The URL can be used to link to this page

Home My WebLink AboutR30-Economic Development Agency ECONOMIC O THE CITY OF S NBERNARD NOENCY ORIGINAL FROM: Maggie Pacheco SUBJECT: Property Owner Participation Agreement Executive Director for development of 696 West 5th Street, San Bernardino in the Central City North Redevelopment Project Area (Bruce C. DATE: September 8,2006 Ko,Christopher C.Ko and Henry C.Ko) ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Svnopsis of Previous Commission/Council/Committee Action(s): On February 7, 2005, the Community Development Commission ("Commission") authorized Staff to send out Owner Participation notices to the property owners who own property in the proximity to the block bounded by 4`h, 5`h, "G" and"H" Streets,the parcels on the north side of 5th Street between"G" and"H" Streets,the 4 parcels on the northeast comer of 5th and"G" Streets and 6 parcels on the south side of 5th Street between"G"and"F"Streets in accordance with the adopted Agency Owner Participation Rules for the Central City North Redevelopment Project Area. No proposals were received. On November 7, 2005, the Commission adopted a Resolution: 1) approving the Downtown Mixed Use Project Concept Plan ("Project") and adopting a Mitigated Negative Declaration for the Project in accordance with CEQA, and; 2) approving a Redevelopment Project Study and Exclusive Right to Negotiate Agreement by and between the Agency and Watson and Associates Development Company,Inc.("Watson")relative to the implementation of the Project. On July 24, 2006, the Commission adopted Resolution No. CDC/2006-30 declaring the Public Interest and Necessity of Acquisition of Real Property for community redevelopment purposes over the property located at 696 West 5th Street, San Bernardino (APN's: 0134-061-21,22,25 and 30)in the Central City North Redevelopment Project Area. On September 7,2006,Redevelopment Committee Members Estrada,Johnson and Baxter unanimously voted to recommend that the Community Development Commission consider this action for approval. ------------------------------------------------—-—------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Recommended Motion(s): (Community Development Commission) Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the Executive Director of the Redevelopment Agency of the City of San Bernardino("Agency")to execute the 2006 Property Owner Participation Agreement by and between the Agency and Christopher Cheng-Chyh Ko, Bruce Cheng-Hsieh Ko and Henry Cheng-Ju Ko("Property Owners")for the development of the Property ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Maggie Pacheco Phone: (909)663-1044 Central City North Project Area(s) Redevelopment Project Area Ward(s): 1 Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) El Map(s) ❑ Letters Approximately FUNDING REQUIREMENTS Amount: $ 360,000 Source: Housing Fund Bond Proceeds G Budget Authority: 2006-2007 EDA Budget SIGNATURE: pe�c, 'G �,, Ma ie Pacheco,Executive Director -Barbara Lindseth,Admin. Services Director ---------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------- Commission/Council Notes: -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4817-1981-7473.1 COMMISSION MEETING AGENDA P:\Agendas\Comm Dev Commission\CDC 2006\09-I8-06 Ko OPA-696 West 5th Street SP-doc Meeting Date: 161-2-106 Agenda Item Number: R 30 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT PROPERTY OWNER PARTICIPATION AGREEMENT FOR DEVELOPMENT OF 696 WEST 5TH STREET, SAN BERNARDINO IN THE CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA (BRUCE C. KO, CHRISTOPHER C. KO AND HENRY C. KO) BACKGROUND: On November 7, 2005, the Community Development Commission ("Commission") approved the Central City North Downtown Mixed Use Project Concept Plan ("Plan" or "Project") and the Redevelopment Project Study and Exclusive Right to Negotiate Agreement ("Agreement") with Watson and Associates Development Co., Inc. ("Developer"). Through the Plan and the CEQA compliance that was undertaken as part of the Plan approval on November 7, 2005, the Agency will acquire certain properties in an effort to encourage and effectuate the redevelopment of certain real property bounded by 5th Street to the north, "G" Street on the east, "H" Street on the west, and 4th Street on the south, including the north side of 5th Street between"H" and"G" Streets, the four (4) parcels at the northeast corner of 5th and"G" Streets, and the six (6)parcels at the southeast corner of 5th and "G" Streets but excluding the new TELACU II Monte Vista Senior Housing Complex ("Study Area"). The intent of the Plan is to eliminate blighted conditions, encourage economic development by creating owner-occupied mixed use and mixed income housing for those properties with frontage on 4t and 5th Streets, with townhouses located immediately south of the mixed use development on the south side of 5th Street and on the west side of"G" Street. On May 4, 2006, the Agency sent a purchase offer ("Offer") to Bruce C. Ko, Christopher C. Ko and Henry C. Ko ("Property Owners") to purchase the property located at 696 West 5th Street, San Bernardino, California (APN's: 0134-061-21, 22, 25 and 30) (the "Property" or the "Site") based on the appraised value. The Property contains a restaurant built in or about 1956 that has been vacant for approximately ten (10) years. The structure is dilapidated, in disrepair, boarded up and is another example of blight within the Study Area and an impediment to the economic revitalization of the Project Area. In the response to the Offer and on-going communications with the Property Owners and their representatives, the Property Owners replied that they required more time to determine if the purchase price, as offered by the Agency, would be acceptable to them, and furthermore, expressed a desire to participate in the proposed redevelopment of the Project as an owner participant. The Property Owners, with their legal counsel, have met with Agency Staff and legal counsel regarding owner participation opportunities for the Property. The Property Owners have neither accepted nor rejected the Agency's Offer. On July 24, 2006, the Commission adopted a Resolution of Public Interest and Necessity of Acquisition of the Property. However, Staff was directed to continue to work with the Property Owners in hopes of preparing an agreement whereby the Property Owners could participate in the Project as an owner participant. Should the Property Owners execute the Property Owner Participation Agreement ("OPA"), then the Agency would delay taking any further condemnation activities to acquire the Property provided that the terms and conditions contained in the OPA were being met by the Property Owners. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4817-1981-7473.1 COMMISSION MEETING AGENDA PAAgendas\Comm Dev Commission\CDC 2006\09-18-06 Ko OPA-696 West 5th Street SR.doe Meeting Date: lo 2_106/ Agenda Item Number: U\ : 0 Economic Development Agency Staff Report Ko OPA Page 2 On September 7, 2006, Staff presented to the Redevelopment Committee the business points concerning an OPA with the Property Owners. The Redevelopment Committee reviewed the business points including the time limits for submission and performance and recommended the OPA be moved to the Community Development Commission for approval. CURRENT ISSUE: By executing the OPA, the Property Owners have agreed to comply with the development design standards for the Property as currently zoned (CR-2) and to develop the Property, including, but not limited to, improvements to the parking lot, lighting and landscaping in accordance with the OPA. The Property Owners agree, at their own cost and expense, to the following items within the time limits for submission and performance as required by the Agency and shall be specified in the final OPA to be presented to the Commission: • Within thirty (30) days from the Effective Date of the OPA, the Property Owners will deliver to the Agency, a signed letter stating whether or not they will rehab the existing building or demolish the building and construct a new 5,000 square feet structure. • Within ninety (90) days from the Effective Date of the OPA, the Property Owners will deliver to the Agency, for Agency approval, plans including a site grading plan, exterior elevations (including materials, colors, fagade, signage, and general exterior appearance), a conceptual landscape plan, an architectural rendering of the structure, and a parking plan consistent with City requirements and Redevelopment Plan. • Within one hundred eighty (180) days from the Effective Date of the OPA, the Property Owners will provide evidence that they have funding available from either equity sources and/or commercial lenders to redevelop the Site. • Within ninety (90) days from the Agency approval of the plans for the Site, the Property Owners will deliver to the Agency, copies of fully executed agreements/contracts with consultants, including, architectural, civil engineering and landscape architect that will be used in connection with the redevelopment of the Site. • Within one hundred eighty (180) days from the Agency approval of the plans for the Site, the Property Owners will deliver to the City, a completed and accepted development application for the redevelopment of the Site and demonstrate to the Agency, with satisfactory evidence, that the City has accepted and then approved their development application. • Within one hundred eighty (180) days from the Agency approval of the plans for the Site, the Property Owners shall submit to the Agency, a list of nationally recognized businesses that will operate in the Property if the Property Owners intend to lease the Site or a statement together with an acceptable business plan that the Property Owners intend to operate their own business on the redeveloped Property. • Within ninety (90) days from the Design Review Committee meeting, the Property Owners shall obtain all permits and entitlements required to redevelop the Site. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4817-1981-7473.1 COMMISSION MEETING AGENDA P:\AgendasWomm Dev Commission\CDC 2006\09-18-06 Ko OPA-696 West 5th Street SR.doc Meeting Date: 10/2/66 Agenda Item Number: P�3 o Economic Development Agency Staff Report Ko OPA Page 3 • Within seventy (70) days from obtaining all permits and entitlements required to redevelop the Site, the Property Owners shall commence the construction and installation of the approved improvements by the required dates, including any off-site improvements, as may be required by the City. • Not more than twenty-four (24) months from the Effective Date of the OPA, the Property Owners shall complete the construction and installation of the improvements to the Property, obtain a Certificate of Occupancy from the City, and have signed one or more leases with tenants, as applicable, and opened for business. • Under certain default circumstances, the Property Owners agree to sell the Property to the Agency if they fail to meet the development schedule through commencement of construction at a price equal to $360,000 and if the Site is not substantially constructed or the Property Owners have abandoned the Site, the Property Owners will sell the Property to the Agency for the $360,000 figure plus the actual costs incurred by the Property Owners to redevelop the Property. The Agency will have additional remedies through a Stipulated Judgment in the condemnation proceeding to enforce any such repurchase by the Agency. The goal of the Plan was to redevelop those properties identified in the Study Area. All the properties in the Study Area, except for the Site as owned by the Property Owners, were contiguous to other properties in the Study Area. Because the Property is not contiguous to other parcels in the Study Area, it is Staff's opinion that this exception of allowing the Property Owners to move forward with the redevelopment of the Property will not detract from the intent of the Plan and will allow the Agency to utilize its resources in a more cost efficient manner to foster the effective redevelopment on the remaining contiguous parcels. The Agency will work with the Property Owners to assure that the Property is developed(northeast corner of 5`h and "G" Streets) in accordance with the Plan. ENVIRONMENTAL IMPACT: The approval of the proposed OPA described above is categorically exempt under the California Environmental Quality Act ("CEQA"), Section 15301, Class 1. Accordingly, a Notice of Exemption for the proposed development under CEQA Section 15301, Class 1 will be filed with the County Clerk. FISCAL IMPACT: There is no fiscal impact to the Agency as a result of this action unless the Agency elects to exercise its repurchase option at the price specified in Section 8 of the OPA. The Property Owners are responsible for all construction costs associated with developing the Property. RECOMMENDATION: That the Co u Development ity Delopment Commission adopt the attached Resolution. .