HomeMy WebLinkAboutR31-Economic Development
CITY OF SAN BERNARDINO () R I (' I ~ , A L
ECONOMIC DEVELOPMENT AGENCV I V il\l
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT:
Public Hearing - Maya Cinemas North
America, LLC - HUD Application for a Section
108 Loan Guarantee (Central City North
Redevelopment Project Area)
DATE:
March 18, 2009
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Svnonsis of Previous Commission/Council/Committee Action(s):
On October 20, 2008, the Community Development Commission of the City of San Bernardino approved Resolution No.
CDC12008-41 authorizing the Interim Executive Director of the Agency to enter into a Redevelopment Project Study and
Exclusive Right to Negotiate Agreement with Maya Cinemas North America, Inc.
On December 15, 2008, the Mayor and Common Council of the City of San Bernardino ("Council") consented to the
disposition of the 20-Plex to Maya and the Commission approved the sale of the 20-Plex and authorized the Interim Executive
Director to execute the Disposition and Development Agreement between the Agency and Maya.
On February 2, 2009, the Council authorized the submittal of a HUD Section 108 Loan Application to the U.S. Department of
Housing and Urban Development.
On March 6, 2009, the Community Development Citizen Advisory Committee recommended to forward the Pre-Application
for the HUD Section 108 Loan Guarantee for the 20-Plex Re-finance and Rehabilitation Project to the Mayor and Common
Council for Approval.
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Recommended Motion:
Open/Close Public Hearing
(Mavor and Common Council)
Resolution of the Mayor and Common Council of the City of San Bernardino approving and authorizing I) the
submittal of the Section 108 Loan Guarantee Application for Maya Cinemas North America, Inc. to the U.S.
Department of Housing and Urban Development and 2) the Mayor to execute such documents as may be
required to submit and implement the Application (Maya Theater Project) (Central City North Redevelopment
Project Area)
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Project Area(s):
Kathleen Robles
Central City North
Redevelopment Project Area
Phone:
(909) 663-1044
Contact Person(s):
Ward(s):
IS!
Supporting Data Attached:
Ii'! Staff Report Ii'! Resolution(s) Ii'! HUD Application 0 Agreement(s)/Contract(s) 0 Map(s)
o Letter( s)
FUNDING REQUIREMENTS:
Amount: $
-0-
Source:
N/A
Budget Authority:
N/A
Signature:
7~f)t0
Fiscal Review:
Emil A. Marzullo, Interim Executive Director
n_m_________________________m___________mm_m_mm____m_______mm__~-mmm---mm------mm-mmmmmmm------
Commission/Council Notes: (f::;Cl>O 2009- 7f>
P:\Agcndas\COfiun Dcv Commission\CDC 2009\04-06-09 Maya Section 108 Loan SR,doc
COMMISSION MEETING AGENDA
Meeting Date: 04/062009
Agenda Item Number: j2-':S'
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
PUBLIC HEARING - MAYA CINEMAS NORTH AMERICA, LLC - HUD APPLICATION FOR
A SECTION 108 LOAN GUARANTEE
(CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On September 28, 2008, CinemaStar Luxury Theaters, Inc. ("CinemaStar"), the tenant of the
Redevelopment Agency of the City of San Bernardino ("Agency") owned 20-Plex movie theater building
(the "20-Plex") located at 450 North "E" Street in downtown San Bernardino, ceased operations but
retained possession of the premises. As of that date, 14 months of forbearance of partial rent in the
amount of $574,000 was outstanding. Therefore, the Agency forwarded a termination notice to
CinemaStar but no response was ever received. Accordingly, on November 7, 2008, the Agency filed an
unlawful detainer action with the Superior Court of California which held CinemaS tar to be in default of
the terms of their lease, declared the lease to be terminated and granted possession of the 20-Plex to the
Agency on December 1,2008.
On October 20, 2008, the Community Development Commission of the City of San Bernardino (the
"Commission") approved Resolution No. CDC/2008-41, authorizing the Interim Executive Director of the
Agency to enter into a Redevelopment Project Study and Exclusive Right to Negotiate Agreement
("ERN") with Maya Cinemas North America, Inc. ("Maya"). The ERN provided for negotiating the
terms of and possibly entering into a Disposition and Development Agreement ("DDA") with the Agency
for the purposes of acquiring the vacant Agency-owned 20-Plex, refurbishing the building and updating
the projection equipment to include digital and 3-D projection equipment, converting one auditorium to
an I-MAX theater, and the development of the vacant pads in front of the 20-Plex to include retail and
entertainment related uses.
On December 15, 2008, the Mayor and Common Council of the City of San Bernardino consented to the
disposition of the 20-Plex to Maya and the Commission approved the sale of the 20-Plex and authorized
the Interim Executive Director to execute the DDA between the Agency and Maya.
CURRENT ISSUE:
The DDA requires that Maya acquire the 20-Plex for the sum of $4.6 million together with the
contribution of additional new money by Maya as required for the rehabilitation and upgrades to be
provided in a new U.S. Department of Housing and Urban Development HUD Section 108 Loan
Guarantee ("HUD-I08 Loan") in a principal amount of $9 million. The amount outstanding on the
Agency's current HUD-I08 Loan is $4.6 million. The current HUD-I08 Loan will be paid off from funds
received by the new HUD-I08 Loan. Failure by Maya to refinance within three years will result in the
forfeiture of an additional $450,000 from Maya in the form of a letter of credit which will be on deposit
with the Agency. The letter of credit will be drawn upon by the Agency at three years from the date of
the new HUD-108 Loan and used to partially repay the principal amount of the new HUD-I 08 Loan if the
refinancing does not occur by this 3-year date.
P:\Ag~ndas\Comm Dcv CommissionlCDC 2009\04-06-09 Maya Scclion 108 Loan SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 04/06/2009
Agenda Item Nnmber: J2.:;I
Economic Development Agenc. JtaffReport
Maya Cinemas North America, Inc. - HUD-I08 Loan
Page 2
The new HUD-I08 Loan is essential for Maya to acquire, renovate and place the project back in
operation. Because of the prior operator's lack of reinvestment and management attention to the project, a
substantial reinvestment is necessary at this time. Without the combination of the planned equity
investment by Maya, New Markets Tax Credit investment equity and the HUD-I08 Loan, the project
cannot be completed in the foreseeable future. Private bank debt is not currently available for the
acquisition and renovation of this special purpose facility prior to the reopening of a successful operation.
The total project value is approximately $14.5 million to be funded with $9 million in a new HUD-108
Loan, $2.6 million in developer equity and $2.9 million in New Market Tax Credit investment equity.
Working drawings are being finalized and construction and material estimates are being refined by Maya.
The repayment source for the HUD-I08 Loan will be provided from the net income received from the
project and from the backup resources, as necessary, available through Maya. Maya has a successful
record of accomplishment, raising capital for its expansions in excess of $15 million from non-related
investors over the last four years. Review of personal financial statements reveals that the principal
owner has personally invested millions into the business. When CinemaStar received a forbearance on
fifty percent (50%) of the monthly lease payments and then eventually defaulted on the lease payments in
their entirety, the debt service payments on the current $4.6 million balance of the original HUD-I08
financing were paid by the Agency. In the event Maya were to default on the new HUD-I08 Loan, the
Agency would once again remit the necessary payments on the City's HUD-I08 Loan. The City and its
CBDG funds will not be at risk as long as the Agency has the financial resources to continue the
payments of the debt service on the HUD-I08 Loan as it has in the past.
FISCAL IMP ACT:
The HUD-I08 Loan obligation for the 20-Plex will increase from the current $4.6 million outstanding
principal balance to a $9.0 million HUD-108 Loan with a seven-year interest only payment schedule
together with required sinking fund payments and a letter of credit draw to reduce the principal balance of
the loan as set forth in the DDA. Maya has incurred the requirement to prepay the new HUD-I08 Loan
within three years or certain benefits under the DDA will no longer be available to Maya. If the HUD-
108 Loan is not paid within seven years, then Maya will be in default under the DDA thus requiring Maya
to terminate its occupancy and transfer the 20-Plex to the Agency.
RECOMMENDATION:
That the Mayor and Common Council adopt the Resolution.
~~
Emil A. Marzullo, Interim Executive Director
P:\Agcndas\Comm Dcv Commission\CDC 2009\04-06~09 Maya Section lOR Loan SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 04/062009
Agenda Item Number:
(2..; ,
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RESOLUTION NO.
C(Q)flf
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO APPROVING AND AUTHORIZING 1) THE
SUBMITTAL OF THE SECTION 108 LOAN GUARANTEE APPLICATION
FOR MAYA CINEMAS NORTH AMERICA, INC. TO THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND 2) THE
MAYOR TO EXECUTE SUCH DOCUMENTS AS MAY BE REQUIRED TO
SUBMIT AND IMPLEMENT THE APPLICATION (MAYA THEATER
PROJECT) (CENTRAL CITY NORTH REDEVELOPMENT PROJECT
AREA)
WHEREAS, the City of San Bernardino (the "City") has determined that a high priority
9 exists to create jobs for the City's low- and moderate-income persons; and
10 WHEREAS, the declining job base and economy within the City's downtown area
11 necessitates the City to implement certain activities for job creation; and
12 WHEREAS, to stimulate the downtown economy and thereby create jobs, the
13 Redevelopment Agency of the City of San Bernardino (the "Agency") entered into a Disposition
14 and Development Agreement ("DDA") with Maya Cinemas North America, Inc. ("Maya"), to
15 purchase the CinemaStar 20-Plex Luxury Theater building and property for $4,600,000 which
16 theater building is currently vacant and under the ownership of the Agency; and
17 WHEREAS, per the DDA, Maya will rehabilitate the building and property to re-brand the
18 20-Plex Theater to include an I-MAX Theater, including water feature and other public
19 improvements (the "Project") at an estimated cost of approximately $10 million, in addition to the
20 cost for the acquisition thereof from the Agency; and
21 WHEREAS, the implementation of the Project will assist the City in meeting one of the
22 federal National Objectives of benefiting low- and moderate-income persons; and
23 WHEREAS, the United States Department of Housing and Urban Development's ("HUD")
24 Section I 08 Loan Guarantee Program is designed to provide funds to assist with this type of
25 Project; and
26 WHEREAS, under the Section 108 Loan Guarantee Program, the City can borrow five (5)
27 times its latest approved annual Community Development Block Grant ("CDBG") entitlement
28 amount, minus any outstanding Section 108 commitments and/or principal balances of Section 108
~-60
f? '31
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P\Agendas\Resolulions\Resolulions\2009\04-06-09 Maya- Section lOB Loan MCC Reso doc
1 loans and the City may repay said borrowing pursuant to a payment schedule extending for twenty
2 (20) years; and
3 WHEREAS, the City is requesting $9,000,000 from the Section 108 Loan Guarantee
4 Program (the "Loan") to assist with the implementation of the Project, and the City will pledge its
5 yearly CDBG allocation from HUD to pay the interest on said Loan for a period of seven (7) years
6 with the then outstanding principal balance to be due and payable at such time by the Agency, from
7 the CDBG allocation or from refinancing proceeds pursuant to the DDA; and
8 WHEREAS, the Mayor of the City is duly authorized to submit the $9,000,000 Section 108
9 Loan Guarantee application to HUD and any amendments thereto and all understandings,
10 assurances and guarantees contained therein, and to act in connection with the application to
11 provide such additional information as may be required by HUD; and
12 WHEREAS, the Community Development Citizen Advisory. Committee ("CDCAC")
13 conducted a public hearing on March 6, 2009, and at such time considered the Pre-Application as
14 was presented to the CDCAC and further recommended to the Mayor and Common Council of the
15 City of San Bernardino ("Council") the approval of the application for the Loan and its submittal to
16 HUD as set forth in this Resolution; and
17 WHEREAS, the Mayor of the City is the official representative to execute such documents
18 as may be required in order to implement the application and issue debt obligations pursuant
19 thereto.
20 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED
21 BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
22 FOLLOWS:
23 Section 1. The City hereby certifies and assures with respect to its application for a
24 Loan guarantee pursuant to Section 108 of the Housing and Community Development Act of 1974
25 (the "Act"), as amended, that it possesses the legal authority to make the pledge of CDBG grants to
26 repay said Loan required under 24 CFR 570.705 (b )(2).
27 Section 2. As prerequisites for submission of the application to HUD, the City certifies
28 that it has: (a) furnished citizens with information required by 24 CFR 570.704 (a) (2) (i), as
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P:\Agendas\Re,olulions\Resolulions\2009\04-06-+09 Maya. Section 108 Loan MCC Resodoc
I amended; (b) held at least one public hearing or meetings, on March 6, 2009, by the CDCAC and
2 April 6, 2009, by the Council to obtain the views of citizens on community development and
3 housing needs; and (c) prepared its application in accordance with 24 CFR 570.704 (a) (I) (iv), as
4 amended, and made the application available to the public.
5 Section 3. The City has and will continue to follow a detailed citizen participation plan
6 that meets the requirements described in 24 CFR 570.704 (a) (2).
7 Section 4. The City has and will continue to affirmatively further fair housing, and the
8 guaranteed loan funds will be administered in compliance with the Title VI of the Civil Rights Act
9 of 1964 (42 U.S.C. 2000d et seq.) and the Fair Housing Act (42 U.S.C. 3601-3619) and the City
10 will expend in the aggtegate, at least seventy percent (70%) of all CDBG funds, as defined in 24
II CFR 570.3 during the term of the Consolidated Plan, specifically to ensure that the City carries out
12 activities for the benefit of low- and moderate-income persons, as described in 24 CFR 570.208(a).
13 Section 5. The City has and will continue to comply with the requirements governing
14 displacement, relocation, real property acquisition and the replacement of low- and moderate-
IS income housing described in 24 CFR 570.606.
16 Section 6. The City has and will continue to certify regarding debarment, suspension
17 and other responsibilities in accordance with the provisions of the Act.
18 Section 7. The City has and will continue to comply with other provisions of the Act
19 and with other applicable laws.
20 Section 8. The City hereby assures and certifies with respect to its application for a loan
21 guarantee pursuant to Section 108 of the Act, as amended, that it has made efforts to obtaining
22 financing for the Project described herein without the use of such guarantee, that it will maintain
23 documentation of such efforts for the term of the Loan guarantee, and that it cannot complete such
24 financing consistent with the timely execution of the Project plans without such guarantee.
25 Section 9. The City will continue to maintain a drug-free workplace as provided under
26 24 CFR Part 24 (Appendix C).
27 Section 10. The City has and will continue to certify, to the best of its knowledge and
28 belief the following anti-lobbying statement required under 24 CFR Part 87 (Appendix A) that: (a)
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1 No federal appropriated funds have been paid or will be paid by or on behalf of it, to any person for
2 influencing or attempting to influence an officer or employee of any agency, a member of
3 Congress, an officer or employee of Congress, or any employee of any Member of Congress in
4 connection with the awarding of any grant, loan or cooperative agreement, it will complete and
5 submit Standard Form LLL "Disclosure Form to Report Lobbying," in accordance with its
6 instructions; and (b) it will require that the language of paragraph (a) of this certification be
7 included in the award documents for all subawards at all tiers (including subcontracts, subgrants
8 and contracts under grants, loans and cooperative agreements) and that all subrecipients shall
9 certify and disclose accordingly.
