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HomeMy WebLinkAboutR34-Economic Development Agency r CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY FROM: Maggie Pacheco Executive Director SUBJECT: Redevelopment Cooperation Agreement with Inland Valley Development Agency: Owner Participation Agreement with ICO Real Estate Group (dba Perris Campus Plaza, LLC, Project) and Findings of Fact related to Health and Safety Code Section 33445 (Tippecanoe Avenue-IVDA Redevelopment Project Area) DATE: May 29, 2007 SvnoDsis of Previous Commission/Council/Committee Action(s): On December 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): (Mavor and Common Council) A: Resolution of the Mayor and Conunon Council of the City of San Bernardino making certain findings and determinations and consenting to payments for public improvements by the Redevelopment Agency of the City of San Bernardino ("Agency") related to the property at 678 South Tippecanoe A venue ("Site") pursuant to the 2007 Property Owner Participation Agreement by and between the Agency and Perris Campus Plaza, LLC, Project (IVDA Redevelopment Project Area) (Communitv Develooment Commission) B: 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 (1) a Redevelopment Cooperation Agreement by and between the Agency and Inland Valley Development Agency ("IVDA") and (2) a 2007 Property Owuer Participation Agreement ("OP A") by and between the Agency and Perris Campus Plaza, LLC, Project for the development of 678 South Tippeeanoe Avenue (the "Site") (IVDA Redevelopment Project Area) Contact Person(s): Maggie Pacheco Phone: (909) 663-1044 All Project Area(s): Supporting Data Attached: N/A Ward(s): o Staff Report 0 Resolution(s) Ii'! Agreement(s)/Contract(s) Ii'! Map(s) 0 Letter(s) FUNDING REQUIREMENTS: Amount: $ 28,500 Per Annum Source: Tax Increment Budget Authority: 2007-2008 Anoual Budget SIGNATURE: Maggie Pacheco, Executiv 5L- Fiscal Review: ,/J:J 0 GUa C'~J~j ~ if Barbara Lindseth, Administrative Services Director Commission/Council Notes: P:\Agenda.\Comm Dev Commission\CDC 2001\06-04-07 Perris Campus Plaza - Tippecanoe OrA Projecl SR_doc ,;? .g if (P/1-/6f ;ENDA 04/2007 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT REDEVELOPMENT COOPERATION AGREEMENT WITH INLAND VALLEY DEVELOPMENT AGENCY; OWNER PARTICIPATION AGREEMENT WITH ICO REAL ESTATE GROUP (DBA PERRIS CAMPUS PLAZA, LLC, PROJECT) AND FINDINGS OF FACT RELATED TO HEALTH AND SAFETY CODE SECTION 33445 (TIPPECANOE A VENUE-IVDA REDEVELOPMENT PROJECT AREA) BACKGROUND: Over 80% of the IVDA Redevelopment Project Area ("Project Area") is located within the City of San Bernardino (the "City") and because of staffing limitations and the IVDA's emphasis of concentrating their redevelopment powers on the civilian reuse of the former Norton Air Force Base ("NAFB"), there is no staff dedicated by the IVDA to areas outside of the NAFB. Redevelopment of adjacent NAFB areas is equally important to the NAFB reuse and is absolutely critical to the successful revitalization of member cities. For this reason, the transfer or delegation of redevelopment authority by the IVDA to member jurisdictions, such as the City, through the Redevelopment Agency of the City of San Bernardino (the "Agency"), to promote and expedite specific NAFB redevelopment activities to eliminate blight and promote sustainable development within the Project Area resulted in the IVDA Board adopting IVDA Resolution No. 2003-11 on October 8, 2003. This Resolution allows each member agency of the IVDA, including the City and the Agency, to undertake development projects located within specified areas of the Project Area. This policy allows each member agency of the IVDA, at its discretion, to provide incentives and assistance to any developer, which the member agency wishes to support, without having to seek formal IVDA Board approval on each project. The Executive Director of the IVDA has been authorized to approve and execute all project agreements requested by the member agency pursuant to a generic form of Redevelopment Cooperation Agreement. This Redevelopment Cooperation Agreement allows for the member agency to receive the IVDA portion of the tax increment revenues (net tax increment above an established base year amount and net of all pass-throughs and Housing Fund deposits) accruing from a specific project. In certain circumstances, member agencies are also able to utilize the IVDA's powers of condemnation to the extent allowed under the IVDA Redevelopment Plan. However, no condemnation powers are necessary to assist the Project as described in this Staff Report. Other examples of similar Redevelopment Cooperation Agreements can be found at the HUB Project near Hospitality Lane, which was undertaken by the Agency under similar terms of this arrangement but without the transfer of any tax increment revenues, and in another Redevelopment Cooperation Agreement between the Agency and the IVDA for the redevelopment of the North Arden Guthrie Area. In this later Redevelopment Cooperation Agreement for the North Arden Guthrie Area, the Agency will retain the net tax increment revenues. CURRENT ISSUE: Mr. Jian Torkan, ICO Real Estate Group (dba Perris Campus Plaza, LLC, Project) (the "Developer"), has commenced the Perris Campus Plaza project at 678 South Tippecanoe Avenue in the Project Area ("Site"). The project consists of 3 buildings of 64,800 square feet; 18,000 square feet and 25,000 P:\AgcndasIComm Dev Commission\CDC 2007\06-04-07 Pcrris Campus Plaza - Tippecanoe OPA Project SRdoc COMMISSION MEETING AGENDA Meeting Date: 06/0412007 Agenda Item Nnmber: 1-- Economic Development Agency Staff Report Perris Campus Plaza, LLC, Project -Tippecanoe OPA Project Page 2 square feet, respectively, and will be leased to the Community Action Partnership of San Bernardino County; the County of San Bernardino Weatherization Department, and to the San Bernardino County Preschool Services Department ("Project"). The largest building will be utilized as a distribution center for the food bank of the Community Action Partnership of the County of San Bernardino, a mandated non-profit responsible for the distribution of food to the underprivileged of the City, the County of San Bernardino and the County of San Bernardino Weatherization Department are responsible for providing energy efficient refrigerators and air conditioning units to needy families in exchange for energy inefficient appliances. The 2 smaller buildings will be used as administrative offices for the tenants. The County will employ approximately 200 people and owing to the public services nature of the tenants, the Developer has signed below market rate leases. The Developer is well known to the Agency and owns several properties in the City, including 2 shopping centers, one at Highland Avenue and Del Rosa Avenue and one on Highland Avenue and Elmwood Road, as well as an 80,000 square foot office building on Commercenter Drive. In addition, the Developer is currently developing a 45,000 square foot office building at 4th Street and Waterman Avenue for the County of San Bernardino Transitional Assistance Department ("TAD"). The Project is located north of Central Avenue and west side of Tippecanoe Avenue which is the main thoroughfare from the 1-10 Freeway to the San Bernardino International Airport ("Airport") and is in proximity to all the ancillary development around the Airport such as the new Stater Bros. Headquarters, Mattei's and Pep Boys. With the construction of the new Wells Fargo/Opus project to the south, Tippecanoe Avenue becomes even more critical as one of the City's main arterials. As part of the City's development review process, the City has imposed additional and unforeseen public right- of-way requirements on the Project, including the installation of an upgraded sewer system, which has also occasioned substantial additional asphalt paving and concrete work to the street, sidewalks and gutters in the amount of $430,000. In the Staff Report to the Redevelopment Committee dated December 7, 2006, it was reported that the majority of the work consisted of an installation of a storm basin, this has, however, been replaced with an upgrade to the area sewer system instead, and the maximum amount of the reimbursables for the expenditures have remained the same. Due to these unexpected costs, which are beyond the financial capability of the Developer, the Developer has requested that the Agency assist in off-setting these public improvement costs. Accordingly, the Agency, the IVDA Staff and the Developer have discussed entering into a Redevelopment Cooperation Agreement ("Agreement") and 2007 Property Owner Participation Agreement ("OPA") to facilitate the development of the Project as follows: I. The attached Agreement between the Agency and the IVDA will provide for the IVDA to transfer authority to the Agency to undertake the implementation of the Project with the Developer, and to allow the Agency to receive any net tax increment generated specifically from the Project pursuant to the Agreement; 2. The attached OP A between the Agency and the Developer recognizes that the Developer has incurred all expenses related to the development of the Project. The Agency will reimburse the Developer over a period of years from the new net tax increment revenues that it will receive from the IVDA related to the completed Project. The Developer estimates that the Project will increase the value of the Site by $10 million; therefore, it is proposed that the reimbursement to _______________________________________________________________________________..______________________________d_~..___________________________________~______.