporated areal8l 0 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 V ALUABLE 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.
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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 thereot) 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:
(1)
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."
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(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.
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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:
Maggie Pacheco, Interim Executive Director
(NOTARY ACKNOWLEDGEMENT)
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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)
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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
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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 is December 5, 2005
The Developer shall commence the following within the time periods provided herein:
(a) The Developer will open escrow and the Agency will deposit deeds in escrow.
(b) The Developer will obtain building permits within one hundred eighty (180) days
after the close of escrow.
(c) Mass grade the entire Property area (as appropriate) within one hundred twenty
(120) 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 ofthe 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 thirty (30) days after the Developer has obtained
all building permits as required by item (b) above.
(k) The Project will be completed within five hundred forty (540) days after
commencement of the work of the improvements for which all building permits
have been issued for the Property.
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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 December 5, 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.
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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:
, Interim Executive Director
Redevelopment Agency
of the City of San Bernardino
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EXHIBIT "F-l"
PURCHASE PRICE PROMISSORY NOTE
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PURCHASE PRICE PROMISSORY NOTE
SECURED BY RECORDED DEED OF TRUST
AND UCC FILING
Borrower:
Arrowhead Central Credit Union
202 East Airport Drive, Suite 195
San Bernardino, CA 92402
Attention: Mr. Steve Skaggs
Lender:
Redevelopment Agency
of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 92401
FAX: (909) 888-9413
Principal Amount:
$1,400,000
Date of Purchase Price Promissory Note:
December , 2005
Interest Rate: 5%
[Fixed]
[Date of Disbursement of Loan in the event
the Loan is not paid in whole as of the
maturity date as herein provided]
Maturity Date of Promissory
Note: Within thirty (30) calendar days from the date the Borrower receives a written Notice and
Request for Payment as defined in that certain "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" (hereafter "Agreement"), which the Lender may
provide at any time following the issuance of certificate of occupancy for the Project (as defined
in the Agreement) by the City of San Bernardino, or at any time after the "Assessed Value
Determination Date" defined in the Agreement as a date not later than five hundred forty (540)
days after the commencement of the work of the improvements as further set forth in Section
3.08 of the Agreement or within thirty (30) calendar days after the date that the Borrower has
delivered the Developer Assessed Value Certificate to the Lender.
PROMISE TO PAY. The Undersigned ARROWHEAD CENTRAL CREDIT UNION a
California Corporation (the "Borrower"), promise to pay the REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO, a public agency (the "Lender"), or order, in lawful
money of the United States of America, the principal amount of One Million Four Hundred
Thousand Dollars ($1,400,000.00), or so much as may be outstanding, together with interest on
the unpaid outstanding principal balance. Interest shall be calculated annually from the date of
this Purchase Price Promissory Note Secured by Recorded Deed of Trust and UCC Filing (this
"Purchase Price Promissory Note") until repayment in whole of the outstanding principal balance
and all accrued and unpaid interest hereunder.
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INDEBTEDNESS. This Purchase Price Promissory Note evidences the indebtedness of the
Borrower to the Lender, and shall supercede, void and cancel any and all prior agreements made
between the Borrower and the Lender with respect to the payment of the principal amount set
forth in this Purchase Price Promissory Note.
PAYMENT. This Purchase Price Promissory Note shall be deemed to have been paid in whole
if as of the Assessed Value Determination Date the assessed value for the land and
improvements constituting the Project upon both the "Property" and the "Adjoining Property" as
defined in the Agreement are equal to not less than $30,000,000. In the event that the assessed
value of the Project as of the Assessed Value Determination Date is less than $30,000,000, the
Borrower will pay this Purchase Price Promissory Note to the Agency in an amount equal to
$46.6667 for each $1,000 that the assessed valuation is less than $30,000,000 (e.g., if the final
assessed valuation is $20,000,000 as of the Assessed Value Determination Date, then 10,000 x
$46.6667 = $466,667.00). Either the Lender shall provide a written Notice and Request for
Payment to the Borrower at anytime after the Assessed Value Determination Date, or the
Borrower may provide the Developer Assessed Value Certificate to the Lender as provided in
Section 3.08(a) of the Agreement, together with supporting information obtained from the
Assessor of the County of San Bernardino verifying the assessed valuation of the Project as of
the Assessed Value Determination Date and providing the calculation of the amount due, if any,
from the Borrower to the Lender pursuant to this Purchase Price Promissory Note and the
Agreement. Such amount shall be due and payable within thirty (30) calendar days after either
(i) receipt by the Borrower of such Notice and Request for Payment and supporting information
from the Lender or (ii) receipt by the Lender of the Developer Assessed Value Certificate if
provided to the Lender at the option of Borrow, together with any unpaid collection costs, late
charges, unpaid interest (on the outstanding principal) and principal by such date. Interest on
that portion, if any, of this Purchase Price Promissory Note that is due and payable and not paid
by the Developer within thirty (30) calendar days after the due date shall be computed by
applying the ratio of the annual interest rate over a year on the basis of the actual number of days
on the basis of a 365/366 day year, calculated upon the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding. The Borrower shall make all
payments of interest and principal to the Lender at the address of the Lender: 201 North "E"
Street, Suite 301, San Bernardino, CA 92401, or at such other place as the Lender may designate
in writing. Unless otherwise agreed to by the Lender in writing or required by applicable law,
payments will be applied first to any unpaid collection costs and any late charges, then to any
interest due, and then any remaining amount to principal.
INTEREST RATE. Interest shall accrue on the outstanding principal balance of this Purchase
Price Promissory Note commencing on its date at the rate of Five Percent (5%) per annum in the
event this Purchase Price Promissory Note is not paid in full by the Developer in the manner as
provided in the Agreement upon request by the Agency as provided in Section 3.08 of the
Agreement, and such interest shall only be calculated based upon the principal amount of this
Purchase Price Promissory Note that is then due and payable.
LATE CHARGE. If an installment payment is ten (10) days or more late, the Borrower shall
also be charged $250.00 as a late charge for each such late payment of an installment.