� m � _ Maggie Pacheco, Executive Director 4817-1981-7473.1 COMMISSION MEETING AGENDA P:\Agendas\Comm Dev Commission\CDC 2006\09-18-06 Ko OPA-696 West 5th Street SR.doc Meeting Date: ( 0/2_/0 61 Agenda Item Number: K 3 o ORIGINAL 1 RESOLUTION NO. 2 3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING 4 THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE 2006 5 PROPERTY OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE AGENCY AND CHRISTOPHER CHENG-CHYH KO, BRUCE CHENG- 6 HSIEH KO AND HENRY CHENG-JU KO ("PROPERTY OWNERS") FOR 7 THE DEVELOPMENT OF THE PROPERTY 8 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), a 9 public entity created pursuant to the Community Redevelopment Law (Health and Safety Code 10 Section 33000, et seq.), is authorized to acquire and redevelop blighted properties located in the City 11 of San Bernardino (the "City"), in accordance with the Community Redevelopment Law; and 12 WHEREAS, the Community Development Commission of the City of San Bernardino (the 13 "Commission"), as the governing board of the Agency, has authorized the Agency to assemble and 14 acquire real property for community redevelopment purposes in the Central City North 15 Redevelopment Project Area("Project Area"); and 16 WHEREAS, the Project Area displays substantial and pervasive symptoms of blight that 17 cannot be remedied by private parties acting alone without community redevelopment assistance; 18 and 19 WHEREAS, on November 7, 2005, the Commission adopted Resolution No. CDC/2005-39 20 approving a Redevelopment Study Agreement and Exclusive Right to Negotiate (the "Agreement") 21 by and between the Agency and Watson & Associates Development Company, Inc. (the 22 "Developer"), and adopted the Mitigated Negative Declaration for the Downtown Mixed Use 23 Project Plan (the "Plan"), and for the Project (the "Project") described in more detail in the 24 California Environmental Quality Act ("CEQA") Initial Study dated October 11, 2005; and 25 WHEREAS, on August 16, 2004, the Agency considered and certified Environmental 26 Impact Report SCH 42003031072 (the "EIR") in accordance with the CEQA for the Project Area, 27 and the acquisition of property contemplated within the Plan and for the Project considered with the 28 EIR; and I P.\Agendas\Resolutions\Resolutions\2006\09-18-06 Ko OPA-Final 696 West 5th Street CDC Reso.doc I WHEREAS, the Agreement contemplates the Agency acquiring or obtaining control of 2 parcels necessary for the Plan either through purchase negotiations or alternatively, by eminent 3 domain proceedings, if necessary; and 4 WHEREAS, the Agency has acquired other real property in the Project Area; and 5 WHEREAS, the Agency retained the services of an appraiser to appraise the property and 6 the appraiser has reported an opinion of the fair market value of the improved property located at 7 696 West 5th Street, San Bernardino, CA 92410 (APN's: 0134-061-21, 22, 25 and 30) (the 8 "Property"); and 9 WHEREAS, the Property is improved with a restaurant that has been vacant for about (10) 10 years and is dilapidated, in disrepair and is another example of blight within the Project Area that is 11 an impediment to the economic rebirth of the Project Area; and 12 WHEREAS, based upon such real property appraisal report, the Commission authorized the 13 Agency to send a purchase offer and summary statement of valuation in conformity with 14 Government Code Section § 7626.2(b) to the owners of record, to attempt to purchase the Property 15 at the appraised value in lieu of condemnation, and on May 4, 2006, the Agency mailed a purchase 16 offer and summary statement of valuation in conformity with Government Code Section § 7267.2(b) 17 to the owners of record of the Property based on the appraised value of the Property described in 18 this Resolution; and 19 WHEREAS, the Agency transmitted the offer to purchase the Property situated within the 20 Project Area, based on the appraised value on May 4, 2006, to the owners of record of the Property 21 at the address on file with the office of the County Tax Assessor, as shown on the last equalized 22 county assessment roll and the owners of record, Christopher Cheng-Chyh Ko, Bruce Cheng-Hsieh 23 Ko and Henry Cheng-Ju Ko (the "Property Owners"), received the Agency's offer; and 24 WHEREAS, the Property Owners did not accept the Agency Offer, but requested additional 25 time in order to accept the Agency Offer or provide a counter offer; and 26 WHEREAS, on July 5, 2006, notice of intent to adopt a resolution was mailed to the owners 27 of record of the Property, Christopher Cheng-Chyh Ko, Bruce Cheng-Hsieh Ko and Henry Cheng- 28 Ju Ko, at the address of record on file at the office of the County Tax Collector and at the last 2 P.\Agendas\Resolutions\Resolutions\2006\09-18-06 Ko OPA-Final 696 West 5th Street CDC Reso.doc 1 known address for the Property Owners; and 2 WHEREAS, on July 24, 2006, after not less than fifteen (15) days written notice to the 3 Property Owners of the Property, the Commission conducted a hearing for the purpose of affording 4 the Property Owners a reasonable opportunity to appear and be heard on the matters referred to in 5 Code of Civil Procedure Section 1240.030 and whether the Agency has met all other prerequisites 6 for the exercise of eminent domain to acquire the Property for the Plan and community 7 redevelopment purposes; and 8 WHEREAS, as a result of such hearing, on July 24, 2006, the Commission adopted 9 Resolution No. CDC/2006-30 entitled: "Resolution of the Community Development Commission 10 of the City of San Bernardino declaring the Public Interest and Necessity of Acquisition of Real 11 Property by the Redevelopment Agency of the City of San Bernardino for community 12 redevelopment purposes over the property located at 696 West 5th Street, San Bernardino, California 13 (APN's: 0134-061-21, 22, 25 and 30) in the Central City North Redevelopment Project Area" and 14 furthermore, directed Agency Staff to work with the Property Owners, if possible, to develop an 15 Agreement with the Property Owners concerning the development of the Property; and 16 WHEREAS, the Property Owners executed the 2006 Property Owner Participation 17 Agreement ("OPA") by and between the Agency and the Property Owners indicating a desire to 18 rehabilitate and reuse the existing structure located on the Property or cause the demolition of the 19 existing structure and construction of a new structure of not less than 5,000 square feet of building 20 space for a retail end user(s) in compliance with the approval of City of San Bernardino 21 development requirements for property zoned as CR-2 (Commercial Regional —Downtown) District 22 and in accordance with the terms and conditions in the OPA. 23 NOW, THEREFORE, BE IT RESOLVED THAT THE COMMISSION FINDS, 24 DETERMINES AND DECLARES AS FOLLOWS: 25 Section 1. The information set forth in the above recitals of this Resolution is true and 26 correct. 27 Section 2. The Commission hereby approves the OPA between the Agency and the 28 Property Owners in substantially the form presented at the meeting of the Commission at which this 3 P.\Agendas\Resolutions\Resolutions\2006\09-18-06 Ko OPA-Final 696 West 5th Street CAC Reso.doc I Resolution is adopted, subject to non-substantive changes as approved by Agency Counsel, and 2 hereby authorizes the Executive Director to execute the OPA on behalf of the Agency. 3 Section 3. The Commission hereby finds and determines that the environmental review 4 of the OPA contemplated hereunder is "categorically exempt" for reasons noted in the Staff Report. 5 No potential adverse environmental effects are anticipated to be associated with the OPA based 6 upon its own independent review of the information provided to the Commission regarding the OPA 7 and the Commission hereby authorizes the filing of a Notice of Exemption under CEQA Section 8 15301, Class 1. 9 Section 4. The Secretary of the Commission is authorized and directed to certify the 10 adoption of this Resolution. This Resolution shall take affect upon adoption. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 P\Agenclas\Resolutions\Resolulions\2006\09-18-06 Ko OPA-Final 696 West 5th Street CDC Reso doc 1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING 2 THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF 3 THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE 2006 PROPERTY OWNER PARTICIPATION AGREEMENT BY AND BETWEEN 4 THE AGENCY AND CHRISTOPHER CHENG-CHYH KO, BRUCE CHENG- HSIEH KO AND HENRY CHENG-JU KO ("PROPERTY OWNERS") FOR 5 THE DEVELOPMENT OF THE PROPERTY 6 PASSED, APPROVED AND ADOPTED this day of 52006. 7 I CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission of the City of San Bernardino at its meeting 9 held on , 2006 by the following vote, to wit: 10 11 Commission Members: Ayes Nays Abstain Absent 12 ESTRADA 13 BAXTER 14 VACANT DERRY 15 KELLEY 16 JOHNSON 17 MC CAMMACK 18 19 Secretary 20 21 The foregoing resolution is hereby approved this day of , 2006. 22 23 Patrick J. Morris, Chairperson 24 Community Development Commission of the City of San Bernardino 25 Approved as to Form: 26 By: 27 Agency Counsel 28 5 P.\Agendas\Resolutions\Resolutions\2006\09-18-06 Ko OPA-Final 696 West 5th Street CDC Reso.doc REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 2006 PROPERTY OWNER PARTICIPATION AGREEMENT (Christopher Cheng-Chyh Ko,Bruce Cheng-Hsieh Ko and Henry Cheng-Ju Ko) THIS 2006 PROPERTY OWNER PARTICIPATION AGREEMENT(this"OPA")is dated as of September 18,2006,by and among Christopher Cheng-Chyh Ko,Bruce Cheng-Hsieh Ko and Henry Cheng-Ju Ko (collectively, the "Property Owners") and the Redevelopment Agency of the City of San Bernardino,a public body,corporate and politic(the"Agency"),and this OPA is entered into with respect to the following facts: RECITALS A. WHEREAS,the Property Owners are married men,and own the lands(having APN No. 0134-061-21, APN No. 1034-061-22, APN No. 1034-061-25 and APN No. 1034-061-30), as their sole and separate property, situated on the northeast corner of 5th Street and "G" Street, San Bernardino, California 92410 (the "Property"). The location of the Property is shown on a map attached hereto as Exhibit"A"and incorporated herein by this reference. The legal description of the Property is attached hereto as Exhibit"B" and is incorporated by this reference; and B. WHEREAS,on November 7, 2005 the Community Development Commission(the "Commission") of the City of San Bernardino (the "City") adopted Resolution No. CDC/2005-39 approving: (1)the Central City North Downtown Mixed Use Project Concept Plan(the"Plan")and the adoption of a Mitigated Negative Declaration in accordance with the California Environmental Quality Act(the"CEQA"),and(2)the authorization of,and the execution by,the Interim Executive Director of the Agency of a Redevelopment Project Study and Exclusive Rights to Negotiate Agreement(the"Agreement")by and between the Agency and Watson and Associates Development Co., Inc. ("Watson"); and C. WHEREAS,the Agreement with Watson envisioned the development of thirty(30) parcels within the Central City North Redevelopment Project Area(the "Project Area") of which four(4)parcels are owned by the Property Owners; and D. WHEREAS,the Property Owners have represented to the Agency that,in lieu of the Agency immediately exercising the powers of condemnation pursuant to the Eminent Domain Law, the Property Owners shall construct,or cause to be constructed,a new retail building space whether within the existing structure located on the Property or a new structure; and E. WHEREAS, the Agency and the Property Owners (the Agency and the Property Owners are sometimes referred to herein as the"Parties")are amenable to entering into this OPA to set forth the respective duties of the Parties regarding the construction and the development of the Property by the Property Owners in lieu of condemnation of the Property by the Agency; and 4851-7723-7761.5 1 P:WgendasWgenda Attachments\Agvnts-Amend 2006109-I8-06 Ko Final OPA-Development of 696 West 5th Street.doc F. WHEREAS,subject to the terms,covenants and conditions of this OPA,the Plan,as may hereafter be undertaken by the Agency and/or Watson, or its successors or nominees, shall exclude the Property owned by the Property Owners. NOW,THEREFORE,IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PROPERTY OWNERS FOR THEMSELVES AND THEIR SUCCESSORS AND ASSIGNS,AND THE AGENCY FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AGREE TO THE FOLLOWING: Section 1. Recitals. The matters set forth in the Recitals of this OPA are true and correct, are material inducements that caused the Parties to execute and deliver this OPA, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Effective Date of the OPA. This OPA shall take effect following its approval by the Agency and execution by the Parties (hereinafter referred to as the "Effective Date"); provided, however, if this OPA has not been fully executed by all of the Parties on or before September 18, 2006, it shall be void and of no force or effect. Section 3. Covenants of the Property Owners as to the Property. Subject to the terms, covenants and conditions of this OPA, the Property Owners covenant and agree as follows: I. General Covenants: (a) It is the intent of the Parties that on and after the Effective Date of this OPA (and subject to the terms, covenants and conditions of this OPA), the Property Owners shall commence the rehabilitation, reuse, reparation, demolition, construction, development, work and/or installation (collectively, the "Construction") of the improvements (the "Development Improvements" which Development Improvements are described in Exhibit"C"attached hereto and incorporated herein by this reference)on or at the Property subject to obtaining applicable City approvals. Further,the Property Owners shall use commercially reasonable efforts to complete the Development Improvements on or at the Property within the time periods described in this Section 3 (and/or in any other provision of this OPA). On and after the Effective Date, the Property Owners shall commence the Construction of the Development Improvements on the Property, and shall diligently prosecute to completion the Construction of the Development Improvements. All construction and development obligations and responsibilities of the Property Owners as related to the Development Improvements shall be initiated and completed in accordance with the terms,covenants and conditions set forth in this OPA,or within such reasonable extensions of such time as may be granted by the Agency to the Property Owners. For purposes of this OPA, the term "Project" shall mean the Construction and completion of the Development Improvements. 