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ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Office of Business Development (G@~)1 REOUEST FOR COUNCIL ACTION FROM: TODD HOOKS, Manager Office of Business Development SUBJECT: GARNER HOLT PRODUCTIONS DATE: August 28, 1997 ----------------.-.------------------------.---------------------------------------------------------------------------------------------- Snlonsis of Previous CommissioolCouncillCommittee Action(s): The Redevelopment Committee recommended this item for approval on August 28, 1997. ----------------------------------------------------------------------------------------------------..-------------------------------------- Recommended Motion(s): (Mavor and Common Council) (Communitv Develonment Commission) MOTION A: That the Mayor and Common Council/Community Development Commission approve an assistance package not to exceed $150,000.00; and an Employment Linkage Program Agreement, in an amount not to exceed $25,000.00 to Garner Holt Productious, in accordance with the terms and conditions set forth in the Staff Report; and further, recommend that the Agency Administrator be authorized to execute an Owner Participation Agreement with Garner Holt Productions, Inc., and all other implementing documentations; fmally, that the Agency budget be increased accordingly. ~ ~ TODD HOO S, Manager Office of Business Development (Motions continued on next page. . . ) ------------------------------------------------------------------------------------------------------------------------------------------- Coutact Person(s): Todd Hooks Phone: 5081 Project Area(s): Southeast Indnstriai Park Ward(s): One Supporting Data Attached: Staff Reoort. Benefit Resolution. Owner Participation A oreement FUNDING REQUIREMENTS: Amount: $175.000.00 Bond ProceedsfCDBG Source: Budget Authority: Reouested ------------------------------------------------------------------------------------------------------------------------------------------- Council Notes: ------------------------------------------------------------------------------------------------------------------ TGH:d1eGARNER.CDC COMMISSION MEETIN~ENDA MEETING DA TE'PlI9III__ "'" Agenda Item Number: Rs3 . . . REQUEST FOR COUNCIUCOMMISSION ACTION RE: GARNER HOLT PRODUCTIONS AUlU" 28. 1997 MOTION B: Pale 2 (Communitv Develonment Commission) RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA. APPROVING AN AGREEMENT TO PROVIDE ASSISTANCE TO GARNER HOLT PRODUCTIONS. IN CONNECTION WITH THE REHABILITATION AND DEVELOPMENT OF MANUFACTURING FACILITIES. ------------------------------------------------------------------------------------------------------------.----- TGH:d1eGARNERCDC COMMISSION MEETING AGENDA MEETING DATE: 09102/1997 Agenda Item Number: f5'- '3 e e e ECONOMIC DEVELOPMENT AGENCY Office of Business Development STAFF REPORT ------------------------------------------------------------------------------------------------------------------ GARNER HOLT PRODUCTIONS. INC. Garner Holt Productions, is requesting Agency assistance for their expansion and relocation into a larger facility in San Bernardino. Currently located at 741 South Lugo Avenue, Garner Holt Productions intends to acquire the former Carrier air conditioning facility at 825 East Cooley Avenue, in order to expand their production capacity to meet the growing demand for their products. Garner Holt Productions designs, engineers, and manufactures animatronics, special; effects, and ride and show systems for use in theme parks, museums, resort casinos, movies, theme restaurants, and family entertainment centers. Some of their more well-known clients include, Knotts Berry Farm, MGM Grand Hotel, Universal Studios, Scripps Memorial Hospital, Volvo/General Motors, Michael Jackson, Primadonna Resorts, and F AO Schwarz. Recognized in the industry as an innovator and creator of unique and extraordinary animated robotics and magical special effects, Garner Holt Productions combines computers, mechanics, plastics, electronics, art, costuming, and other technologies to create the illusion of a living human or creature. The company is projecting year-end revenues of $4.5 million. Their 1998 annual revenue is expected to jump to $8 million with the help of three new major contracts. All revenue is generated from outside of San Bernardino, with a significant portion represented by international sales. Garner Holt generates utility user tax revenue of approximately $15,000 annually. Garner Holt Productions currently employs 25 people. Wages range from $7.00 to $ 15.00 per hour for the basic positions. The pay range is $17.00 to $25.00 per hour for supervisory and professional jobs. Based on future workload estimates, they project the need to hire an additional 35 to 50 employees over the next eighteen months. Garner Holt Productions proposes to acquire the property at 825 East Cooley for approximately $1 million. An additional $175,000 is estimated for necessary site and capital improvements to allow for their business relocation and expansion. This proposed project clearly meets the basic tier