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D EF A UL T. The Borrower shall be in default under the terms of this Purchase Price Promissory
Note if any of the following occurs:
(a) The Borrower fails to make any payment when due.
(b) The Borrower defaults on any promise the Borrower has made to the
Lender or if the Borrower otherwise fails to comply with or to perform
when due any other term, obligation, covenant or condition contained in
this Purchase Price Promissory Note or any agreement related to this
Purchase Price Promissory Note.
(c) The Borrower defaults under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of the
Borrower's property or the Borrower's ability to repay this Purchase Price
Promissory Note or the ability of the Borrower to perform its other
obligations under this Promissory Note.
(d) Any representation or statement made or furnished to the Lender by the
Borrower or on the Borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished.
(e) Either of the parties who have executed this Purchase Price Promissory
Note on behalf of the Borrower dies or becomes insolvent, or if a receiver
is appointed for any part of the Borrower's property, or if the Borrower
makes an assignment for the benefit of creditors, or any proceeding is
commenced either by the Borrower or against the Borrower under any
bankruptcy or insolvency laws.
(f) Any creditor tries to take any of the Borrower's property on or in which
the Lender has a lien or security interest.
If any default is curable and if the Borrower has not been given a notice of a breach of the same
provision of this Purchase Price Promissory Note within the preceding twelve (12) months, it
may be cured (and in such event no default will be deemed to have occurred) if the Borrower,
after receiving written notice from the Lender demanding cure of such default:
(i) cures the default within fifteen (15) days; or
(ii) if the cure requires more than fifteen (15) days, immediately initiates steps
which the Lender deems in its sole discretion to be sufficient to cure the
default, and thereafter Borrower continues and cures such default within
the time expressly authorized in writing by Lender.
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RIGHTS/REMEDIES OF THE LENDER/HOLDER. Upon default the Lender, or its assign
(a "Holder"), as the case may then be, may exercise any of the Lender's rights, including without
limitation, the declaration by the Lender/Holder that the entire unpaid principal balance on this
Purchase Price Promissory Note and all accrued unpaid interest is immediately due, without
notice, and then the Borrower shall pay that amount. The Lender/Holder may hire or pay
someone else to help collect this Purchase Price Promissory Note if the Borrower does not pay.
The Borrower also will pay the Lender/Holder that amount for hiring or payment to enforce such
collection, including without limitation, subject to any limits under applicable law, any and all of
the attorneys' fees and the legal expenses incurred by the Lender/Holder whether or not there is a
lawsuit, including efforts to modifY or vacate any automatic stay or injunction, appeals, and any
anticipated post-judgment collection services incurred by the Lender/Holder, in addition to such
other relief as may be granted in an action or proceeding, whether at trial or on appeal, to be paid
by Borrower to Lender/Holder for all out-of-pocket costs and expenses incurred as a result
thereof. The Borrower also shall pay any and all court costs, in addition to all other sums due the
Lender/Holder provided by law. This Purchase Price Promissory Note has been delivered to the
Lender/Holder and accepted by the Lender/Holder in the State of California. If there is a lawsuit
arising under this Purchase Price Promissory Note, the Superior Court of the State of California
in and for the County of San Bernardino shall have jurisdiction of such lawsuit. This Purchase
Price Promissory Note shall be governed by and construed in accordance with the laws of the
State of California.
COLLATERAL. The Borrower acknowledges this Purchase Price Promissory Note is secured
by a Deed of Trust of even date herewith. The Deed of Trust affects only the Property as has
been sold by the Lender to the Borrower pursuant to the Agreement and identified as Assessor's
Parcel Number 0136-111-22 (the "Property"). The Deed of Trust contains the following due on
sale provision:
"The Trustee (or the Beneficiary) may, at its option, declare
immediately due and payable all sums secured by this Deed of
Trust upon the sale, transfer or further encumbrance without the
prior written consent of the Trustee (or the Beneficiary), of all or
any part of the Real Property, or any interest in the Real Property.
A "sale, transfer or encumbrance" means the conveyance of the
Real Property or any right, title or interest therein except as
otherwise permitted by reason of Section 3.08(e) of the
Agreement; whether legal, beneficial, or equitable; whether
voluntary or involuntary; whether by outright sale, deed, the
creation of a new installment sale contract, land contract, contract
for deed, leasehold interest in the Property with a term greater than
one (1) year, lease-option contract, or by sale, assignment, or
transfer of any beneficial interest in or to any land trust holding
title to the Property, or by any other method of conveyance of
property interest."
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GENERAL PROVISIONS. The Lender/Holder may delay or forego enforcing any of its rights
or remedies under this Purchase Price Promissory Note without losing them. The Borrower and
any other person who signs, guarantees or endorses this Purchase Price Promissory Note, to the
extent allowed by law, waive any applicable statute of limitations, presentment, demand for
payment, offsets, claims, protest and notice of dishonor. Upon any change in the terms of this
Purchase Price Promissory Note, and unless otherwise expressly stated in writing, no party who
signs this Purchase Price Promissory Note, whether as maker, guarantor, accommodation maker
or endorser, shall be released from liability. All such parties agree that the Lender/Holder may
renew or extend (repeatedly and for any length of time) this Purchase Price Promissory Note, or
release any party, or guarantor or collateral, and take any other action deemed necessary by the
Lender/Holder in its sole discretion without the consent of or notice to anyone. All such parties
also agree that the LenderIHolder may modify this Purchase Price Promissory Note without the
consent of or notice to anyone other than the party with whom the modification is made.
SUBORDINATION. The Lender agrees to execute such documents as may reasonably be
required to subordinate this Purchase Price Promissory Note and the Deed of Trust to a future
construction loan and/or permanent financing to be secured by the Property with a principal
amount not to exceed eighty percent (80%) of the fair market value of the Property, with an
interest rate not to exceed five (5) percentage points over the prime rate as published by the Wall
Street Journal, and for a term of not more than thirty (30) years. The Lender further agrees to
consider in good faith any request from the Borrower to subordinate the Purchase Price
Promissory Note and the Deed of Trust to a construction loan and/or permanent financing on
terms other than those as provided above.