10 Section 11. The Council hereby finds and determines that the facts and circumstances set
11 forth in the Recitals hereof are true and correct in all respects. The Mayor and Common Council
12 acknowledge that the Staff report together with the accompanied Exhibit A, the pre-application to
13 be submitted to HUD, are correct and in accordance with the direction provided to Staff at the
14 CDCAC public meeting of March 6,2009.
15 Section 12. The Council hereby authorizes the Mayor to submit the Section 108 Loan
16 Guarantee Application consistent with the actions of the Council at this public hearing as duly
17 conducted on April 6, 2009, and to execute such documents as may be required in order to submit
18 and implement the application pursuant to the requirements under the Act. The final loan
19 documents as may be prepared and submitted by HUD to the City for final acceptance pursuant to
20 the Loan guarantee request as set forth in the Section 108 Loan Guarantee Application shall be
21 presented to the Council for their consideration and approval at the sole discretion of the Council.
22 Nothing contained herein or in the Section 108 Guarantee Application shall commit the Council to
23 approve the final form of the required documents to evidence the Loan as contemplated herein.
24 Section 13. This Resolution shall take effect upon its adoption and execution in the
25 manner as required by the City Charter.
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8 Common Council of the City of San Bernardino at a
,2009, by the following vote to wit:
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO APPROVING AND AUTHORIZING 1) THE
SUBMITTAL OF THE SECTION 108 LOAN GUARANTEE APPLICATION
FOR MAYA CINEMAS NORTH AMERICA, INC. TO THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND 2) THE
MAYOR TO EXECUTE SUCH DOCUMENTS AS MAYBE REQUIRED TO
SUBMIT AND IMPLEMENT THE APPLICATION (MAYA THEATER
PROJECT) (CENTRAL CITY NORTH REDEVELOPMENT PROJECT
AREA)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
meeting thereof,
Navs
Abstain
Absent
Rachel G. Clark, City Clerk
day of
,2009.
20 The foregoing Resolution is hereby approved this
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Patrick J. Morris, Mayor
City of San Bernardino
24 Approved as to Form:
25
26 By:
27
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James F. Penman, City Attorney
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EXHIBIT "A"
Section 108 Loan Guarantee Application
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P IAgendas\Resol"tions\ResoJullOns\2009\04-06-0Q Maya - Section 108 Loan MCC Resodoc
City of San Bernardino
HUD 108 lOAN GUARANTEE
PRE-APPLICATION
APRil, 2009
[THIS PAGE RESERVED FOR MAYOR'S TRANSMITTAL
LETTER TO HUD WITH THE FINAL APPLICATION]
TABLE OF CONTENTS
I. INTRODUCTION ..............................................................................................................................................1
II. FUNDING REQUEST .......................................................................................................................................1
III. THE PROJECT..................................................................................................................................................1
IV. FINANCE STRUCTURE ..................................................................................................................................3
V. COMMUNITY DEVELOPMENT AND NATIONAL OBJECTIVES.........................................................5
VI. ACTIVITY ELIGIBILITY FOR SECTION 108 FUNDS..............................................................................8
VII. PLEDGE OF GRANTS .....................................................................................................................................9
VIlI. CITY OF SAN BERNARDINO CITIZEN PARTICIPATION PLAN .........................................................9
IX. PUBLICA T10NS .............................................................................................................................................10
X. PUBLIC COMMENT ......................................................................................................................................10
XI. ACTIVITY DESCRIPTION RELATING TO THE FEDERAL NATIONAL OBJECTIVES ................11
XII. SCHEDULE OF P A YMENTS........................................................................................................................12
XIlI. CERTIFICATIONS FOR SECTION 108 LOAN GUARANTEES.............................................................14
570.704(B)(3) - CERTIFICATION REGARDING LEGAL AUTHORITY TO PLEDGE GRANTS .....................................14
570.704(BX4) - CERTIFICATION REGARDING EFFORTS TO OBTAIN OTHER FINANCING .....................................14
570.704(BX5) - CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS ..................................14
570.704(B)(6)- CERTIFICATION REGARDING DEBARMENT, SUSPENSION, AND OTHER RESPONSffilLITY
MATfERS; PRIMARY COVERED TRANSACTIONS .......................................................................17
570.704(BX7) - ANTI-LOBBYING STATEMENT ...................................................................................................17
570.704(B)(8) - CITY ENTITLEMENT CERTIFICATION .........................................................................................18
EXHIBIT A - PROJECT MAP................................................................................................................................20
EXHIBIT B - CITIZEN PARTICIPATION PLAN...............................................................................................21
EXHIBIT C - ACTIVITIES THE CITY PROPOSES TO PURSUE WITH ASSISTANCE FROM
SECTION 108 FUNDS - MAY A CINEMAS SAN BERNARDINO, LLC .................................................28
EXHIBIT D - PUBLICATION NOTICES .............................................................................................................30
EXHIBIT E - DISPOSITION AND DEVELOPMENT AGREEMENT ..............................................................31
EXHIBIT F - MAY A CINEMAS' PROPOSED AND CURRENT DEVELOPMENTS ....................................32
i
I. Introduction
The City of San Bernardino ("City") is a municipal corporation and charter city
incorporated in 1854 with a population of approximately 205,000 residents
making it the second largest municipality east of Los Angeles and the 18th largest
in California. As a charted city, San Bernardino has an elected mayor and seven
(7) Council Districts represented by elected Council Members ("Mayor and
Common Council"). The City is the county seat of San Bernardino County and is
organized pursuant to the provisions of the constitution of the State of California.
San Bernardino is located approximately 70 miles east of Los Angeles and is
conveniently served by the 1-10 Freeway, the 1-210 Freeway, and the 1-215/91
Freeways with rail service provided by Amtrak, Metro-link and Burlington
Northern Santa Fe. The Redevelopment Agency of the City of San Bernardino
("Agency") is a public body, corporate and politic, existing under the laws of the
State of California, Health and Safety Code Section 33000 et. seq., and is charged
with the mission of redeveloping blighted and underutilized land.
II. Funding Request
The City is requesting a $9.000.000 (nine million dollars) U. S. Housing and
Urban Development (HUD) Section 108 Loan. The $4.6. million balance of the
current HUD Section 108 Loan will be paid-off by the City.
III. The Project
The Agency is the owner of a 104,900 square-foot, 20-Plex movie theater ("20-
Plex") located at 450 North "E" Street in downtown San Bernardino (Exhibit A-
Phase I) with approximately 4,200 seats, a main concession area in the lobby and
two satellite concession areas, preparation kitchen and offices. Since 1998, the
building has been leased to the CinemaStar Luxury Theaters, Inc. ("CinemaStar")
formerly of Oceanside, California. The Agency acquired fee title to the 20-Plex
in 2000 from Metropolitan Development, the original Developer, and renegotiated
the lease with CinemaStar. The San Bernardino location was profitable until
approximately 2006. On September 28, 2008, the CinemaStar ceased operations
at this location so effectively terminating the lease with the Agency. The Agency
has since regained possession of the building and is desirous of disposing of the
20-Plex to a new operator and owner. The disposition of the 20-Plex to a new
operator is hereby defined as "the Project."
It is imperative that this major icon in downtown be reopened as quickly as
possible as a viable business in the Central Business District. Downtown San
Bernardino is economically depressed suffering major losses in the past decade
with the departure of three department stores (J.C. Penney, Montgomery Wards,
and Harris') which has left the Carousel Mall at 4th Street virtually lifeless as well
as the closure of the 230-room Clarion Hotel and Convention Center two blocks
away. The one remaining success story for downtown San Bernardino has been
the California Theatre of the Performing Arts adjacent to the 20-Plex site. This
beautiful and ornate 1,700 seat historical live performance venue built in 1928 is
home to Theatrical Arts International that attracts a myriad of touring Broadway
shows such as Cats and Phantom, plays and ballets as well as being home to the
San Bernardino Symphony Orchestra and the Sinfonia Mexicana. Together these
two theaters, the old and the new, the classical and the modern, created a vibrant
theater district upon which many other downtown businesses, such as restaurants,
relied on to boost their revenues. Re-opening of the 20-Plex at the earliest
opportunity will retain the impetus of the customer base which may otherwise
become accustomed to alternative theaters in the region, restore the employment
opportunities lost when the 20-Plex closed and compliment the California Theatre
as a "Theater District" rather than simply as a stand-alone playhouse.
On December 15,2008, the Community Development Commission of the City of
San Bernardino ("Commission"), at a Public Hearing, approved a Disposition and
Development Agreement ("DDA") (Exhibit E) between the Agency and Maya
Cinemas, North America, Inc. ("Maya"), for Maya to purchase the building and
the property from the Agency for $4.6 million. Maya will own the building, the
land, all improvements, fixtures, and fittings in fee thereby restoring the 20-Plex
to the tax rolls from which it had been exempt while under Agency ownership.
The building, however, is now ten years old and has suffered over the last four
years from severe deferred maintenance to the extent that the product is no longer
competitive in the marketplace. Virtually all furnishings and fixtures need to be
replaced including many of the 4,200 seats, as well as new carpeting, tile,
countertops, paintwork, wall carpeting, and installation of new digital projection
equipment, movie screens, and sound systems. Regrettably, it has been
discovered that there are also a number of Americans with Disabilities Act
("ADA") deficiencies, including the steps to the risers in each auditorium, which
must be addressed. This portion of the work will cost approximately $6.7 million
dollars.
Furthermore, in order to gain market superiority in the region, Maya has signed a
license agreement with I-MAX to operate a 3-D I-MAX cinema at this location.
The closest I-MAX to the west is in the City ofOntarlo and to the east is in
Cathedral City (20 miles and 60 miles respectively). The terms of the I-MAX
license agreement restrict the number ofI-MAX movie theaters in anyone
geographical region so, according to the license, there can be no additional 1-
MAX theaters in the Inland Empire which will undoubtedly give the San
Bernardino 20-Plex a distinct advantage over surrounding communities. The
value of the I-MAX improvements including the projection equipment and
refitting one auditorium for an I-MAX screen, which involves raising the roofto
accommodate the large screen and the related licenses all amount to a further $1.8
million.
2
In addition to the purchase of the 20-Plex building/property ($4.6 million),
building repairs and upgrades for health and safety, code compliance, and general
repair ($6.4 million), a new I-MAX theater ($1.6 million), and design and
engineering costs ($ 0.3 million), Maya proposes to install a water feature and a
public plaza ($1.6 million). The water feature and public plaza will contain new
lighting and pedestrian walkways. Phase I & II costs of the Project are estimated
to be $14.5 million. Exhibit A shows both Phases of the Project.
IV, Finance Structure
The total project value is approximately $14.5 million, funded with $9 million in
Section 108 Financing, $2.6 million in developer equity, and $2.9 million in New
Market Tax Credit financing (financing by investors).
Borrower:
Amount:
Upper Tier Investment Fund
$9,000,000
Rate:
HUD cost of funds based on 3-month UBOR plus \1,%
(currently approximately 2%).
Term:
7 years, interest only.
Fees:
I % of principal amount.
Security
Assignment of a senior security interest in the investment
fund and any rights it may have related to the investment
fund's equity investment.
HUD-I08 Loan
Guaranty:
Guaranty of repayment through a $450.000 Letter of Credit
and to assure the timely completion of the project, funding
any project cost overruns, and project operation to achieve
a 1.35 to 1.0 debt service coverage ratio.
Forbearance
Agreement:
The HUD-I 08 loan will be subject to a forbearance
agreement restricting the City/HUD 108 lender from
exercising any right to collect its loan for seven (7) years
(the term of the New Markets Tax Credit compliance
period).
Purpose #1:
The Upper Tier Investment Fund will, with the proceeds
from the HUD-I08 loan, tax credit investor funds, and
Maya funds, make two (2) qualified equity investments
(QEI's) into 1) Urban America CDE and 2) NDC/HEDC
CDE.
3
Sources and Uses,
Investment Fund
Level:
Purpose #2:
Sources and Uses,
Project Level:
Project Level
Security:
Project Level
Guarantees:
Sources
City of San Bernardino
HUD-I08 Loan
Maya's Equity
Tax Credit Investors
Total
Uses
$7,500,000
$7,000,000
Urban America QEI
NDCIHEDC QEI
$9,000,000
$2,600,000
$2,900,000
$14,500,000
Total
$14,500,000
The two community development entities (Urban America
and NDCIHEDC) who receive the QEI's will make loans to
Maya Cinemas San Bernardino, LLC (Cinemas), wholly
owned subsidiary of Maya, to complete the acquisition of
the cinema building and land parcel, FF&E improvements,
building repairs and code compliance work, cinema
upgrades, soft costs, and public improvements.
Sources
A. Loan HUD-I08
B. Maya's Equity
C. Loan Investors
Total
Uses
$9,000,000
$2,600,000
$2,900,000
$14,500,000
Acquisition
FF&E
Repairs
Upgrades
Soft costs
Contingency
Public Improvements
Total
$4,600,000.
$2,072,650
$1,264,500
$3,795,000
$1,179,530
$288,320
$1,200.000
$14,500,000
. Pays off existing HUD-} 08 Loan
The two CD E' s will have pro rata first trust deeds to secure
their loans. All Maya funds including the $2.6 million for
the project and the $450,000 Letter of Credit security must
be on deposit with the CDE's or the City prior to
disbursement of the HUD-I08 Loan or investor funds.
Maya shall execute a repayment guarantee and guaranty 1)
timely completion of the project, 2) fund any project cost
overruns, and 3) operate the project at better than a 1.35 to
1.0 debt service coverage ratio.
4
HUD-I08
Loan Security After
Tax Credit
Compliance:
If the HUD-I 08 Loan is not refinanced sooner, at the end of
the seven (7) year tax credit compliance period, the first
trust deed held by the CDE's will be assigned to the City of
San Bernardino.
Conditions Precedent
to HUD-108 Loan
Closing:
Maya or Moctesuma Esparza to post a $450,000 AA rated,
clean sight draft, letter of credit, or cash collateral with the
San Bernardino Redevelopment Agency prior to close for
sinking fund payment purposes and execute appropriate
documents to evidence their obligation to make additional
sinking fund payments of$180,000 in year 2, $360,000 in
year 3, and $450,000 in each of years 4,5,6, and 7.
Working drawings have not been completed and contractors' bids have not been
received, so at the present time it is not possible to determine with accuracy the
project's costs (Exhibit C).
Maya has a successful record of accomplishment, raising capital for its
expansions in excess of$15.0 million from non-related investors over the last four
years. The principal owner has also personally invested millions into the
business.
The CinemaS tar defaulted lease payments were paid by the Agency and if there is
a default by Maya, the Agency will step in and pay the City's HUD-I 08 Loan
debt service. The City and its CBDG funds will not be at risk.
V. Community Development and National Objectives
The City proposes to submit a pre-application for a BUD Community
Development Block Grant (CDBG) Section 108 Loan Guarantee for the purchase
and rehabilitation of the CinemaStar in San Bernardino, California.
The proposed use of proceeds from the Section 108 Loan Guarantee complies
with the federal National Objectives of the CDBG program [24 CFR
570.200(a)(2)] and the City's Community Development Objectives as indentified
in the City's Consolidated Plan 2005-2010 and Action Plan for Program Year
2008-2009. Given that the City's Community Development Objectives are
aligned with those of the federal National Objectives, only federal National
Objectives will be cited for reference in the pre-application.
5
The National Objective the City proposes to pursue is 24 CFR 570.208 (a)
Activities benefiting low- and moderate-income persons.
24 CFR 570.208 (a) Activities benefiting low- and moderate-income persons, (I)
Area benefit activities and (4) Job creation or retention activities.
Activities benefitinf! low- and moderate-income oersons
The Project's services and employment opportunities will target low- and
moderate-income residents and will not benefit moderate-income persons to the
exclusion oflow-income persons.