4851-7723-7761.5 2 PAAgendas\Agenda Attachments\Agrmts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc (b) The City's zoning ordinances,the City's building codes and all City requirements(as amended and replaced from time to time) (collectively, the "Codes") will be applicable to the Construction of the Development Improvements. The Property Owners acknowledge that any changes in the plans for the Construction of the Development Improvements as set forth in this OPA shall be subject to the Codes. No action by the Agency or by the City with reference to this OPA, or related instruments,documents and/or agreements,shall be deemed to constitute a wavier of any City requirements which are applicable to the Construction, the Development Improvements,the Property and/or to the Property Owners,any successor in interest of the Property Owners, or any successor in interest to the Property, except by modification or variance approved by the City consistent with this OPA. (c) The Development Improvements include,without limitation, the rehabilitation and reuse of the existing commercial structure or a new construction of not less than 5,000 square feet of retail space on the Property in accordance with the terms, covenants and conditions of this OPA. The Development Improvements will include, without limitation, various interior building demolition, repair and improvement work as necessary or appropriate to accommodate the reuse and re- occupancy of the building by one (1) or more retail tenants and exterior building facade renovations and improvements to the existing building, on-site parking lot repairs and improvements, the removal of all existing temporary fencing and/or obstruction located on the Property, parking lot lighting improvements and on-site landscape improvements to the existing parking lot. All work associated with the interior and exterior components of the Development Improvements shall be undertaken by the Property Owners in compliance with all Laws(as defined below) and all Codes. (d) If it is determined by the Property Owners that the existing structure is not structurally sound,the Development Improvements will include,without limitation, the demolition of the existing structure and the construction of a new structure providing for not less than 5,000 square feet of new retail building space. (e) The Property Owners agree to allow the Agency, and/or its agents, employees or contractors,upon prior notice at reasonable times to inspect: (1)the Design Plans(as defined below) for the Construction of the Development Improvements on or at the Property,and(2)the progress of the Construction of the Development Improvements on or at the Property to ensure that the Construction of the Development Improvements on or at the Property is occurring in a timely manner and to the reasonable satisfaction of the Agency. 4851-7723-7761.5 3 P:\Agendas\Agenda Attachments\Agmrts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc H. Special Covenants: (f) Within thirty(30) calendar days from the Effective Date of this OPA, the Property Owners shall notify the Executive Director of the Agency in writing of their intended use of the Property and the type of building, structure and facility(the "Designated Facility") to be rehabilitated or rebuilt. The Property Owners shall also provide written notice to the Agency whether or not the existing structure will be rehabilitated and reused or will be demolished and rebuilt with a new structure in its place. (g) Within ninety(90)calendar days from the Effective Date of this OPA, the Property Owners shall deliver to the Agency all plans,designs and specifications, including, without limitation, a site grading plan, exterior elevations (including, without limitation, materials, colors, facade, signage, and general exterior appearance), a conceptual landscape plan,an architectural rendering of the Designated Facility,and a parking plan consistent with City requirements and the Plan (hereinafter collectively referred to as the "Design Plans"). (h) Within ten(10)calendar days after the Property Owners have submitted the Design Plans to the Agency pursuant to Section 3(g) above, the Agency will review the Design Plans. The Executive Director of the Agency will use her/his discretion to approve or reject the Design Plans as being consistent or inconsistent with the proposed Plan and Project, which approval shall not be unreasonably withheld, conditioned or delayed. The Design Plans will be approved if they are in substantial conformity with the City General Plan, the Code and the Plan. If the Agency disapproves or rejects the Design Plans,in whole or in part,the Agency will provide written notice setting forth in reasonable detail the specific elements of the Design Plans that are disapproved, the nature and extent of such disapproval and what corrective action can be taken for such element to be approved. If the Agency disapproves or rejects the Design Plans, it will provide notice to the Property Owners or to the Property Owner's attorney (as provided for in Section 11 of this OPA). If the Agency disapproves or rejects the Design Plans (the "Design Plans Rejection Letter"), the Property Owners shall have ten (10) calendars days from receipt of the Design Plans Rejection Letter from the Agency to resubmit the Design Plans to the Agency, for review. If the Design Plans are once again rejected by the Agency, the Agency may enforce those rights and remedies provided for in Section 8(a)herein(including,without limitation,the right to purchase the Property pursuant to Section 9 of this OPA, the right to file a complaint for specific performance, and/or the right to acquire the Property by the filing of the Complaint and the filing of the Stipulated Judgment with the Court). (i) Within one hundred eighty(180)calendar days from the Effective Date of this OPA, the Property Owners will provide evidence that they have funding available to construct, develop and complete the Designated Facility. If the Property Owners intend to finance the construction themselves, then the evidence will consist of verification of available funds from a banking institution. If the Property Owners 4851-7723-7761.5 4 P:\Agendas\Agenda Attachments\Agrmts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc intend to obtain a loan for the Construction and completion of the Designated Facility, then the evidence will consist of one (1) or more loan commitments approved by an established commercial bank,subject only to the receipt of approval of building permits. The Agency has the right,in its sole and absolute discretion,to reject evidence of the financing. If the Agency rejects evidence of the financing,the Agency will provide written notice (the "Notice of Rejection") setting forth in reasonable detail the specific elements of the financing that are disapproved, the nature and extent of such disapproval and what corrective action can be taken for such element to be approved. The Agency will notify the Property Owners or their attorney(at the address and in the manner provided for in Section 11 of this OPA). The Property Owners,or their attorney,shall have the opportunity to cure any defect within ten (10) calendar days from the date that the Property Owners (or their attorney)receive the Notice of Rejection. (j) If the Agency approves the Design Plans pursuant to Section 3(h)above,the Property Owners must provide the Agency with fully executed binding agreements with all general contractors,subcontractors,architects,civil engineers,landscape architects, all consultants and all other persons and entities that are,have been,or will be,used in connection with the Construction and completion of the Designated Facility within ninety(90) calendar days from the approval by the Agency of the Design Plans. (k) Within one hundred eighty(180)calendar days from the approval under Section 3(h) above: (i)the Property Owners will prepare, file and submit to the City a completed Development Application(the"Development Application")for a DPII Development Permit for the Construction of the Development Improvements at the Property, (ii) the City and/or the Design/Environmental Review Commission for and/or on behalf of the City(the "D/ERC") will receive, accept and acknowledge the Development Application, as being complete, correct and accurately completed by the Property Owners, and (iii) the Property Owners will submit evidence satisfactory to the Agency, to be determined by the Agency in its sole and absolute discretion as to satisfactory compliance,that the Development Application has been delivered by the Property Owners to the City, that the City and/or the D/ERC has received and accepted the Development Application from the Property Owners,and that the City and/or the D/ERC has accepted and approved the Development Application as being complete, correct and accurately completed by the Property Owners. The filing by the Property Owners of the Development Application shall be subject to extension to force majeure events of floods,earthquakes,fires,casualties,acts of God,epidemics and quarantine restrictions (collectively, the "Delay Events"); provided, however, that the maximum number of days which may be claimed as delay by the Property Owners prior to the filing of the Development Application with the City (and/or through the D/ERC), shall not, in the aggregate, exceed ninety(90) calendar days. An extension of time as a result of any such Delay Event shall be for the period of the existence of the particular circumstance imposing such delay, and each particular delay shall commence to run from the date of occurrence of such Delay Event; provided, however, that the Property Owners have first provided the Agency with 4851-7723-7761.5 5 PAAgendas\Agenda Attachments\Agmits-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc written notice of the occurrence of the force majeure Delay Event within ten (10) calendar days from its commencement. A Delay Event will continue only for so long as the circumstances giving rise to the delay continue to remain in effect, and the Property Owners shall exercise reasonable effort to mitigate the circumstances causing the continuance or existence of the delay. (1) Within one hundred eighty(180)calendar days from the approval under Section 3(h) above,the Property Owners must obtain from the City the DPH Development Permit (the "Development Permit") to the Property Owners. The Agency will cooperate with the Property Owners in connection with all proceedings,hearings,procedures, policies and requirements of the City(and/or of the City through the D/ERC) from the time that the Development Application is delivered by the Property Owners to the City(and/or to the City through the D/ERC) and the receipt and acceptance by the City (and/or by the City through the D/ERC) of the Development Application through the date that the Development Permit is issued by the City(and/or by the City through the D/ERC) to the Property Owners (collectively, the "City