PRIOR TO SIGNING THIS PURCHASE PRICE PROMISSORY NOTE, THE BORROWER
HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. THE BORROWER
AGREES TO THE TERMS OF THIS PURCHASE PRICE PROMISSORY NOTE AND
ACKNOWLEDGES RECEIPT OF A COPY HEREOF.
BORROWER
Arrowhead Central Credit Union,
a California Corporation
Date:
By:
Title:
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EXHIBIT F-2
DEED OF TRUST WITH UCC FILING
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Redevelopment Agency
of the City of San Bernardino
201 North "E" Street, Suite 301,
San Bernardino, CA 92401
Attn.: Interim Executive Director
(Space Above Line for Recorder's Use Only)
Recording Fee Exempt Pursuant to Government Code Section 6103
DEED OF TRUST WITH UCC FILING
(Redevelopment Agency of the City of San Bernardino)
THIS DEED OF TRUST WITH UCC FILING ("Deed of Trust"), dated October _,
2005, is made by ARROWHEAD CENTRAL CREDIT UNION, a California Corporation whose
address is 202 East Airport Drive, Suite 195, San Bernardino, CA 92402 (the "Trustor"), in favor
of Title Insurance Company (the "Trustee"), whose address is
, CA , for the benefit of the REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO, a public agency whose address is 201
North "E" Street, Suite 301, San Bernardino, CA 92401 ("Beneficiary"). This Deed of Trust is
executed to secure the payment of a note of even date herewith in the principal amount of One
Million Four Hundred Thousand Dollars ($1,400,000), and all accrued interest thereon.
1. General.
1.1 Real Property. The "Real Property" includes:
(a) the land described in Exhibit "A" attached to this Deed of Trust and
incorporated in this Deed of Trust by this reference (the "Land");
(b) all buildings, structures and other improvements now or in the future
located or to be constructed on the Land (collectively, the "Improvements"); and
( c) all tenements, hereditaments, appurtenances, privileges and other rights
and interests now or in the future benefiting or otherwise relating to the Land or the
Improvements, including, but not limited to, easements, rights-of-way, development rights
(including any mineral rights, water rights and water stock that Trustor may have of whatever
kind or character, surface or underground) (collectively, the "Appurtenances"); provided,
however, if any such Appurtenances benefit both the Real Property and other real property
owned by Trustor that is not encumbered by this Deed of Trust (e.g., utility or access easements
mutually benefiting both properties), Trustor reserves the right to use such Appurtenances for the
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benefit of such other appurtenant property that Trustor owns and that is not encumbered by this
Deed of Trust.
1.2 Ril!hts. The "Rights" include:
(a) subject to the assignment to Beneficiary as set forth in Section 4 below, all
Moneys, issues, income, revenues, royalties and profits now or in the future payable with respect
to or otherwise derived from the Real Property or the ownership, use, management, operation,
leasing or occupancy of the Real Property, including, without limitation, any such Moneys,
issues, income, revenues, royalties and profits which are past due and/or unpaid (collectively, the
"Moneys");
(b) the Appurtenances;
( c) all present and future right, title and interest of Trustor in and to all
accounts, general intangibles, chattel paper, deposit accounts, money, instruments and
documents (as those terms are defined in the California Uniform Commercial Code (the
"UCC")), and all other agreements, obligations, rights and written materials (in each case
whether existing now or in the future), now or in the future relating to or otherwise arising in
connection with or derived from the Real Property or the ownership, use, development,
construction, maintenance, management, operation, marketing, leasing, occupancy, sale or
financing of the Real Property, including the following (collectively, the "Intangibles"):
(i) permits, approvals and other governmental authorizations;
(ii) improvement plans and specifications and architectural drawings;
(iii) agreements with contractors, subcontractors, suppliers, project managers
and supervisors, designers, architects, engineers, sales agents, leasing
agents, consultants and property managers;
(iv) takeout, refinancing and permanent loan commitments;
(v) warranties, guaranties, indemnities and insurance policies, together with
insurance payments and unearned insurance premiums;
(vi) claims, demands, awards, settlements and other payments ansmg or
resulting from or otherwise relating to any insurance or any loss or
destruction of, injury or damage to, whether or not required, trespass on or
taking, condemnation (or conveyance in lieu of condemnation) or public
use of any of the Real Property;
(vii) leases, subleases, rental agreements, license agreements, service and
maintenance agreements, purchase and sale agreements and purchase
options, whether written or verbal, now or in later effect, together with
advance payments, security deposits and other amounts paid to or
deposited with Trustor under any such agreements;
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(viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts,
cost savings, escrow proceeds, sale proceeds and other rights to the
payment of money, trade names, trademarks, goodwill and all other types
of intangible personal property of any kind or nature; and
(ix) all supplements, modifications, amendments, renewals, extensions,
proceeds, replacements and substitutions of or to any of such property.
1.3 Personal Property. The "Personal Property" includes (a) the Intangibles,
and (b) and all present and future right, title and interest of Trustor in and to all inventory,
equipment, fixtures and other goods (as those terms are defined in the DCC), now or in the future
located at, upon or about, or affixed or attached to or installed in, the Real Property or used or to
be used in connection with or otherwise relating to the Real Property or the ownership, use,
development, construction, maintenance, management, operation, marketing, leasing or
occupancy ofthe Real Property, including furniture, furnishings, machinery, appliances, building
materials and supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air
conditioning equipment, and all other types of tangible personal property of any kind or nature,
and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and
substitutions of or to any of such property (collectively, the "Goods"); provided that "Personal
Property" shall not include construction equipment and other personal property used during
construction of improvements on the Real Property that are intended to be removed from the
Real Property upon completion of construction.
2. Grant of Security Interest. Trustor further grants to Beneficiary, pursuant to the
DCC, a security interest in all present and future right, title and interest of Trustor in and to all
Personal Property in which a security interest may be created under the DCC.
3. Fixture Filinl!. This Deed of Trust covers certain Goods which are or are to
become fixtures related to the Real Property and constitutes a "fixture filing" with respect to
such Goods executed by Trustor (as "debtor") in favor of Beneficiary (as a "secured party").