requirements of the City's Economic Development Strategic Plan as a "net importer of dollars". The acquisition of this property will not only increase production capacity, but will enable the company to become more effective in presenting an enhaneed image to such clients as Disney and other national and international corporations. The tremendous growth potential of Garner Holt Productions represents the fIrst wave of expansion by local technology-based business people who are pursuing the opportunities and advantages of doing business here. ------------------------------------------------------------------------------------------------------------------ TGH:d1eGARNER.CDC COMMISSION MEETING AGENDA MEETING DATE: 0910211997 Agenda Item Number: t 5-" -3 . . . COMMISSION STAFF REPORT. RE: GARNER HOLT PRODUCTIONS AUl(ust 26, 1997 pal(e 2 RECOMMENDATION Garner Holt Production (GHP\ 1. GHP to acquire the property at 825 East Cooley A venue and complete the improvements necessary for the relocation and expansion of their present San Bernardino operation. 2. GHP to make best efforts to attract and recruit San Bernardino residents for the new positions that are created as a result of the relocation/ expansion project. 3. If; at any time before completing eight (8) continuous years of operation following the execution of the Owner Participation Agreement to implement this action, GHP should cease operations within the City, All funds provided through the Economic Development Agency shall be repaid to the Agency. Economic Development Allency lEDA\ 1. Under an OP A with Garner Holt Productions, provide $150,000 as a reimbursement for facility improvement costs related to business relocation and expansion at 825 East Cooley A venue. Payments to be made as follows: A. Loan $150,000 at 5.5% interest with a five-year term loan balance to be repaid on a quarterly basis beginning five years after the date of the Certificate of Occupaney. Interest will accrue from the beginning of the repayment period. Further, $25,000 of the loan balance shall be forgiven based on the retention of the twenty-five existing employees. Additionally, at the beginning of the loan repayment period, the remaining balance shall be credited. $2,500 for each new job created over and above the current level of 25 employees up to 50 new jobs. 2. Enter into an Employment Linkage Program Agreement with GHP through SBET A, based on 25 new jobs created by the relocation/expansion project, with the Agency providing reimbursement at the end of the initiall2-month period of$I,OOO per new job ($25,000). ..--:-- ..~ TODD HOOKS, Manager Office of Business Development ------------------------------------------------------------------------------------------------------------------ TGH:dleGARNER.CDC COMMISSION MEETING AGENDA MEETING DATE: 09/0211997 Agenda Item Number: {'5 ~ 3 . . . SBEO/0001-163/0PA/GARNER HOLT 8/28/97 10:55 ew RECORDING REQUESTED BY: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND WHEN RECORDED RETURN TO: SABO & GREEN A PROFESSIONAL CORPORATION 23801 CALABASAS ROAD SUITE 1015 CALABASAS, CALIFORNIA 91302 (Space Above for Recorder's Use) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OWNER PARTICIPATION AGREEMENT (GARNER HOLT PROJECT) By and Between REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and GARNER HOLT PRODUCTIONS e e e RECITALS Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17. Section 18. Section 19. Section 20. Section 21. Section 22. Section 23. EXHIBIT "A" - EXHIBIT "B" - EXHIBIT "c" - EXHIBIT "D" - TABLE OF CONTENTS Incorporation of Basic Documents Public Purpose Agency Assistance Completion of the Project Participant's Responsibilities Certain Sales or Transfers of the Project Notice of Sales and Transfers Prevailing Wage/Other Laws Plans and Specifications . . . Remedies ... .... Obligation to Obtain Financing Notices .. .... Applicability of Laws and Litigation Costs Nondiscrimination and Related Covenants Certificate of Completion .... Successors and Assigns; Assignment Events of Default .... Entire Agreement; Amendment Severabili ty . . Section Headings Meaning of Terms Indemnification Effective Date of This Agreement; Execution; Term of Agreement Legal Description Scope of Development Description of Facilities Certificate of Completion - i - ~ 1 5 6 6 7 8 11 11 12 12 13 15 15 16 17 19 19 20 21 22 23 23 23 24 . . . REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OWNER PARTICIPATION AGREEMENT (GARNER HOLT PROJECT) This Owner Participation Agreement (the "Agreement") is entered into this day of 1997 by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic duly organized and existing pursuant to the Community Redevelopment Law of the State of California (hereinafter referred to as the "Agency") GARNER HOLT PRODUCTIONS, a ("Participant") and is entered into by the parties hereto with reference to the following facts: RECITALS WHEREAS, the Agency is authorized and empowered by the Community Redevelopment Law, Chapter 1 of Division 24 of the California Health and Safety Code, as amended (the "Law"), to permit owner participation in the redevelopment