Area benefits activities
The Project's services and employment opportunities will be available to all the
residents within the City because at least 51 percent of the residents are low- and
moderate-income persons. Based on HUD Income Definitions and the 2000
Census, almost 35.1 percent of the City's total households were within extremely
low- or low-income levels, while 19.5 percent were within moderate-income
levels. Based on the 2000 Census, 54.6 percent of low- and moderate-income
households translate to approximately 102,350 residents based on the 2000
Census total population of 185,388.
Job creation or retention activities
The Project is estimated to create 125 new permanent jobs for the City. These
jobs are forecasted to create an annual payroll of$957,087 by the end of the first
two operating years.
Every attempt will be made to employ those residents that are low- or moderate-
income persons. The San Bernardino Employment Training Agency (SBETA)
will be engaged to locate area residents that meet the low- or moderate-income
criteria. Additionally, SBET A can provide on-the-job training for employers at
no cost to the employer. The no-cost job training benefit will increase the
potential to give first consideration to and hire low- or moderate-income residents
for jobs that require special skills.
The Project to benefit from the Section 108 Loan Guarantee, along with its
creation of 125 new jobs, is located in Census Tract (CT) 57.00. The 2000
Census poverty rate for CT 57.00 was 40 percent. Additionally, the job creation
activity being undertaken is located in CT 57.00 Block Group 1, which had a
poverty rate of 40 percent. As an additional incentive to hire low- to moderate-
income residents, the Project is located within the San Bernardino Valley
Enterprise Zone, a State Enterprise Zone designation. The employee hiring tax
credit benefit offered by the Enterprise Zone program offers the Project another
avenue for capital investment into the Project.
The Project is also located in the City's Central City North Redevelopment
Project Area. Tax increment received, as result this Project returning to the tax
6
rolls, will be used to breathe new life into the area plagued by physical and
economic conditions, achieve desired development, reconstruction, and
rehabilitation including residential, commercial, industrial, and retail land use.
Jobs will be created, businesses will be revitalized, and once again the area will
gain active participation and investment by its citizens.
7
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AIl proposed activities will take place at 450 North E Street, San Bernardino, CA.
No program income will be generated from any proposed activities and all
activities meet the National Objective 24 CFR !}570.208 (a) as an activity to benefit
area low- and moderate-income persons.
Additional information about the proposed activities, along with a complete copy
ofthe City's proposed Section 108 pre-application may be obtained from:
City of San Bernardino
City Manager's Office
Attn: Catherine Pritchett, Management Analyst
300 North D Street
San Bernardino, CA 92408
Phone: 909-384-5122
Fax: 909-384-5138
Email: pritchett_Ca@ci.san-bernardino.ca.us
Website: htto://www.sbcitv.org/deots/citv managers officelhomeoage.aso
For questions regarding the pre-application contact:
Kathleen Robles, Project Manager
City of San Bernardino Economic Development Agency
215 North EStreet, Suite 301
San Bernardino, CA 92408
Phone: 909-663-2296
Fax: 909-888-9413
Email: krobles@sbrda.org
Website: www.sbrda.org
VII. Pledge of Grants
To assure the repayment of debt obligations, charges incurred (issuance,
underwriting, servicing, etc.), and as a condition for receiving HUD loan
guarantee assistance, the City of San Bernardino pledges all future CDBG grant
funds for which the City may become eligible to receive.
VIII. City of San Bernardino Citizen Participation Plan
Refer to Exhibit B for the City's Citizen Participation Plan.
9
IX. Publications
Community Development Citizen advisory Committee meeting March 6, 2009:
A Public Notice was advertised in the San Bernardino Sun, a community
newspaper, on February 20, 2009, to interview applicants, review HUD
108 Loan Guarantee Pre-Application, deliberate and determine funding
recommendations for the Mayor and Common Council for the 2009/2010
Community Development Block Grant portion of the Annual Plan.
City Council meeting April 6, 2009:
A Public Notice was advertised in the San Bernardino Sun, a community-
wide newspaper, on March 4, 2009, and again on April 3, 2009, inviting
persons to appear before the Mayor and Common Council to present
evidence or testimony concerning the 20-Plex Re-Finance and
Rehabilitation Project.
Refer to Exhibit D for Proof of Publications.
X. Public Comment
No public comment was received at the March 6, 2009 Community Development
Citizen Action Committee (CDCAC) public meeting.
CDCAC Recommendation: Recommend to the Mayor and Common Council for
Approval of the HUD Section 108 Loan Application for Maya Cinemas San
Bernardino, LLC and Submittal to the U.S. Department of Housing and Urban
Development.
Passed:
7 - Ayes
0- Nays
Comments and recommendation if any are attached to this page.
10
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XII. Schedule of Payments
Loan Amount: $9,000,000
Interest per year: 5.0%
Amortization: 7 years
Loan due: end of year 7
2nd year - Quarterly sinking fund payment 2ndQ2ndYr: $45,000
3rd year _ Quarterl~ sinking fund payment 2ndQ3rdYr: $90,000
4th year through 7 year - Quarterly sinking fund payment 2ndQ4thYr - 7thYr:
$112,500
Month 42 - one time payment against principal: $450,000 per Letter of Credit
No. Beginning Scheduled Extra Total Principal Interest Ending
Balance Payment Payment Payment Balance
1 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
2 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
3 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
4 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
5 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
6 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
7 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
8 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
9 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
10 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
11 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9 000,000
12 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
13 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
14 $9,000,000 $37,500.00 $0 $37,500.00 $0 $37,500.00 $9,000,000
15 $9,000,000 $37,500.00 $45,000 $82,500.00 $45,000 $37,500.00 $8,955,000
16 $8,955,000 $37,312.50 $0 $37,312.50 $0 $37,312.50 $8,955,000
17 $8,955,000 $37,312.50 $0 $37,312.50 $0 $37,312.50 $8,955,000
18 $8,955,000 $37,315.50 $45,000 $82,315.50 $45,000 $37,312.50 $8,910,000
19 $8,910,000 $37,125.00 $0 $37,125.00 $0 $37,125.00 $8,910,000
20 $8,910,000 $37,125.00 $0 $37,125.00 $0 $37,125.00 $8,910,000
.21 $8,910,000 $37,125.00 $45,000 $82,125.00 $45,000 $37,125.00 $8,865,000
22 $8,865,000 $36,937.50 $0 $36,937.50 $0 $36,937.50 $8,865,000
23 $8,865,000 $36,937.50 $0 $36,937.50 $0 $36,937.50 $8,865,000
24 $8,865,000 $36,937.50 $45,000 $81,937.50 $45,000 $36,937.50 $8,820,000
25 $8,820,000 $36,750.00 $0 $36,750.00 $0 $36,750.00 $8,820,000
26 $8,820,000 $36,750.00 $0 $36,750.00 $0 $36,750.00 $8,820,000
27 $8,820,000 $36,750.00 $90,000 $126,750.00 $90,000 $36,750.00 $8,730,000
28 $8,730,000 $36,375.00 $0 $36,375.00 $0 $36,375.00 $8,730,000
29 $8,730,000 $36,375.00 $0 $36,375.00 $0 $36,375.00 $8,730,000
30 $8,730,000 $36,375.00 $90,000 $126,375.00 $90,000 $36,375.00 $8,640,000
31 $8,640,000 $36,000.00 $0 $36,000.00 $0 $36,000.00 $8,640,000
32 $8,640,000 $36,000.00 $0 $36,000.00 $0 $36,000.00 $8,640,000
33 $8,640,000 $36,000.00 $90,000 $126,000.00 $90,000 $36,000.00 $8,550,000
34 $8,550,000 $35,625.00 $0 $35,625.00 $0 $35,625.00 $8,550,000
35 $8,550,000 $35,625.00 $0 $35,625.00 $0 $35,625.00 $8,550,000
36 $8,550,000 $35,625.00 $90,000 $125,625.00 $90,000 $35,625.00 $8,460,000
12
No. Beginning Scheduled Extra Total Principal Interest Ending
Balance Pavment Payment Payment Balance
37 $8,460,000 $35,250.00 $0 $35,250.00 $0 $35,250.00 $8,460,000
38 $8,460,000 $35,250.00 $0 $35,250.00 $0 $35,250.00 $8,460,000
39 $8,460,000 $35,250.00 $112,500 $147,750.00 $112,500 $35,250.00 $8,347,500
40 $8,347,500 $34,781.25 $0 $34,781.25 $0 $34,781.25 $8,347,500
41 $8,347,500 $34,781.25 $0 $34,781.25 $0 $34,781.25 $8,347,500
42 $8,347,500 $34,781.25 $562,500 $597,281.25 $562,500 $34,781.25 $7,785,000
43 $7,785,000 $32,437.50 $0 $32,437.50 $0 $32,437.50 $7,785,000
44 $7,785,000 $32,437.50 $0 $32,437.50 $0 $32,437.50 $7,785,000
45 $7,785,000 $32,437.50 $112,500 $144,937.50 $112,500 $32,437.50 $7,672,500
46 $7,672,500 $31,968.75 $0 $31,968.75 $0 $31,968.75 $7,672,500
47 $7,672,500 $31,968.75 $0 $31,968.75 $0 $31,968.75 $7,672,500
48 $7,672,500 $31,968.75 $112,500 $144,468.75 $112,500 $31,968.75 $7,560,000
49 $7,560,000 $31,500.00 $0 $31,500.00 $0 $31,500.00 $7,560,000
50 $7,560,000 $31,500.00 $0 $31,500.00 $0 $31,500.00 $7,560,000
51 $7,560,000 $31,500.00 $112,500 $144,000.00 $112,500 $31,500.00 $7,447,500
52 $7,447,500 $31,031.25 $0 $31,031.25 $0 $31,031.25 $7,447,500
53 $7,447,500 $31,031.25 $0 $31,031.25 $0 $31,031.25 $7,447,500
54 $7,447,500 $31,031.25 $112,500 $143,531.25 $112,500 $31,031.25 $7,335,000
55 $7,335,000 $30,562.50 $0 $30,562.50 $0 $30,562.50 $7,335,000
56 $7,335,000 $30,562.50 $0 $30,562.50 $0 $30,562.50 $7,335,000
57 $7,335,000 $30,562.50 $112,500 $143,062.50 $112,500 $30,562.50 $7,222,500
58 $7,222,500 $30,093.75 $0 $30,093.75 $0 $30,093.75 $7,222,500
59 $7,222,500 $30,093.75 $0 $30,093.75 $0 $30,093.75 $7,222,500
60 $7,222,500 $30,093.75 $112,500 $142,593.75 $112,500 $30,093.75 $7,110,000
61 $7,110,000 $29,625.00 $0 $29,625.00 $0 $29,625.00 $7,110,000
62 $7,110,000 $29,625.00 $0 $29,625.00 $0 $29,625.00 $7,110,000
63 $7,110,000 $29,625.00 $112,500 $142,125.00 $112,500 $29,625.00 $6,997,500
64 $6,997,500 $29,156.25 $0 $29,156.25 $0 $29,156.25 $6,997,500
65 $6,997,500 $29,156.25 $0 $29,156.25 $0 $29,156.25 $6,997,500
66 $6,997,500 $29,156.25 $112,500 $141,656.25 $112,500 $29,156.25 $6,885,000
67 $6,885,000 $28,687.50 $0 $28,687.50 $0 $28,687.50 $6 885,000
68 $6,885,000 $28,687.50 $0 $28,687.50 $0 $28,687.50 $6,885,000
69 $6,885,000 $28,687.50 $112,500 $141,187.50 $112,500 $28,687.50 $6,772,500
70 $6,772,500 $28,218.75 $0 $28,218.75 $0 $28,218.75 $6,772,509
71 $6,772,500 $28,218.75 $0 $28,218.75 $0 $28,218.75 $6,772,500
72 $6,772,500 $28,218.75 $112,500 $140,718.75 $112,500 $28,218.75 $6,660,000
73 $6,660,000 $27,750.00 $0 $27,750.00 $0 $27,750.00 $6,660,000
74 $6,660,000 $27,750.00 $0 $27,750.00 $0 $27,750.00 $6,660,000
75 $6,660,000 $27,750.00 $112,500 $140,250.00 $112,500 $27,750.00 $6,547,500
76 $6,547,500 $27,281.25 $0 $27,281.25 $0 $27,281.25 $6,547,500
77 $6,547,500 $27,281.25 $0 $27,281.25 $0 $27,281.25 $6,547,500
78 $6,547,500 $27,281.25 $112,500 $139,781.25 $112,500 $27,281.25 $6,435,000
79 $6,435,000 $26,812.50 $0 $26,812.50 $0 $26,812.50 $6,435,000
80 $6,435,000 $26,812.50 $0 $26,812.50 $0 $26,812.50 $6,435,000
81 $6,435,000 $26,812.50 $112,500 $139,312.50 $112,500 $26,812.50 $6,322,500
82 $6,322,500 $26,343.75 $0 $26,343.75 $0 $26,343.75 $6,322 500
83 $6,322,500 $26,343.75 $0 $26,343.75 $0 $26,343.75 $6,322,500
84 $6,322,500 $26,343.75 $112,500 $138,843.75 $112,500 $26,343.75 $6,210,000
13
XlII. Certifications for Section 108 Loan Guarantees
[The following certifications are required by 24 CFR Section 570.704. The signature that
follows the last certification applies to all required certifications.]
570.704(b)(3) - Certification Regarding Legal Authority to Pledge Grants
The City hereby certifies and assures with respect to its application for a loan guarantee
pursuant to Section 108 of the Housing and Community Development Act of 1974, as
amended, that it possesses the legal authority to make the pledge of grants required under
24 CFR part 570.705(b)(2).
570.704(b)(4) - Certification Regarding Efforts to Obtain Other Financing
The City hereby assures and certifies with respect to its application for a loan guarantee
pursuant to Section 108 of the Housing and Community Development Act of 1974, as
amended, that it has made efforts to obtain financing for activities described in the
application without the use of the loan guarantee, will maintain documentation of such
efforts for the term of the loan guarantee, and certifies that it cannot complete such
financing consistent with the timely execution of the project without such guarantee.
570.704(b)(5) - Certification Regarding Drug-Free Workplace Requirements
[The certification set out below is a material representation upon which reliance is placed
by the United States Department of Housing and Urban Development in awarding the
loan guarantee assistance. If it is later determined that the City knowingly rendered a
false certification, or otherwise violates the requirements of the Drug-Free Workplace
Act, the U.S. Department of Housing and Urban Development, in addition to any other
remedies available to the Federal Government, may take action authorized under the
Drug-Free Workplace Act.]
The City certifies that it will continue to maintain a drug-free workplace by:
A. Publishing a statement notifying employees that the unlawful
manufacture, dispensation, possession, or use of a controlled substance is
prohibited in the City's workplace, and specifying the action that will be
taken against employees for violation of such prohibition;
14
B. Establishing an on-going drug-free awareness program to inform
employees about:
I. The dangers of drug abuse in the workplace;
2. The City's policy of maintaining a drug-free workplace;
3. Any available drug counseling, rehabilitation, and employee
assistance programs; and
4. The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace.
C. Making it a requirement that each employee engaged in grant activity be
given a copy of the statement required by paragraph A.
D. Notifying the employee in the statement required by paragraph A. that, as
a condition of employment under the grant, the employee will:
1. Abide by the terms of the statement; and
2. Notify the employer in writing of his or her conviction for a
violation of a criminal drug statute occUrring in the workplace no
later than five calendar days after such conviction.
E. Notifying the agency in writing, within ten calendar days after receiving
notice under subparagraph D.2. from an employee or otherwise receiving
actual notice of such conviction. Employers of convicted employees must
provide notice, including position and title, to every grant officer or other
designee on whose grant activity the convicted employee was working,
unless the federal Agency has designated a central point for the receipt of
such notices. (Notice shall include the identification number or numbers
of each affected grant.)