4. Assil!nment of Monevs. Trustor irrevocably grants, transfers and assigns to
Beneficiary, during the continuance of this Deed of Trust, percent L%) of all
of Trustor's right, title and interest in and to moneys received with respect to the Real Property
securing this Deed of Trust ("Moneys") payable to the Trustor from the Trustor's project
consisting of the redevelopment, improvement and use of approximately 8.2 acres of land, more
or less, 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, 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 (the "Project"). Notwithstanding such assignment, so long as no
Event of Default has occurred, Trustor shall have the right to collect, receive, hold and dispose of
the Moneys as the same become due and payable, provided that unless Beneficiary otherwise
consents in writing: (a) any such Moneys paid more than thirty (30) days in advance of the date
when due shall be delivered to Beneficiary and held by Beneficiary, to be released and applied
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on the date when due (or, if an Event of Default has occurred, at such other time or times and in
such manner as Beneficiary may determine), and (b) if an Event of Default has occurred,
Trustor's right to collect and receive the Moneys shall cease and Beneficiary shall have the sole
right, with or without taking possession of the Real Property, to collect all Moneys, including
those past due and unpaid. Any such collection of Moneys by Beneficiary shall not cure or
waive any Event of Default or notice of default, or invalidate any act done pursuant to such
notice. Failure or discontinuance of Beneficiary at any time or from time to time, to collect the
Moneys shall not in any manner affect the subsequent enforcement by Beneficiary of the right to
collect the same. Nothing contained in this Deed of Trust, nor the exercise of the right by
Beneficiary to collect the Moneys, shall be deemed to make Beneficiary a "mortgagee in
possession" or shall be or be construed to be, an affirmation by Beneficiary of or an assumption
of liability by Beneficiary under or a subordination of the lien of this Deed of Trust to, any
tenancy, lease or option. During an Event of Default, any and all Moneys collected or received
by Trustor shall be accepted and held for Beneficiary in trust and shall not be commingled with
Trustor's funds and property, but shall be promptly paid over to Beneficiary.
5. Obli!mtions Secured. This Deed of Trust is given for the purpose of securing
payment and performance of each and every agreement and obligation of Trustor under the
promissory note with a principal amount of One Million Four Hundred Thousand Dollars
($1,400,000) (the "Note") (the terms of which are incorporated herein by this reference) or
contained herein or reciting it is so secured, and payment of any other sum (and any interest
thereon) which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced
in writing that they are secured by this Deed of Trust (the "Secured Obligation").
6. Trustor's Covenants. TO MAINTAIN AND PROTECT THE SECURITY OF
THIS DEED OF TRUST, TO SECURE FULL AND TIMELY PERFORMANCE BY
TRUSTOR OF EACH AND EVERY OBLIGATION, COVENANT AND AGREEMENT OF
TRUSTOR UNDER THE NOTE, AND AS ADDITIONAL CONSIDERATION FOR THE
INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THE NOTE, TRUSTOR HEREBY
COVENANTS, REPRESENTS AND AGREES AS FOLLOWS:
6.1 Pavment and Performance of Secured Oblil!ations. Trustor shall pay
and perform all Secured Obligation in accordance with the respective terms of the Note.
6.2 Maintenance of Trust Estate. Unless Beneficiary otherwise consents in
writing, Trustor shall, at its sole cost and expense:
(a) keep the Real Property and Goods in good condition and repair,
and promptly and in a good and workmanlike manner (and with new materials of good quality),
complete any Improvements to be constructed on the Land, repair or restore any part of the Real
Property that may be injured, damaged or destroyed, and repair, restore or replace (at equal or
greater value) any Goods that may be injured, damaged, destroyed or lost, or that may be or
become obsolete, defective or worn out (except that Trustor shall not be required to repair,
restore or replace any such Goods of insignificant value which are not reasonably necessary or
appropriate to the efficient operation of the Trust Estate), and in each case pay when due all valid
claims for labor, service, equipment and material and any other costs incurred in connection with
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any such action, and not permit any mechanics lien to arise against the real Property or Goods, or
adequately furnish a loss or liability bond against such lien claim;
(b) except as otherwise consented to by Beneficiary in writing, not
remove, demolish or materially alter any Improvements;
(c) not construct any Improvements on the Land or undertake any site
development work unless approved by any applicable governmental agencies;
(d) not commit or permit any waste of any part of the Real Property;
(e) not permit or consent to any restriction that would prevent or
otherwise impair the use or development of the Real Property;
(f) comply in all material respects with all applicable laws and other
governmental requirements, present or future, and not commit or permit any material violation of
any applicable laws or other governmental requirements, which affect any part of the Trust
Estate or require any alterations or improvements to be made to any part of the Real Property;
(g) take such action from time to time as may be reasonably necessary
or appropriate or as Beneficiary may reasonably require, to protect the physical security of the
Real Property and Goods;
(h) except as otherwise consented to by Beneficiary in writing, not
part with possession of or abandon any part of the Trust Estate or Goods or cause or permit any
interest in any part of the Trust Estate to be sold, transferred, leased, encumbered, released,
relinquished, terminated or otherwise disposed of (whether voluntarily, by operation of law or
otherwise), other to an affiliate of Trustor (which such affiliate shall mean an entity owned by
Trustor or its principals and Trustor or its principals shall be responsible for the day-to-day
management of its activities) except as otherwise provided in Section 3.08(e) of the Agreement
as defined in the Note as referenced herein;
(i) take all other action which may be reasonably necessary or
appropriate to preserve, maintain and protect the Trust Estate and Goods, including the
enforcement or performance of any rights or obligations of Trustor or any conditions with
respect to any Rights;
(j) provide to Beneficiary, within five (5) days following receipt of
Beneficiary's request, copies of all lease and sale agreements of any kind encumbering the Real
Property or Goods, certified by Trustor to be true and correct copies of valid agreements, as well
as any other documentation reasonably requested by Beneficiary; and
(k) notify Beneficiary in writing if any condition at or on the Real
Property may have a significant and measurable effect on its market value.