________________________________________________ P:\Agcndas\Comm Dev CommissionlCDC 2007\06.04-07 Perri, Campus Plaza. Tippecanoe OPA Project SR.doc COMMISSION MEETING AGENDA Meeting Date: 06/0412007 Agenda Item Nnmber: Economic Development Agency Staff Report Perris Campus Plaza, LLC, Project - Tippecanoe OP A Project Page 3 the Developer does not exceed more than 30% of the I % property tax generated from the Project until such time as the original capital cost of not to exceed $427,000 is reached. This is anticipated to occur in about 14 years, and to the extent further Agency debt can be substantiated, the difference between the net tax increment realized from the Project and the amount paid to the Developer will be retained by the Agency to cover legal and administrative expenses; however, the funds pledged to the Developer under the OP A will come solely from the new tax increment revenues to be transferred by the IVDA, pursuant to the Agreement, and not from any other funds or revenues of the Agency; 3. As such, pursuant to Health and Safety Code Section 33455, both the Agency and the Mayor and Common Council of the City of San Bernardino ("Council") are required to make certain findings and determinations related to the use of tax increment revenues from the Project Area for the construction of publicly owned improvements. In addition, said Section requires the legislative body, the Council, to consent to the payments to be paid by the Agency to the Developer. Therefore, the findings of fact regarding the installation and construction of the publicly owned improvements are as follows: 1) The improvements are to the benefit of the Project Area as adopted by the IVDA; 2) No other reasonable means of financing the improvements are available to the community; 3) The cost of the improvements will assist in the elimination of one or more blighting conditions within the Project Area; and 4) The payment for such improvements is consistent with the Redevelopment/Implementation Plan of the IVDA. ENVIRONMENTAL IMPACT: The Planning Commission adopted a Mitigated Negative Declaration for this Project based upon findings offact on December 6,2005. FISCAL IMPACT: See items 1 and 2 above. RECOMMENDATION: That the Mayor and Common Council and the Community Development Commission adopt the attached Resolutions. ..,g~~,.tl~!...., ~_______________.._________________u________________.________________.________________._._________________________----------------- ------------------------------------------------------------------------- P:\Agclldas\Comm Dev Commi"sion\CDC 2007\06-04-07 Perris Campus Plaza - Tippecanoe OPA Project SR.doc COMMISSION MEETING AGENDA Meeting Date: 06/04/2007 Agenda Item Number: 1 2 3 4 5 6 7 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO MAKING CERTAIN FINDINGS AND DETERMINATIONS AND CONSENTING TO PAYMENTS FOR PUBLIC IMPROVEMENTS BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") RELATED TO THE PROPERTY AT 678 SOUTH TIPPECANOE A VENUE ("SITE") PURSUANT TO THE 2007 PROPERTY OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE AGENCY AND PERRIS CAMPUS PLAZA, LLC, PROJECT (IVDA REDEVELOPMENT PROJECT AREA) 8 WHEREAS, the City of San Bernardino (the "City"), is a municipal corporation and charte 9 city, duly organized and existing pursuant to the provisions of the Constitution of the State 0 10 California; and 11 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is 12 public body, corporate and politic, existing under the laws of the State of California, Health an 13 Safety Code 33000, et seq., and is charged with the mission of redeveloping blighted an 14 underutilized land; and 15 WHEREAS, a 2007 Property Owner Participation Agreement (the "OPA") between th 16 Agency and Perris Campus Plaza, LLC, Project, a California limited liability company (th 17 "Developer"), will use the Site in the development of 3 separate buildings for a total 0 18 approximately 108,000 square feet in size, respectively, to be leased to the Community Actio 19 Partnership of the County of San Bernardino as a food bank distribution center, the County of Sa 20 Bernardino Weatherization Department and the County of San Bernardino Preschool Service 21 Department; and 22 WHEREAS, the approved Project has been conditioned with unfunded, unanticipate 23 requirements by the City related to improvements to the public right-of-way on Tippecanoe Avenue 24 including the installation of a new sewer line occasioning substantial additional asphalt paving an 25 concrete work in the amount of$430,000; and 26 WHEREAS, pursuant to Health and Safety Code Section 33445, the Communit 27 Development Commission of the City of San Bernardino (the "Commission") must make certai 28 findings and the Agency must obtain the consent of the Mayor and Common Council of the City 0 P:\Agendas\Resolutions\Resolutions\2007\06-04-07 Perris Campus Plaza MCC Reso.dor 1 San Bernardino (the "Council") and the Council must make certain findings prior to the Agenc 2 paying for the costs of installation and construction of certain improvements which are publicl 3 owned. 4 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 5 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 6 FOLLOWS: 7 Section 1. On June 4, 2007, the Council and the Commission, as the governing board of 8 the Agency, at their respective meetings, received testimony relating to the funding of public 9 improvements and the development thereof, pursuant to the OP A. The minutes of the City Clerk 10 for the June 4, 2007 meeting of the Council shall include a record of all communication and 11 testimony submitted to the Council. 12 Section 2. Pursuant to Health and Safety Code Section 33445, the Council hereby 13 makes the following findings and determinations concerning the installation and construction of 14 improvements which are publicly owned and determines: (I) that the improvements are of benefit 15 to the Project Area as adopted by the Inland Valley Development Agency (the "IVDA") and for 16 which Project Area the Agency has been delegated the necessary powers to undertake the 17 redevelopment of certain areas thereof; (2) that no other reasonable means of financing the 18 improvements are available to the community pursuant to the Statement of Facts noted in the Staff 19 Report; (3) that the payment of the cost of the improvements will assist in the elimination of one or 20 more blighting conditions inside the Project Area; and (4) the payment of said improvements are 21 consistent with the Redevelopment/Implementation Plan and the Council hereby consents to the 22 payments to be made by the Agency pursuant to the OP A for the public improvements set forth in 23 the Recitals of this Resolution and in the OPA. 24 Section 3. This Resolution shall take effect upon its adoption and execution III the 25 manner as required by the City Charter. 26 / / / 27 / / / 28 2 P:\Agendu\ResoJutlons\Resolutlons\2007\06-04-07 Perrls Campus Plaza MeC Reso.doc 1 2 3 4 5 6 7 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO MAKING CERTAIN FINDINGS AND DETERMINATIONS AND CONSENTING TO PAYMENTS FOR PUBLIC IMPROVEMENTS BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") RELATED TO THE PROPERTY AT 678 SOUTH TIPPECANOE A VENUE ("SITE") PURSUANT TO THE 2007 PROPERTY OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE AGENCY AND PERRIS CAMPUS PLAZA, LLC, PROJECT (IVDA REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 8 Common Council of the City of San Bernardino at a meeting ,2007, by the following vote to wit: Abstain Absent Rachel G. Clark, City Clerk 19 20 The foregoing Resolution is hereby approved this day of ,2007. 21 22 23 24 25 26 27 28 Patrick J. Morris, Mayor City of San Bernardino Approved as to Form: 3 P:\Agendas\Resolutiops\Resolutlons\2007\06-04-07 Penis Campus Plan MCC Reso.doc 1 2 3 4 5 6 7 8 RESOLUTION NO. 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 (1) A REDEVELOPMENT COOPERATION AGREEMENT BY AND BETWEEN THE AGENCY AND INLAND V ALLEY DEVELOPMENT AGENCY ("IVDA") AND (2) A 2007 PROPERTY OWNER PARTICIPATION AGREEMENT ("OPA") BY AND BETWEEN THE AGENCY AND PERRIS CAMPUS PLAZA, LLC, PROJECT FOR THE DEVELOPMENT OF 678 SOUTH TIPPECANOE A VENUE (THE "SITE") (IVDA REDEVELOPMENT PROJECT AREA) WHEREAS, Perris Campus Plaza, LLC, Project (the "Deve]oper"), owns 7.2 acres of 9 vacant land (APN: 0280-09]-10, 11 and 12) located on the east side of Tippecanoe Avenue 10 between Mill Street and Palm Meadows Drive (See Site Plan), in the In]and Valley Development 11 Agency ("IVDA") Redevelopment Project Area ("Project Area"); and 12 WHEREAS, the Developer has undertaken a Project ("Project") on the site consisting of 3 13 separate buildings of approximately 108,000 square feet in size, respectively, to be leased to the 14 Community Action Partnership of San Bernardino County as a food bank distribution center, the 15 County of San Bernardino Weatherization Department and the San Bernardino County Preschool 16 Services Department; and 17 WHEREAS, on October 8, 2003, the NDA Board adopted a policy allowing member 18 jurisdictions to undertake redevelopment activities within the Project Area pursuant to a generic 19 Redevelopment Cooperation Agreement adopted through Resolution No. 2003-] 1; and 20 21 22 WHEREAS, the Developer's Project is located within the Project Area, and WHEREAS, the Project has been conditioned with unfunded, unanticipated requirements by the City of San Bernardino (the "City") related to the improvements to the public right-of-way 23 24 25 on Tippecanoe A venue, including the installation of a new sewer line occasioning substantial additional asphalt paving and concrete work; and WHEREAS, the Agency and the IVDA will enter into a Redeve]opment Cooperation 26 Agreement ("Agreement") to receive the IVDA's share of the tax increment revenues generated 27 from the Project to assist the Agency with its financial obligations under the 2007 Property Owner 28 Participation Agreement ("OP A"); and 1 P:\Agenda:;\ResolulionslRcsolulion:;\2007\06-04-07 Perris Campus Plaza eDe Rcso.doc 1 WHEREAS, the Community Development Commission of the City of San Bernardino 2 ("Commission"), as the governing board of the Agency, pursuant to the California Environmental 3 Quality Act ("CEQA") Regulations Section 15096, through the efforts of Agency Staff, has 4 completed an independent review of the 2005 CEQA determination and approval of a Mitigated 5 Negative Declaration by the Planning Commission ofthe City as it relates to the Project and hereby 6 finds that as a responsible agency under CEQA for the purpose of the redevelopment assistance 7 provided to the Developer under the terms of the OP A, no further environmental review of the 8 Project or the OP A by the Commission is necessary at this time in connection with its consideration 9 of the approval of the OP A; the Developer shall be responsible for complying with all conditions 10 and environmental impact mitigation measures as required by the City under the City's approval of 11 the development project application for the Project; the Executive Director of the Agency is 12 authorized to file an appropriate Notice of Exemption or such other appropriate CEQA notices with 13 the County Clerk for the approval of the OP A; and 14 WHEREAS, an Agreement between the Agency and the IVDA has been prepared; and 15 WHEREAS, it is appropriate for the Commission to take action with respect to the OPA 16 and the Agreement. 