F. Taking one of the following actions within 30 calendars days of receiving
notice under paragraph D.2., with respect to any employee so convicted:
1. Taking appropriate personnel action against such employee, up to
and including termination, consistent with the requirements of the
Rehabilitation Act of 1973, as amended, and any other applicable
federal and State laws; and
2. In appropriate circumstances, require an employee to participate
satisfactorily in a drug abuse assistance or rehabilitation program
approved for such purpose by a federal, state, or local health, law
enforcement, or other appropriate agency.
15
G. Making a good faith effort to continue to maintain a drug-free workplace
through implementation of paragraphs A, B, C, D, E and F
H. The City shall insert in the space provided below the site(s) expected to be
used for the performance of work under the assistance covered by the
certification (identify place(s) of performance including address, city,
state, and zip code for each site):
. City of San Bernardino-City Hall, 300 North "D" Street, San
Bernardino, County of San Bernardino, CA 92401
Animal Control, 333 Chandler Place, San Bernardino, County of San
Bernardino, CA 92408
City of San Bernardino Code Enforcement, 201 North "E" Street, San
Bernardino, County of San Bernardino, CA 9240 I
. City of San Bernardino, Cable TV, 201 North "E" Street, San
Bernardino, County of San Bernardino, CA 92401
City of San Bernardino Parks, Recreation and Community Services,
201 North "E" Street, San Bernardino, County of San Bernardino, CA
92401
City of San Bernardino Economic Development Agency, 201 North
"E" Street, San Bernardino, County of San Bernardino, CA 92401
City of San Bernardino Fire Department, 200 East Third Street, San
Bernardino, County of San Bernardino, CA 92410
. City of San Bernardino Public Library, 555 West 6th Street, San
Bernardino, County of San Bernardino, CA 92401
. San Bernardino Employment Training Agency, 600 North Arrowhead
Avenue, Suite 300, San Bernardino, County of San Bernardino, CA
92401
City of San Bernardino Police Department, 701 North "D" Street, San
Bernardino, County of San Bernardino, CA 92401
16
570.704(b)(6) - Certification Regarding Debarment, Suspension, and Other
Responsibility Matters; Primary Covered Transactions
J. The prospective primary participant certifies to the best of its knowledge and
belief, that it and its principals:
A. Are not presently debarred, suspended, proposed for debannent, declared
ineligible, or voluntarily excluded from covered transactions by any
federal department or agency;
B. Have not within a three year period preceding this proposal been
convicted of or had a civil judgment rendered against them for
commission of fraud or a criminal offense in connection with obtaining,
attempting to obtain, or performing a public (federal, State or local)
transaction or contract under a public transaction; violation of federal or
state antitrust statutes or commissions of embezzlement, theft, forgery,
bribery, falsification, or destruction of records, making false statements, or
receiving stolen property;
C. Are not presently indicted for or otherwise criminally or civilly charged by
a governmental entity (federal, State, or local) with commission of any of
the offenses enumerated in paragraph I.B. of the certification; and
D. Have not within a three-year period preceding this application/proposal
had one or more public transactions (federal, State, or local) terminated for
cause or default.
II. Where the prospective primary participant is unable to certifY to any of the
statements in this certification, such prospective participant shall attach an
explanation to this proposal.
570.704(b)(7) - Anti-Lobbying Statement
The undersigned states, to the best of his or her knowledge and belief, that:
A. If any funds have been paid or will be paid to any person for influencing
or attempting to influence an officer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an employee
of a Member of Congress in connection with this commitment providing
for the United States to insure or guarantee a loan, the undersigned shall
complete and submit Standard Form-LLL, Disclosure form to Report
Lobbving in accordance with its instructions.
17
B. Submission of this statement is a prerequisite for making or entering into
this transaction imposed by Section 1352, Title 31, U.S. Code. Any
person who fails to file the required statement shall be subject to a civil
penalty of not less than $10,000 and not more than $100,000 for each such
failure.
570.704(b)(8) - City Entitlement Certification
In accordance with Section 108 of the Housing and Community Development Act of
1974, as amended (the "Act"), and with 24 CFR ~570.704(b), the City certifies that:
A. It possesses the legal authority to submit the application for assistance
under 24 CFR Part 570, subpart M (Section 108 Loan Guarantee
Program), and to use the guaranteed loan funds in accordance with the
requirements of subpart M.
B. Its governing body has du1y adopted or passed as an official act a
resolution, motion or similar action:
I. Authorizing the person identified as the official representative of
the City to submit the application and amendments thereto and all
understandings and assurances contained therein, and directing and
authorizing the person identified as the official representative of
the City to act in connection with the application to provide such
additional information as may be required; and
2. Authorizes such official representative to execute such documents
as may be required in order to implement the application and issue
debt obligations pursuant thereto (provide that the authorization
required by this paragraph (B) may be given by the local governing
body after submission of the application but prior to execution of
the contract required by Sec. 570.705(b).
C. Before submission of its application to HUD, the City has:
1. Furnished citizens with information required by regulation at 24
CFR part 570.704(a)(2)(i);
2. Held at least one public hearing to obtain the views of citizens on
community development and housing needs; and
3. Prepared its application in accordance with 24 CFR part
570.704(a)(1)(iv) and made the application available to the public.
18
D. It is following a detailed citizen participation plan which meets the
requirements described at 24 CFR part 570.704(a)(2).
E. The City will affirmatively further fair housing, and the guarantee loan
funds will be administered in compliance with:
I. Title VI of the Civil Rights Act of 1964 (42 D.S.C. 2000d, et seq.);
and
2. The Fair Housing Act (42 D.S.C. 3601-20).
F. In the aggregate, at least 70 percent of all CDSG funds as defmed in 24
CFR part 570.3( e), to be expended during the one, two, or three
consecutive years specified by the City for its CDSG program will be for
activities which benefit low and moderate-income persons as described in
criteria at 24 CFR part 570.208(a).
G. It will comply with the requirements governing displacement, relocation,
real property acquisition and the replacement oflow and moderate-income
housing described in 24 CFR part 570.606.
H. It will comply with the requirements of24 CFR part 570.200(c)(2) with
regard to the use of special assessments to recover the capital costs of
activities assisted with guaranteed loan funds.
1. It will comply with the other provisions ofthe Act and with other
applicable laws.
Patrick J. Morris, Mayor
Date
19
Exhihit A - Project Map
20
Exhibit B - Citizen Participation Plan
I. INTRODUCTION AND POLICY STATEMENT
It is the policy of the City of San Bernardino to provide for community involvement in
the planning, development, implementation, monitoring and evaluation of programs
funded under the Housing and Community Development Acts of 1974 and 1977, as
amended, and the Cranston-Gonzales Act of 1990.
The Citizen Participation Plan ("Plan") sets forth the procedures and guidelines to be
implemented by the City to provide for the continuing participation by the citizens of San
Bernardino. While the City desires and recognizes the need for citizen involvement and
has appointed the Community Development Citizen Advisory Committee (CDCAC) to
provide citizen input, it is the Common Council which has fmal determination and
responsibility for all aspects of the City's housing, community development and
homeless programs. This Plan, originally adopted in 1975, may be amended from time to
time by the Common Council and shall remain in effect until superseded by a new Plan
or until the City no longer participates in the Community Development Block Grant
Program, Home Investment Partnership Program and Emergency Shelter Grant Program,
or other programs that pertain to the consolidated planning process as required by 24
CFR parts 91, et. al.
II. PURPOSE
A summary of the primary objectives of the Plan are provided below:
(1) Ensure that citizens are informed of the amount of funds available under the Plan,
the range of activities that may be undertaken, as well as the various program
requirements;
(2) Provide for public hearings on community development and housing needs;
(3) Provide citizens with adequate opportunities to participate in the development of
the Consolidated Plan with any required changes, revisions, or amendments to the
plan;
(4) Provide technical assistance to citizens in developing specific proposals for
funding consideration;
(5) Provide an on-going process for citizens likely to be effected by program
activities, to articulate needs, express preferences about proposed activities, assist
in selecting priorities, and participate in the overall development of the
Consolidated Plan;
(6) Provide a process through which citizens may participate in the monitoring and
evaluation of community development and housing activities; and
(7) Provide a process whereby citizens may comment with respect to any aspect of
the City's housing and community development performance and be assured that
oral and written comments will be considered and responded to in accordance
with federal regulations.
21
III. STANDARDS OF PARTICIPATION
All aspects of the City's citizen participation efforts shall be conducted in an open
manner with freedom of access to all interested parties. The City encourages the
involvement of all income groups, particularly those living in blighted areas, and in areas
where CDBG funds are proposed to be used including non-English speaking persons, as
well as persons with mobility, visual or hearing impairments, members of minority
groups, the elderly, the disabled, the business community, civic groups, and the
community at large.
While this Plan describes a specific citizen's organization as the mechanism to receive
citizen input through the CDCAC, it is not intended to exclude any individual resident's
input. All the citizens of San Bernardino are encouraged to participate in every public
meeting and to contact the City's RedevelopmentlEconomic DevelopmentIHousing &
Community Development Division with any questions concerning the process and the
programs pertaining to the Plan including the Community Development Block Grant
Program, Home Investment Partnership Program, Emergency Shelter Grant Program, or
any other applicable future programs.
IV. COMMUNITY DEVELOPMENT CITIZEN ADVISORY COMMITTEE (CDCAC)
STRUCTURE
As a means to reach out to the community and obtain citizen input, the Mayor and
Common Council have appointed individuals to serve on the CDCAC. The following
rules shall apply to the CDCAC:
Size and Appointment: The CDCAC shall consist of 13 members. Each member
of the Common Council shall appoint one (1) member for a total of seven (7)
members. The Mayor shall appoint the other six (6) members.
Term of Office: Each member shall serve at the pleasure ofhislher appointee.
The term of office shall automatically expire with the succession of their
appointees' service as Common Council member or Mayor.
The CDCAC shall have a chairperson and vice chairperson. Both shall be elected
from and by the members of the CDCAC each year.
Ouorum: Member quorum is formed when majority of all the Committee
members are present; not just a majority of those positions that have been filled.
[Government Code 954952(b)]
Meetings and Attendance bv CDCAC Members: The CDCAC will meet as often
as required for reviewing proposals and establishing needs and priorities, and as
needed during the program year. All meetings will be conducted in the Economic
Development Agency Board Room (or other designated location as deemed
necessary), located on the 3'd floor of201 North "E" Street, San Bernardino. All
meetings are open to the public.
22
Anv member failing to attend three (3) or more scheduled meetings per program
vear without being excused bv the Committee. (each member shall advise Staff or
CDCAC of intended absences) shall automaticallv cease to be a member of the
Committee and the Mavor or Common Council shall fill such vacancv
immediatel v.
A. Role and responsibilities of the CDCAC
The CDCAC is an advisory committee to the Mayor and Common Council. The
responsible legislative body in matters relating to the programs/projects
associated with the Plan. The CDCAC responsibilities shall include the
following, but not limited to:
(1) Scheduling public hearings on housing and community development needs
and program performance;
(2) Assisting in the identification of community needs, priorities and
strategies;
(3) Receiving and reviewing citizens' comments on housing and community
development program progress and performance;
(4) Receiving and reviewing housing and community development project
proposals for specific funding to include Community Development Block
Grant and other federally funded projects.
(5) Preparing specific funding and program recommendations to the Mayor
and Common Council on the use of grant funds.
(6) Assisting and evaluating ongoing housing and community development
program activities.
(7) Reviewing and preparing recommendations to the Mayor and Common
Council on all proposed program amendments, as necessary.
(8) Receiving and answering citizen complaints regarding housing and
community development activities.
In addition to the responsibilities listed above the CDCAC will act as liaison between the
community and the City. Therefore, the CDCAC will also be responsible for meeting
with citizen groups which represent residents impacted by community development and
housing activities, providing technical assistance to citizen groups when requested, and
keeping the general community informed on housing and community development
matters of importance.
V. TECHNICAL ASSISTANCE TO THE COMMUNITY DEVELOPMENT CITIZEN
ADVISORY COMMITTEE
To help facilitate citizen input, the City's Redevelopment/Economic
DevelopmentIHousing & Community Development Division will provide technical
assistance through its staff to the Community Development Citizen Advisory Committee
as well as to groups representing low and moderate income residents who may require
such assistance in developing proposals for federal funding as required by federal
23
regulations. Technical assistance will be provided by telephone, meetings, and
workshops throughout the year as needed.
VI. PUBLIC INFORMATION
In order for citizens to become informed and involved in the Plan process, the City will
make available all relevant information including the following:
(I) Material concerning the amounts of funds available for proposed
community development and housing activities and the range of activities
that may be taken.
(2) Applicable regulations and guidelines governing all aspects of the funding
source.
(3) Prior applications, final statements and amendments, grant agreements,
grantee performance reports, citizens' participation plan and any other
reports required by the U.S. Department of Housing and Urban
Development (HUD).
(4) Documents regarding other important program requirements such as
contracting procedures, environmental policies, fair housing and other
equal opportunity requirements and relocation provisions.
(5) Mailings and promotional materials, minutes of meetings and hearings,
and any other documents the City believes is necessary to the consolidated
planning process.
The summary of the proposed Consolidated/Annual Action Plan will be published in one
or more newspapers of general circulation in compliance with 24 CFR 570.302 and
91.105 (b)( 4), providing a 30-day oral and written comment period. Under unforeseeable
circumstances, a reasonable public notice and comment period is defmed, as two weeks
(IS-day). The summary will provide the contents and the purpose of the
Consolidated/Annual Action Plan and a list oflocations where copies of the entire
proposed draft Consolidated/Annual Action Plan will be available to the public. A
summary of any oral or written comments regarding the proposed Plan will be attached to
the fmal Consolidated/Annual Action Plan.
VII. SUBSTANTIAL AMENDMENTS TO THE CONSOLIDATED PLAN AS
DEFINED BY HUD
According to HUD, the City is required to develop criteria outlining the manner in
which it will amend its Consolidated Plan should changes occur throughout the
program year. An amendment to the Consolidated Plan is defined as:
(I) There is change in the City's funding allocation and priority or method of
distributing funds within a program year as identified in the approved
Consolidated Plan.
(2) There is a change in activity/project or program description to the extent
that the activity/project or program will be perceived as a new
24
activity/project or program not previously described in the approved
Annual Action Plan.
(3) There is a change in the scope, purpose, location, or beneficiaries of an
activity/project or program.
(4) Using funds from any activity/project or program covered in the approved
Consolidated Plan (including program income) not previously described in
the approved Annual Action Plan.
VIII. AMENDMENTS TO THE CONSOLIDATED PLAN AS DEFINED BY CITY
In light of the fact that HUD requires jurisdictions, to set forth a written policy
describing the process it will follow when changes or amendments occur to its
Consolidated Plan, below is the amendment policy to be implemented by the City
should any of the following occur during the life of the Consolidated Plan and the
Annual Action Plan for each program year:
(1) Unforeseeable circumstances occur during project/program
implementation and inadequate funds are budgeted and the cost of
addressing such does not exceed $25,000.
(2) There is minor programmatic change in activity/project description
however; the change is not significant for the project, program to be
perceived as a new activity/project that is previously described in the
approved Consolidated and/or Annual Action Plan.
(3) There is a minor change in scope project/program however; the purpose,
location, or beneficiaries of the activity/project or program have not
change.
(4) Reallocating funds from activities/projects/programs covered in the
approved Consolidated and/or Annual Action Plan (including program
income) where a project/program has been completed under budget or
discontinued and remaining funds are not more than $25,000. Should any
of the above issues occur, the amendments to the Consolidated and/or
Annual Action Plan will be done administratively. Should changes to the
Consolidated and/or Annual Action Plan occur beyond the circumstances
above, the Consolidated and/or Annual Action Plan will be amended
through the formal funded by the Public Hearing Process before the
Mayor and Common Council.