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6.3 Insurance. Condemnation and Dama2e Claims. Trustor shall maintain
"all risks" and general public liability insurance on the Real Property to the extent and in the
form required by Beneficiary. All proceeds of any claim, demand, award, settlement or other
payment arising or resulting from or otherwise relating to any such insurance or any loss or
destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu
of condemnation) or public use of any of the Real Property (a "Damage Claim") are assigned and
shall be payable and delivered to Beneficiary (any such proceeds of any Damage Claim being
referred to in this Deed of Trust as "Damage Proceeds"). Trustor shall take all action reasonably
necessary or required by Beneficiary in order to protect Trustor's and Beneficiary's rights and
interests with respect to any Damage Claim, including the commencement of, appearance in and
prosecution of any appropriate action or other proceeding, and Beneficiary may in its discretion
participate in any such action or proceeding at the expense of Trustor.
So long as no Event of Default has occurred, Trustor may settle, compromise or
adjust any Damage Claim. Upon the occurrence of any Event of Default, Beneficiary shall have
the sole right to settle, compromise or adjust any Damage Claim in such manner as Beneficiary
may determine, and for this purpose Beneficiary may, in its own name or in the name of Trustor,
take such action as Beneficiary deems appropriate to realize on any such Damage Claim. In
either case, all Damage Proceeds payable in connection with any such Damage Claim shall be
delivered directly to Beneficiary as provided in the preceding paragraph.
Any Damage Proceeds received by Beneficiary may be applied by Beneficiary in
payment of the Secured Obligations in such order and manner as Beneficiary may determine,
provided that so long as no Event of Default has occurred, Beneficiary shall release such
Damage Proceeds to Trustor for the repair and restoration of the Real Property, except that
Beneficiary shall not be required to release such Damage Proceeds (and may apply such Damage
Proceeds to the Secured Obligation as set forth above) to the extent that such Damage Proceeds
relate to any condemnation, seizure or other appropriation by any governmental agency of all or
any portion of the Real Property (including Damage Proceeds payable in lieu of any such action),
or if Beneficiary has reasonably determined that the security of this Deed of Trust has been
impaired, or will be impaired upon release of Damage Proceeds to Trustor.
6.4 Liens and Taxes. Trustor shall pay, prior to delinquency, all taxes,
charges, fees, costs and expenses which are or may become a lien affecting any part of the Trust
Estate (including assessments on appurtenant water stock), and Trustor shall pay and perform
when due all other obligations secured by or constituting a lien affecting any part of the Trust
Estate. If Trustor is in default under this Deed of Trust or the Note, regardless of whether the
Default has been cured, then Beneficiary or Trustee may at any subsequent time, at its option to
be exercised on thirty (30) days written notice to Trustor, require Trustor to deposit with
Beneficiary or its designee, a the time of each payment of an installment of interest or principal
under the Note, an additional amount sufficient to discharge the obligations of Trustor under this
Section 6. The calculation of the amount payable and of the fractional part of it to be deposited
with Beneficiary shall be made by Beneficiary in its sole and absolute discretion. If the amounts
deposited are in excess of the actual obligations for which they were deposited, Beneficiary may
refund any such excess, or at its sole option, may hold the excess in a reserve account, not in
trust and not bearing interest, and reduce proportionately the required deposits for the ensuing
year.
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6.5 Claims. Trustor shall appear in and defend any claim or any action or
other proceeding purporting to affect title or other interests relating to any part of the Trust
Estate, the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee, and
give Beneficiary prompt written notice of any such claim, action or proceeding. Beneficiary and
Trustee may, at the expense of Trustor, appear in and defend any such claim, action or
proceeding and any claim, action or other proceeding asserted or brought against Beneficiary
(and Beneficiary's general partners, agents, employees, partners, unitholders, shareholders,
affiliates, officers and directors, each a "Beneficiary Indemnitee"), or Trustee in connection with
or relating to any part of the Trust Estate or this Deed of Trust.
6.6 Leases of Real Property. At Beneficiary's request, Trustor shall furnish
Beneficiary with executed copies of all leases of the Real Property or any portion of it.
6.7 Uniform Commercial Code Security Al?:reement. This Deed of Trust is
intended to be and shall constitute a security agreement under the California Uniform
Commercial Code (UCe) for any of the Personal Property noted herein, that, under law may be
subject to a security interest under the UCC, and Trustor grants to Beneficiary a security interest
in those items. Trustor authorizes Beneficiary to file financing statements in all states, counties
and other jurisdictions as Beneficiary may elect, without Trustor's signature if permitted by law.
Trustor agrees that Beneficiary may file this Deed of Trust, or a copy of it, in the real estate
records or in the Office of the Secretary of State of the State of California and such other states
Beneficiary may elect, as a financing statement for any of the items specified above.
6.8 Senior Lender. For the purposes of this Deed of Trust, the term "Senior
Lender" means a financial institution or other lender which (a) loans money to Trustor for the
purposes of (i) financing the construction of the "Project" (as defined in the "2005
DISPOSITION AND DEVELOPMENT AGREEMENT" between Trustor and Beneficiary); (ii)
finances the construction of any other building or improvement to the Property or the acquisition
of fixtures of equipment located on the Property, and (iii) permanent financing; or (b) holds an
existing encumbrance on the Property or (c) the refinancing of any loan to Trustor under (a) or
(b). Any such obligation of Trustor to a Senior Lender is referred to below as a "Senior Loan".
6.9 Subordination of Deed of Trust to Senior Loans. Beneficiary and
Trustor acknowledge that the security interest of Beneficiary in the Property under this Deed of
Trust is and shall remain subordinate to the interests of any Senior Lender under a Senior Loan.
Beneficiary shall execute, at the request of Trustor and a Senior Lender, a commercially
reasonable subordination agreement (a "Subordination Agreement") subordinating its rights
under this Deed of Trust to a specific Senior Loan within 30 days after such Senior Lender
requests in writing. For purposes of this Deed of Trust a "commercially reasonable
subordination agreement" shall not include language which would suspend Beneficiary's right to
collect, sums due under the Note or this Deed of Trust from Trustor without first obtaining
permission of the Senior Lender, or otherwise enforce its rights under this Deed of Trust. Each
holder of the Note, by its acceptance hereof shall be bound by the provisions of such
Subordination Agreement.