of real property; to enter into agreements for the acquisition, disposition and development of property or to otherwise assist in the redevelopment of real property within a redevelopment project area conforming with a redevelopment plan adopted for such area; to acquire real and personal property in redevelopment project areas; to receive consideration for the provision of redevelopment assistance; to - 1 - . make and execut!,!, contracts and other instruments necessary or convenient to the exercise of its powers; and to incur indebtedness to finance or refinance redevelopment projects; and WHEREAS, the Redevelopment Plan for the Southeast Industrial Redevelopment Project Area, has previously been approved and adopted by the City of San Bernardino, California (the "City"), pursuant to a duly adopted Ordinance (the "Redevelopment Plan"); and WHEREAS, Participant is currently engaged in the design, engineering and manufacturing of animatronics, special effects and e ride and show systems for use in theme parks, museums, resort casinos, movies, theme restaurants and family entertainment centers; and WHEREAS, the Participant intends to acquire certain real property with existing improvements generally located at 825 East Cooley Avenue within the project area subject to the Redevelopment Plan (the "Project Area"), as legally described in Exhibit "A" attached hereto and incorporated herein by reference (the "Prop~rty"); and . - 2 - . WHEREAS, pursuant to Health and Safety Code Section 33444.6 the Agency may, within a redevelopment project area, assist in the financing of facilities and capital equipment in connection with the development and/or rehabilitation of property used for industrial or manufacturing purposes; and WHEREAS, the Participant intends to relocate its existing operations located at 741 South Lugo Avenue in the City of San Bernardino to 825 East Cooley Avenue, San Bernardino and to install certain facilities and capital equipment (the "Project"), all as more fully described in the Scope of Development attached hereto as Exhibit "B" and incorporated herein by this reference; . and WHEREAS, the Participant has requested the Agency to exercise certain redevelopment powers, pursuant to the Community Redevelopment Law, and to assist the Participant with respect to undertaking the Project; and WHEREAS, it is proposed that the Agency will provide up to One Hundred Twenty Five Thousand Dollars ($125,000.00) of assistance with respect to the development of the proj ect by reimbursing to the Participant a portion of the costs of the acquisition, construction and installation of certain capital . - 3 - (C) ~?; e equipment and facilities (the "Facilities") as more fully described in Exhibit "C" attached hereto and incorporated herein by this reference; and WHEREAS, in addition to the reimbursement for costs related to the Facilities, the Agency shall reimburse Participant Twenty Five Thousand Dollars ($25,000.00) upon Participant's employment of 50 new full time permanent employees hired within 18 months of issuance of a Certificate of Completion; and WHEREAS, in addition to the foregoing Agency assistance, e the Agency shall cause to be made available up to Twenty-Five Thousand Dollars ($25,000) through the Employment Linkage Program Agreement with the San Bernardino Employment Training Agency ("SBETA") . Subj ect to the provisions of a final negotiated Agreement, the Employment Linkage Program will provide One Thousand Dollars ($1,000) per employee hired through SBETA's contract with Participant after said employee has been retained by Participant for at least one (1) year after initiation of the program based upon the assumption that the Project will produce at least 25 new jobs in addition to the 25 positions now existing; and e - 4 - . WHEREAS,.~t is currently anticipated that the Project, upon completion, shall generate tax revenues for the City and will create employment opportunities for approximately twenty-five (25) persons; and WHEREAS, the development of the Project will benefit the Project Area by eliminating a blighted condition within the Project Area and will facilitate development of the Property in a manner consistent with the Redevelopment Plan and help encourage economic growth and revitalization within the Project Area; and WHEREAS, the Participant has demonstrated to the . satisfaction of the Agency its financial ability to undertake the completion of the Project. NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: Section 1. Incoroorati on of Basic Documents. The Redevelopment Plan is by reference incorporated herein and made a part of this Agreement with the same force and effect as though set forth in full herein; provided, however, that any amendments to the Redevelopment Plan after the date of this Agreement shall not affect any rights granted hereby to the Participant, except as may otherwise be required by law. All terms not otherwise defined . - 5 - . herein shall have the same meaning as used in the Community Redevelopment Law, Health and Safety Code Section 33000, ~ ~. (the "Law"). The recitals are by reference