17 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY 18 OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: 19 Section 1. The Commission hereby approves (I) the Agreement by and between the 20 Agency and the IVDA and (2) the OPA by and between the Agency and the Developer in the forms 21 of both documents as presented at the meeting of the Commission at which this Resolution is 22 adopted, and the Commission further authorizes the Executive Director of the Agency to execute 23 said agreements and to take all actions set forth in the agreements and make such technical and 24 conforming changes as may be approved by the Agency Counsel. Pursuant to Health and Safety 25 Code Section 33445, the Commission hereby makes the following findings and determinations 26 concerning the installation and construction of improvements which are publicly owned and 27 determines: (I) that the improvements are of benefit to the Project Area as adopted by the Inland 28 Valley Development Agency (the "IVDA") and for which Project Area the Agency has been 2 P:\Agendas\Rcsolution,\Reso[utiolls\2007\06-04-07 Perris Campus Plaza CDC Rcso,doc 1 delegated the necessary powers to undertake the redevelopment of certain areas thereof; (2) that no 2 other reasonable means of financing the improvements are available to the community pursuant to 3 the Statement of Facts noted in the Staff Report; (3) that the payment of the cost of the 4 improvements will assist in the elimination of one or more blighting conditions inside the Project 5 Area; and (4) the payment of said improvements are consistent with the 6 Redevelopment/Implementation Plan. 7 Section 2. The Commission hereby finds and relies on the CEQA determination of the 8 Design Review Committee of the City for approval of the Project and hereby finds that no further 9 environmental review of the Project or OP A by the Commission is necessary at this time to 10 approve this Resolution. The Resolution shall become effective immediately upon its adoption. 11 Section 3. 12 II/ 13 II/ 14 /11 15 II/ 16 II/ 17 II/ 18 II/ 19 /11 20 /11 21 II/ 22 II/ 23 II/ 24 /11 25 /11 26 II/ 27 II/ 28 II/ 3 P:lAgendas\Rcsolulions\Re,olutions\2007\06.04-07 Perris Campus Plaza CDe Rcso.doc 1 2 3 4 5 6 7 8 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 (1) A REDEVELOPMENT COOPERATION AGREEMENT BY AND BETWEEN THE AGENCY AND INLAND VALLEY DEVELOPMENT AGENCY ("IVDA") AND (2) A 2007 PROPERTY OWNER PARTICIPATION AGREEMENT ("OPA") BY AND BETWEEN THE AGENCY AND PERRIS CAMPUS PLAZA, LLC, PROJECT FOR THE DEVELOPMENT OF 678 SOUTH TIPPECANOE AVENUE (THE "SITE") (IVDA REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community meeting Development Commission of the City of San Bernardino at a 9 19 20 21 22 23 24 ,2007, by the following vote to wit: Navs Abstain Absent Secretary The foregoing Resolution is hereby approved this ,2007. day of Patrick J. Morris, Chairperson Community Development Commission of the City of San Bernardino 25 Approved as to FO~1!-- :: By: \::~Sel 28 4 P:\Agcndas\RcsoluliotlS\RCsolulions\2007\06.04-07 Perris Campus Plaza CDC Rcso.doc REDEVELOPMENT COOPERATION AGREEMENT BY AND BETWEEN THE INLAND VALLEY DEVELOPMENT AGENCY AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (Perris Campus Plaza, LLC, Project) This Redevelopment Cooperation Agreement (this "Agreement") is dated as of June 4, 2007, by and between the Inland Valley Development Agency, ajoint powers authority, established under the laws of the State of California (the "IVDA"), and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), and is entered into with respect to the following facts set forth in the Recitals: -- RECITALS -- WHEREAS, the City of San Bernardino (the "City") and the Agency have been engaged in efforts to address blighting conditions in a portion of the City located at 678 South Tippecanoe (the "Property"); and WHEREAS, Perris Campus Plaza, LLC (the "Developer"), will undertake a project on the Property consisting of 7.2 acres of vacant land (APN: 0280-091-10, II and 12) to develop 3 separate buildings of approximately 108,000 square feet (the "Project"), to be leased to the Community Action Partnership of San Bernardino County as a food bank distribution center, the County of San Bernardino Weatherization Department and San Bernardino County Preschool Services; and WHEREAS, the Project has occasioned unanticipated conditions of approval required by the City related to improvements to the public right-of-way on Tippecanoe Avenue, including the installation of a new sewer line occasioning substantial additional asphalt paving and concrete work; and WHEREAS, it is necessary and appropriate for the Agency to enter into this Agreement between the Agency and the IVDA in order to provide for the IVDA to transfer authority to the Agency to undertake the implementation of the Project with the Developer, and to receive any net tax increment generated from the Project to the extent that the Agency is able to assist each homebuyer; and WHEREAS, the Project, as defined herein, is situated within the IVDA Redevelopment Project Area ("Project Area") which is a special redevelopment project area administered by the IVDA; and P\AgendaslAgenda Attachmel1lSlAgrmts-Amend 2007\06-04-07 Penis Campus Plaza - IVDA Cooperation Agreementdoc WHEREAS, the IVDA has been established pursuant to a joint exercise of powers agreement in January 1990, for the purpose of assisting in the conversion, redevelopment and civilian reuse of the former Norton Air Force Base ("NAFB") located within the City; and WHEREAS, the member governmental entities of the lVDA include the County of San Bernardino, a political subdivision of the State of California, the City of Colton, a municipal corporation, the City of Loma Linda, a municipal corporation, and the City, a charter city; and WHEREAS, the lVDA has been granted specific powers by the State Legislature in 1989 (Stats. 1989 c.545 and See Now Stats 1997, c.580 and Health and Safety Code Section 33492.40, et seq.) to assist in the redevelopment of the NAFB and the lands in proximity thereto pursuant to the Community Redevelopment Law (Health and Safety Code Section 33000, et seq., hereinafter referred to as the "CRL"); and WHEREAS, the lVDA has adopted the Redevelopment Plan for the Project Area (the "Redevelopment Plan") in accordance with the provisions of the CRL, and the Redevelopment Plan provides for certain redevelopment activities to be undertaken within the Project Area as more fully described in the Redevelopment Plan; and WHEREAS, at the present time, substantially all the financial and administrative staff resources available to the IVDA are devoted to the implementation of certain agreements affecting the NAFB, including an agreement entitled "Agreement between the Department of the Air Force and the Inland Valley Development Agency," dated March 7, 1995, as amended, and an agreement entitled "Master Disposition and Development Agreement", dated November 6, 2002, both of which specifically relate to the civilian reuse and redevelopment of the lands comprising the NAFB; and WHEREAS, the Agency seeks to initiate certain redevelopment actlVlttes affecting the Project, as defined herein, which is situated within the Project Area but which is not part of the NAFB; and WHEREAS, the lVDA and the Agency deem that the approval and implementation of this Agreement are consistent with the Redevelopment Plan and the purposes and intent of the CRL and in particular, Health and Safety Code Section 33492.40, et seq., to expeditiously accomplish the redevelopment of certain lands located in the City which are also within the Project Area. NOW, THEREFORE, THE INLAND V ALLEY DEVELOPMENT AGENCY AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DO HEREBY MUTUALLY AGREE AS FOLLOWS: Section 1. Recitals. The parties acknowledge and agree that the recitals as set forth above are accurate and correct in all respects. Section 2. Accomplishment of Public Purposes. The parties acknowledge and agree that this Agreement provides the IVDA, and the Agency with a means to foster the redevelopment of a portion of the Project Area located within the municipal boundaries of the City of which could not otherwise be accomplished within the foreseeable future unless the parties to this Agreement agree to exercise certain responsibilities as set forth herein. This Agreement is intended to be consistent 2 P\Agendas\Agenda Altachmenl~\Agrmts"Amend 2007\06.04-07 Penis Campus Plaza -IVDA Cooperation Agreement.doc 1- with the intent and legal requirements ofthe CRL and in particular, Health and Safety Code Section 33413, et seq., and shall be considered as an agreement entered into by and between the IVDA and the Agency to accomplish the removal of blighting conditions within the Project Area and to compliment the civilian reuse and redevelopment of certain lands near the NAFB in the Project Area. This Agreement shall provide the IVDA with additional assistance from the Agency to undertake redevelopment activities in the portion of the Project Area where the Project is located, as more fully depicted in Exhibit "A" attached hereto. The