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7. Default.
7.1 Events of Default. For all purposes in this Deed of Trust, the term "Event
of Default" or "default" shall mean:
(a) The Trustor fails to make any payment when due.
(b) The Trustor defaults on any promise the Trustor has made to the Trustee
or Beneficiary or if the Trustor otherwise fails to comply with or to perform when due any other
term, obligation, covenant or condition contained in this Deed of Trust or any agreement related
to this Deed of Trust.
( c) The Trustor defaults under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of the Trustor's property or the Trustor's ability to repay
the Note or the ability of the Trustor to perform its other obligations under this Deed of Trust.
(d) Any representation or statement made or furnished to the Trustee or the
Beneficiary by the Trustor or on the Trustor's behalf is false or misleading in any material
respect either now or at the time made or furnished.
( e) If the Trustor becomes insolvent, or if a receiver is appointed for any part
of the Trustor's property, or if the Trustor makes an assignment for the benefit of creditors, or
any proceeding is commenced either by the Trustor or against the Trustor under any bankruptcy
or insolvency laws.
(f) Any creditor tries to take any of the Trustor's property on or in which the
Trustee or the Beneficiary has a lien or security interest.
(g) [RESERVED]
(h) The failure for any reason of this Deed of Trust to remain at all times a
valid first lien upon the Trust Estate, unless the Trustee or the Beneficiary consents in writing to
the subordination of this Deed of Trust.
(i) The sale, transfer, assignment, conveyance, mortgage or hypothecation of
all or any portion or interest in the Trust Estate without obtaining the prior written consent of
Beneficiary), other to an affiliate of Trustor (which such affiliate shall mean an entity owned by
Trustor or its principals and Trustor or its principals shall be responsible for the day-to-day
management of its activities) except as otherwise provided in Section 3.08(e) of the Agreement
as defined in the Note as referenced herein.
G) Notwithstanding Sections 7.1 (b) through (i) above, Trustor shall not be in
default unless Trustor fails to cure a breach within fifteen (15) business days after receipt of
written notice from Trustee or Beneficiary of such breach, and if any other provision of this
Deed of Trust or any provision of the Secured Obligation shall provide for a greater period of
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time within which to cure any event or condition, then an Event of Default shall not be deemed
to have occurred unless Trustor shall fail to cure such event or condition within such specified
greater period of time.
7.2 Remedies. Upon the occurrence of any Event of Default Trustor shall
then be in default under this Deed of Trust, and upon acceleration of the maturity of the Secured
Obligation, the Secured Obligation shall immediately become due and payable without further
notice to Trustor, and Beneficiary may, without notice to or demand upon Trustor, which are
expressly waived by Trustor (except for notices or demands otherwise required by applicable
laws to the extent not effectively waived by Trustor and any notices or demands specified
below), and without releasing Trustor from any of its obligations, either directly or through an
agent or court-appointed receiver, and without regard to the adequacy of any security for the
Secured Obligation, exercise anyone or more of the following remedies, as Beneficiary may
determine in its sole and absolute discretion:
(a) enter, take possession of, manage, operate, protect, preserve and maintain
and exercise any other rights of an owner of, the Trust Estate, and use any other properties or
facilities of Trustor relating to the Trust Estate, all without payment of rent or other
compensation to Trustor;
(b) enter into such contracts and take such other action as Beneficiary deems
appropriate to complete all or any part of the Trust Estate including but not limited to any
construction of Improvements on the Land, subject to such modifications and other changes in
any plan of development as Beneficiary may deem appropriate in its sole and absolute discretion;
(c) make, cancel, enforce or modify sale or lease agreements, sale prices,
lease rates or marketing plans and, in its own name or in the name of Trustor, otherwise conduct
any business of Trustor in relation to the Trust Estate and deal with Trustor's creditors, debtors,
tenants, prospective tenants, agents and employees and any other persons having any relationship
with Trustor in relation to the Trust Estate, and amend any contracts between them, in any
manner Beneficiary may determine with Trustor executing a power of attorney or similar
document required in order for Beneficiary to exercise such rights;
(d) either with or without taking possession of the Trust Estate, notify obligors
on any rights that all payments and other performance are to be made and rendered directly and
exclusively to Beneficiary, and in its own name supplement, modify, amend, renew, extend,
accelerate, accept partial payments or performance on, make allowances and adjustments and
issue credits with respect to, give approvals, waivers and consents under, release, settle,
compromise, compound, sue for, collect or otherwise liquidate, enforce or deal with any rights,
including collection of amounts past due and unpaid (Trustor agreeing not to take any such
action after the occurrence of an Event of Default without prior written authorization from
Beneficiary);
( e) endorse, in the name of Trustor, all checks, drafts and other evidences of
payment relating to the Trust Estate, and receive, open and dispose of all mail addressed to
Trustor and notify the postal authorities to change the address for delivery of such mail to such
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address as Beneficiary may designate with Trustor executing a power of attorney or similar
document required in order for Beneficiary to exercise such rights;
(f) take any such other action as Beneficiary deems appropriate to protect the
security of this Deed of Trust; and
(g) Notwithstanding Sections 7.2(a) through (g), neither Beneficiary nor
Trustee shall be under any obligation to preserve, maintain or protect the Trust Estate or any of
Trustor's rights or interests in the Trust Estate, or make or give any presentments, demands for
performance, protests, notices of nonperformance, protest or dishonor or other notices of any
kind in connection with any rights, or take any other action with respect to any other matters
relating to the Trust Estate. Beneficiary and Trustee do not assume and shall have no liability
for, and shall not be obligated to perform, any of Trustor's obligations with respect to any rights
or any other matters relating to the Trust Estate, and nothing contained in this Deed of Trust shall
release Trustor from any such obligations.