Approval Process"). The City Approval Process shall be subject to extension due to the force majeure Delay Events;provided,however,that the maximum number of days which may be claimed as delay by the Property Owners (prior to the filing of the Development Applications with the City(and/or through the D/ERC)(as provided for in Section 3(k) above) and prior to the issuance by the City (and/or by the City I through the D/ERC) shall not, in the aggregate, exceed ninety (90) calendar days when combined in the aggregate with Delay Event order Section 3(k). An extension of time as a result of any such Delay Event shall be for the period of the existence of the particular circumstance imposing such delay, and each particular delay shall commence to run from the date of occurrence of such Delay Event; provided, however,that the Property Owners have first provided the Agency with written notice of the occurrence of the force majeure Delay Event within ten (10) calendar days from its commencement. A Delay Event will continue only for so long as the circumstances giving rise to the delay continue to remain in effect,and the Property Owners shall exercise reasonable effort to mitigate the circumstances causing the delay to continue to exist. (m) Within one hundred eighty(180)calendar days from the approval by the Agency of the Design Plans under Section 3(h) above,the Property Owners shall submit to the Agency a list of nationally recognized businesses that will operate in the Property if the Property Owners intend to lease the Designated Facility to an independent operator. (n) Within ninety(90)calendar days from the D/ERC meeting,the Property Owners shall obtain all permits and entitlements including,without limitation,all building permits, zoning, health and safety permits, authorizations, and certifications necessary or required by the City or other public agency or utility company for the Construction of the Development Improvements. If the Property Owners have submitted all appropriate and satisfactory documents to the City and the City has not issued 4851-7723-7761.5 P:\Agendas\Agenda Attachments\Agtmts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc building permits for reasons beyond the Property Owners' control,the Agency will allow a single thirty(30)calendar day extension to obtain all building permits under this Section 3(n). (o) Within seventy (70) calendar days from the approval by the City of all permits, pursuant to Section 3(n) above, the Property Owners, at the Property Owners' sole cost and expense, shall immediately commence Construction of the Development Improvements, as approved by the City and by any other governmental or quasi- governmental agency or entity having jurisdiction over the approval of the Development Improvements,or any part thereof,to the Property,including,without limitation, all off-site public improvements, if any, as required by the City. Within seventy(70) calendar days after the approval by the City of all permits pursuant to this Section 3(n): (i)all equipment,supplies,and materials needed to commence the Construction of the Development Improvements must be delivered to,and located on or at,the Property,by,or for the benefit of,the Property Owners,(ii)all labor needed to commence the Construction of the Development Improvements at the Property must be hired by,or under contract with a general contractor,or for the benefit of,the Property Owners,and(iii)the concrete foundation for the new structure to be built at the Property (pursuant to the City General Plan, the Plan, the Code and the terms, covenants and conditions of this OPA),must be poured by,or for the benefit of,the Property Owners; (p) Within two (2)years after the Effective Date of this OPA: (1)the Property Owners shall have completed, at the Property Owners' sole cost and expense, the Construction and the completion of the Development Improvements to the Property, in accordance with the City General Plan, the Plan, the Code, and the terms, covenants and conditions of this OPA,(2)the Property Owners must have obtained a certificate of occupancy(the"Certificate of Occupancy")from the City(whether by a written temporary or permanent certificate of occupancy), and (3) the Property Owners shall have executed and entered into one(1)or more binding leases with one (1) or more tenants (which tenants, including the Property Owners, must be continuously open for business). After the Certificate of Occupancy has been issued by the City, the Property Owners will not unreasonably withhold the leasing of the Property,or any portion thereof,to any tenant. The Property Owners agree that after construction has been completed and the Certificate of Occupancy has been issued by the City, the Property Owners and/or their tenants will commence and continue to operate their respective business operations, without interruption, within two (2) weeks thereafter. The failure of the Property Owners and/or their tenants to continuously operate their respective businesses for ninety(90)consecutive calendar days shall constitute a Purchase Event as defined in Section 9 of this OPA. Further, the Property Owners agree that they shall cause the Construction of the Development Improvements to or at the Property, including, without limitation, all off-site improvements,if any,required by the City,to be accomplished in a diligent manner and within the time periods specified in Section 3 of this OPA. 4851-7723-7761.5 7 PAAgendas\Agenda Attaclmrents\Agmrts-Amend 2006\09-18-06 Ko Final OPA-Development of 6%West 5th Street.doc (q) The Property Owners agree that they will not abandon, terminate or substantially suspend the Construction of the Development Improvements to or at the Property, including,without limitation,all off-site improvements,if any,required by the City. The Parties agree that the abandonment(the"Abandonment")of the Construction of the Development Improvements to or at the Property shall mean and occur whenever the Construction of the Development Improvements has terminated or been suspended by the Property Owners,for a period of five(5)consecutive business days, or seven(7)business days within any thirty(30)-day period. For the purpose of this OPA,the Parties agree that Saturday, Sunday and recognized state and federal legal holidays are not considered a business day. If the Abandonment occurs,the Property Owners shall be in default under this OPA. Notwithstanding anything to the contrary in this Section 3(q), an Abandonment shall not be deemed to have occurred whenever: (i)such Abandonment is the direct result of a force majeure Delay Event; provided, however, that the maximum number of days which the delay may be extended by the Property Owners shall not, in the aggregate, exceed thirty (30) calendar days. An extension of time as a result of any such force majeure Delay Event shall be for the period of the existence of the particular circumstance imposing such delay, and each particular delay shall commence to run from the date of occurrence of such force majeure Delay Event;provided,however,that the Property Owners have first provided the Agency with written notice of the occurrence of the force majeure Delay Event within ten(10)calendar days from its commencement. A force majeure Delay Event will continue only for so long as the circumstances giving rise to the delay continue to remain in effect,and the Property Owners shall exercise reasonable effort to mitigate the circumstances causing the continued existence of the delay, or (ii) such Abandonment is the result of one (1) or more Construction scheduling delays (singularly, the "Scheduling Delay" and collectively, the "Scheduling Delays")caused by,and directly resulting from,the inability on the part of the Property Owners to obtain labor or construction materials needed to continue and complete the Construction of the Development Improvements, or any part thereof,to be performed and completed at the time of the alleged abandonment(other than from a force ma j eure Delay Event). Each Scheduling Delay must be beyond the control of, and not the fault of, the Property Owners (or any one of them), the Property Owners must notify, identify and describe in writing and in detail each Scheduling Delay to the Agency within ten (10) calendar days of first becoming aware of each such Scheduling Delay,and the Agency must approve in writing to the Property Owners (or to their attorney) each and every Scheduling Delay, in its sole and absolute discretion. Notwithstanding anything to the contrary in this Section 3(q), no abandonment resulting from a Scheduling Delay may be extended beyond thirty(30)calendar day from its original scheduling date(unless otherwise agreed to, in writing, by and between the Parties). 4851-7723-7761.5 8 PAAgendas\Agenda AttachmentsWgmits-Amend 2006\09-18-06 Ko Final OPA-Development of 6%West 5th Street.doc M. Post-Construction Covenants: (r) Upon the timely Construction and completion of the Development Improvements by, or for the benefit of, the Property Owners, the Property Owners may request the Agency to cause a Certificate of Completion to be executed and provided to the Property Owners substantially in the form of Exhibit "D" attached hereto and incorporated herein by this reference. The Certificate of Completion shall evidence a conclusive determination by the Agency of the satisfaction of the obligation by the Property Owners under this OPA to undertake and complete the Development Improvements. (s) If the Agency seeks to withhold the execution of a Certificate of Completion on the grounds of an existing default or breach under this OPA, then the Agency shall within thirty(30)calendar days from the date of the written request for the issuance of a Certificate of Completion from the Property Owners,provide a written statement to the Property Owners setting forth the reasons for the Agency's refusal or failure to prepare and execute a Certificate of Completion. The statement shall also contain a detailed description of any action the Property Owners must take to obtain a Certificate of Completion. No provision of this Section 3(s) shall be deemed to excuse the Property Owners from having to comply with all applicable Codes with respect to the Construction of the Development Improvements. (t) In consideration of the terms, covenants, conditions and obligations made by the Property Owners under this OPA,and provided no default of this OPA has occurred by the Property Owners,the Agency hereby agrees that it shall not file proceedings to acquire the Property for community redevelopment purposes by an exercise of the power of eminent domain for the period provided in Section 3(p)above. Nothing in this Section 3(t) shall be deemed to affect the power or capacity of any other public entity,including the City,to acquire any interest in the Property Owners'Property by an exercise of the power of eminent domain for a public purpose, as authorized by law. Section 4. Agency Not to Request Commission to Acquire Property. As consideration for the terms, covenants, conditions, provisions, representations and/or warranties made by the Property Owners in Section 3 of this OPA, the Agency agrees that for the period described in Section 3(p)above,and provided that the Property Owners are then not in Default under this OPA, the Agency shall not request the Commission to commence proceedings to acquire the Property by way of the exercise of condemnation powers of the Commission pursuant to the Eminent Domain Law,Code of Civil Procedure Section 1230.010,et M. Except as specifically provided for in this OPA as exclusive remedies in Section 8(f) and in Section 8(g) below, the Agency and the Property Owners hereby acknowledge that in the Event of a Default(as defined below)on the part of the Property Owners with respect to any of the terms, covenants, conditions, provisions, representations and/or warranties made by the Property Owners in this OPA, the Agency may exercise and enforce any remedies, at law or in equity,and as provided for in this OPA(including, without limitation the acquisition of the Property by immediate purchase and sale in accordance with 4851-7723-7761.5 9 P:\Agendas\Agenda Attachments\Agrmts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc Section 9,the filing of a complaint for specific performance,and the acquisition of the Property by the filing of the Complaint and the filing of the Stipulated Judgment with the Court). Section 5. Compliance with the City Approval Process; Other Required Entitlements. (a) Notwithstanding any provision of this OPA to the contrary,the Property Owners will timely prepare, file and submit the Development Application to the City(and/or to the City through the D/ERC), shall fully comply with the City Approval Process, shall fully comply with all Codes, and shall exercise its good faith efforts to obtain from the City(and/or from the City through the D/ERC) the Development