incorporated herein and made a part of this Agreement. Section 2. Public Puroose. The Agency and the Participant agree that the completion of the proj ect shall be undertaken for the common benefit of the parties hereto and the residents of the City in order to eliminate blight within the Project Area. The Agency and the Participant further agree that the development of the Project shall not only eliminate blight on the Property, but will also assist in creating an environment which . will encourage and facilitate the elimination of blight within the Project Area. Therefore, the completion of the Project will be of benefit to the Project Area, and will help improve, upgrade and revitalize, both economically and physically, a portion of the City located within the Project Area that manifests itself as a blighted area. Section 3. Agencv Assistance. The Agency hereby agrees that in order to assist the Participant in the development of the Project, the Agency shall, upon the fulfillment of the conditions and obligations of the Participant hereunder, provide the Agency assistance through the reimbursement to the Participant of its . - 6 - ~ costs of causing the acquisition, installation and construction of the Facilities as more fully described in Exhibit "C". The Agency shall provide reimbursement in an amount not to exceed One Hundred Twenty-Five Thousand Dollars ($125,000.00) within thirty (30) days of completion of the acquisition and installation of the Facilities, as evidenced by the submission of appropriate invoices and documentation approved by the Agency. After exhaustion of said $125,000 amount, the Agency shall also provide reimbursement in the amount of Fifty Thousand Dollars ($50,000.00) for Facilities not already reimbursed by the foregoing One Hundred Twenty Five Thousand Dollar ($125,000.00) amount as ~ evidenced by the submission of appropriate invoices and documentation approved by the Agency provided that Participant has created 50 new full-time permanent employment positions in addition to the existing 25 employment positions on the last day of the eighteenth (18) month following the Agency's issuance of a Certificate of Completion pursuant to Section 15. Notwithstanding the foregoing, should Participant fail to maintain said 50 full- time permanent positions for one full year after said 18 month period, Participant shall immediately reimburse said Fifty Thousand Dollars ($50,000.00) of reimbursement moneys to Agency. Participant shall document the existence of said employment positions to the satisfaction of the Agency. ~ - 7 - e Section .4.. Comoletion of the proi ect. Except as otherwise provided herein, the Participant, solely at its own cost, shall undertake or cause to be undertaken the acquisition, construction and installation of all private improvements comprising the Project. The Participant shall pay any and all fees and assessments that may be levied against the Proj ect or the Property or which may be required in connection with undertaking the proj ect. The Participant shall commence development of the Project prior to and shall substantially complete such construction prior to subject to any extensions by mutual written consent of the parties hereto. e Section 5. Participant's Resoonsibilities. A substantial portion of the consideration which supports the agreement as herein contained of the Agency to assist in the redevelopment of the Property is the agreement of the Participant to complete the Project as set forth in the Scope of Development attached hereto as Exhibit "B", including the acquisition and installation of the Facilities, and cause the commencement of manufacturing operations prior to Certificate , all as evidenced by the issuance of a of Completion in the form attached hereto as subject to any extensions as mutually agreed upon by Exhibit "0", the Parties hereto. e - 8 - 't5 '-3 . However, the foregoing responsibility of the Participant shall be subject to the following limitations: By reason of acts of God; strikes, lockouts or other industrial disturbances; delays in obtaining materials or labor which are through no fault of Participant, shortages of materials or labor or acts of public enemies; orders of any kind of the Government of the United States or of the state of California or any department, agency, political subdivision, court or official of any of them, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornados; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or . accident to machinery; partial or entire failure of utilities; or any cause or event not reasonably wi thin the control of the Participant, the Participant is unable in whole or in part to carry out anyone or more of its agreements or obligations contained in this Agreement, the Participant shall, for the time of said delay or such longer period as shall be agreed in writing by the Agency, not be deemed in default pursuant to Section 17 hereof by reason of not carrying out said agreement or agreements or performing said obligation or obligations during the continuance of such inability. The Participant shall make reasonable efforts