parties presently anticipate that an Owner Participation Agreement for the redevelopment of the Project site shall be executed with Perris Campus Plaza, LLC by the Agency. Section 3. Grant of Redevelopment Powers to the Agencv for the Proiect. (a) Except as set forth in Section 3(b) and Section 3(c) of this Agreement, the IVDA hereby grants to the Agency, acting by and through the Community Development Commission of the City of San Bernardino (the "Commission") and to the legislative body of the Agency acting by and through the Mayor and Common Council of the City of San Bernardino (the "Council"), as applicable, the right, power and authority to act for and on behalf of the IVDA for the purpose of exercising all redevelopment powers legally available to the IVDA as set forth in the Redevelopment Plan, the CRL and in particular, the provisions of Health and Safety Code Section 33492.40, et seq., affecting any lands and property situated within the Project. In addition to any other powers which the City and/or the Agency may have, the Agency may, either in its name or on behalf of the IVDA, exercise all of the powers, rights and authorities of the IVDA as set forth in the Redevelopment Plan with respect to the lands and property situated within the Project, including, but not limited to, the right to acquire and dispose of real and personal property, to either exercise the power of eminent domain directly on behalf of the IVDA or request the IVDA to consider the exercise of such powers in support of the Agency and at the sole discretion of the IVDA, sue and be sued, enter into agreements and undertake such other actions as appropriate to the intent of this Agreement. No such action of the City or the Agency, as applicable with respect to the exercise of such redevelopment powers affecting the Project, need to be consented to, ratified or confirmed by the IVDA unless such ratification, consent or confirmation by the IVDA is otherwise requested at the discretion of the City or the Agency. In the event the IVDA is so requested in writing by either the City or the Agency to ratify, consent or confirm any action or intended action of the City or the Agency with respect to the Project pursuant to this Agreement, the IVDA shall consider such matter as soon as practicable after receipt of such written request. The City and the Agency shall be solely responsible for the payment of all costs and expenses as may be associated with the implementation of any redevelopment activity as may hereafter be undertaken by the City and the Agency in the Project as authorized by this Agreement. (b) Notwithstanding the provisions of Section 3(a), the City and the Agency shall not mltJate any amendment of the Redevelopment Plan or any amendment or supplement to the Implementation Plan for the Project Area without first obtaining the written approval of the IVDA in its sole and absolute discretion. 3 P.\Agendas\Agenda AnachmenlSlAgmns-Amend 2007\06-04-07 Penis Campus Plaza .IVDA Cooperation Agreemenldoc (c) Notwithstanding the provisions of Section 3(a) or any other part of this Agreement, the City and the Agency shall take no action under this Agreement which causes the IVDA to incur an indebtedness which is payable from any funds, revenues or assets of the IVDA, except from "Transfer Revenues", if any, as this term is defined in Section 4. Section 4. Transfer of a Certain Portion of the IVDA Tax Increment Funds for the Redevelopment of the Proiect. (a) In addition to the meaning of certain words and phrases as set forth in the preceding Recital paragraphs and sections of this Agreement, the following definitions shall apply to usage of the terms set forth in this Agreement: (i) "Project Properties Base Year" means and refers to the secured property tax roll assessed valuation of the properties within the Project Properties for ad valorem property tax purposes, for the 2005-2006 fiscal year of the IVDA as shown on the secured property tax assessment rolls of the County Assessor; (ii) "Project Properties Indebtedness" means and refers to the indebtedness which the Agency may incur on or after the date of this Agreement with respect to the Project; (iii) "Project Properties" means and refers to the approximately 7.2 acres of land in the Project which is also depicted in Exhibit "A"; (iv) "Perris Campus Plaza, LLC" means and refers to a community redevelopment project of the Agency, and the related activities which may hereafter be undertaken by the Agency in the Project. The Projc<::t shall be more particularly identified in the written notice provided to the IVDA by the Agency under Section 4(e); (v) "Tax Increment Revenue" means and refers to those revenues, if any, received by the IVDA under Article VII, Section B(702) of the Redevelopment Plan as related to the Project Properties; (vi) 'Transfer Revenue" means and refers to a portion of the tax increment revenue of the IVDA attributable to the Project Properties described in Section 4(b) which the IVDA shall pay to the Agency each year during the term of this Agreement with respect to indebtedness incurred by the Agency in connection with the redevelopment of the Project Properties subject to the conditions set forth in Section 4. (b) Transfer Revenue is a portion of the tax increment revenue of the IVDA generated by the Project Properties by virtue of the Project, if any, each fiscal year, in excess of such tax increment revenue of the IVDA attributed to the Project Properties Base Year, net of the low- and moderate-income housing set-aside obligation of the IVDA with respect to such tax increment revenue in each such fiscal year, and further net of the portion of such tax increment revenue of the IVDA with respect to the Project Properties which is payable by the IVDA in such fiscal year under the School District Agreements as set forth in Section 4(1). (c) Provided the Agency has given the IVDA the notice described in Section 4(e), commencing no sooner than the 2007-2008 fiscal year of the IVDA, and for each fiscal year of the 4 P:\Agendas\Agenda Attacnments\Agrmts-Amend 2007\06-04-07 Penis Campus Plaza - IVDA COOperation Agreememdoc IVDA thereafter during the term of this Agreement, the IVDA hereby agrees to pay to the Agency, the Transfer Revenue attributable to the Project Properties, if any, for each such fiscal year following the Project Properties Base Year. The obligation of the IVDA to pay the Transfer Revenue to the Agency is a special fund obligation of the IVDA payable solely from the portion of the tax increment revenue of the IVDA generated by the Project Properties by virtue of the Project, if any, in the amount as calculated each fiscal year under the formula set forth in Section 4(b). No Transfer Revenues shall be payable by the IVDA to the Agency for any fiscal year of the IVDA after June 30, 2030. Any unpaid balance of the Project Properties Indebtedness as may exist as of July I, 2030, shall be discharged, released and forgiven by the Agency. (d) The IVDA shall only remit the Transfer Revenues calculated pursuant to Section (b) to the extent that the Agency has incurred on or after July I, 2006, funds, or incurred indebtedness in connection with the redevelopment of all or any portion of the Project Properties Indebtedness, including, without limitation, indebtedness incurred under one or more separate agreements by and between the Agency and the City or indebtedness to a noteholder, bondholder, trustee or other creditor of the Agency related to costs incurred or paid by the Agency for the redevelopment of the Project. The Agency shall, as a condition precedent to the receipt of Transfer Revenue on each May I, commencing on May 1, 2008, submit to the IVDA, a suitably detailed written statement of the outstanding unpaid balance of Project Properties Indebtedness incurred by the Agency, including the relevant terms of repayment of such Project Properties Indebtedness. (e) Bya date not later than April 30, 2007, the Agency shall give notice to the IVDA that the Agency entered into one or more written agreements with third-parties for the redevelopment of at least one-half(Yz) of the acres of land included in the Project. Such notice shall contain a suitably detailed description of the Project and the current balance, as of the date of such notice of the Project Properties Indebtedness. Concurrently with such notice, the Agency shall also deliver to the IVDA, a copy of such written agreements. In the event that such notice is not given by the Agency, then in such event, no Transfer Revenues shall be payable to the Agency by the IVDA under this Agreement. (f) This Agreement and the amounts of Transfer Revenue to be remitted by the IVDA to the Agency shall, at all times, be subject to the provisions of the various school district pass-through agreements between the IVDA and the San Bernardino City Unified School District, Colton Joint Unified School District, Redlands Unified School District, County Superintendent of Schools and the San Bernardino Valley College District (collectively, the "School District Pass-Through Agreements") as the same are applicable to the increases in the tax increment revenues generated by the Project Properties. The calculation of the amount of the Transfer Revenue to be remitted by the IVDA to the Agency shall be a net of all amounts required to be paid by the IVDA to the various school districts pursuant to the School District Pass-Through Agreements. The IVDA shall be solely responsible for the administration of the School District Pass-Through Agreements and the IVDA may charge a proportion of fee against the Tax Revenues for third-party costs associated with such administration. (g) The IVDA has established the Low- and Moderate-Income Housing Fund for the Inland Valley Redevelopment Project, and twenty percent (20%) of tax increment revenues received by the IVDA are deposited into such fund each year, subject to certain decreases authorized under applicable law. Said twenty percent (20%) figure may be decreased pursuant to Health and Safety Code Section 33334.2(a) (I) and (2) from