IX URGENT NEED DEFINITION
Urgent need activities under the City's Consolidated and/or Annual Action Plan is
defined as an activity that meets the City's development need and it is certified
that such activity is designed to alleviate existing conditions which:
. Pose a serious and immediate threat to the health or welfare of the
community,
. Are of recent origin or recently became urgent,
25
. The City is unable to fmance the activity on its own, and
. Other resources of funding are not available to carry out the activity.
A condition will generally be considered to be of recent origin if it is developed or
became critical within 18 months preceding the City's certification.
X. OUTREACH
The City will utilize the CDCAC and other forums of public participation to reach
out to the community. Letters of invitation to attend the public hearing to receive
input on housing and non-housing community development needs will be sent to
community service organizations, business organizations, Chamber of Commerce,
religious organizations and any other applicable groups and affected parties
showing an interest in the Plan. The City will also coordinate its planning
activities with the San Bernardino County Housing Authority as well as any other
applicable inter-governmental jurisdictions impacted by the Plan.
Xl. COMPLAINTS
The City will make every reasonable effort to provide written responses to
complaints within 15 working days in compliance with 24 CFR 91.1050). A
copy of each written citizen comment or complaint related to the Consolidated
Plan, Amendment, Performance Report, and a description of any action taken or
written response made will be kept on file as a public record.
XII. PUBLIC MEETINGS AND PUBLIC HEARINGS
The City will conduct public meetings and public hearings during various phases
of the Consolidated Plan process each program year. All public meetings and
public hearings shall be open to the public. Meetings will be held at times and at
locations in the City that are convenient and acceptable to potential and actual
beneficiaries. Special accommodations shall be made for persons with disabilities
upon advance notice and as necessary. In cases where a significant number of
non-English speaking residents are reasonably expected to participate, an
interpreter will be provided by the City upon advance notice.
The CDCAC will meet, confer and hold public meetings as needed, to review
issues related to the Consolidated Plan and program performances, etc.
Moreover, the Common Council shall conduct a total of two (2) public hearings
during the program year. A first public hearing will be held to obtain views on
the proposed Consolidated Plan prior to its review and adoption by the Common
Council. A second public hearing will be held to review Consolidated Plan
Annual Performance Report (CAPER).
26
Prior to each public hearing, a legal notice shall be published in a newspaper of
general circulation within a reasonable time frame. The legal notice shall contain
the following information:
(1) Date, time and place of hearing;
(2) Subject to be considered; and
(3) Basic information about the Plan program.
27
Exhibit C - Activities the City Proposes to Pursue with Assistance from Section
108 Funds - Maya Cinemas San Bernardino, LLC
FF&E Improvements
Projection and Sound Equipment
Carpet - Lobby & Auditorium
Seats - 4,158 Chairs
Lobby tile and Base
Wall Coverings
Auditorium Wall Carpet
Masking - Screens
Lighting
Concession Equipment
Box Office System
Poster Cases
Aisle Lighting
Acoustical Wall Panels
Security Cameras
Flat Screens
Menu Boards
Total FF&E
Total
$ 50,000
$ 150,000
$ 677 ,000
$ 135,000
$ 75,000
$ 100,000
$ 80,000
$ 35,000
$ 55,000
$175,000
$ 30,000
$ 195,000
$ 200,000
$ 50,000
$ 30,000
$ 35,000
$ 2,072,000
BuUdin!! Repairs & Code Compliance
HV AC Estimated Repair Cost (8
compressors, 3 fan motors, etc)
Roof
Concession County Repairs
Restroom Stalls & Upgrades
Misc Tile Repair
Paint Exterior and Interior
Step Stairway Corrections to Comply with
Code
ADA Correction
Total Building Repairs
$ 45,000
$ 200,000
$ 75,000
$ 100,000
$ 50,000
$ 145,000
$ 314,000
$ 335,000
$ 1,264,000
Up!!rades
New Concession Stand in Front of Theater
Demo Concession & New Game Room
New Blade Signs
Lobby Extension
Retro- fit Screen #9 to !MAX
Configuration
Digital Projections
3D Digital Projectors
!MAX Licenses and Projector
Total Upgrades
$ 250,000
$ 30,000
$ 250,000
$ 1,400,000
$ 200,000
$ 85,000
$ 280,000
$ 1,200,000
$ 3,695,000
28
Exhibit C - Activities the City Proposes to Pursue with Assistance from Section
108 Funds - Maya Cinemas San Bernardino, LLC (continued)
Soft Costs
Architect & Engineering
ERN Deposit Fee (towards A&E)
Permit Fees
Legal & Accounting
Appraisal
Insurance
Pre-Opening Marketing Costs
Pre-Opening Start-up Costs
Administration on Total Project
Developer Fee (on construction only)
Total Soft Costs
$ 112,000
$ 100,000
$ 100,000
$ 50,000
$ 15,000
$ 20,000
$ 100,000
$ 144,000
$ 147,000
$ 145,000
$ 933,000
Total FF&E, Repairs, Up2rades, & Soft Costs
$ 7,964,000
Theater Fee Simple Purchase (Property and
Premises)
$ 4,600,000
Total Theater Costs
$ 12,564,000
Financinl! Costs
Loan Interest @ 5.0%
Loan & Closing Costs
Contingency
Total Financing Costs
$ 114,000
$ 90,000
$ 82,000
$ 286,000
Total Project Cost
$ 12,850,000
Other
Public Plaza & Water Feature
Cash Collateral
Total Other
$ 1,200,000
$ 450,000
$ 1,650,000
Total Development Cost
$14,500,000
29
Exhibit D - Publication Notices
30
SAN BERNARDINO COUNTY SUN
4030 N GEORGIA BLVD, SAN BERNARDINO, CA 92407
Telephone (909) 889-9666 I Fax (909) 885-1253
Lisa Connor
ECONOMIC DEVELOPMENT AGENCY-CI
201 NORTH E ST #301
SAN BERNARDINO, CA - 92401
PROOF OF PUBLICATION
(2015.5 C.C.P.)
State of California )
County of SAN BERNARDINO ) 55
Notice Type: GPNSB - GOVERNMENT PUBLIC NOTICE-SB
Ad Description: CDCAC Hearing
I am a citizen of the United States and a resident of the State of California; I am
over the age of eighteen years, and not a party to or interested in the above
entiUecl matter. 1 am the principal clerk. of the printer and publisher of the SAN"
BERNARDINO COUNTY SUN, a newspaper published In Ihe English language
in Ihe city of SAN BERNARDINO. county of SAN BERNARDINO. and adjudged
a newspaper of general ciraJlation as defined by the laws of the State of
California by Ihe Superior Court of the County of SAN BERNARDINO, State of
California, under date 06120/1952, Case No. 73084. That the notice, of which
the annexed Is a printed copy, has been published in each regular and entire
issue of said newspaper and not In any supplement thereof on the following
dates, ~wit
0212012009
Executed on: 0311012009
At Los Angeles, California
I certify (or declare) under penalty of peljury that the foregoing is true and
correct.
~
.--c-
Signature
Thi5~~ forflling st.mp only
SBS#: 1529211
PUBLIC NOTICE
CITY OF SAN BERNARDI NO 2005-
2010 CONSOLIDATED PLAN AND
2009-2010 ANNUAL PLAN OF
ENTITLEMENT FUNDS - HUD 108
LOAN GUARANTEE
APPLICATION. COMMUNITY
DEVELOPMENT BLOCK GRANT,
HOME INVESTMENT
PARTNERSHIPS AND
EMERGENCY SHELTER GRANT
PROGRAMS
Notice is hereby given that the
Community Development Citizens
Advisory Committee ("CDCAC") will
conduct a Public Hearing to interview
applicants, review H U 0 108 Loan
Guarantee Application, deliberate and
determine funding recommendatIons
for the Mayor and Common Council of
the City of San Bernardino for the 2009-
2010 Community Development Block
Grant portion of the Annual Plan.
The Hearing wlll be held at 1 :30 p.m.,
on March 6, 2009 at the Economic
Development Agency located at 201
North "E' Street, Suite 301 In the City of
San Bernardino.
The CDCAC will also discuss and
receive comment(s} on the proposed
2009-2010 Annual Action Plan. Any
interested citizen may attend and
make comments.
Notice given this 20th day of Februarv
~9
SBS-1529211#
111111111111111111111111111111111111111111111111111111111111111111111111111
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Customer Information
Customer Name ECONOMIC DEVELOPMENT AGENCY
Address 201 NORTH E ST #301
City SAN BERNARDINO
state - Zip CA - 92401
Product Information
Legal GOVERNMENT - GOVERNMENT PUBUC NOTICE-SB
Order Information
Master Id
36534
9096631044
Phone
Fax
Attention Name
Billing Reference
No.
sale/Hrg/Bld Date
Kathleen Robles/Lorraine Wyche
Ad Description
Special
Instructions
Orders Created
Maya - Section 108 Application
Order Newspaper Name Publishing Dates Ad Price Ad
No. . status
SAN BERNARDINO COUNTY Depth :
1537363 SUN,CA 03/04/2009,04/03/2009 13.10" $B09.60 Sent
Lines: 138
Onder No. Newspaper View
1537363 SAN BERNARDINO COUNTY SUN View Ad In PDF
NOnCE OF PUBUC HEARING
REGARDING AN APPUCAnON UNDER SECTION 108 OF THE HOUSING
AND COMMUNITY DEVELOPMENT ACT PUBUC NonCE
NonCE IS HEREBY GIVEN THAT the Mayor and Common Council of the City
of San Bernardino ("Council") will conduct a public hearing on Monday, April 6,
2009, at 4:30 p.m., or as soon thereafter as may be practical, In the City Hall
Council Chambers, 300 North "0" Street, San Bernardino, CA 9241B to receive
citizen comrnents regandlng the submittal of an application for loan guarantee
assistance for the downtown San Bernardino 20-plex cinema complex known as
the "20-Plex Re-finance and Rehabilitation" Project (the 'Project") under Section
108 of the Federal Housing Act of 1974, as amended (Title 24).
NOnCE IS FURTHER GIVEN that any and all persons are Invited to appear
before the Council and present evidence or testimony concerning the 20-Plex
Re-finance and Rehabilitation Project at the time, date and place set forth
herein. Written comments should be addressed to the applicant below.
Section 108 of Title 24 authorizes a program of community development loan
guarantee assistance ("Section 108 financing"). Under this program, the u.s.
Department of Housing and Urban Development (HUD) provides cities that
receive Community Development Block Grant ("CDBG") Funds with front-end
financing for large scale community and economic development projects that
cannot be financed from annual grants. Current and future annual grants are
pledged as security for the Section 108 finanCing. As with all CDBG program
activities, the projects funded with Section 108 financing must either principally
benefit low- and moderate-Income persons, aid In the elimination or prevention
of slums and blight, or meet other community development needs having a
particular urgency.
Applicant: City of San Bemandlno 300 North '0" Street, San Bemandlno,
california, 92418, Attention: City Manager. Phone: (909)384-5122; Fax: (909)
384-5138.
PROJECT DESCRIPnON
The proposed Project will address the purchase, remodeling and upgrading of
the cinema bUilding by Maya San 8emandlno Cinemas, LLC ("Maya"), located at
4S0 North 'E" Street In downtown San Bernardino. The Project will Include: new
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furniture and fixtures, carpeting, tile, counter.tops, palntworlc, new seating, new
digital projection equipment, movie screens and sound equipment, correction of
American with Disabilities Act deficiencies, expansion of the main lobby and
Installation of equipment and expansion of one I-Max auditorium.
LOAN REQUEST
The City of San Bernardino ("City") Is naquestlng Section lOB financing in the
amount of $9,000,000 for a term of seven (7) years with Interest only
payments. This loan will assist In the creation and retention of approximately
125 jobs and economic opportunities for the citizens of San Bernardino.
Repayment of the 108 Loan will be pledged from future CDBG applications and
payments to be made by Maya, together with a deed of trust on the theater
Project.
NATIONAL OBJECTIVE
The proposed Project re-finance and rehabilitation meets the City's adopted
Consolidated Plan objective by providing job creation for economic
empowerment of low- and moderate-Income residents In the City. The Project
will create entry-level jobs for local residents and thus Increase the economic
vitality of the City.
PROGRAM INCOME
No program Income Is expected to be generated.
DISPLACEMENT OF LOW- TO MODERATE-INCOME HOUSEHOLDS
No displacement will occur. However, If displacement occurs, the City or the
Economic Development Agency will Implement and comply with policies and
procedures consistent with State and Federal relocation and acquisition statutes.
Demolition of structures (single-family and various multi-family) will not occur.
All said activities, If conducted, wiil be In compliance with state and federal
requirements.
The City of San Bernardino recognizes its obligation to provide equal acoess to
public services to those Individuals with disabilities. Please contact the Director
of Facilities Management at (909) 384-5244 two (2) working days prior to the
meeting with any requests for reasonable accommodations, to Include
interpreters.
. This notice Is prepared In compliance with the Citizen Participation Plan and 24
CFR 91 Consolidated Submissions for Community Planning and Development
Programs and 570 Community Development Block Grants.
NOTICE given this ;ZZlh da.,. of Februarv 2009.
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Exhibit E - Disposition and Development Agreement
31
2008
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
MAYA CINEMAS NORTH AMERICA, INe.
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
Section 1.05.
Section 1.06.
ARTICLE II
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
Section 2.07.
Section 2.08.
Section 2.09.
Section 2.10.
Section 2.11.
Section 2.12.
Section 2.13.
Section 2.14.
Section 2.15.
Section 2.16.
Section 2.17.
Section 2.18.
Section 2.19.
Section 2.20.
Section 2.21.
Section 2.22.
Section 2.23.
Section 2.24.
Section 2.25.
TABLE OF CONTENTS
Page
Purpose of Agreement...................... ............................................... .................. I
The Project .. ....... .... .......... ....................... ... '" ................. ........................ ...... ..... I
Parties to the Agreement................................................................................... 1
Defined Terms ....... ................... ................. ......................... ............. ................. 2
Restrictions Against Change in Ownership, Management and Control of the
Developer and Assignment of Agreement........................................................ 9
Benefit to Project Area...................................................................................... 9
DISPOSITION OF THE PROPERTY.............................................................. 9
Purchase and Sale of the Property.................................................................... 9
Phase I Property Deposit, the Phase II Property Deposit and the Phase 1II
Property Deposit .. ............ ................................................... ............................ 10
Opening and Closing of Escrow ..................................................................... 12
Escrow Instructions........................................................................................ 14
Conveyance of Title to the Phase I Property, to the Phase II Property and to
the Phase III Property...................................................................................... 14
Additional Closing Obligations of the Agency............................................... 15
Closing Obligations of the Developer............................................................. 16
Inspections and Review.................................................................................. 17
Due Diligence Investigation of the Phase I Property, the Phase II Property and
the Phase 1Il Property By the Developer ........................................................ 19
Due Diligence Certificate ............................................................................... 20
Books and Records ......................................................................................... 21
Condition of the Property and the Developer's Release................................. 21
Review and Approval of Condition of Title by the Developer....................... 23
Survey. .......... ....................................................... ........... ................................ 23
Extension of Due Diligence Period................................................................. 24
Developer's Conditions Precedent to Close Escrow for the Phase I Property,
for the Phase II Property or the Phase III Property......................................... 24
Agency's Conditions Precedent to Close Escrow For the Phase I Property, for
the Phase II Property and for the Phase III Property ...................................... 26
Distribution of Documents to the Developer .................................................. 28
Satisfaction of Conditions ............................................................................... 28
RESERVED .................................................................................................... 28
Prorations, Closing Costs, Possession ............................................................ 28
RESERVED .................................................................................................... 30
Breach by the Developer of Article II Liquidated Damages Payable by the
Developer to the Agency................................................................................ 30
Representations and Warranties...................................................................... 30
Damage, Destruction and Condemnation .......................................................35
ARTICLE III
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
Section 3.08.