to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its agreements; provided, that the settlement of strikes, . - 9 - 4It lockouts and other industrial disturbances shall be entirely within the discretion of the Participant, and the Participant shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Participant unfavorable to the Participant. The completion and operation of the Project by the Participant shall substantially assist the Agency to implement the Redevelopment Plan. Therefore, the Participant will take all reasonable steps to enable the Project, including the Facilities, to be completed prior to 4It For the purposes hereof, completion of the Project shall mean the date on which the Agency approves the issuance of a Certificate of Completion provided that such approval shall not be unreasonably withheld and which Certificate of Completion shall be substantially in the form attached hereto as Exhibit "D", certifying that the construction of the Project, including the installation of any operating machinery and equipment has been completed and that the manufacturing operations as contemplated by the construction of the Project by the Participant have commenced. e - 10 - ~ ParticippDt shall maintain the Project as a manufacturing plant for the manufacture of furniture products for a period of at least eight (8) years from the execution of this Agreement. Should Participant cease said manufacturing operations or substantially diminish said operations at any time within said eight (8) year period as determined by Agency in its sole discretion, Participant shall reimburse Agency the full amount of any Agency Assistance and Employment Linkage Program funds submitted to Participant. Participant shall utilize its best efforts to attract and recruit residents of the City of San Bernardino for the 50 anticipated new employment positions created as a result of the ~ increased manufacturing capacity created by the Project. Notwithstanding the foregoing, the Participant shall use its best efforts to attract and recruit residents of the Project Area or the City of San Bernardino for any available employment positions at all times. Section 6. Certain Sales or Transfers of the proj ect. The Participant hereby covenants and agrees not to sell, transfer or otherwise dispose of the Property or the Project located thereon prior to the completion of the Project and for a period of eight (8) years therefrom without obtaining the prior express written consent of the Agency. ~ - 11 - . Section 7. Notice of Sales and Transfers. Notwithstanding the foregoing, and for the term of this Agreement, the Participant agrees to notify the Agency in writing of any sales or transfers of any portion of the Property or the Project prior to the consummation of such sale and/or transfer, which notice shall contain the name, address and formal description of the entity so acquiring interests in the Project or the Property. Section 8. Prevailing Wage/Other Laws. The Participant shall comply with any prevailing wage requirements and any other laws, regulations or policies, as applicable, in connection with the installation of the Facilities and the construction of the . Project. Section 9. Plans and Specifications. The Participant agrees that the plans and specifications to be prepared for the acquisi tion, construction and installation of all improvements comprising the Proj ect shall be submitted to the appropriate department of the City for approval prior to commencement of construction; provided, however, that said plans and specifications shall be in all respects in accordance and in conformity with this Agreement, the Redevelopment Plan and all appropriate plans or building standards of the City. In the event said plans and specifications are not reasonably acceptable to such department of . - 12 - . the City and in compliance with this Agreement, then, in such event, the Participant agrees to amend or modify said plans and specifications or to submit such further or additional plans and specifications as may reasonably be required by the appropriate department of the City. The plans and specifications approved by the appropriate department of the City shall not be amended or modified in any material respect subsequent to such date of approval without the prior written approval of either or both the Ci ty or the Agency, as applicable. The Agency shall use best efforts to assure that the approvals set forth in this Section are not unreasonably withheld or delayed. . Section 10. Remedies. In the event the Participant breaches any of its covenants or obligations under this Agreement, including the obligation to remain in business on the Property for a period of eight (8) years from the date of completion of the Project, all subject to the acts of force majeure as provided in Section 5 hereof, the Participant shall, at the option of the Agency and upon demand by the Agency to the Participant, immediately reimburse to the Agency the amount of the Agency Assistance provided to the Participant and any moneys provided to Participant under the Employment Linkage Program. As a