Permit, prior to the commencement by the Property Owners of any Construction of the Development Improvements at or to the Property. (b) Any use of the Property that the Property Owners may hereafter propose for the Property that is not specifically set forth in this OPA shall be subject to the separate and independent review by the City in accordance with the applicable Codes. It is recognized that the City expressly reserves the discretion to approve,conditionally approve or reject any such development proposal of the Property Owners in accordance with its regulatory discretion and jurisdiction under applicable law. Nothing contained in this OPA shall be interpreted to be a pre-approval by the City as to the Designated Facility and the redevelopment of the Property. Section 6. Covenant Against Unlawful Discrimination. The Property Owners for themselves and their successors and assigns agree that in the Construction of the Development Improvements, the Property Owners will not discriminate against any employee or applicant for employment because of sex,marital status,race, color,religion,creed,national origin,or ancestry. The Property Owners shall be responsible for carrying out the Construction of the Development Improvement in conformity with the Laws and the Codes. Section 7. Maintenance Condition of the Property. The Property Owners for themselves, their successors and assigns, hereby covenant and agree that: (a) The areas of the Property that are subject to public view (including all existing improvements,paving,walkways,landscaping,exterior signage and ornamentation) shall be maintained in good repair and a neat,clean and orderly condition,ordinary wear and tear excepted. If, at any time during the term of this OPA, there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maintenance standard described above (the"Maintenance Deficiency")the Agency shall notify the Property Owners,or their attorney,in writing,of the Maintenance Deficiency and give the Property Owners,or their attorney, thirty (30) calendar days from receipt of such notice to cure the Maintenance Deficiency identified in the notice. If the Property Owners fail to cure or commence to cure the Maintenance Deficiency within the time allowed, the Agency may conduct a public hearing following transmittal of written notice thereof to the Property Owners,or to their attorney,at least ten(10)calendar days prior to the scheduled date of such public hearing to verify whether a Maintenance Deficiency exists and whether the Property Owners have failed to comply with the provision of this Section 7(a). If, upon the conclusion of a public hearing, the Agency makes a 4851-7723-7761.5 10 PAAgendasUgenda Attachments\Agmtts-Amend 2006109-18-06 Ko Final OPA-Development of 696 West 5th Street.doc finding that a Maintenance Deficiency exists and that there appears to be non- compliance with the general maintenance standard, described above,thereafter, the Agency shall have the right to enter the Property and perform All acts necessary to cure the Maintenance Deficiency, or to take other action at law or in equity that the Agency may then have to accomplish the removal and/or abatement of the Maintenance Deficiency. Any sum expended by the Agency for the removal and/or abatement of the Maintenance Deficiency on the Property authorized by this Section 7(a)shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the Agency to the Property Owners,or to their attorney,the Agency shall have the right to enforce the lien in the manner as provided in Section 7(c). (b) Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property and that is visible from any public right-of-way adjacent or contiguous to the Property,shall be removed by the Property Owners by either painting over the evidence of such vandalism with a paint that is color-matched to the surface on which the paint is applied,or graffiti may be removed with solvents,detergents or water,as appropriate. If any such graffiti may become visible from an adjacent or contiguous public right- of-way, but is not removed within 48 hours following the time of such application, the Agency shall have the right to enter the Property and remove the graffiti,without notice to the Property Owners or to their attorney. Any sum expended by the Agency for the removal of graffiti from the Property authorized by this Section 7(b) by the Agency, shall become a lien on the Property. If the amount of the lien is not paid within thirty(30) calendar days after written demand for payment by the Agency to the Property Owners, or to their attorney, the Agency shall have the right to enforce its lien in the manner as provided in Section 7(c). (c) The Parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 7 expressly include the power to establish and enforce a lien or other encumbrance against the Property, or any portion thereof, in the manner provided under Civil Code Sections 2924,2924b and 2924c in an amount reasonably necessary to restore the Property to the maintenance standard required under Section 7(a)or Section 7(b),including attorneys' fees and costs of the Agency associated with the removal and/or abatement of the Maintenance Deficiency, the removal of graffiti and/or the collection of the costs of the Agency in connection with such action. The provisions of this Section 7, shall be a covenant running with the land and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 7 shall be deemed to preclude the Property Owners from making any alteration, addition,or other change to any structure or improvement or landscaping on the Property, provided that such changes comply with applicable zoning and building regulations of the City. Section 8. Defaults and Remedies. The failure or delay by either party to perform or observe any term,covenant,condition or provision of this OPA,or the making of any representation or warranty that is or becomes inaccurate or untruthful in any material manner, shall constitute an 4851-7723-7761.5 11 PAAgendas\Agenda Attachments\Agrmts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc event of default(the"Default"or the"Event of Default")under this OPA. Should a Default occur under this OPA (or will occur upon the giving of notice, the passage of time, or both), the non- defaulting party shall be entitled to seek any remedy at law or in equity or as otherwise provided for in this OPA. I. General. (a) Except for those remedies that are exclusive to the Agency as set forth in Section 8(0 and 8(g)below,the Agency and the Property Owners acknowledge that in the Event of a Default by the Property Owners with respect to any of the terms, covenants, conditions,provisions,representations and/or warranties described in this OPA,the Agency may exercise and enforce any remedies, at law or in equity, or as otherwise provided for in this OPA(including,without limitation,the purchase of the Property by the Agency from the Property Owners in accordance with Section 9,the filing of a complaint for specific performance,or the acquisition of the Property by the filing of the Complaint and the Stipulated Judgment with the Court(as provided for in Section 8(h) and in Section 8(i)) below. (b) The non-defaulting party that claims a Default has occurred shall give written notice of the Default(the"Notice of Default")to the defaulting party(in the manner and as provided for in Section 11), specifying the alleged Default. Any delay or failure by the non-defaulting party in giving such notice to the defaulting party shall not constitute a waiver of any Default nor shall it change the time of Default;provided, however, the non-defaulting party shall have no right to exercise any remedy for a Default without delivering the Notice of Default. (c) Any failure or delay by the non-defaulting party in asserting and enforcing any of its rights and remedies with respect to any Default shall not operate as a waiver of any Default or of any of the non-defaulting party's rights or remedies in connection with and resulting from the Default. Except with respect to the remedies expressly declared to be exclusive to the Agency in Section 8(f) and Section 8(g) below, the rights and remedies of the Parties are cumulative and the exercise by either party of one(1)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 defaulting party. (d) If the Property Owners shall fail to cooperate with the Escrow Holder (as defined below), with the title company and/or with the Agency, in the prompt purchase and sale of the Property to the Agency, pursuant to and in accordance with Section 9 below,including,but not limited to,the refusal or the failure by the Property Owners to execute, acknowledge and/or to deliver any and all quitclaim deeds, instruments, documents,agreements,and/or escrow instructions needed to consummate the sale by the Property Owners of the Property to the Agency and to close the Escrow (as defined below),the Agency may seek and enforce all available remedies at law and in equity(including,without limitation,the filing of a lawsuit for specific performance 4851-7723-7761.5 12 P:\Agendas\Agenda Attachments\Agnnts-Amend 2006\09-18-06 Ko Final OPA-Development of696 West 5th Street.doc to enforce this OPA and to force,enforce and cause the sale by the Property Owners of the Property to the Agency in accordance with this OPA and with any other instruments, documents and/or agreements in connection therewith). (e) A Default under this OPA shall also occur whenever a representation or warranty made by any party is materially false or inaccurate when made,or becomes materially false or inaccurate after such representation and/or has been made by one party to the other party. In such event,the Agency may exercise and enforce any remedies,at law or in equity, or as otherwise provided for in this OPA. H. Special Remedies (f) If the Property Owners fail to commence the Construction of the Development Improvements under Section 3(o) above or fail to meet the times specified under Sections 3 (f, g, h, i,j, k, 1, in and n), the Agency may immediately purchase the Property for Three Hundred Sixty Thousand Dollars($360,000)(hereinafter referred to as the"Pre-Construction Purchase Price"). The Pre-Construction Purchase Price is the price to be paid by the Agency to the Property Owners for the purchase of the Property if the Property Owners have not commenced the Construction of the Development Improvements. The Pre-Construction Purchase Price paid by the Agency to the Property Owners would be in lieu of the Agency exercising its condemnation powers pursuant to the Eminent Domain Law, Code of Civil Procedure,Section 1230.010,et sue. The Parties agree that the consummation of the sale by Property Owners to the Agency of the Property,the purchase of the Property by the Agency from the Property Owners, and the recording in the Official Records of the County of San Bernardino,State of California,of the quitclaim deed conveying the Property from the Property Owners to the Agency (the "Pre-Construction Purchase and Sale Transaction")shall occur within sixty(60)calendar days from the receipt by the Property Owners of the Notice of Default from the Agency (in accordance with Section 11). The Property Owners agree to cooperate with the escrow holder, the title company and/or the Agency to promptly open and close the escrow in connection with the consummation of the Pre-Construction Purchase and Sale Transaction and the transactions contemplated by this OPA. (g) If the Property Owners have commenced the Construction of the Development Improvements at or on the Property (prior to having substantially completed the Construction of the Development Improvements at or to the Property) and an Abandonment of the Construction of the Development Improvements at or on the Property has occurred, and/or if the Property Owners have breached (or there is a default under) Section 3(h), Section 3(i), Section 30), Section 3(k), Section 3(1), Section 3(m) and/or Section 3(n)above, the Agency may purchase the Property for the post-construction purchase price(the"Post-Construction Purchase Price"). The Post-Construction Purchase Price is the amount of Three Hundred Sixty Thousand Dollars ($360,000) plus the costs, expenses and amounts actually paid by the Property Owners for labor,equipment,materials,supplies,architect fees,engineering 4851-7723-7761.5 13 P:\Agendas\Agenda Attachments\Agnnts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc fees and designer fees(collectively,the"Construction Costs")in connection with the Construction of the Development Improvements in accordance with this OPA (exclusive of any costs, expenses or amounts incurred by the Property Owners in connection with matters relating to general overhead). The Property Owners must provide the Agency with evidence and proof of payments(acceptable to the Agency in its sole and absolute discretion) for all Construction Costs that the Property Owners have actually