ARTICLE IV
Section 4.0L
Section 4.02.
Section 4.03.
Section 4.04.
ARTICLE V
Section 5.0L
Section 5.02.
Section 5.03.
Section 5.04.
Section 5.05.
Section 5.06.
ARTICLE VI
Section 6.0L
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.1 O.
Section 6. I I.
Section 6.12.
DEVELOPMENT OF THE PROJECT .......................................................... 35
Development of the Project by Developer...................................................... 35
RESERVED .................................................................................................... 43
Taxes and Assessments .................... ......... ........ .......... ............... ..... ................ 43
Change in Ownership, Management and Control of the Developer--
Assignment and Transfer ................................................................................43
Security Financing; Right of Holders .............................................................45
Right of the Agency to Satisfy Other Liens on the Property after Conveyance
of Titl e............................................................................................................. 5 I
Certificate of Completion. ... ............ .............................. ............ ......... ............ 51
Right to Purchase the Phase II Property and/or the Phase III Property.......... 53
USE OF THE SITE......................................................................................... 53
Uses ................... ... ............................ ......... ......................................... ..... ........ 53
Maintenance of the Property ................................................................... .,. ..... 54
Obligation to Refrain from Discrimination..................................................... 54
Form of Nondiscrimination and Nonsegregation Clauses ..............................55
DEFAULTS, REMEDIES AND TERMINATION ........................................ 56
Defaults - General...........................................................................................56
Legal Actions .................. ....,.................. .................... ................ ............. ........ 58
Rights and Remedies are Cumulative.............................................................59
Damages; Specific Performance .......................................................... ........... 59
RESERVED.................................................................................................... 59
Agency Rights of Termination Following Close of Escrow........................... 59
GENERAL PROVISIONS ............................................................................. 60
Notices, Demands and Communications Between the Parties .......................60
Conflict of Interest.................................... ..... ..... ............... ............................. 61
Warranty Against Payment of Consideration for Agreement......................... 61
Nonliability of Agency Officials and Employees ........................................... 62
Enforced Delay: Extension of Time of Performance...................................... 62
Inspection of Books and Records ................................................................... 63
Approvals .... ......................................................................................... ........... 63
Real Estate Commissions................................................................................ 63
Indemnification................... ..... ......................... .......... ...................... ... ..... ...... 63
Release of Developer from Liability............................................................... 64
Attorneys' Fees ............................... ........................ ........................................ 64
Effect................................................................................... ......... .... ............... 64
11
ARTICLE VII ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH GRANT
DEED; WAIVERS AND AMENDMENTS................................................... 65
Section 7.01. Entire Agreement; Counterparts ..................................................................... 65
Section 7.02. No Merger; Waivers and Amendments .......................................................... 65
ARTICLE VIIl TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND
RECORDATION ............................................................................................ 65
Section 8.01. Execution and Recordation.............................................................................65
EXHIBIT "A-I" -
EXHIBIT "A-2" -
EXHIBIT "A-3" -
EXHIBIT "A-4"
EXHIBIT "B"
EXHIBIT "C"
EXHIBIT "D"
EXHIBIT "E"
EXHIBIT "F"
EXHIBIT "G"
PHASE 1 PROPERTY DESCRIPTION
PHASE IA PROPERTY DESCRIPTION
PHASE II PROPERTY DESCRIPTION
PHASE III PROPERTY DESCRIPTION
BUDGET
SCOPE OF DEVELOPMENT
SCHEDULE OF PERFORMANCE
- AGENCY GRANT DEED
- CERTIFICATE OF COMPLETION
NOTICE OF AGREEMENT
111
2008
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND MAY A CINEMAS NORTH AMERICA, INC.
THIS 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is
entered into as of December 15, 2008 (the "Effective Date"), by and between the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic (the "Agency") and MAY A CINEMAS NORTH AMERICA, INC., a
Delaware corporation (the "Developer"). The Agency and the Developer hereby agree as
follows:
Section 1.01. PUI:pose of Agreement. The purpose of this Agreement is to implement
the Redevelopment Plan by providing for: (i) the purchase and redevelopment by the Developer
of the Phase I Property (as defined below) in accordance with and pursuant to this Agreement
and (ii) the subsequent purchase and redevelopment by the Developer of the Phase II Property
(as defined below) and/or of the Phase III Property (as defined below) in the event the Developer
exercises the right to acquire the Phase II Property and/or to acquire the Phase III Properly in
accordance with and pursuant to this Agreement. As of the Effective Date of this Agreement, the
Property is owned by the Agency and shall be conveyed by the Agency to the Developer subject
to the terms, covenants and conditions of this Agreement. The redevelopment of the Property
pursuant to this Agreement is in the vital and best interests of the City and of the health, safety
and welfare of its residents, and is in accordance with the public purposes and provisions of
applicable state and local laws. The Agency has determined that the development and the use of
the Property contemplated by this Agreement are consistent with the Redevelopment Plan for the
Project Area (as defined below).
Section 1.02. The Proiect. Promptly following the conveyance by the Agency to the
Developer of the Phase I Property, the Developer shall promptly commence and complete the
construction, development, installation and completion of the Phase I Property Improvements at,
on or in connection with the Phase I Property. On and after the Close of Escrow for the Phase II
Property and/or for the Phase III Property in the event the Developer exercises the right to
acquire the Phase II Property and/or to acquire the Phase III Property pursuant to Section 3.08 of
this Agreement, the Developer shall construct, development, install and complete the Phase II
Property Improvements and/or the Phase III Property Improvements, in accordance with this
Agreement.
Section 1.03. Parties to this Agreement.
(a) The Agency is a public body, corporate and politic, exercising governmental
functions and powers and organized and existing under Chapter 2 of the Community
Redevelopment Law of the State of California (Health and Safety Code Section 33020, et seq.).
The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino,
California 92401.
1
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(b) The Developer is a Delaware corporation. The principal office and mailing
address ofthe Developer for purposes of this Agreement is as set forth below, and notice shall be
sufficient when served upon the notice party whether or not a copy is similarly served upon any
other person:
To the Developer:
Maya Cinemas North America, Inc.
Attn.: Moctesuma Esparza, Chief Executive Officer
1201 West 5lh Street, Suite T-2JO
Los Angeles, California 90017
Telephone: (213) 542-4420
with a copy to:
Maya Entertainment Group, Inc.
Attn.: )ose Martinez, Jr., General Counsel
1201 West 5lh Street, Suite T-210
Los Angeles, California 90017
Telephone: (213) 542-4420
(c) The City of San Bernardino is not a party to this Agreement and shall have no
obligations pursuant to this Agreement.
Section 1.04. Defined Terms. In addition to the usage of certain terms which have
defined meaning as set forth in this Agreement certain other words and phrases are used in this
Agreement to refer to the following unless the particular context of usage of a word or phrase
may otherwise require:
"Agency" means and refers to the Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic.
"Agreement" means and refers to this 2008 Disposition and Development Agreement,
dated as of November 17, 2008, by and between the Agency and the Developer, as amended
from time to time. The Agreement means and also includes all exhibits, schedules and riders
attached thereto.
"Budget" means and refers to the "Budget" prepared by the Developer and approved by
the Agency in connection with the purchase, acquisition, construction, development, installation
and/or completion of the Phase I Property Improvements. The Budget is attached hereto as
Exhibit "B" and is incorporated herein by this reference.
"City" means and refers to the City of San Bernardino located in the County of San
Bernardino and in the State of California.
"County" means and refers to the County. of San Bernardino located in the State of
California.
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"Developer" means and refers to Maya Cinemas North America, Inc., a Delaware
corporation, its permitted successors and permitted assigns, subject to the terms, covenants and
conditions of this Agreement.
"Escrow" means and refers to the escrow created in cOIUlection with and relating to the
Phase I Property, to the Phase II Property and/or to the Phase III Property in the event the
Developer exercises the right to acquire the Phase II Property and/or to acquire the Phase III
Property.
"Executive Director" or "Interim Executive Director" shall mean the person who is then
appointed and acting as the chief executive officer of the Agency and who is authorized to
exercise all administrative and executive functions on behalf of the Agency.
','HUD 108 Loan" means and refers to the loan made by HUD in favor of the City which
HUD 108 Loan is secured by a deed of trust (the "HUD Deed of Trust" encumbering the Phase I
Property (but excluding the Phase IA Property) and a pledge of current and future CDBG funds
of the City as required by HUD. Such pledge ofCDBG funds is not released by the sale of the
Phase I Property, assumption of the BUD 108 Loan, or any other action taken pursuant to this
Agreement. The outstanding principal balance of the BUD 108 Loan as of the Effective Date of
this Agreement is $4,600,000. Any modification to the HUD 108 Loan, including, but not
limited to, an assumption of the existing HUD 108 Loan or the undertaking of a New HUD Loan
(as defined in Section 3.05), requires an independent action of the City of San Bernardino.
Conditions or covenants appearing herein concerning actions to be taken by the Agency with
respect to the HUD 108 Loan and the New HUD Loan (as defined in Section 3.05) are in
addition to and separate and apart from the actions of the City. The Developer is hereby placed
on notice that it shall not act in reliance on any representations as may appear to be contained
herein, or as made by any persons, whether or not a party to this Agreement, concerning whether
the City will initiate an action for modification of the HUD 108 Loan or approval ofa New HUD
Loan (as defined in Section 3.05) or as to the outcome of such action as may be initiated.
"hnprovements" mean and refer to the Phase I Property hnprovements, to the Phase II
Property Improvements and/or to the Phase III Improvements.
"Laws" mean and refer to all federal, state, municipal and local laws, statutes, codes,
rules, regulations, ordinances and orders, now or hereafter existing, as amended from time to
time. The Laws shall include, without limitation, the ADA.
"License Agreement" means and refers to the License Agreement by and between the
Developer and the Agency, of even date herewith, wherein the Agency grants to the Developer,
without limitation, from the date that the Developer acquires title from the Agency in and to the
Phase I Property until the termination of the License Agreement, the right of access to the Phase
II Property and/or to the Phase III Property. Pursuant to the License Agreement, the Developer
shall pay no license fee for such license but, in lieu of remitting license payments to the Agency,
the Developer, at its sole cost and expense, shall maintain, repair and provide landscaping in
connection with the Phase II Property and/or with the Phase III Property, including, without
limitation, the maintenance and repair of the existing water fountains owned by the Agency.
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Such water fountains may be retained or removed by the Developer, at its sole discretion and
expense, and the removal of such water fountains must immediately be replaced by the
installation of hardscape reasonably acceptable to the Agency, at the sole cost of the Developer,
or the commencement of building improvements in connection with the Phase II Property Project
and/or with the Phase III Property Project. The License Agreement shall automatically
terminate, without limitation, without any further notice from the Agency to the Developer, upon
the occurrence of the following events, whichever occurs first: (i) the acquisition by the
Developer of the Phase II Property and/or of the Phase III Property, (ii) an event of default under
this Agreement, (iii) five (5) years from the Effective Date of this Agreement.
"Notice of Agreement" means and refers to the Notice of Agreement, dated of even date
of this Agreement, as executed and acknowledged by and between the Agency and the
Developer. The Notice of Agreement is attached hereto and incorporated herein by this
reference as Exhibit "0". The Escrow Officer shall record the Notice of Agreement in the
Official Records of the County Recorder's Office for the County of San Bernardino, State of
California, on the Closing Date of the Escrow in connection with the Phase I Property.
"Phase I Property" means and refers to that certain improved land located in the City of
San Bernardino, County of San Bernardino, and State of Califomia, Assessor Parcel Number
0134-131-25, as described in Exhibit "A-I" to this Agreement attached hereto and incorporated
herein by this reference. The Phase I Property also includes the following: (i) the Phase I
Property Improvements to be constructed, developed, installed and completed by the Developer
in accordance with this Agreement and (ii) the Phase IA Property and the Phase IA Property
Improvements.
"Phase I Property Deposit" means and refers to the deposit paid by the Developer to the
Escrow Holder for the benefit of the Agency in connection with the Escrow for the Phase I
Property, subject to the terms, covenants and conditions of this Agreement. The Phase I Property
Deposit is in the amount of $1 00,000, receipt of which is hereby acknowledged by the Agency.
"Phase I Property Due Diligence Certificate" means and refers to the Phase I Property
Due Diligence Certificate to be provided by the Developer to the Agency in accordance with this
Agreement.
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"Phase I Property Improvements" mean and refer any and all buildings, structures,
improvements and/or fixtures, now or hereafter, existing or located on or at the Phase I Property.
The Phase I Property Improvements include, without limitation, the following: (i) the
remodeling and rebranding of the theater, (ii) the establishment of the I-Max theater, (iii) the
removal and relocation of the ticket booth, (iv) the expansion of the entry area into a public
access lobby, (v) the relocation of all concessions, (vi) the providing access to the Phase I
Property in compliance with the Americans With Disabilities Act (the "ADA"), (vii) the
modifications to the risers in each theater to assure conformity, (viii) the replacement of all
seating, (ix) the installation of digital project and sound systems and (x) the Phase IA Property
Improvements. The Phase I Property Improvements must be constructed, developed, installed
and completed by July I, 2009, unless such date is extended by the Agency in its sole and
absolute discretion; provided, however, that notwithstanding said stated date the Developer shall
have at least one hundred twenty (120) calendar days from the Close of Escrow of the Phase I
Property and receipt of all required construction and building permits to complete all such
activities.
"Phase I Property Preliminary Title Report" means and refers to the preliminary report
prepared by the Title Company in connection with the Phase I Property. The Phase I Property
Preliminary Title Report shall be delivered by the Title Company to the Developer in accordance
with this Agreement and shall list, describe and disclose all existing title exceptions, including,
without limitation, all liens, encumbrances, deeds of trust, mortgages, leases, mechanics' liens,
memorandums, covenants, conditions, restrictions and all other matters affecting, encumbering
and/or relating to the Phase I Property, as amended from time to time.
"Phase I Property Project" means and refers to the construction, development, installation
and completion by the Developer of the Phase I Property Improvements, subject to the terms,
covenants and conditions of this Agreement.
"Phase I Property Purchase Price" means and refers to the purchase price paid by the
Developer to the Agency in connection with the sale by the Agency and the purchase by the
Developer of the Phase I Property, subject to the terms, covenants and conditions of this
Agreement. The Phase I Property Purchase Price is $4,600,000.
"Phase IA Property" means and refers to the land adjacent to the theater on the PhaSe I
Property on which the Developer shall develop the Phase IA Property Improvements in
accordance with this Agreement. The Phase IAProperty is located in the City of San
Bernardino, County of San Bernardino, State of California, as described on Exhibit "A-2"
attached hereto and incorporated herein by this reference.
"Phase IA Property Improvements" mean and refer to a mutually agreed upon public
feature comprised of a public seating area or amphitheater plus an additional water feature to the
existing installed fountains owned by the Agency plus some fOrIIl of hardscape mutually
acceptable to the Developer and to the Agency pending development of the Phase II Property
and of the Phase III Property.
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"Phase II Property" means and refers to that certain unimproved land located in the City
of San Bernardino, County of San Bernardino, and State of California, as described in Exhibit
"A-2" to this Agreement attached hereto and incorporated herein by this reference.