further and cumulative remedy, the Participant, for itself, its legal representatives, successors and assigns, agrees that the Agency, . - 13 - (Jc, -';J . its successors and assigns, shall have the right and power to institute and prosecute any proceeding at law or in equity to enforce any covenants and agreements herein contained and to enjoin the threatened or attempted violation thereof by the Participant, its legal representatives, successors, tenants and assigns and/or to collect damages from the aforesaid, whomsoever of which may violate said covenants and agreements; and in addition, the Participant for itself, legal representatives, successors and assigns does hereby grant the Agency such right and power to institute and prosecute such proceedings. The remedies for the benefit of the Agency set forth in . this Section 10 shall be in addition to any and all other remedies available to the Agency under this Agreement or as a matter of law. The parties acknowledge and agree that the Agency may exercise any and all legal and equitable remedies available to the Agency under the laws of the State of California to enable the Agency to exercise the rights of the Agency hereunder and to enforce the provisions of this Agreement including, but not limited to, those which are contained in this Section 10. The Participant further agrees to pay upon written demand of the Agency all costs, fees and expenses of the Agency including, I. but not limited to, reasonable attorneys' fees, court costs and - 14 - ? /' r ( '"' .,.{ ~ costs attributable to Agency Staff time, incurred in connection with any enforcement by the Agency of the provisions of this Section 10 or the seeking of any remedies legally available to the Agency related to this Agreement. In the event the Agency breaches any of its covenants or obligations under this Agreement, the Participant may exercise all legal and equitable remedies available to the Participant under the laws of the State of California and the Participant shall be entitled to reimbursement of reasonable attorney fees, court costs and related costs. ~ Section 11. Obligation to Obtain Financina. The Agency shall have no obligation or commitment to provide any form of financial assistance to the Participant in connection with the Property or the completion of the Project, except as is specifically provided in this Agreement. Section 12. Notices. All notices and demands of any kind which any party hereto may be required to serve upon any other party under the terms of this Agreement shall be served in writing on such other party by personal service or by leaving a copy of such notice or demand at the address hereinafter set forth, whereupon service shall be deemed complete and notices and demands e - 15 - e e e shall be deemed to have been received on the date of such personal service; or by mailing a copy thereof by certified or registered mail, postage prepaid, airmail if the address is outside the State in which the same is mailed, with return receipt requested, addressed as follows: If to the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Third Floor San Bernardino, California 92401-1507 Attention: Director with copy to: Sabo & Green A Professional Corporation 23801 Calabasas Road., Ste. 1015 Calabasas, CA 91302 Attention: Timothy J. Sabo If to the Participant: Garner Holt Productions Attention: In case of service by mail, service shall be deemed complete and notices and demands shall be deemed to have been received at the expiration of the third calendar day after the date of mailing, notwithstanding any other date for receipt set forth on any return receipt or the failure of any party to receive a return receipt. The addresses to which notices and demands may be delivered or sent may be changed from time to time by service of notice as hereinabove provided by any party upon the other party. - 16 - is-3 . Section 13. Aoo1icability of Laws and Litiaation Costs. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Should any action be brought in any court of competent jurisdiction, the prevailing party in such action shall be entitled to reimbursement by the other party for all reasonable attorney's fees, court costs and other costs related to such litigation. Section 14. Nondiscrimination and Related Covenants. The Participant agrees that, in addition to the other provisions set forth in this Agreement, every conveyance of the Property, in whole or in part to the extent as permitted pursuant to this Agreement, . shall, in addition to any other covenants, contain covenants on the part of the Participant, for itself, its successors and assigns of the Property and which covenants shall be covenants running with the land and shall bind the Participant, its successors and assigns and all persons claiming under or through it to effectuate the following: (a) That the work of the redevelopment of the Property or part or parts thereof as in this Agreement provided shall be implemented as intended by this Agreement. . - 17 - r . (b) That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises to be conveyed, nor shall the Participant