time-to-time by the IVDA. If the IVDA determines for 5 P\Ag",nda$IAgenda AlIacnmentslAgrmts-Amend 2007\06-04-07 Penis Campus Plaza - IVDA Cooperation Agreemenldoc the entire Project Area, inclusive of the Project Properties, to deposit less than said twenty percent (20%) figure for a particular fiscal year, as permitted by Health and Safety Code Section 33492.40(e) and 33334.2(a)(2)(A), or if the IVDA determines to make no deposit into the Low- and Moderate-Income Housing Fund for the entire Project Area, inclusive of the Project Properties, as permitted by Health and Safety Code Section 33334.2(a)(I)(A), then in any such event, the Transfer Revenue calculation as set forth in Section 4(b) of this Agreement for the particular fiscal year or fiscal years, as applicable, in which such a finding is made by the IVDA, shall not be subject to any off-set or adjustment corresponding to any amounts of such tax increment revenue that the NDA has not deposited into the IVDA Low- and Moderate-Income Housing Fund. (h) The obligation of the IVDA to remit any portion of the Transfer Revenue to the Agency pursuant to this Agreement is, at all times, subordinate to the obligations of the IVDA incurred pursuant to any and all tax allocation bonds, notes or other forms of indebtedness, and all refinancings of any of these, issued or incurred by the NDA to the holders of publicly issued bonds, notes or other forms of indebtedness considered municipal securities sold in the municipal bond market. (i) The IVDA and the Agency will cooperate in each year during the term of this Agreement in the preparation of the Statement of Indebtedness for the IVDA as it relates to the Project Properties indebtedness and the Transfer Revenue payable by the IVDA to the Agency for the Project Properties indebtedness. The IVDA and the Agency further agree, upon thirty (30) days written request, to exchange suitably detailed and written accounting and audit records related to the Project Properties indebtedness and the Transfer Revenue, including the estimates and final remittance amounts of Transfer Revenue each fiscal year as calculated by the IVDA, and the Project Properties indebtedness amounts incurred by the Agency with respect to the redevelopment of the Project Properties. (j) Except as set forth in this Agreement as it relates to Transfer Revenues, no other tax increment revenue or other funds or assets of the IVDA are subject to this Agreement. The IVDA may, but shall not be required, unless subsequently approved by the NDA on a case-by-case basis, advance, loan or otherwise transfer to the Agency other tax increment revenue as may then be available to the IVDA from the Project Area, subject to applicable law. Section S. Pre-June 30, 2006 Indebtedness of the Agencv Relating to the Proiect. As of June 30, 2006, the Agency has incurred no debt in redevelopment indebtedness with respect to its efforts to address conditions of blight in the Project, including indebtedness incurred for the acquisition of the property. No cost, expense or indebtedness incurred by the Agency with respect to the Project prior to June 30, 2006, shall be deemed to be an eligible cost or indebtedness of the Agency for purposes of calculating the Project Properties indebtedness. Section 6. Notices. Formal notices, demands and communications between the IVDA and the Agency shall be deemed sufficiently given if (i) dispatched registered or certified mail via United States Postal Service, postage prepaid, return receipt requested, as designated in this Section 6; (ii) by personal delivery; (iii) express delivery service with written verification of delivery; or (iv) by electronic transmittal, including fax transmissions with telephonic verification of receipt. Such written notices, demands and communications may be sent in the same manner to such other addresses as any party may, from time-to-time, designate by written notice to the other parties. 6 P,lAgendaslAgenda Attachme11lslAgrmts-Amend 2007\06-04-07 Pa-ris Campus Plaza. [VDA Cooperation Agreemenldoc Copies of all notices, demands and communications shall be sent as follows: IVDA: Inland Valley Development Agency Attention: Executive Director 294 South Leland Norton Way San Bernardino, California 92408 AGENCY: Redevelopment Agency of the City of San Bernardino Attention: Maggie Pacheco, Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 Notices which are dispatched by registered or certified mail through the United States Postal Service shall be deemed to be given three (3) business days after deposit with the United States Postal Service, and notices which are given by personal delivery shall be deemed given upon such personal delivery. Notices dispatched by express delivery service shall be deemed to have been given upon receipt by the party receiving such notice and execution of the delivery receipt, and notices dispatched through electronic transmittals shall be deemed to have been given upon telephonic verification of receipt. Section 7. Indemnification and Hold Harmless. The Agency hereby agree to indemnify, defend and hold harmless, the IVDA and each of its officers, officials and employees from any and all loss, liability, claim, cost, expense or judgment, including attorney's fees, that may result from the implementation of this Agreement by the Agency. The Agency will also defend, indemnify and provide the cost of defense on behalf of the IVDA with respect to any third party challenge to the legality or enforceability of this Agreement pursuant to the CRL. Such indemnification and hold harmless shall apply whether or not the City and/or the Agency, or either of them was at fault or in any manner contributed to any such loss, liability, claim, cost, expense or judgment. Section 8. Entire Agreement of the Parties. This Agreement represents the entire agreement by and between the IVDA and the Agency with respect to the transfer of the redevelopment powers of the IVDA affecting the Project. Section 9. Invalidity of Any Provision. In the event it is determined that any provision of this Agreement is invalid or unenforceable as between the parties, the remaining provisions which are determined to be valid and enforceable shall remain in full force and effect. Section 10. Approval and Effective Date of Agreement. This Agreement has been duly approved and authorized for execution and delivery by the governing board of the IVDA and by the Commission on behalf of the Agency, and this Agreement has been duly executed and delivered by the parties hereto. This Agreement may be executed in counterparts and when fully executed by the parties, it shall be effective for all purposes as of the date set forth in the introductory paragraph. /II 1/1 /II 7 P,\Agendas\Agenda Attachmel1ts\Agrmts-Amend 2007\06-04-07 Perri. Campus Plaza - IVDA Cooperation Agreement.doc THIS AGREEMENT HAS BEEN DULY EXECUTED BY THE AUTHORIZED REPRESENTATIVES OF THE PARTIES HERETO AS SET FORTH BELOW. IVDA Inland Valley Development Agency, a joint powers authority Date: By: Co-Chair By: Co-Chair (SEAL) ATTEST: By: Clerk of the Board Approved as to Form: By: General Counsel AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Maggie Pacheco, Executive Director (SEAL) ATTEST: By: Don Gee, Assistant Secretary Appro,,' '" " 'ifjj:L Log.. C'o","' By:~ Agency ~n I 8 P:\AgendaslAgcnda AtlachmcntslAgrmts-Amcnd 2007\06-04-07 Perris Campus Pla<:a - IVDA Cooperation Agrecmen1.doc EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Previously vacant land on the west side of South Tippecanoe Avenue between Mill Street and Central Avenue: APN: 020-091-10, II, and 12 in the City of San Bernardino as per Parcel Map No. 17003 being a subdivision of a portion of Lot I, block 46 of the Rancho San Bernardino, County of San Bernardino as per map recorded in Book 7, Page 2, of maps in the office of the County Recorder of said County. . MILL STREET iw...................i . ...' ,.-' W :J Z W ~ W o z ~ o W 0.. 0.. i= iI~ ....'~ -',;;; .;(' ',"w.-: ~n. I CENTRAL AVENUE PALM MEADOWS OR REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 2007 PROPERTY OWNER P ARTICIP A TION AGREEMENT THIS 2007 PROPERTY OWNER PARTICIPATION AGREEMENT (this "Agreement") is dated as of June 4, 2007, by and between Perris Campus Plaza, LLC, a California limited liability company (the "Developer"), and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), and this Agreement is entered into with respect to the following facts: RECITALS The Developer has purchased certain lands situated at 662, 678 and 696 South Tippecanoe Avenue, legally described per Parcel Map No. 17003, San Bernardino, California (the "Property"). Following such purchase, the Developer transferred the portion ofthe Property located at 678 South Tippecanoe to TIP Property One, LLC, a Delaware limited liability company, of which Developer is the sole member ("TIP One"), and the Developer transferred the portion of the Property located at 696 South Tippecanoe to TIP Property Three, LLC, a Delaware limited liability company, of which the Developer is the sole member ("TIP Three"). To the extent this Agreement is required to be executed by TIP One or TIP Three to bind or benefit the Property, the Developer is executing this Agreement on behalf of those entities as well as on its own behalf. The Property is located in the redevelopment project area described in the Redevelopment Plan (the "Redevelopment Plan") for the Inland Valley Development Agency (the "IVDA") (the adopted redevelopment project area of the IVDA is defined herein as the "Project Area"). The general location of the Property is shown on a vicinity map and is more particularly described in the legal description of the Property, attached hereto as Exhibit "A" and incorporated herein by this reference. The Agency has concurrently entered into a Redevelopment Cooperation Agreement with the IVDA whereby the Agency has been delegated certain powers under the Redevelopment Plan of the IVDA in the same manner as such powers may be exercised by the IVDA. The Developer for itself and its successors and assigns, and the