"Phase II Property Deposit" means and refers to the deposit paid by the Developer to the
Escrow Holder for the benefit of the Agency in connection with the Escrow for the Phase II
Property, subject to the terms, covenants and conditions of this Agreement. The Phase II
Property Deposit shall be no more than five percent (5%) of the Phase II Property Purchase
Price.
"Phase II Property Due Diligence Certificate" means and refers to the Phase II Property
Due Diligence Certificate to be provided by the Developer to the Agency in accordance with this
Agreement.
"Phase II Property Improvements" mean and refer to the following improvements to be
constructed, developed, installed and completed by the Developer in connection with the Phase
II Property Project, as described, without limitation, in the Scope of Development and in the
Schedule of Performance: (i) an 11,000 square foot food, office, retail and/or commercial
building adjacent to the California Theatre (the "Commercial Building"), and (ii) paving stones
or other low maintenance hardscape and/or landscape on remaining vacant land located at the
Phase II Property and/or at the Phase III Property, as mutually agreed to by and between the
Developer and the Agency, at the sole cost and expense of the Developer. Subject to Section
3.05(d) of this Agreement, in the event the Developer purchases the Phase II Property pursuant
to this Agreement, the Phase II Property Improvements must be constructed, developed, installed
and completed within three (3) years from the Close of Escrow for the Phase 1 Property.
"Phase II Property Preliminary Title Report" means and refers to the preliminary report
prepared by the Title Company in connection with the Phase II Property. The Phase II Property
Preliminary Title Report shall be delivered by the Title Company to the Developer in accordance
with this Agreement and shall list, describe and disclose all existing title exceptions, including,
without limitation, all liens, encumbrances, deeds of trust, mortgages, leases, mechanics' liens,
memorandums, covenants, conditions, restrictions and all other matters affecting, encumbering
and/or relating to the Phase II Property, as amended from time to time.
"Phase II Property Project" means and refers to the construction, development,
installation and completion by the Developer of the Phase II Property Improvements, subject to
the terms, covenants and conditions ofthis Agreement.
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"Phase II Property Purchase Price" means and refers to the purchase price paid by the
Developer to the Agency in connection with the sale by the Agency and the purchase by the
Developer of the Phase II Property in the event the Developer exercises the right to acquire the
Phase II Property, subject to the terms, covenants and conditions of this Agreement. The Agency
has provided the Developer with a copy of an appraisal report supporting the purchase price
herein referenced, and the purchase price for the Phase II Property and for the Phase III Property
shall be $715,000, in the aggregate, allocated proportionately at the time of the purchase and of
the sale of the Phase II Property and/or of the Phase III Property. If the Developer elects to
acquire the Phase II Property and to acquire the Phase III Property in a single transaction, the
purchase price for the Phase II Property and for the Phase III Property shall be $715,000, in the
aggregate, subject to the terms, covenants and conditions of this Agreement.
"Phase III Property" means and refers to that certain unimproved land located in the City
of San Bernardino, County of San Bernardino, and State of California, , as described in Exhibit
"A-3" to this Agreement attached hereto and incorporated herein by this reference.
"Phase III Property Deposit" means and refers to the deposit paid by the Developer to the
Escrow Holder for the benefit of the Agency in connection with the Escrow for the Phase III
Property, subject to the terms, covenants and conditions of this Agreement. The Phase ill
Property Deposit shall be no more than five percent (5%) of the Phase III Property Purchase
Price.
"Phase III Property Due Diligence Certificate" means and refers to the Phase III Property
Due Diligence Certificate to be provided by the Developer to the Agency in accordance with this
Agreement.
"Phase III Property Improvements" mean and refer to the improvements to be
constructed, developed, installed and completed by the Developer in connection with the Phase
III Property Project, subject to the terms, covenants and conditions of this Agreement.
"Phase III Property Preliminary Title Report" means and refers to the preliminary report
prepared by the Title Company in connection with the Phase III Property. The Phase ill
Property Preliminary Title Report shall be delivered by the Title Company to the Developer in
accordance with this Agreement and shall list, describe and disclose all existing title exceptions,
including, without limitation, all liens, encumbrances, deeds of trust, mortgages, leases,
mechanics' liens, memorandums, covenants, conditions, restrictions and all other matters
affecting, encumbering and/or relating to the Phase II Property, as amended from time to time.
"Phase III Property Project" means and refers to the construction, development,
installation and completion by the Developer of the Phase III Property Improvements, subject to
the terms, covenants and conditions of this Agreement.
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"Phase III Property Purchase Price" means and refers to the purchase price paid by the
Developer to the Agency in connection with the sale by the Agency and the purchase by the
Developer of the Phase III Property in the event the Developer exercises the right to acquire the
Phase III Property, subject to the terms, covenants and conditions of this Agreement. The
Agency has provided the Developer with a copy of an appraisal report supporting the purchase
price herein referenced, and the purchase price for the Phase II Property and for the Phase III
Property shall be $715,000, in the aggregate, allocated proportionately at the time of the
purchase and of the sale of the Phase II Property and/or of the Phase III Property. If the
Developer elects to acquire the Phase II Property and to acquire the Phase III Property in a single
transaction, the purchase price for the Phase II Property and for the Phase III Property shall be
$715,000, in the aggregate, subject to the terms, covenants and conditions of this Agreement.
"Project" means and refers to the Phase I Property Project, to the Phase II Property
Project and/or to the Phase III Property Project.
"Project Area" means and refers to the Central City North Redevelopment Project Area
in the City of San Bernardino, County of San Bernardino, State of California.
"Property" means and refers to the Phase I Property, to the Phase II Property and/or to the
Phase III Property.
"Redevelopment Plan" means and refers to the Redevelopment Plan for the Central City
North Redevelopment Project Area of the Agency.
"Schedule of Performance" means and refers to the Schedule of Performance on which
the Agency and the Developer shall describe in detail the schedule of performance in connection
with: (i) the construction, development, installation and completion of the Phase I Property
Project, (ii) the construction, development, installation and completion of the Phase II Property
Project, and/or (iii) the construction, development, installation and completion of the Phase III
Property. The Schedule of Performance is attached hereto and incorporated herein by this
reference as Exhibit "D."
"Scope of Development" means and refers to the construction, development, installation
and completion by the Developer of the Phase I Property Improvements, of the Phase II Property
Improvements and/or of the Phase III Property Improvements in the event the Developer
exercises the right to acquire the Phase II Property and/or to acquire the Phase III Property. The
Scope of Development is described in Exhibit "c" to this Agreement which Exhibit is attached
hereto and incorporated herein by this reference.
"State" means and refers to the State of California.
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Section 1.05. Restrictions Against Change in Ownershio. Management and Control of
the Develooer and Assignment of Agreement. The qualifications and identity of the Developer
are of particular concern to the Agency. It is because of those qualifications and identity that the
Agency has entered into this Agreement with the Developer. Prior to the issuance of a
Certificate of Completion as set forth in Section 3.07, no voluntary or involuntary successor in
interest of the Developer shall acquire any rights or powers under this Agreement.
The Developer shall not, except as set forth above or as authorized in Section 3.04 hereof
for a Transfer as a Permitted Transfer, assign all or any part of this Agreement or any rights
hereunder prior to the issuance of the Certificate of Completion with respect to the Project, or
any part thereof, without the prior written approval of the Interim Executive Director of the
Agency, which approval shall not be unreasonably withheld, delayed or conditioned.
The Developer shall promptly notifY the Agency in writing of any and all changes
whatsoever in the identity of the business entities and individuals either comprising or in control
of the Developer, as well as any and all changes in the interest or the degree of control of the
Developer by any such party, of which information the Developer or any of its officers have
been notified or may otherwise have knowledge or information. This Agreement may be
terminated by the Agency prior to the Close of the Escrow as set forth in Section 2.03 if there is
any significant or material change, whether voluntary or involuntary, in membership, ownership,
management or control of the Developer (other than such changes occasioned by the death or
incapacity of any individual) that has not been approved by the Agency prior to the time of such
change or the Agency may seek other appropriate relief in the event that at any time following
the Close of Escrow and prior to issuance of the Certificate of Completion such a change in the
ownership, or control of the Developer occurs with respect to the Phase I Property, the Phase II
Property and/or the Phase III Property in the event the Developer acquires the Phase II Property
and/or the Phase III Property pursuant to this Agreement; provided, however, that (i) the Agency
shall first notifY the Developer in writing of its intention to terminate this Agreement or to
exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following
receipt of such written notice to commence and thereafter diligently and continuously proceed
with the cure of the default of the Developer and submit evidence of the initiation of satisfactory
completion of such cure to the Agency in a fonn and substance deemed satisfactory to the
Agency, in its reasonable discretion.
Section 1.06.. Benefit to Proiect Area. The Agency has determined that the conveyance
by the Agency to the Developer of the Property, or any portion thereof, will materially assist in
the elimination of blight and the implementation of the Redevelopment Plan for the Project Area.
ARTICLE II
DISPOSITION OF THE PROPERTY
Section 2.01. Purchase and Sale of the Propertv.
(a) Purchase and Sale of the PropertY. Subject to the terms, covenants, conditions
and provisions of this Agreement: (i) the Agency agrees to sell to the Developer and the
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Developer agrees to purchase from the Agency the Phase I Property at and for the Phase I
Property Purchase Price, and (ii) upon the exercise by the Developer of its right to acquire the
Phase II Property and/or the Phase III Property pursuant to this Agreement, the Agency agrees to
sell to the Developer and the Developer agrees to purchase from the Agency, the Phase II
Property at and for the Phase II Property Purchase Price and/or the Phase III Property at and for
the Phase III Property Purchase Price. The Phase I Property Purchase Price shall be deemed to
have been paid by the Developer to the Agency upon either (i) the HUD Loan Assumption (as
hereinafter defined) by the Developer with the approval of HUD, (ii) the repayment of the
existing $4,600,000 principal balance of the presently outstanding HUD 108 Loan with the
proceeds of any other Financing or the New HUD Loan (as hereafter defined), if approved by
HUD, and (iii) regardless of whether (i) or (ii) as immediately set forth are applicable, the
additional compliance with all other requirements as set forth in Section 3.05 hereof.
(b) Phase I Propertv Purchase Price. The Phase I Property Purchase Price which the
Agency agrees to accept from the Developer and which the Developer agrees to pay and to
deliver to the Agency for the purchase by the Developer of the Phase I Property is $4,600,000.
The Phase I Property Purchase Price shall be delivered to the Escrow Officer on behalf of the
Agency.
(c) Phase II Prooerty Purchase Price. The Phase II Property Purchase Price which the
Agency agrees to accept from the Developer and which the Developer agrees to pay and to
deliver to the Agency for the purchase by the Developer of the Phase II Property is the Phase II
Property Purchase Price, subject to the terms, covenants and conditions of this Agreement The
Phase II Property Purchase Price shall be delivered to the Escrow Officer on behalf of the
Agency.
(d) Phase III Prooerty Purchase Price. The Phase III Property Purchase Price which
the Agency agrees to accept from the Developer and which the Developer agrees to pay and to
deliver to the Agency for the purchase by the Developer of the Phase III Property is the Phase III
Property Purchase Price, subject to the terms, covenants and conditions of this Agreement. The
Phase III Property Purchase Price shall be delivered to the Escrow Officer on behalf of the
Agency.
Section 2.02. Phase I Prooerty Deposit. the Phase II Prooertv Deposit and the Phase III
Property Deposit.
(a) The Agency acknowledges receipt of the Phase I Property Deposit from
Developer and shall within five (5) calendar business days deliver to the Escrow Holder (as
hereinafter defined) the Phase I Property Deposit. Upon receipt of the Phase I Property Deposit
together with a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow
to be opened as provided in Section 2.03, and the Escrow Holder shall place the Phase I Property
Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit
of the Developer. At the Close of Escrow (as defined below) in connection with the Phase I
Property, the Phase I Property Deposit shall be applied as a credit to the Phase I Property
Purchase Pri ceo
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(b) Within five calendar (5) business days following receipt by the Developer of
written notice from the Developer to the Agency of the election by the Developer to acquire the
Phase II Property and/or the Phase III Property (the "Notice"), the Developer shall deliver to the
Escrow Holder the Phase II Property Deposit and/or the Phase III Property Deposit, an executed
copy of the Notice and a fully executed copy of this Agreement. Upon receipt by the Escrow
Holder of the executed copy of the Notice, the Phase II Property Deposit and/or the Phase III
Property Deposit and of a fully executed copy of this Agreement, the Escrow Holder shall cause
the Escrow to be opened as provided in Section 2.03, and the Escrow Holder shall place the
Phase II Property Deposit and/or the Phase III Deposit into an interest-bearing escrow account
with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow in
connection with the Phase II Property, the Phase II Property Deposit shall be applied as a credit
to the Phase II Property Purchase Price. At the Close of Escrow in connection with the Phase III
Property, the Phase III Property Deposit shall be applied as a credit to the Phase III Property
Purchase Price.
(c) The Phase I Property Deposit (less an amount equal to the customary and
reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer
in the event that:
(i) the Agency or the Developer terminates this Agreement pursuant to
Section 2.03(b); or
(ii) the Developer does not deliver its Phase I Property Due Diligence
Certificate to the Escrow Holder pursuant to Section 2.03(b) and this
Agreement is terminated; or
(iii) the conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2.16 are not satisfied by the
Agency or other entities, as appropriate (unless satisfaction has been
waived by the Developer), and this Agreement is terminated; or
(iv) the Phase I Property is materially damaged prior to the Close of Escrow
(as defined below), or an action of eminent domain is commenced by a
governmental entity with respect to the Phase I Property prior to the Close
of Escrow, and the Developer elects to terminate this Agreement pursuant
to Section 2.25.
(d) The Phase II Property Deposit (less an amount equal to the customary and
reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer
in the event that:
(i) the Agency or the Developer terminates this Agreement pursuant to
Section 2.03(e); or
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(ii) the Developer does not deliver its Phase II Property Due Diligence
Certificate to the Escrow Holder pursuant to Section 2.03(e) and this
Agreement is terminated; or
(iii) the conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2.16 are not satisfied by the
Agency or other entities, as appropriate (unless satisfaction has been
waived by the Developer), and this Agreement is terminated; or
(iv) the Phase II Property is materially damaged prior to the Close of Escrow,
or an action of eminent domain is commenced by a governmental entity
with respect to the Phase II Property prior to the Close of Escrow, and the
Developer elects to terminate this Agreement pursuant to Section 2.25.
(e) The Phase III Property Deposit (less an amount equal to the customary and
reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer
in the event that:
(i) the Agency or the Developer terminates this Agreement pursuant to
Section 2.03( e); or
(ii) the Developer does not deliver its Phase III Property Due Diligence
Certificate to the Escrow Holder pursuant to Section 2.03(e) and this
Agreement is terminated; or
(iii) the conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2.16 are not satisfied by the
Agency or other entities, as appropriate (unless satisfaction has been
waived by the Developer), and this Agreement is terminated; or
(iv) the Phase III Property is materially damaged prior to the Close of Escrow,
or an action of eminent domain is commenced by a governmental entity
with respect to the Phase III Property prior to the Close of Escrow, and the
Developer elects to terminate this Agreement pursuant to Section 2.25.
Section 2.03. Opening and Closing of Escrow.
(a) The transfer and sale of the Phase I Property, the Phase II Property and/or the
Phase m Property shall take place through the Escrow to be administered by Chicago Title
Insurance Company or such other escrow or title insurance company mutually agreed upon by
the Developer and the Agency (the "Escrow Holder"). The Escrow shall be deemed open upon
the receipt by the Escrow Holder of a fully executed copy of this Agreement and the Phase I
Property Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number
and the title insurance order number assigned to the Escrow.