or any grantees or any persons claiming under or through the Participant establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises to be conveyed. (c) That, after the satisfactory completion of the Project . made necessary by this Agreement, the Property shall be devoted to the uses specified in this Agreement and consistent with the Redevelopment Plan and shall not, in whole or in part, be devoted to any other use or used for any other purposes. (d) That such agreements and covenants shall run with the land, and shall inure to the benefit of and be enforceable by the Agency, its successors and assigns. Furthermore, it is intended and agreed that the covenants contained in subsection (b) of this Section 14 shall remain in effect without limitation as to time. . - 18 - . (el Such agreements and covenants shall run in favor of the Agency for the entire period during which such agreements shall remain in force and effect without regard to whether the Agency has at any time been, remains, or is an owner of any land or interest therein to which these covenants relate. In the event of any breach, the Agency shall have the right to exercise all the rights and remedies available at law or in equity to enforce the curing of such breach. (f) That for the duration of the Redevelopment Plan no portion of the Project or the Property shall be sold or used by any tax-exempt entity for the duration of the Redevelopment Plan ~ without written consent of the Agency and the Participant shall not appeal any assessed valuation established by the County for the purposes of the levy of real property taxes. Section 15. Certificate of ComDletion. The Agency, its successors and assigns agree that upon the full compliance by the Participant with the terms of this Agreement which pertain to the construction of the Project upon the Property, and following completion as per City code of the Project, the receipt by the Agency of a written request from the Participant for a Certificate of Completion and notification that the Property is ready for occupancy, the Agency shall provide promptly and furnish to the ~ - 19 - 4It Participant a Ce~~ificate of Completion, substantially in the form as attached hereto as Exhibit "0", certifying that the construction and installation of the Project, as required pursuant to this Agreement, has been completed as per City code to the satisfaction of the Agency, its successors and assigns. The Director may execute such Certificate of Completion on behalf of the Agency. Upon issuance of the Certificate of Completion by the Agency, each of the covenants, restrictions, warranties and conditions contained in Section 4 only shall be deemed satisfied and shall terminate. Section 16. Successors and Assians: Assianment. The provisions of this Agreement shall be binding upon and inure to the 4It benefit of the heirs, executors, administrators, successors and assigns of the parties hereto. The Participant shall not assign, transfer or in any manner hypothecate any or all of the rights and obligations of the Participant under this Agreement or with respect to the Property without the prior written approval and consent of the Agency. Section 17. Events of Default. "Event of Default" wherever used in this Section, means anyone of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary, or be effectual by operation of law pursuant to any judgment, decree or order of any court or 4It - 20 - . any order, rule or regulation of any administrative or governmental body superior to the Agency) : (a) Default in the performance, or breach, of any provision of this Agreement by the Participant, and continuance of such Default or breach for a period of thirty (30) calendar days after the Agency has given notice as specified in Section 12, and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (b) The entry of a decree or order by a court having jurisdiction in the premises adjudging the Participant bankrupt or . insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adj ustment or composition of or in respect of the Participant under the Federal Bankruptcy Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator, or other similar official of the Participant or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of thirty (30) calendar days; or (c) The institution by the Participant of proceedings to be adjudged bankrupt or insolvent, or the consent by it to the . - 21 - {S~3 4It institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other applicable federal or state law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Participant or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Participant in furtherance of any such action. 4It Section 18. Entire Aareement: Amendment. Except as otherwise expressly provided herein, this Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior and contemporary agreements and understandings. The parties intend this Agreement to be the final expression of their agreement with respect to the terms hereof and a complete and exclusive statement of such terms. No modification, amendment or waiver of any term hereof shall be binding unless executed in writing by any party or parties to be bound thereby. 