Agency for itself and its successors and assigns, have entered into this Agreement in order to implement the Redevelopment Plan and for the benefit of the Project Area and the Property as authorized under Health and Safety Code Section 33000, et seq. 4848-1151-3089.1 I NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES, THE DEVELOPER FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS AND THE AGENCY FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AGREE: Section 1. Effective Date of Al!reement and Oblil!ation of the Al!encv to Make Certain Pavments to the Developer. (a) This Agreement shall take effect following its approval by the Agency and execution by the parties and upon satisfaction of all conditions precedent to this Agreement taking effect in accordance with its terms all having been duly satisfied. The obligation of the Agency to remit the payments to the Developer under Section 3 of this Agreement shall be as set forth in said Section 3. (b) the Developer has completed prior to the date of this Agreement all of the installation of the off-site work to be conducted by the Developer in various public street rights- of-way (the "Off-Site Improvements") in connection with the construction of the three (3) buildings constructed and presently being constructed on the Property by the Developer (the "Project"). Notwithstanding anything in the foregoing or elsewhere in this Agreement to the contrary, the Agency hereby acknowledges and agrees that as of the date of this Agreement, the Developer has completed the Off-Site Improvements and that there are no other conditions precedent relating to the completion of the Off-Site Improvements by the Developer or any other person on behalf of the Developer to limit the payments of the Site Tax Increment except as otherwise provided in this Agreement as to compliance with the procedures for the payment to the Developer of the Improvement Cost Reimbursement (as defined in Section 3(b) hereof) and the other terms and conditions related to certain defaults by the Developer under this Agreement. (c) The Notice of Memorandum of Agreement referenced in Section I I, and attached hereto as Exhibit "C", shall be fully executed by the parties and filed for recordation as soon as practical after the date of this Agreement. Section 2. Redevelopment Plan. Conformity of the Development Project with the (a) The Agency has found and determined as of the date of this Agreement, that the improvement of the Project described in the Scope of Development, attached hereto as Exhibit "B", and thereafter, the operation of the mixed-use warehouse and distribution/office facility on the Property is consistent with the Redevelopment Plan. (b) The Agency hereby finds and determines that the redevelopment assistance to be provided by the Agency to the Developer, subject to the conditions set forth in Section I of this Agreement, is necessary and appropriate pursuant to Health and Safety Code Section 33445 and that the Mayor and Common Council acting as the legislative body of the City (the "Council") has made the following findings of fact regarding the installation of the publicly owned improvements: (i) the improvements are to the benefit of the Project Area as adopted by the IVDA; (ii) no other reasonable means of financing the improvements are available to the community; (iii) the payment of said improvements is consistent with the 4848-1151-3089.1 2 Redevelopment Plan of the IVDA pursuant to Health and Safety Code Section 33490; and (iv) that the redevelopment covenants of the Developer as contained in this Agreement shall materially assist the Agency to eliminate conditions of blight in the Project Area. Additionally, as required by Health and Safety Code Section 33445, the Council has consented to the payments to be made by the Agency to the Developer pursuant to this Agreement. Section 3. Al!:encv Contribution to Pav a Portion of the Costs of the Off- Site Improvements to the Developer. (a) The improvement and completion of the Project required the Developer to design, construct and install the Off-site Improvements as conditioned by the City. (b) Subject to the terms and conditions of this Agreement, the Agency hereby agrees to reimburse the Developer from time-to-time, but solely from the special source of funds described herein as the Site Tax Increment, a sum not to exceed Four Hundred Twenty-Seven Thousand Dollars ($427,000) (the "Improvement Cost Reimbursement") as an off-set to the cost of the Off-Site Improvements: (i) the indebtedness of the Agency to the Developer under this Section 3 shall be evidenced solely by this Agreement; (ii) No additional Site Tax Increment shall be payable by the Agency to the Developer after the total principal amount of the Improvement Cost Reimbursement has been paid in whole by the Agency to the Developer, without interest; (iii) no interest shall accrue on any amounts due under the terms of this Agreement; (iv) this Agreement shall have a maturity date which is the fifteenth (15th) anniversary following the date of this Agreement, and if any unpaid principal balance remains owing after such fifteenth (15th) anniversary, such sum shall be waived and forgiven by the Developer or other holder of this Agreement or any other person then entitled to receive payments of the Site Tax Increment pursuant to this Agreement; (v) the costs to be reimbursed pursuant to this Agreement shall be payable solely from the special source of funds designated as the "Site Tax Increment" which shall mean the IVDA portion of the tax increment revenues comprising new tax increment revenues in excess of the established base year amount and net of all statutory pass-tbroughs and pass-through agreements with taxing agencies and deposits as more particularly described in Section 4(b) of the Redevelopment Cooperation Agreement (the "Cooperation Agreement") dated June 4, 2007, between the Agency and the IVDA, as attached hereto as Exhibit "D"; for purposes of this Agreement, the Developer recognizes that the dollar amount of the Site Tax Increment as of the current fiscal year of the IVDA represents a dollar amount that is approximately 36% to 39% of the I % general property taxes paid with respect to the Property; the Developer further recognizes that the actual percentage amount represented by the Site Tax Increment will vary for each fiscal year under this Agreement due to the manner in which the tax 4848-1151-3089.1 3 increment revenues of the IVDA are calculated pursuant to the Redevelopment Plan and all applicable pass-through agreements of the IVDA; and (vi) the Agency shall execute and deliver this Agreement to the Developer upon satisfaction of the conditions precedent to the execution and delivery of this Agreement. (c) Subject to the terms of this Agreement, the Agency hereby pledges to the Developer an amount of the Site Tax Increment on an annual basis during the term of this Agreement that represents not more than 30% of the I % general property taxes paid with respect to the Property, but commencing no sooner than the 2007/2008 fiscal year until the sum of $427,000 has been reimbursed to the Developer or such lesser amount as may be remitted by the Agency from the Site Tax Increment pursuant to the terms of this Agreement prior to the Termination Date of this Agreement. Such pledge of the Site Tax Increment shall terminate upon the payment in full in the amount of $427,000 or on the fifteenth (15th) anniversary date of this Agreement, which shall be June 4, 2022, whichever occurs earlier. (d) The Site Tax Increment is presently estimated to be a percentage from 36% of the 1% general property taxes to 39% of the 1% general property taxes paid by the Developer for the completed Project of which any amount in excess of 30% will be retained by the Agency for administrative costs and other similar expenses of the Agency. The remaining amount not to exceed 30% of the I % general property taxes will be remitted to the Developer upon submittal of adequate proof to the Agency that the general property taxes for the preceding tax year have been paid and are current. Such process shall commence as of the 2007/2008 tax year and continue thereafter during the term of this Agreement. Notwithstanding anything in the foregoing or elsewhere in this Agreement, the Agency shall have no obligation to pay the Developer any portion of the Site Tax Increment with respect to a tax year if the Developer has not submitted adequate proof of payment of the property taxes on the Property for that tax year by June 15 and such failure continues for a period of fifteen (15) days following written notice of such failure from the Agency to the Developer. (e) In the event that the Site Tax Increment is recalculated in any fiscal year to be a percentage less than the presently estimated percentage amount of 36% to 39% of the 1 % general property tax rate, as may then be applicable with respect to the Property, any amount of such payment not to exceed 30% of the I % general property tax rate will be forwarded to the Developer. However, in the event that the percentage is less than 30%, the entire amount of such payment shall be remitted to the Developer and the Agency shall retain nothing for payment or reimbursement of its administrative costs and other similar expenses. (f) The Developer estimates that, upon completion of the Project, the cost of acqUisItion and construction of the Project will be approximately Ten Million Dollars ($10,000,000). (g) The base year for this Agreement shall mean the secured property tax roll assessed valuation of the Property for the 2005-2006 tax year, as shown on the secured property 4848-1151-3089.1 4 tax assessment rolls of the County Assessor, and as further set forth in the Redevelopment Cooperation Agreement. (h) The Developer shall submit to the Agency copies of all property tax bills for the Property payable on and after December 2007, provided that all conditions contained in Section I have been timely met, together with cancelled checks or other written evidence from the County Tax Collector