paid in connection with the Construction of the Development Improvements and that the Property Owners wish to have included as part of the Post-Construction Purchase Price. The purchase and sale pursuant to this Section 8(g)would be in lieu of the Agency exercising its condemnation powers pursuant to the Eminent Domain Law, Code of Civil Procedure, Section 1230.010, et sue. The Parties agree that the consummation of the sale by Property Owners to the Agency of the Property,the purchase of the Property by the Agency from the Property Owners, and the recording in the Official Records of the County of San Bernardino, State of California,of the quitclaim deed conveying the Property from the Property Owners to the Agency (the "Post-Construction Purchase and Sale Transaction") shall occur within sixty(60)calendar days from the receipt by the Property Owners of the Notice of Default from the Agency(in accordance with Section 11). The Property Owners agree to cooperate with the escrow holder, the title company and/or the Agency to promptly open and close the escrow in connection with the consummation of the Post-Construction Purchase and Sale Transaction and the transactions contemplated by this OPA. (h) Subject to Section 8(i)below,the Agency reserves the right to acquire the Property by way of the exercise of condemnation powers pursuant to the Eminent Domain Law, Code of Civil Procedure Section 1230.010, et sec., in lieu of filing an action for specific performance. (i) The Parties stipulate that in the Event of a Default by the Property Owners of one(1) or more of the terms,covenants,conditions,provisions,obligations,representations and warranties set forth in Section 3 of this OPA, a Stipulated Judgment for Condemnation of the Property(the"Stipulated Judgment")may be filed and entered with the appropriate court(the"Court")having jurisdiction thereof immediately after the Agency has filed with the Court a Complaint for Eminent Domain (the "Complaint"). A form of the Stipulated Judgment is attached as Exhibit `B" and incorporated herein by this reference. The Stipulated Judgment shall specify,without limitation,that: (i)the Agency has the right to file the Complaint and the Stipulated Judgment with the Court, (ii) that the title to the Property shall be awarded to the Agency and will be transferred from the Property Owners to the Agency, (iii) the Property Owners shall execute a quitclaim deed conveying the Property from the Property Owners to the Agency, and (iv) that the Agency will pay the Property Owners the Pre-Construction Price if the construction has not commenced or the Post-Construction Purchase Price if construction is not yet substantially complete. 4851-7723-7761.5 14 PAAgendas\Agenda Attachments\Agmris-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc Section 9. Option to Purchase. If the Property Owners or their tenants cease to operate their respective business at the Property for ninety(90)consecutive calendar days, the Agency,in its sole and absolute discretion, shall have the option (the "Option") to purchase the Property (the "Purchase Event'). If the Agency elects to exercise this Option,the Agency must give written notice to the Property Owners, or their attorney, of the exercise by the Agency of the Option within one hundred eighty(180) calendar days after the Purchase Event has occurred and after receipt by the Agency of written notice from the Property Owners that the Purchase Event has occurred. (a) If the Agency timely exercises the Option pursuant to Section 9 of this OPA, the Agency shall open an escrow (the "Escrow"), shall appoint an acceptable escrow holder to administer the purchase of the Property by the Agency from the Property Owners,and shall execute reasonable and customary written escrow instructions(the "Escrow Instructions") reflecting a closing date that is no sooner than sixty (60) calendar days nor later than ninety(90)calendar days after the date that the Agency exercised the Option. In the event of any inconsistency or contradiction between this OPA and the Escrow Instructions,the inconsistency or contradiction shall be resolved in favor of this OPA. The Escrow shall provide, without limitation, for the following: (i) a conveyance by quitclaim deed from the Property Owners of the Property to the Agency; (ii) no representation and warranty of any kind or nature whatsoever by the Property Owners or the Agency(except as otherwise provided for by either party in this OPA); (iii) the Property Owners shall execute customary escrow instructions,instruments,documents and agreements prepared by counsel for the Agency,the title company or the Escrow Holder, in order to close the Escrow in accordance with this OPA; (iv) no brokerage commissions shall be due by the Property Owners or by the Agency in connection with the exercise by the Agency of the Option and the purchase by the Agency from the Property Owners of the Property; and (v) the Agency shall, in its sole discretion and expense, conduct and complete such due diligence investigations, studies and inspections, relating to, without limitation,matters involving title, surveys, environmental issues and/or the physical condition of the Property. (b) The purchase price to be paid by the Agency to the Property Owners in connection with the Escrow is the Post-Construction Purchase Price. The Post-Construction Purchase Price shall be delivered by the Agency to the Escrow Holder one (1) business day prior to the closing of the Escrow. Section 10. Covenants Running With the Land. The terms, covenants, conditions, agreements and provisions of this OPA shall be covenants that run with the land and the Property from the Effective Date of this OPA as a community redevelopment covenant. This OPA is expressly declared by the Parties for themselves, and for their successors and assigns, to be for the benefit of the Property and the Project Area. Section 11. Notices. Any and all notices required or permitted to be given under this OPA must be in writing and shall be: (i)personally delivered,or(ii)mailed certified or registered mail, via United States Postal Service, return receipt requested, postage prepaid, or (iii) delivered by 4851-7723-7761.5 15 PAAgendas\Agenda Attachments\Agmus-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc express delivery service or messenger service, or(iv)dispatched through other electronic means or by verified fax transmission, to the respective Parties at the addresses indicated below: If to the Agency: Executive Director Redevelopment Agency of the City of San Bernardino 201 North"E" Street, Suite 301 San Bernardino, California 92401 Telephone: (909) 663-1044 Fax: (909) 888-9413 With a copy to: Timothy J. Sabo (For Informational Lewis Brisbois Bisgaard& Smith LLP Purposes Only) 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Fax: (909) 387-1138 If to Property Owners: Bruce Cheng-Hsieh Ko 795 West 51h Street San Bernardino, California 92410 Fax: (909) 885-4481 Or to their Attorney Joseph Aklufi Aklufi & Wysocki 3403 10th Street, Suite 610 Riverside, California 92501-3653 Telephone: (951) 682-5480 Fax: (951) 682-2619 The Agency may provide Notice as required by this OPA either to the Property Owners,or to their Attorney to complete the giving of adequate Notice pursuant to this OPA. Any party may change its address by delivery of notice to the other party in the manner set forth above. Section 12. Governing Law; Liti!ation Costs. This OPA shall be construed and enforced in accordance with the laws of the State of California. Any legal actions arising among the Agency and the Property Owners related to this OPA must be instituted in the Superior Court of the State of California in and for the County of San Bernardino or any other appropriate court within the County of San Bernardino, or in the Federal District Court for the Central District of California. Should any such legal action be brought in any court of competent jurisdiction,the prevailing party in such action will be entitled to reimbursement by the other party for all reasonable attorneys' fees, court costs and any other costs related to such litigation. If any legal action is commenced by the Property Owners against the Agency, service of process on the Agency must be made by personal service to the Executive Director of the Agency,or in such other manner as may be allowed by law. If any legal action is commenced by the Agency against the Property Owners,service of process on the Property Owners shall be made by personal service on Bruce Cheng-Hsieh Ko (or such other 4851-7723-7761.5 16 PAAgendas\Agenda Attachments\Agnnts-Amend 2006\09-18-06 Ko Final OPA-Development U696 West 5th Street.doc agent for service of process and at such address as may be specified in prior written notice to the Agency), or in such other manner as may be allowed by law, and is valid whether made within or without the State of California. Section 13. Non-Liability of City and Agency Officials and Employees. No member, official or employee of the City or of the Agency shall be personally liable to the Property Owners,or to their successors and assigns, in the Event of any Default by the City or by the Agency under the terms, covenants and conditions of this OPA. Section 14. Delay; No Force Maieure Defense. (a) Except as set forth in Section 3(k), 3(1) and 3(q) above, the Property Owners agree that delays due to force majeure events including acts 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, does not extend the time for,or excuse,the performance of any covenant or undertaking by the Property Owners arising under this OPA. (b) The inability of the Property Owners to obtain a satisfactory commitment from a lender or to satisfy any other condition of this OPA relating to the Construction of the Development Improvements does not constitute a valid ground for a delay. Changes in either general economic conditions or changes in the economic assumptions of any party that may have provided a basis for entering into this OPA and that occur after the execution of this OPA do not provide any party with grounds for asserting the existence of a delay in the performance of any term, covenant, condition or undertaking arising under this OPA. Each party expressly assumes the risk that changes in general economic conditions or changes in economic assumptions relating to the terms, covenants, conditions and undertaking of this OPA could impose an inconvenience or hardship on the continued performance of such party under this OPA, but that such inconvenience or hardship does not excuse the performance by such party of its obligations under this OPA. Section 15. Term of OPA, Amendment; No Waiver. (a) This OPA shall remain in effect until August 6, 2013, or the expiration date of the Redevelopment Plan for the Project Area, whichever date shall first occur. (b) This OPA may be amended or modified only by a written agreement duly executed by the Parties. Modifications or amendments to this OPA must be approved by official action of the members of the Commission. Failure on the part of a party to enforce any provision of this OPA shall not be construed as a continuing waiver of the right to compel enforcement of such provision or provisions and such failure to enforce any provision of this OPA shall never constitute nor be deemed to constitute I 4851-7723-7761.5 17 PAAgendas\Agenda Attachments\Agrmts-Amend 2006\09-1"Ko Final OPA-Development of 696 West 5th Street.doc an amendment to this OPA,without the official action of the Agency to specifically approve any such amendment. Section 16. Representations and Warranties of the Property Owners. The Property Owners make the following representations and warranties to the Agency and the Property Owners acknowledge that execution of this OPA by the Agency is made in material reliance by the Agency on such representations and warranties: (a) The Property Owners have the legal right,power and authority to enter into this OPA and to the instruments, documents and agreements referenced in this OPA, and the Property Owners have taken all requisite action and obtained all requisite consents in connection with entering into this OPA; (b) This OPA has been duly executed by the Property Owners and shall be enforceable in accordance with its terms; (c) The execution of this OPA shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Property Owners are a party, or under law, statute, ordinance, rule, governmental regulation or any writ,injunction,order or decree of any court or governmental body applicable to the Property Owners, or any of them, or to the Property; (d) The Property Owners jointly own the fee simple interest in the Property,subject only to the matters of record disclosed to the Agency, and the Property Owners are married men who own their respective undivided fee simple interests in the Property as their respective sole and separate property; (e) The Property Owners have the