4It - 22 - e This Agreement may be amended from time-to-time as deemed necessary by the parties hereto upon written instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by both the Participant and the Agency after the same have been duly approved and authorized for execution. Section 19. Severability. Each and every section of this Agreement is, and shall be construed to be, a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall to any extent be e invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. Section 20. Section Headin9s. The headings of the several sections of this Agreement are inserted solely for convenience of reference, and are not a part of and are not intended to govern, limit or aid in the construction of any term or provision hereof. e - 23 - . . . Section 21. Meaning of Terms. Where the context so requires, the use of the masculine gender shall include the feminine and the neuter gender, and the singular shall include the plural and vice versa. Section 22. Indemnification. It is understood and agreed that no official, employee or agent of the Agency shall be personally liable to the Participant or to anyone else as to any obligation or obligations under the terms of this Agreement. The Participant shall save the Agency, and all parties in privity to it, harmless from all claims, demands, causes of action, expenses, and liability of whatsoever kind or nature which may arise out of, because of, concerning, or incident to the performance of the Participant under this Agreement, including all court actions, costs and expenses and attorney's fees relative to the Agency being a party to this Agreement as may be initiated by the Participant or any third party for any reason whatsoever, except in the event that the Agency has caused the default either through willful misconduct or negligence, including any claims for damages or with respect to personal injuries on the Property. Section 23. Effective Date of This A9reement: Execution; Term of Aareement. This Agreement shall not be effective for any purpose whatsoever or binding and enforceable upon the Agency until - 24 - . . . such time as thi~ ~greement has been approved pursuant to official action of the Agency in accordance with a duly adopted and approved Agency resolution authorizing the Chairman and Secretary of the Agency to execute this Agreement on behalf of the Agency. This Agreement may be executed in original counterparts, each of which shall be deemed to be an original for all purposes, and such counterparts shall constitute one and the same instrument. This Agreement shall remain in full force and effect until all of the obligations hereunder have been satisfied in full. - 25 - e e e .-..'--'.-;"-.'~""""7 IN WITNES~ WHEREOF, the parties hereto have executed this Agreement on the year and day first hereinabove written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Timothy C. Steinhaus, Agency Administrator By: "PARTICIPANT" GARNER HOLT PRODUCTIONS a BY: SBEO/OOOl-163/0PA/GARNER HOLT OPA - 26 - r - i'"';''''' . EXHIBIT "A" LEGAL DESCRIPTION EXHIBIT "B" SCOPE OF DEVELOPMENT . EXHIBIT "C" DESCRIPTION OF FACILITIES . A - 1 . . . '''-.'''''-'.'''''!",:,", EXHIBIT "0" CERTIFICATION OF COMPLETION When Recorded, Mail to: CERTIFICATE OF COMPLETION I, , Director of the Redevelopment Agency of the City of San Bernardino hereby certify as follows: Section 1. The facilities [or that certain portion of the facilities described as the "Facilities" required to be constructed in.accordance with that certain Owner Participation Agreement (the "Agreement") dated 1997, by and between the Redevelopment Agency of the City of San Bernardino and Garner Holt Productions, a (the "Participant") on that certain real property more fully described in Exhibit "A" attached hereto and incorporated herein by this reference have been completed in accordance with the provisions of said Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction' of the agreements and covenants contained in the Agreement with respect to D - 1 ;;' 2- f 5- " e e . ;..&.....'"..!. the obligations of the Participant, and its successors and assigns, to construct the improvements and install the Facilities and the dates for the beginning and completion thereof; provided, however, that the Agency, may enter the Property for purposes of enforcing any covenant of the Agreement and shall have the right to offset such expenditures against sums otherwise due to the Participant under the Agreement. Said Agreement is an official record of the Redevelopment Agency of the City of San Bernardino and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency of the City of San Bernardino located at 201 North "E" Street, Third Floor, San Bernardino, California 92401-1507 during regular business hours. Section 3. The real property to which this Certificate of Completion pertains is more fully described in Exhibit "A" attached hereto. DATED AND ISSUED this day of 199_ Director of the Redevelopment Agency of the City of San Bernardino (SEAL) ATTEST: D - 2 fe" .~