to verify that all property tax payments have been duly made for the applicable fiscal year with respect to the Property. After receipt of the documentation required in the preceding sentence to be submitted to the Agency by the Developer, the Agency shall remit payments of the applicable amount representing the Site Tax Increment within thirty (30) calendar days after the receipt of same from the IVDA. The Agency shall notify the IVDA within thirty (30) calendar days after receipt from the Developer of the information required by this Section 3(h) of the requested dollar amount to be remitted from the IVDA to the Agency as the Site Tax Increment. The Agency shall have no liability to pay the Developer from any other assets, funds, tax increment revenues or other financial resources of the Agency except from and to the extent that the Agency receives the Site Tax Increment from the IVDA. The Site Tax Increment shall be payable in the 2021/2022 fiscal year only for those property taxes paid by the Developer, or any successor in interest, to the County Tax Collector prior to the date of the expiration of this Agreement, and such amounts as may be received by the Agency subsequent to the actual termination of this Agreement for those property tax payments remitted by the Developer, or any successor in interest, to the County Tax Collector prior to the termination of this Agreement shall be remitted to the Developer when received by the Agency as Site Tax Increment from the IVDA, as applicable. Section 4. Exemption ofPropertv from Ad Valorem Property Taxes. The Developer recognizes and agrees that in the event the Property is exempt or becomes exempt from real property taxation, either in whole or in part, or should the assessed valuation of the Property be decreased either by the actions of the County Assessor and/or the Developer to an assessed value amount less than the base year assessed value described in Section 3(g) above, the Site Tax Increment will be decreased accordingly or may be eliminated entirely by the operation of the formula set forth in Section 3 above. The Developer assumes all risks arising from actions of the Developer to reduce or to eliminate the assessed valuation of the Property, or upon a sale thereof to an entity that then removes the Property from the taxable real property tax rolls of the County of San Bernardino, or real property assessment policies of the County Tax Assessor, or other changes to the laws of the State of California that cause a reduction in the dollar amount of the real property taxes on the Property. It is possible that the calculation of the Site Tax Increment pursuant to the Redevelopment Plan and the Redevelopment Cooperation Agreement will not produce any Site Tax Increment for payments to the Developer upon any substantial reduction in the assessed valuation in the manner as set forth above. Section 5. Covenant Al!:ainst Unlawful Discrimination. The terms and provisions of Health and Safety Code Section 33436 which prohibit various types of unlawful discrimination are hereby incorporated into this Agreement by 4848-1151-3089.1 5 this reference. The Developer agrees to comply with such terms and provisions as contained in the Community Redevelopment Law as set forth in the Health and Safety Code and in the Redevelopment Plan with respect to covenants against unlawful discrimination for the periods of time specified therein, in the Redevelopment Plan and in Section 9 hereof. Section 6. Special Representations and Covenants of the Developer; Developer Compliance with Prevailine: Wae:e Requirements. (a) The Developer hereby covenants and warrants that not less than "prevailing wages", as this term is defined at California Labor Code Section 1770, et seq., have been paid by the Developer, its contractor and any subcontractor to all workmen employed in connection with the construction and installation of the Off-Site Improvements. The provisions of California Labor Code Sections 1775 and 1776 shall be applicable to the performance of this obligation of the Developer as the same relate to the Off-Site Improvements and to the remedies of the Agency in the event of a breach of this obligation by the Developer as further set forth in subsections (b) through (d), inclusive. (b) The construction and installation of the items constituting the Off-Site Improvements are a "public work" as this term is defined in Labor Code Section 1720. As a condition for the payments of the Site Tax Increment by the Agency to reimburse the costs of the Off-Site Improvements, all employees of the Developer and its contractors and subcontractors who have performed construction work on the items constituting the Off-Site Improvements relative to the Project, shall have been compensated at prevailing wage rates, and the Developer for itself and its contractors and subcontractors, has paid, as applicable, prevailing wage rates under California law in performance of any such construction work related to the items constituting the Off-Site Improvement. (c) The Developer recognizes and is aware of the existence of State legislation adopted by the California Legislature in 2001 and generally referred to as SB 975 and the present provisions contained in Labor Code Section 1720, et seq. The Developer has prepared and maintained, or has caused each of its construction contractors and subcontractors, for each item constituting the Off-Site Improvements, to prepare and maintain certified payroll records for all work of improvement undertaken by the Developer on the items constituting the Off-Site Improvements, and has provided the Agency with copies of same. The Developer has caused to be included in all of its third-party construction contracts relating to the construction and improvement of the items constituting the Off-Site Improvements suitable provisions which compelled its contractors and each subcontractor to pay not less than prevailing wages to their employees engaged in the work of improvement of the items constituting the Off-Site Improvements. (d) The Agency shall never be responsible for the payment of any sums under Labor Code Section 1720, et seq., or other prevailing wage requirements as the result of the activities of the Developer, any of its tenants, or the contractors or subcontractors of any of them, in connection with the development and improvement of the Project and any of the items constituting the Off-Site Improvements. The Developer shall indemnify, defend and hold harmless the Agency and all officers, officials, employees, consultants and attorneys of the 4848-1151-3089.1 6 Agency with respect to all such prevailing wage compliance issues arising from the activities of the Developer associated with constructing the Project and/or any other public improvements items which constitute the Off-Site Improvements under this Agreement or other agreements between the Developer and third parties. In the event of additional work required in furtherance of the completion of any elements of the Off-Site Improvements, the Developer agrees to apprise in writing all third parties seeking to provide labor and construction work on the items constituting the Off-Site Improvements as to the provisions of this Section 6 and the compliance required pursuant to State law regarding the payment of prevailing wages. Any indemnification provided to the Developer from such third parties with respect to compliance of the Project with the public work requirements imposed upon the Developer and the items constituting the Off- Site Improvements by virtue of the provisions of Labor Code Section 1720, et seq, shall not relieve the Developer of its indemnification obligations to the Agency arising under this Section 6. (e) From and after the date of the delivery of the executed Agreement to the Developer, the Developer for itself and its successors and assigns hereby covenants and agrees upon the request of the Agency to provide the Agency with a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment or payment correspondence by and between the Developer and the Assessor and Property Tax Collector of San Bernardino County. Section 7. Maintenance Condition of the Property. Upon the delivery of this Agreement to the Developer as set forth herein, the Developer for itself, its successors and assigns hereby covenants and agrees that: (a) Until the earlier of the maturity date of this Agreement and the date on which the Agency no longer has any obligation to pay any portion of the Improvement Cost Reimbursement to the Developer hereunder (the "Termination Date"), the areas of the Property which 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. In the event that at any time following the date of recordation of the Notice of Memorandum of Agreement as provided in Section I I but prior to the Termination Date, there is an occurrence of an adverse condition on any area of the Property which is subject to public view in contravention of the general maintenance standard described above (a "Maintenance Deficiency"), then the Agency shall notify the Developer in writing of the Maintenance Deficiency and give the Developer thirty (30) calendar days from receipt of such notice to cure the Maintenance Deficiency as identified in the notice. In the event the Developer fails 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 Developer ten (10) calendar days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Developer has failed to comply with the provision of this Section 7(a). If upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, described above, thereafter 4848-1151-30891 7 the Agency shall have the right to suspend payments of the Site Tax Increment hereunder until the Maintenance Deficiency has been abated. (b) Graffiti as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of a structure or improvement on the Property which is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that, prior to the Termination Date, such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within seventy-two (72) hours following the Agency's written notice to the Developer