funds available to them to undertake and to complete the Construction of the Development Improvements on or at the Property; (f) The Property Owners shall perform,carry out and complete the Construction of the Development Improvements on or at the Property in conformity with all Codes,and shall comply with all federal, state, municipal, city and local laws, statutes, ordinances,codes,rules,regulations,orders and policies,as amended or superseded from time to time, applicable to the Property Owners, the Property and/or the Construction of the Development Improvements on or at the Property (including, without limitation,all applicable federal and state labor laws,regulations,standards and requirements (collectively,the "Laws"); (g) The Property Owners shall,at their own cost and expense,secure or shall cause to be secured, any and all permits that may be required by the City or any other governmental entity having jurisdiction over the Construction and completion of the Development Improvements; 4851-7723-7761.5 18 PAAgendas\Agenda Attachments\Agmts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc (h) The Property Owners warrant that they possess,or shall obtain immediately after the execution and delivery of this OPA,and maintain and shall maintain during the term of this OPA, a business registration certificate pursuant to Title 5 of the City of San Bernardino Municipal Code, together with any and all other licenses, permits, qualifications,insurance and approvals of whatever nature that are legally required to be maintained by the Property Owners to conduct their business activities within the City. Section 17. Property Owners and Agency Indemnity. The Property Owners agree to indemnify, defend, protect and hold the Agency, its officials, officers, attorneys, employees and agents, harmless from and against all actions, causes of action, claims, costs, damages, demands, expenses, fees, judgments, liabilities, obligations and penalties (including, without limitation, attorneys' fees and costs) (singularly the "Claim" and collectively, the "Claims") arising from or related to: (i) any act or omission of the Property Owners, or any of them, their agents, representatives, executors, administrators, trustees, personal representatives, devisees, heirs, successors and assigns(collectively,the"Other Parties"), in performing or failing to perform their obligations hereunder, or(ii)the approval and execution of this OPA by the Agency. The Agency agrees to indemnify and hold the Property Owners and the Other Parties harmless from and against all Claims arising from or related to any act or omission of the Agency in performing its obligations hereunder. This indemnity provision shall survive the execution of this Agreement and the expiration of the term of this OPA. Section 18. Property Owners' Insurance. The Property Owners shall furnish and maintain, or shall cause to be furnished and maintained, to the Agency duplicate originals or appropriate certificates of comprehensive general liability insurance in the minimum amount of One Million Dollars ($1,000,000.00) combined single limit, naming the Agency and the City as additional insureds. Such 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, personal injury including libel, slander and false arrest,and automobile insurance for vehicles owned,hired or used by the Property Owners. In addition, the Property Owners shall furnish, maintain and provide to the Agency adequate proof of worker's compensation insurance coverage for its employees,as required by law. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+/ (viii) in the most current edition of the Best's Key Rating Guide:Property-Casualty. All such insurance policies shall provide that they may not be canceled unless the Agency receives written notice of cancellation at least thirty(30)calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Property Owners hereunder shall be primary to any and all insurance which the Agency may otherwise carry, including self insurance, which for all purposes of this OPA shall be separate and apart from the requirements of this OPA. Any and all insurance required hereunder shall be maintained and kept in force until end of the term of the construction covenants as set forth in Section 3(p)of this OPA,and shall be occurrence based insurance policies. The Agency reserves the right to require the Property Owners to provide and maintain other insurance policies,in such amounts as reasonably required by the Agency and naming the Agency and the City as additional insured on each such insurance policy. 4851-7723-7761.5 19 PAAgendas\Agenda Attachments\Agrmts-Amend 2006\09-18-06 Ko Final OPA-Development of 6%West 5th Street.doc Section 19. Severability. If any of the terms,conditions,provisions or covenants of this OPA are, to any extent, adjudged to be invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, conditions, provisions and covenants of this OPA will not be affected thereby and will remain in full force and effect and be valid and enforceable to the fullest extent permitted by applicable law. Section 20. Notice of Memorandum of OPA. The Parties agree and declare that the successors and assigns of each shall be bound by the terms, covenants and conditions of this OPA. The Parties shall execute and acknowledge and the Agency shall cause to be recorded a Notice of Memorandum of this OPA substantially in the form of Exhibit"F"attached hereto and incorporated herein by this reference. Section 21. Entire OPA. Except as otherwise expressly provided herein, this OPA constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings. The Parties intend this OPA to be the final expression of their agreement with respect to the terms,covenants and conditions hereof, and a complete and exclusive statement of such terms, covenants and conditions. Section 22. Headings and Attachments. The headings of each section of this OPA are provided for purposes of reference and convenience only and do not have any meaning which is independent of the text of the section of the OPA to which they may generally correspond. The following list of attached documents are part of this OPA: Exhibit"A" - Map Exhibit"B" - Legal Description of the Property Exhibit"C" - Scope of the Development Improvements Exhibit"D" - Form of Certificate of Completion Exhibit"E" - Stipulated Judgment Exhibit"F" - Notice of Memorandum of OPA Section 23. Non-discrimination. The Property Owners for themselves and their successors and assigns agree that in the Construction and completion of the Development Improvements, the Property Owners will not discriminate against any employee or applicant for employment because of sex,marital status,race, color,religion,creed,national origin,or ancestry. The Property Owners shall be responsible for carrying out, performing and completing the Construction of the Development Improvements in conformity with all Codes and Laws. 4851-7723-7761.5 20 P:\Agendas\Agenda Attachments\Agants-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc Section 24. Third Party Beneficiaries. There are no third party beneficiaries to this OPA. The only Parties to this Agreement are the Agency and the Property Owners and their respective successors and assigns. This OPA is not intended,and shall not be construed,to benefit or be enforceable by any other person, entity or governmental authority whatsoever. Section 25. Remedies. Except as provided for in Section 8(f)and in Section 8(g)above, in the Event of a Default under this OPA,the non-defaulting party shall be entitled to all remedies available pursuant to the terms of this Agreement,at law and in equity,including,but not limited to, specific performance of this OPA,the filing of the Complaint and the Stipulated Judgment with the Court,and all such remedies by such party shall not be deemed an exclusive election of remedies or waiver of any other rights conferred on that party by the terms of this OPA. Section 26. Attorneys'Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this OPA,or is made a party to any action or proceeding brought by the Escrow Holder or any escrow holder or agent,then as between the Property Owners and the Agency,the prevailing party shall be entitled to recover as an element of its cots 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 OPA shall be considered as"attorneys' fees" for purposes of this Section. Section 27. Ambiguities. This OPA is,in all respects,intended by each party hereto to be deemed and construed to have been jointly prepared by the Parties. The Parties hereby expressly agree that any uncertainty or ambiguity existing herein shall not be interpreted against either of them. Except as expressly limited by this paragraph,all of the applicable rules of interpretation of contract shall govern the interpretation of any uncertainty or ambiguity. Section 28. Counterparts. This OPA and any amendment or modification may be executed in counterparts,each of which shall be deemed an original,but all of which shall constitute but one(1) original agreement. Section 29. Time is of the Essence. The Property Owners and the Agency agree that time is of the essence in the performance and observance of the terms, covenants and conditions of this OPA. Section 30. Transmission by Facsimile. A facsimile transmitted document shall constitute an original document and facsimile transmitted signatures affixed thereto shall constitute the original signatures and shall be deemed effective execution of such document for purposes hereof. [END OF PAGE] 4851-7723-7761.5 21 PAAgendas\Agenda Attachments\Agrmts-Amend 2006\09-18-06 Ko Final OPA-Development of696 West 5th Street.doc THIS 2006 PROPERTY OWNER PARTICIPATION AGREEMENT is dated as of , 2006, and this OPA shall have no force or effect unless it has been approved by the governing body of the Agency and fully executed by the Parties. PROPERTY OWNERS Date: Christopher Cheng-Chyh Ko Date: Bruce Cheng-Hsieh Ko Date: Henry Cheng-Ju Ko AGENCY Redevelopment Agency of the City of San Bernardino, a public body corporate and politic Date: By: Maggie Pacheco Executive Director Approved as to Form and Legal Content: By: Agency ou sel 4851-7723-7761.5 22 PA\Agendas\Agenda Attachments\Agnnts-Amend 2006\09-18-06 Ko Final OPA-Development of 696 West 5th Street.doc EXHIBIT "A" Map 4851-7723-7761.5 23 Lal 8 1 t".24 7 -8 9 10 12 23 O 9 ' 1 2 26 O 5 1 2 3 42 47 4O 5 6 7 140-261 1U I 27 28 11 ' 21 O 27 O 22 29 21 20 19 18 17 16 15 ' 20 24 8 O /2 37 740-263 13 ' 19 140.271 24 710-272 9 140-273 24 VINE STREET 18 9 23 10 O 29 15 14 ' 17 10 O 11 3 5 6 7 8 9 10 17 12 13 12 O 28 16 ' 16 11 21 140-262 ' 15 20 13 29 - 14 24 23 22 21 20 19 18 17 27 ' 14 13 72 19 18 77 16 14 O O C 23 22 21 20 1g 16 17 16 26 25 19 17 15 15 23-- - - --- - - - - - sEcEUTW. _ 1ao-261- - - - -- 4T4;EZT- - - - - - - - - - - - - - a 15 I i O O 6 ' 1 2 3 4 5 6 10 it 19 2 O3 O4 22 7 8 8 10 11 12 25 71 12 13 34 134-017 7 ' 36 12 18 134-022 14 8 ' 37 O 7 13 17 21 18 17 16 15 14 13 O 15 ' 18 15 14 13 14 VICTORIA STREET 0134-013 t6 32 TO2@1 VICTORIA S1 25 5 17 1 ' 31 15 1 5 55 6 7 8 9 it O 78 � 2 ' O 21 2 3 4 6 7 12 O 3 20 20 134023 134-012 4 O 18 26 23 27 5 19 18 17 15 14 26 6 ' O 26 24 22 19 27 13401 1 27 29 O7 B �9 27 ' 31 O5 O6 7O 8 O9 10 O Q y 5 134-051 134053 PIONEER PARK f 14 26 14 ' 18 26 20 19 18 28 25 23 22 21 20 29 15 F.. F- 17 16 W 24 17 16 W SPRUCE STREET 27 734 ost zs 134-062 17 14 N O1 5 6 10 11 7 134052 18 23 2 3 4 19 8 9 ' 9 10 72 7 - 20 16 25 26 24 ' 22 21 32 17 2fl 30 • — — — — — — — - - - - - -FIFFt+ - - _134051 .� _ � _ _ .gT - - - - - - - - - - - O O 6 O ' O 2 3 4134-01 8 29 ' O O 41 ' O 10 134121 7O g *13fl 11 n VGMA N STREET _ a2 13a os3 O O 13410 24 30 4 24 134131 O24 23 22 20 19 45 i 37 38 ; 24 p4 10 26 13409 OW13 411 F _ — �►- - FOURT# -• — -6;;RSE - - -- - -- - - - - - - EXHIBIT "B" Legal Description of the Property That portion of Lot 2,Block 38,City of San Bernardino,in the County of San Bernardino,as per plat recorded in Book 7 of Maps, Page 1, records of said County, described as follows: Parcel No. 1: Commencing at a point 139 feet west of the southeast corner of said Lot 2;thence running west 41 '/2 feet;thence north 150 feet to the north line of said Lot 2;thence east 41 %2 feet;thence south 150 feet to the point of beginning. Parcel No. 2: Beginning 180 `/2 feet west of the southeast corner of said Lot 2;thence north to the north line of said Lot;thence west 39 feet;thence south to the south line of said Lot;thence east 39 feet to the point of beginning. Parcel No. 3: Beginning at a point 219 `/z feet west of the southeast corner of said Lot 2; thence north 100 feet; thence west 39 feet,more or less,to a point 42 feet east of the west line of said Lot;thence south 100 feet to the south line of said Lot; thence east 39 feet to the point of beginning. Parcel No. 4: Commencing at the southwest corner of said Lot 2;thence north along the west line of said Lot, 100 feet;thence east 42 feet; thence south and parallel with the west line of said Lot 2 a distance of 100 feet, to the south line of said Lot; thence west along the south line to the point of beginning. Parcel No. 5: Commencing at the northwest corner of said Lot 2;thence running south along"G"Street,50 feet to a point 100 feet north of the southwest corner of said Lot 2; thence east 81 feet, more or less, to a point 219 %2 feet west of the east line of said Lot; thence north to the north line of said Lot; thence west along the north line of said Lot to place of beginning. 