7.3 Foreclosure Remedv. Beneficiary, in its sole and absolute discretion,
may execute and deliver to Trustee written declaration of default and demand for sale and
written notice of default and of election to cause all or any part of the Trust Estate to be sold,
which notice Trustee shall cause to be filed for record; and after the lapse of such time as may
then be required by law following the recordation of such notice of default, and notice of sale
having been given as then required by law, Trustee, without demand on Trustor, shall sell such
Trust Estate property at the time and place fixed by Trustee in such notice of sale, either as a
whole or in separate parcels and in such order as Beneficiary may direct (Trustor waiving any
right to direct the order of sale), at public auction to the highest bidder for cash in lawful money
of the United States (or cash equivalents acceptable to Trustee to the extent permitted by
applicable law), payable at the time of sale. Trustee may postpone the sale of all or any part of
the Trust Estate by public announcement at such time and place of sale, and from time to time
after any such postponement may postpone such sale by public announcement at the time fixed
by the preceding postponement. Trustee shall deliver to the purchaser at such sale its deed
conveying the property so sold, but without any covenant or warranty, express or implied, and
the recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness
thereof. Any such sale shall be free and clear of any interest of Trustor and any purchase
agreement, encumbrance or other matter affecting the property sold which is subject or
subordinate to this Deed of Trust, unless Beneficiary consents to otherwise in writing. Any
person, including Trustee or Beneficiary, may purchase all or any part of the Trust Estate at such
sale. Any bid by Beneficiary may be, in whole or in part, in the form of cancellation of all or any
part of the Secured Obligation (the "Credit Bid").
7.4 Secured Creditor Remedv. With respect to any Personal Property,
Beneficiary shall have in any jurisdiction where enforcement of this Deed of Trust is sought, all
remedies of a secured party under the UCC and may require Trustor, on demand, to assemble all
Personal Property and make it available to Beneficiary at places that Beneficiary may select that
are reasonably convenient for both parties.
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7.5 Other Remedies. Beneficiary may proceed to protect, exercise and
enforce any and all other Remedies provided under the Secured Obligation or by applicable laws.
Each of the remedies provided in this Deed of Trust is cumulative and not exclusive of, and shall
not prejudice, any other remedy provided in this Deed of Trust, the Secured Obligation or
pursuant to all applicable laws. Each remedy may be exercised from time to time as often as
deemed necessary by Trustee and Beneficiary, and in such order and manner as Beneficiary may
determine. This Deed of Trust is independent of any other security for the Secured Obligation,
and upon the occurrence of an Event of Default, Trustee or Beneficiary may proceed in the
enforcement of this Deed of Trust independently of any other remedy that Trustee or Beneficiary
may at any time hold with respect to the Trust Estate or the Secured Obligations or any other
security. Trustor, for itself and for any other person claiming by or through Trustor, waives, to
the fullest extent permitted by applicable laws, all rights to require a marshalling of assets by
Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any particular portion
of the Trust Estate or any other security (whether such portion shall have been retained or
conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and
appraisal.
7.6 Application of Sums. Unless otherwise specified in this Deed of Trust or
the Secured Obligation, all sums received by Beneficiary under this Deed of Trust, shall be
applied to: (i) all costs and expenses incurred by Beneficiary, Trustee or any receiver under this
Deed of Trust, including, without limitation, attorneys fees; and (ii) the remainder, in payment of
the Secured Obligation in such order and manner as Beneficiary shall determine in its sole
discretion; provided, however, that Beneficiary shall have no liability for funds not actually
received by Beneficiary.
7.7 Costs. Fees and Expenses. Trustor shall pay, on demand, all costs, fees,
expenses, advances, charges, losses and liabilities of Trustee and Beneficiary under or in
connection with this Deed of Trust or the enforcement of, or the exercise of any remedy or any
other action taken by Trustee or Beneficiary under, this Deed of Trust or the collection of the
Secured Obligations, in each case including but not limited to: (a) reconveyance and foreclosure
fees of Trustee; (b) costs and expenses of Beneficiary or Trustee or any receiver appointed under
this Deed of Trust in connection with the operation, maintenance, management, protection,
preservation, collection, sale or other liquidation of the Trust Estate or foreclosure of this Deed
of Trust; ( c) advances made by Beneficiary to complete or partially construct all or any part of
the Improvements or any other construction on the Land or otherwise to protect the security of
this Deed of Trust; (d) cost of evidence of title; and (e) the reasonable fees and expenses of
Trustee's and Beneficiary's legal counsel and other out-of-pocket expenses, and the reasonable
charges of Beneficiary's internal legal counsel incurred as a result of an Event of Default;
together with interest on all such amounts until paid (i) at the Default Rate (as defined in the
Note) in the case of any such interest payable to Beneficiary and (ii) at the rate provided by law
in the case of any such interest payable to Trustee.
7.8 Late Payments. By accepting payment of any part of the Secured
Obligation after its due date, Beneficiary does not waive its right either to require prompt
payment when due of all other portions of the Secured Obligation or to declare a default for
failure to so pay.
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7.9 Action bv Trustee. At any time and from time to time upon written
request of Beneficiary and presentation of this Deed of Trust for endorsement, and without
affecting the personal liability of any person for payment of the Secured Obligation or the
security of this Deed of Trust for the full amount of the Secured Obligations on all property
remaining subject to this Deed of Trust, Trustee may, without notice and without liability for
such action, and notwithstanding the absence of any payment on the Secured Obligations or any
other consideration: (a) reconvey all or any part of the Trust Estate; (b) consent to the making
and recording, or either, of any map or plat of the Land; (c) join in granting any easement
affecting the Land; or (d) join in or consent to any extension agreement or any agreement
subordinating the lien of this Deed of Trust. Trustee is not obligated to notify Trustor or
Beneficiary of any pending sale under any other deed of trust or of any action or other
proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee.
8. Reconvevance. Upon Beneficiary's written request and surrender of this Deed of
Trust and the Notes to Trustee for cancellation or endorsement, Trustee shall reconvey, without
warranty, all or any part of the Trust Estate then subject to this Deed of Trust that Beneficiary so
instructs. Any reconveyance, whether full or partial, may be made in terms to "the person or
persons legally entitled thereto," and the recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. Beneficiary shall not be required to cause
any Trust Estate to be released from this Deed of Trust until final payment and performance in
full of the Secured Obligation and termination of all obligations of Beneficiary under or in
connection with the Note.