of same, the Agency shall have the right to enter the Property and remove the graffiti without further notice to the Developer. Any sum expended by the Agency for the removal of such graffiti from the Property authorized by this Section 7(b) in an amount not to exceed Two Hundred Fifty Dollars ($250) per entry by the Agency, shall be paid within thirty (30) calendar days after written demand for payment by the Agency to the Developer, and if not so paid may be offset by the Agency against payments ofthe Site Tax Increments hereunder. Section 8. Defaults and Breach - General. (a) Failure or delay by either party to perform any material term or provision of Section 3, Section 5, Section 6 or Section 7 of this Agreement shall constitute a default under this Agreement; provided, however, that if the party who is otherwise claimed to be in default by the other party commences to cure, correct or remedy the alleged default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently complete such cure, correction or remedy, such party shall not be deemed to be in default hereunder. (b) The party which may claim that a default has occurred shall give written notice of default to the party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice as specified herein. (c) Any failure to delay by a party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. (d) In the event that a default of either party may remain uncured for more than thirty (30) calendar days following written notice, as provided above, a "breach" shall be deemed to have occurred. In the event of a breach, the party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings. 4848- \151-3089.1 8 Notwithstanding the foregoing, the Agency shall be entitled to seek specific performance and/or damages for a Developer breach hereunder, offset any such damages and/or enforcement costs against the Site Tax Increments due hereunder and/or suspend payments of the Site Tax Increments pending a cure of the breach, but shall not be entitled to terminate this Agreement due to a Developer breach. Section 9. Covenants Runninl!: with the Land. This Agreement is expressly declared by the parties for themselves and for the successors and assigns of each of them, to be for the benefit of the Property and the Project Area: (a) The provisions of Section 6(b) and Section 7 of this Agreement are covenants which runs with the land and the Property until the Termination Date. (b) [RESERVED - NO TEXT] (c) The provisions of Section 5 of this Agreement are a covenant which runs with the land and the Property in perpetuity. (d) The rights of the Developer under Section 3 do not run with the land and may be transferred or retained by the Developer separate and apart from the interests of the Developer in the Property. Section 10. Earlv Termination of Al!:reement bv the Developer. The Developer may terminate this Agreement at its discretion for any reason before the date on which this Agreement is executed and delivered to the Agency by serving written notice of termination of this Agreement to the Agency which specifically refers to this Section 10 of this Agreement. Upon receipt by the Agency of such written notice of termination, the Agency shall cause to be recorded a release of the Notice of Memorandum of Agreement, and thereafter the parties shall be mutually released from any further obligations which arise under this Agreement. Upon any such termination, the obligations of the Agency to remit the Site Tax Increment shall be terminated and of no further force or effect. Section 11. Notice of Memorandum of Al!:reement. The parties hereby agree and declare that the successors and assigns of each shall be bound by the terms of this Agreement. The parties shall execute and the Agency shall cause to be recorded a Notice of Memorandum of Agreement, substantially in the form as attached hereto as Exhibit "c" and incorporated herein by this reference. The Notice of Memorandum of Agreement shall be recorded promptly upon the full execution ofthis Agreement by the parties. Section 12. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, then the prevailing party shall be entitled to recover as an element of its costs of suit and not as damages, its reasonable attorneys; fees as fixed by the court 4848-1151-3089.1 9 in such action or proceeding or in a separate action or proceeding brought to recover such attorney's fees. Section 13. Headinl!:s and Attachments. The headings of each section of this Agreement 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 this Agreement to which they may generally correspond. The following is a list of documents that are attached as part of this Agreement: Exhibit "A" Vicinity Map and Legal Description of the Property Exhibit "8" Scope of Development Exhibit "C" Notice of Memorandum of2007 Property Owner Participation Agreement Exhibit "D" Redevelopment Cooperation Agreement (Perris Campus Plaza, LLC, Project) 1// 1// 1// 1// /1/ 4848-1151-3089.1 10 THIS 2007 PROPERTY OWNER PARTICIPATION AGREEMENT is dated as of June 4, 2007, and this Agreement shall have no force nor effect unless it has been approved by the governing body of the Agency and executed by the authorized officer of the Developer and by the Agency as evidenced by the signatures of each of them which appear below. This Agreement may be executed in counterpart and when fully executed by the parties, each counterpart shall be deemed to be part of one original Agreement. 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 Coun PROPERTY OWNER Date: ~ ( Z-1' /0 I f>;rrisCampus Plaza, LLC, a California limited liab~mpany --< '). By: 4848-1151-3089.1 II EXHIBIT "A" VICINITY MAP AND LEGAL DESCRIPTION OF THE PROPERTY Previously vacant land on the west side of South Tippecanoe Avenue between Mill Street and Central Avenue: APN: 020-091-10, II, and 12 in the City of San Bernardino as per Parcel Map No. 17003 being a subdivision of a portion of Lot 1, block 46 of the Rancho San Bernardino, County of San Bernardino as per map recorded in Book 7, Page 2, of maps in the office of the County Recorder of said County. , MILL STREET it w . . ::J Z W ~ W 0 z <t: 0 w 0.. Il. l- ii I .... 1 ". . m - CENTRAL AVENUE PALM MEADOWS DR . 4848-1151-3089.1 12 EXHIBIT "B" SCOPE OF DEVELOPMENT Project approved with Development Permit Type II No. 04-29 for three building consisting of a 64,800 square foot distribution center and an 18,000 and 25,0000 square foot mixed use office/storage space buildings in the IL (Industrial Light) land use designation on approximately 7.2 acres located at 662, 678 and 696 South Tippecanoe Avenue Project Area ofthe IVDA. Certain standard public improvements are required and have been performed by Developer, such as work to curbs, gutters, streets, lighting, sewers, water lines, etc. and Developer has paid certain permitting fees and professional fees relating thereto such as civil engineering, architectural and traffic engineering fees. 4848-1151-3089.1 13 4848-1151-30891 EXHIBIT "C" NOTICE OF MEMORANDUM OF 2007 PROPERTY OWNER P ARTICIP A TION AGREEMENT 14 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) ) Redevelopment Agency ofthe ) City of San Bernardino ) Attn.: Maggie Pacheco, Executive Director ) 201 North "E" Street, Suite 301 ) San Bernardino, California 92401 ) ) (Space above line reserved for use by Recorder) Recording Fee Exempt Pursuant to Government Code Section 6103 NOTICE OF MEMORANDUM OF 2007 PROPERTY OWNER PARTICIPATION AGREEMENT Redevelopment Agency of the City of San Bernardino (Perris Campus Plaza, LLC) TO ALL INTERESTED PERSONS, PLEASE TAKE NOTICE: THIS NOTICE OF MEMORANDUM OF 2007 PROPERTY OWNER PARTICIPATION AGREEMENT (this "Memorandum") is dated as of June 4, 2007, by and between Perris Campus Plaza, LLC, a California limited liability company (the "Developer"), and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"). This Memorandum affects certain real property in the City of San Bernardino, County of San Bernardino, California, located at 662, 678 and 696 South Tippecanoe Avenue (the "Property"). The Property is more particularly described in the legal description attached hereto as Exhibit "I" and incorporated herein by this reference. PLEASE TAKE FURTHER NOTICE that the Developer and the Agency have entered into that certain "2007 Property Owner Participation Agreement," dated as of June 4, 2007 (the "OPA"), which affects the Developer and the Agency which OPA benefits and burdens the Property and which (with certain exceptions) run with the land for the period of time as set forth therein. Section 5 of the Agreement is entitled: Covenant Against Unlawful Discrimination. Section 6 of the Agreement is entitled: Special Representations and Covenants of the Developer. Section 7 of the Agreement is entitled: Maintenance Condition of the Property. 4848-1151-30891 15 Interested persons may inspect a copy of the text of the 2007 Property Owner Participation Agreement which is on file as a public record of the Agency in the office of the Agency Secretary during regular business hours. This Memorandum may be executed by the parties in counterpart. The recordation of this Memorandum is authorized by action of the Agency under Government Code Section 6503 and Health and Safety Code Sections 33337, 33338 and 33339. PROPERTY OWNER Perris Campus Plaza, LLC, a California limited liability company Dated: By: Jian Torkan, Manager AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Maggie Pacheco, Executive Director (ALL SIGNATURES TO BE ACKNOWLEDGED) 4848-1151-3089.1 16 Legal Description of the Property Previously vacant land on the west side of South Tippecanoe A venue between Mill Street and Central Avenue: APN: 020-091-10, II, and 12 in the City of San Bernardino as per Parcel Map No. 17003 being a subdivision of a portion of Lot 1, block 46 of the Rancho San Bernardino, County of San Bernardino as per map recorded in Book 7, Page 2, of maps in the office of the County Recorder of said County. 4848-1151-3089.1 17 4848-1151-3089.1 EXHIBIT "D" REDEVELOPMENT COOPERATION AGREEMENT (PERRIS CAMPUS PLAZA, LLC, PROJECT) 18