4851-7723-7761.5 24 EXHIBIT "C" Scope of the Development Improvements Development Improvements consist of the rehabilitation and reuse of the existing structure on the Property or the demolition of the existing structure and construction of a new structure on the Property in accordance with this OPA. If the existing structure is rehabilitated and reused,the Development Improvements include,without limitation,exterior building fagade renovations and improvements to the existing building,as well as on-site parking lot repairs and improvements and the removal of all existing temporary fencing or obstruction located on the Property,parking light improvements and on-site landscape improvements to the existing parking lot. All work associated with the exterior components of the Development Improvements shall be undertaken by the Property Owners in compliance with all applicable Laws an Codes(including,without limitation,all applicable building and development regulations of the City). The exterior components Development Improvements shall be completed by the Property Owners not more than two (2) years from the Effective Date of the OPA. The Development Improvements to the interior of the existing structure include various interior building demolition,repair and improvement work as necessary or appropriate to accommodate the reuse and reoccupancy of the building for retail use. The interior improvements shall be undertaken by the Property Owners in compliance with all applicable Laws and Codes (including, without limitation,all building and development regulations of the City). The interior improvements of the Development Improvements shall be completed by the Property Owners not more than two(2)years from the Effective Date of the OPA. If it is determined by the Property Owners that the existing structure is not salvageable and economically viable for reuse, the Property Owners shall cause the demolition of the existing structure and construction of a new structure with not less than 5,000 square feet of retail building space. The Property Owners shall obtain all necessary permits from and provide all necessary notifications to the appropriate City/County and/or Agency prior to the removal of asbestos and demolition of the existing structure compatible with the CR-2 Zoning and the Agency's Plan. Development Improvements include,without limitation,exterior signage,exterior building facades, on-site parking lot repairs and improvements, parking lot lighting improvements and on-site landscaping improvements to the parking lot. Further, interior improvements for the new structure shall be those necessary and appropriate to accommodate retail and user(s). All work associated with the development of a new structure,exterior site-improvements and interior structure improvements shall be undertaken by the Property Owners in compliance with all applicable Laws and Codes (including,without limitation,all applicable building and development regulations of the City). The new structure,exterior site improvements and interior structure improvements shall be completed not more than two (2) years from the Effective Date of the OPA. 4851-7723-7761.5 25 EXHIBIT "D" Form of Certificate of Completion 4851-7723-7761.5 26 WHEN RECORDED MAIL TO: ) (Space above line reserved for use by Recorder) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO CERTIFICATE OF COMPLETION The undersigned officer of the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") hereby certifies as follows: Section 1. The improvements required to be constructed in accordance with that certain 2006 Property Owner Participation Agreement (the "OPA") dated , by and between the Agency and Christopher Cheng-Chyh Ko,Bruce Cheng-Hsieh Ko,and Henry Cheng-Ju Ko, married men as their sole and separate property (the "Property Owners") on Assessor Parcel Number 0134-061-21,Assessor Parcel Number 0134-061-22,Assessor Parcel Number 0134-061-25 and Assessor Parcel Number 0134-061-3030(collectively, the"Property")more fully described in Exhibit"A" attached hereto and incorporated herein by this reference, have been completed in accordance with the terms, covenants, conditions, agreements and provisions of said OPA. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the OPA with respect to the obligations of the Property Owners, and their successors and assigns, to construct and develop the Development Improvements(as defined in the OPA),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 (as defined in the OPA) and its use and occupancy on the Property,whether or not said improvements are on the Property or on other property subject to the OPA, all as described in the OPA, and to otherwise comply with the Property Owners obligations under the OPA with respect to the Property and the dates for the beginning and completion of construction and completion of the Development Improvements thereon under the OPA;provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms,covenants and conditions of the OPA. Said OPA is an official record of the Agency and a copy of said OPA may be inspected in the office of the Secretary of the Agency located at 201 North "E" Street, Suite 301, San Bernardino, California, during regular business hours. 4851-7723-7761.5 27 Section 3. The Property to which this Certificate of Completion pertains is more fully described in Exhibit"A" attached hereto and incorporated herein by this reference. DATED AND ISSUED this day of 12006. Redevelopment Agency of the City of San Bernardino Maggie Pacheco Executive Director (ACKNOWLEDGMENT ATTACHED) 4851-7723-7761.5 28 EXHIBIT "A" That portion of Lot 2,Block 38,City of San Bernardino,in the County of San Bernardino,as per plat recorded in Book 7 of Maps, Page 1, records of said County, described as follows: Parcel No. 1: Commencing at a point 139 feet west of the southeast corner of said Lot 2;thence running west 41 '/2 feet;thence north 150 feet to the north line of said Lot 2;thence east 41 '/z feet;thence south 150 feet to the point of beginning. Parcel No. 2: Beginning 180 Meet west of the southeast corner of said Lot 2;thence north to the north line of said Lot;thence west 39 feet;thence south to the south line of said Lot;thence east 39 feet to the point of beginning. Parcel No. 3: Beginning at a point 219 % feet west of the southeast corner of said Lot 2; thence north 100 feet; thence west 39 feet,more or less,to a point 42 feet east of the west line of said Lot;thence south 100 feet to the south line of said Lot; thence east 39 feet to the point of beginning. Parcel No. 4: Commencing at the southwest corner of said Lot 2;thence north along the west line of said Lot, 100 feet; thence east 42 feet; thence south and parallel with the west line of said Lot 2 a distance of 100 feet, to the south line of said Lot; thence west along the south line to the point of beginning. Parcel No. 5: Commencing at the northwest corner of said Lot 2;thence running south along"G"Street,50 feet to a point 100 feet north of the southwest corner of said Lot 2; thence east 81 feet, more or less, to a point 219 %2 feet west of the east line of said Lot; thence north to the north line of said Lot; thence west along the north line of said Lot to place of beginning. 4851-7723-7761.5 29 EXHIBIT "E" Stipulated Judgment Form (On File With Agency Counsel) 4851-7723-7761.5 30 EXHIBIT "F" Notice of Memorandum of OPA 4851-7723-7761.5 31 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 Recording Fee Exempt Pursuant to Government Code Section 6103 Space Above Line for Use by Recorder MEMORANDUM OF OPA THIS MEMORANDUM OF OPA(the "Memorandum") is dated as of , 2006,by the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic(the"Agency"),and Christopher Cheng-Chyh Ko,Bruce Cheng-Hsieh Ko and Henry Cheng-Ju Ko (collectively, the "Property Owners"). 1. Covenant to Construct Retail Building Space on the Property. Upon the terms, covenants and conditions set forth in that certain Redevelopment Agency of the City of San Bernardino 2006 Property Owner Participation Agreement(the"OPA")the Property Owners agree to Construct (as that term is defined in the OPA) the Development Improvements (as that term is defined in the OPA)on or at that certain Property located in the City of San Bernardino,County of San Bernardino, California(and as more particularly described in Exhibit"A"attached hereto and incorporated hereby by this reference). 2. Incorporation of OPA. This Memorandum is for informational purposes only and nothing contained in it shall be deemed to in any way modify or otherwise affect any of the terms, covenants, conditions, provisions, agreements, representations and/or warranties(collectively, the "Covenants") made in the OPA. This Memorandum is subject to all of the Covenants made in the OPA, and in the event of any inconsistency between the Covenants of the OPA and of this Memorandum, the Covenants of the OPA shall prevail. 3. Counterparts. This Memorandum maybe executed in any number of counterparts, each of which shall constitute an original and all of which shall constitute one (1) and the same instrument, document and/or agreement.. 4. Covenants Running With the Land. The Covenants shall run with the land and be binding on the Property Owners, their successor and assigns (including, without limitation, all executors, administrators, trustees, personal representatives, devisees and/or heirs), and all successors in interest to the Property Owners until August 6, 2013, or the expiration date of the Redevelopment Plan for the Central City North Redevelopment Project Area,whichever date shall first occur. 4851-7723-7761.5 32 IN WITNESS WHEREOF,the undersigned have executed this Memorandum of OPA as of the day and year first written above. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Maggie Pacheco Executive Director Approved as to Form: Agency Counsel PROPERTY OWNERS Date: Christopher Cheng-Chyh Ko Date: Bruce Cheng-Hsieh Ko Date: Henry Cheng-Ju Ko STATE OF ) COUNTY OF ) On before me, , personally appeared personally known to me(or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the person(s),or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 4851-7723-7761.5 33 STATE OF ) COUNTY OF ) On before me, , personally appeared personally known to me(or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) STATE OF ) COUNTY OF ) On before me, , personally appeared personally known to me(or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) STATE OF ) COUNTY OF ) On before me, , personally appeared personally known to me(or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the person(s),or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 4851-7723-7761.5 34 EXHIBIT "A" That portion of Lot 2,Block 38,City of San Bernardino,in the County of San Bernardino,as perplat recorded in Book 7 of Maps, Page 1, records of said County, described as follows: Parcel No. 1: Commencing at a point 139 feet west of the southeast corner of said Lot 2;thence running west 41 %2 feet;thence north 150 feet to the north line of said Lot 2;thence east 41 %2 feet;thence south 150 feet to the point of beginning. Parcel No. 2: Beginning 180 '/2 feet west of the southeast corner of said Lot 2;thence north to the north line of said Lot;thence west 39 feet;thence south to the south line of said Lot;thence east 39 feet to the point of beginning. Parcel No. 3: Beginning at a point 219 '/2 feet west of the southeast corner of said Lot 2; thence north 100 feet; thence west 39 feet,more or less,to a point 42 feet east of the west line of said Lot;thence south 100 feet to the south line of said Lot; thence east 39 feet to the point of beginning. Parcel No. 4: Commencing at the southwest corner of said Lot 2;thence north along the west line of said Lot, 100 feet; thence east 42 feet; thence south and parallel with the west line of said Lot 2 a distance of 100 feet, to the south line of said Lot; thence west along the south line to the point of beginning. Parcel No. 5: Commencing at the northwest corner of said Lot 2;thence running south along"G"Street,50 feet to a point 100 feet north of the southwest corner of said Lot 2; thence east 81 feet, more or less, to a point 219 %2 feet west of the east line of said Lot; thence north to the north line of said Lot; thence west along the north line of said Lot to place of beginning. 4851-7723-7761.5 35