9. Hazardous Materials.
9.1 Definitions. For the purposes of this Deed of Trust: (a) "Hazardous
Materials" shall mean oil and other petroleum products, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, hazardous waste, toxic or contaminated
substances or similar materials, including, without limitation, any substances which are
"hazardous substances", "hazardous waste", "hazardous materials", or "toxic substances" under
applicable environmental laws, ordinances or regulations; (b) "Hazardous Materials Laws" shall
mean all statutes, ordinances, rules and regulations relating to Hazardous Materials, including,
without limitation, those relating to soil and groundwater conditions; and (c) "Hazardous
Materials Claims" shall mean claims or actions pending or threatened against Trustor or the Real
Property by any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to Hazardous Materials Laws.
9.2 Trustor's Obli2:ations. Except in the ordinary course of Trustor's
business, Trustor shall not cause or permit the Real Property to be used as a site for the use,
generation, manufacture, storage, treatment, release, discharge, disposal, transportation or
presence of any Hazardous Materials. Trustor shall comply and cause the Real Property to
comply with all Hazardous Materials Laws. Trustor shall immediately notify Beneficiary in
writing of: (i) the discovery of any Hazardous Materials on, under or about the Real Property; (ii)
any knowledge by Trustor that the Real Property does not comply with any Hazardous Materials
Laws or (iii) any Hazardous Materials Claim. After such notice, Beneficiary shall have the right
to inspect the Real Property. Beneficiary may request and Trustor shall provide at its sole costs
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and expense, within sixty (60) days, a report from a qualified engineering company or other
qualified consultant acceptable to Beneficiary, with respect to an investigation and audit of the
Real Property satisfactory to Beneficiary. Additionally, in response to the presence of any
Hazardous Materials on, under or about the Real Property, Trustor shall immediately take, at
Trustor's sole cost, all remedial action required by any Hazardous Materials Laws or any
judgment, consent, decree, settlement or compromise in respect of any Hazardous Materials
Claims. All Trustor's obligations as incurred pursuant to this Section 9.2 are subject to the
further qualifications and Beneficiary's obligations incurred pursuant to Section 2.24(a)(1l) of
the Agreement as defined in the Note as referenced herein.
10. Miscellaneous.
10.1. Deed of Trust Is Due on Sale. The Trustee (or the Beneficiary) may, at
its option, declare immediately due and payable all sums secured by this Deed of Trust upon the
sale, transfer or further encumbrance without the prior written consent of the Trustee (or the
Beneficiary), of all or any part of the Real Property, or any interest in the Real Property except
for any sale, transfer or further encumbrance as otherwise provided in Section 3,08(e) of the
Agreement as defined in the Note as referenced herein. A "sale, transfer or encumbrance" means
the conveyance of the Real Property or any right, title or interest therein; whether legal,
beneficial, or equitable; whether voluntary or involuntary; whether by outright sale, deed, the
creation of a new installment sale contract, land contract, contract for deed, leasehold interest in
the Property with a term greater than one (I) year, lease-option contract, or by sale, assignment,
or transfer of any beneficial interest in or to any land trust holding title to the Property, or by any
other method of conveyance of property interest.
10.2 Attorney-in-Fact. Trustor appoints Beneficiary as Trustor's attorney-in-
fact, with full authority in the place of Trustor and in the name of Trustor or Beneficiary, to take
such action and execute such documents as Beneficiary may reasonably deem necessary or
advisable in connection with the exercise of any remedies or any other action taken by
Beneficiary or Trustee under this Deed of Trust.
10.3 Successors and Assil?:ns. This Deed of Trust applies to and shall be
binding on and inure to the benefit of all parties to this Deed of Trust and their respective
successors and assigns.
10.4 Acceptance. Notice of acceptance of this Deed of Trust by Beneficiary or
Trustee is waived by Trustor. Trustee accepts this Deed of Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.
10.5 Beneficiary's Statements. For any statement regarding the Secured
Obligations, Beneficiary may charge the maximum amount permitted by law at the time of the
request for such statement.
10.6 Governinl?: Law. This Deed of Trust shall be governed by and construed
and enforced in accordance with, the laws of the State of California.
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10.7 ReQuest for Notice. Trustor requests that a copy of any notice of default
and a copy of any notice of sale be mailed to Trustor at Trustor's address as first set forth above.
10.8 Attornev's Fees. Should either party commence an action of any kind
whatsoever against the other to enforce any obligation under this Agreement, the prevailing party
shall be entitled to recover its costs and reasonable attorneys' fees (including disbursements)
from the other, whether or not such action is pursued to judgment.
10.9 Substitution of Trustee. Beneficiary may from time to time, by
instrument in writing, substitute a successor or successors to any Trustee named in or acting
under this Deed of Trust, which instrument, when executed by Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or counties where the
Land is situated, shall be conclusive proof of proper substitution of such successor Trustee or
Trustees who shall, without conveyance from the predecessor Trustee, succeed to all of its title,
estate, rights, powers and duties. Such instrument shall contain the name of the original Trustor,
Trustee and Beneficiary, the book and page where this Deed of Trust is recorded (or the date of
recording and instrument number) and the name and address of the new Trustee.
10.10 Subordination. Beneficiary agrees to execute such documents as may
reasonably be required to subordinate this Deed of Trust to a future construction loan and/or
permanent financing to be secured by the Real Property with a principal amount not to exceed
eighty percent (80%) of the fair market value of the Real Property, with an interest rate not to
exceed five (5) percentage points over the prime rate as published by the Wall Street Journal, and
for a term of not more than thirty (30) years. Beneficiary further agrees to consider in good faith
any request from Trustor to subordinate this Deed of Trust to a construction loan and/or
permanent financing on terms other than those as provided above.
IN WITNESS WHEREOF, Trustor hereby executes this Deed of Trust as of the
date set forth below.
"TRUSTOR":
Arrowhead Central Credit Union,
a California Corporation
Date:
By:
Title:
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Exhibit" A" to Deed of Trust
LEGAL DESCRIPTION OF LAND
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