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(b) Subject to any extensions of time pursuant to Section 2.15 hereof, in the event that
the Developer has not delivered its Phase I Property Due Diligence Certificate to the Agency and
the Escrow Holder within thirty (30) calendar days from the opening date of the Escrow for any
reason, then in such event this Agreement shall terminate upon written notice to the Escrow
Holder from either the Agency or the Developer, whereupon the Phase I Property Deposit shall
be returned by the Escrow Holder to the Developer (less an amount equal to the customary and
reasonable escrow cancellation charges payable to the Escrow Holder) without further or
separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged
from all further responsibility or liability under this Agreement.
(c) Provided that the Developer has delivered the Phase I Property Due Diligence
Certificate within the period of time authorized in Section 2. I 0, then the Closing Date of the
Escrow shall occur within twenty (20) calendar days thereafter, unless the Close of Escrow is
extended (a) pursuant to Section 2.16 or (b) to a date that is more than twenty (20) calendar days
thereafter by mutual agreement of the Agency and the Developer.
(d) Upon receipt by the Agency from the Developer of the Notice to acquire the
Phase II Property, the Escrow shall be deemed open on the date that the Escrow Holder is in
receipt of a copy ofthe Notice, is in receipt of the Phase II Property Deposit and is in receipt of a
fully executed copy of the Agreement. Upon receipt by the Agency from the Developer of the
Notice to acquire the Phase III Property, the Escrow shall be deemed open on the date that the
Escrow Holder is in receipt of a copy of the Notice, is in receipt of the Phase III Property Deposit
and is in receipt of a fully executed copy of the Agreement. The Escrow Holder shall promptly
confirm to the parties the escrow number and the title insurance order number assigned to the
Escrow.
(e) Subject to any extensions oftime pursuant to Section 2.15 hereof, in the event that
the Developer has not delivered its Phase II Property Due Diligence Certificate and/or its Phase
III Property Due Diligence Certificate to the Agency and the Escrow Holder within one twenty
(120) calendar days from the Opening of Escrow for any reason, then in such event this
Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or
the Developer, whereupon the Phase II Property Deposit and/or the Phase III Property Deposit
shall be returned by the Escrow Holder to the Developer (less an amount equal to the customary
and reasonable escrow cancellation charges payable to the Escrow Holder) without further or
separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged
from all further responsibility or liability under this Agreement.
(f) Provided that the Developer has delivered to the Agency the Phase II Property
Due Diligence Certificate and/or the Phase III Property Due Diligence Certificate within the
period of time authorized in Section 2.10, then the Closing Date of the Escrow shall occur within
twenty (20) calendar days thereafter, unless the Close of Escrow is extended (a) pursuant to
Section 2.16 or (b) to a date that is more than twenty (20) calendar days thereafter by mutual
agreement of the Agency and the Developer.
The words "Close of Escrow", "Closing Date" and "Closing" shall mean and refer to the
date when: (i) the Escrow Holder is in receipt of the Escrow documents from the parties, (ii) the
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Escrow Holder is in a position to comply with the final written escrow closing instructions from
the parties, (iii) the Escrow Holder is in a position to cause the Agency Grant Deed in connection
with the Phase I Property, and/or in connection with the Phase II Property and/or with the Phase
III Property, in the event the Developer exercises the right to acquire the Phase II Property and/or
the Phase III Property pursuant to this Agreement, as appropriate, to be recorded in the official
records of the County, (iv) the Escrow Holder is in a position in connection with the Escrow
relating to the Phase I Property to record the Notice of Agreement in the Official Records of the
County Recorder's Office for the County of San Bernardino, State of California, (v) the Escrow
Holder has received all required monies and all instruments, agreements, documents, certificates
and estoppels, as executed and acknowledged, in recordable form where applicable, to Close the
Escrow, (vi) the Escrow Holder has received an executed seller and buyer's closing statement
from the Developer and from the Agency, and (vii) the Escrow Holder is in a position to deliver
to the Developer the Phase I Property Title Policy, the Phase II Property Title Policy and/or the
Phase III Property Title Policy, as appropriate, to be delivered to the Developer.
(g) Notwithstanding anything else contained in this Agreement and in any Exhibit to
the contrary, the Close of Escrow for the transfer of the Phase I Property from the Agency to the
Developer must occur not later than July I, 2009. In the event the Close of Escrow has not
occurred by said date, the Agency shall be entitled to exercise all rights and remedies as set forth
in this Agreement and in Article V subject to notice of default from the Agency to the Developer
without any right to cure such default by the Developer after said date.
Section 2.04. Escrow Instructions. This Agreement also constitutes escrow instructions
of the parties to the Escrow Holder. Additionally, the Developer and the Agency each agree to
execute the customary supplemental escrow instructions of the Escrow Holder in the form
provided by the Escrow Holder to its clients in real property escrow transactions administered by
it. In the event of a conflict between the additional terms of such customary supplemental
escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement
shall supersede and be controlling. Upon any termination of this Agreement or cancellation of
the Escrow, the Developer shall be solely responsible for the payment of the escrow cancellation
costs of the Escrow Holder, the Escrow Holder shall forthwith return all monies (as provided in
this Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow
cancellation fees and expenses, as set forth herein.
Section 2.05. Convevance of Title to the Phase I Propertv. to the Phase II PropertY and
to the Phase III Propertv. On or before 12:00 noon on the business day preceding the Closing
Date for the Escrow the Agency shall. deliver to the Escrow Holder a grant deed in the form
attached hereto.asExhibit "E" (the "Agency Grant Deed") duly executed and acknowledged by
the Agency, which Agency Grant Deed shall convey all of its merchantable lien free right, title
and interest of the Agency in the Phase I Property, in the Phase II Property and/or in the Phase III
Property to the Developer. The Escrow Holder shall be instructed to record the Agency Grant
Deed in the Official Records of San Bernardino County, State of California, if and when the
Escrow Holder holds the various instruments of the parties as set forth herein and can obtain for
the Developer a CLTA owner's coverage policy of title insurance ("Title Policy") issued by
Chicago Title Insurance Company or such other title insurance company mutually agreed upon
by the parties (''Title Company") with liability in an amount equal to the Phase 1 Property
".
,
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Purchase Price for the Phase I Property Title Policy, in an amount equal to the Phase II Property
Purchase Price for the Phase II Property Title Policy, and/or in an amount equal to the Phase III
Property Purchase Price for the Phase III Property, as appropriate, together with such
endorsements to the policy as may be reasonably requested by the Developer, insuring that the
title to the Phase I Property, to the Phase II Property and/or to the Phase III Property is vested in
fee title in the Developer and is free and clear of options, rights of first refusal or other purchase
rights, leases or other possessory interests and monetary liens and/or encumbrances and subject
only to:
(1) non-delinquent real property taxes;
(2) non-monetary title exceptions approved by the Developer pursuant to
Section 2.13 below;
(3) applicable provISIons encumbering or affecting the parcel map or
subdivision map for the Phase I Property, the Phase II Property and/or the Phase III Property, as
appropriate;
(4) the effect of any conditions imposed by the City as part of the
development plan approvals for the Phase I Property Project, for the Phase II Property Project
and/or for the Phase III Property Project, or any part thereof, accepted by the Developer in its
sole discretion;
(5) the provisions of the Agency Grant Deed;
(6) the applicable provisions of this Agreement and the Notice of Agreement;
(7) the HUD 108 Loan or the New HUD Loan, as applicable, or any other
deed of trust, mortgage or security interest encumbering the Phase I Property, the Phase II
Property and/or the Phase III Property;
(8) such other title exceptions, if any, resulting from documents being
recorded or delivered through Escrow;
(9) the effect of the Redevelopment Plan for the Project Area.
Section 2.06. Additional Closinl! Oblil!ations of the Al!encv. On or before 12:00 noon
on the business day preceding the Closing Date for the Escrow (and unless indicated otherwise),
the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the
Developer) copies of the following documents and other items:
(I) a certificate of non-foreign status executed by the Agency, in the
customary form provided by the Escrow Holder, and a California
Franchise Tax Board Form 590-RE executed by the Agency;
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(2) all soils, seismic, geologic, drainage, and environmental reports, and
surveys, with respect to the Phase I Property, the Phase II Property and/or
the Phase III Property, if any, which the Agency has in its possession
and/or control to the extent that originals of such items have not been
delivered previously by the Agency to the Developer pursuant to Section
2.08 below;
(3) two (2) duplicate original copies of the Closing Statement described in
Section 2.21, duly executed by the Agency;
(4) evidence of the existence, organization and authority of the Agency and of
the authority of persons executing documents on behalf of the Agency
reasonably satisfactory to the Escrow Holder and Title Company;
(5) any other documents, instruments, funds and records required to be
delivered to the Developer under the terms of this Agreement which have
not been previously delivered;
(6) one (I) original of the Notice of Agreement, as executed and
acknowledged by the Agency (in connection with the Escrow relating to
the Phase I Property);
(7) one (I) original of the Scope of Development and one (I) original of the
Schedule of Performance, as executed by the Agency and by the
Developer;
(8) One (I) original of the Agency Grant Deed, as executed and notarized by
the Agency, in connection with the Phase I Property, with the Phase II
Property and/or with the Phase III Property; and
(9) One (I) original of the License Agreement, in connection with Escrow
relating to the Phase I Property.
Section 2.07. Closing Obligations of the Developer. On or before 12:00 noon on the
business day preceding the Closing Date for the Escrow, the Developer shall deliver to the
Escrow Holder copies of the following documents and other items:
(1) an acknowledgment and acceptance of the Agency Grant Deed, duly
executed and acknowledged by the Developer;
(2) two (2) duplicate original copies of the Closing Statement, duly executed
by the Developer;
(3) one (1) original of the Notice of Agreement, as executed and
acknowledged by the Developer (in connection with the Escrow relating to
the Phase I Property);
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(4) evidence of the existence, organization and authority of the Developer and
of the authority of persons executing documents on behalf of the
Developer reasonably satisfactory to the Escrow Holder and the Title
Company;
(5) documentation of present commitment of financial resources as
determined to be satisfactory by the Agency to provide for the purchase of
the Phase I Property, of the Phase II Property and/or of the Phase III
Property, as appropriate, and to provide for the construction, the
development, the installation and the completion of the Phase I Property
Project, of the Phase II Property Project and/or of the Phase III Property
Project, as appropriate;
(6) the Notice (as previously defined in Section 2.02(b) hereof) from the
Developer to the Agency;
(7) one (1) original of the Scope of Development and one (1) original of the
Schedule of Performance, as executed by the Agency and by the
Developer;
(8) One (I) original of the Agency Grant Deed, as executed and notarized by
the Developer, accepting the conveyance from the Agency to the
Developer in connection with the Phase I Property, with the Phase II
Property and/or with the Phase III Property; and
(9) any other documents, instruments or funds required to be delivered by the
Developer under the terms of this Agreement or as otherwise required by
Escrow Holder or Title Company in order to close the Escrow, which have
not previously been delivered.
Section 2.08. Inspections and Review.
(a) Due Diliv;ence Items. Within five (5) business days after the execution of this
Agreement, or within five (5) business days after delivery by the Developer to the Agency of the
Notice in connection with the Phase II Property and/or with the Phase III Property, the Agency
shall deliver true, correct and complete copies or originals of the following documents and items
(collectively, "Due Diligence Items") to the Developer:
(I) copies of all soils, seismic, geologic, drainage, engineering, environmental
and similar type reports and surveys including, but not limited to, any
Property Environmental Site Assessments, surveys, relating to the Phase I
Property, to the Phase II Property and/or to the Phase III Property, if any,
in the possession or the control of the Agency.
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(2) notices of violations, including, but not limited to, zoning ordinances,
development or building codes affecting the Phase I Property, the Phase II
Property and/or the Phase III Property within the Agency's possession or
control.
(3) disclosure of any legal matters affecting the use, occupancy or condition
of the Phase I Property, the Phase II Property and/or the Phase III Property
within the knowledge of the Agency.
(b) Certain Definitions. For the purpose of this Agreement, the terms set forth below
shall have the following meaning:
(i) "environmental laws" means all federal, state, local, or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of
any government authority regulating, relating to, or imposing liability of standards
of conduct concerning any hazardous substance (as later defined), or pertaining to
occupational health or industrial hygiene (and only to the extent that the
occupational health or industrial hygiene laws, ordinances, or regulations relate to
hazardous substances on, at, in, above, under, from or about the Phase I Property,
the Phase II Property and/or the Phase III Property), occupational or
environmental conditions on, under, or about the Property, as now or may at any
later time be in effect, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA")
[42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of
1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known
as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et
seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.];
the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et
seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.]
the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act
[42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section
6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section
101 et seq.] the Emergency Planning and Community Right to Know Act [42
USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC
Section 655 and 657]; the California Underground Storage of Hazardous
Substances Act [H & S C Section 25288 et seq.]; the California Hazardous
Substances Account Act [H & S C Section 25300 et seq.]; the California Safe
Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.]
the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.]
together with any amendments of or regulations promulgated under the statutes
cited above and any other federal, state, or local law, statute, ordinance, or
regulation now in effect or later enacted, as amended from time to time, that
pertains to occupational health or industrial hygiene, and only to the extent the
occupational health or industrial hygiene laws, ordinances, or regulations relate to
hazardous substances on, at, in, above, under, from or about the Phase I Property,
the Phase II Property and/or the Phase III Property, or the regulation or protection
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of the environment, including ambient air, soil, soil vapor, groundwater, surface
water, or land use.
(ii) "hazardous substances" includes without limitation:
those substances included within the definitions of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," or
"pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any
other environmental law; and
those substances listed in the United States Department of Transportation
(DOT)Table [49 CFR 172.101], or by the EPA, or any successor agency, as
hazardous substances [40 CFR Part 302]; and
other substances, materials, and wastes that are or become regulated or classified
as hazardous or toxic under federal, state, or local laws or regulations; and
any material, waste, or substance that is:
(1) a petroleum or refined petroleum product,
(2) asbestos,
(3) polychlorinated biphenyl,
(4) designated as a hazardous substance pursuant to 33 USC Section
1321 or listed pursuant to 33 USC Section 1317,
(5) a flammable explosive,
(6) a radioactive material,
(7) lead or lead-containing materials.
Section 2.09. Due Dilil!ence Investil!ation of the Phase I Prooerty. the Phase II Prooertv
and the Phase III Property Bv the Developer.
(a) Within thirty (30) calendar days from and after the Opening of Escrow in
connection with the Phase I Property or within one hundred and twenty (120) calendar days from
and after the Opening of Escrow in connection with the Phase II Property and/or with the Phase
III Property, and subject to the extensions of time set forth below in Section 2.15, the Developer
shall have the right to examine, inspect and investigate the Property Phase I Property, the Phase
II Property and/or the Phase III Property (the "Due Diligence Period") to determine whether the
condition of the Phase I Property, of the Phase II Property and/or of the Phase III Property is
acceptable to the Developer and to obtain such development project approvals from the City for
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the improvement of the Phase I Property Project, the Phase II Property Project and/or the Phase
III Property Project, as the Developer may require in its sole and absolute discretion.
(b) During the Due Diligence Period, the Agency shall permit the Developer, its
engineers, analysts, contractors and agents to conduct such physical inspections and testing of
the Phase I Property, of the Phase II Property and/or of the Phase III Property as the Developer
deems prudent with respect to the physical condition of the Phase I Property, of the Phase II
Property and/or of the Phase III Property, including the inspection or investigation of soil and
subsurface soil geotechnical condition, drainage, seismic and other geological and topographical
matters, surveys the potential presence of any hazardous substances, if any.
(c) Any such investigation work on either the Phase I Property, the Phase II Property
and/or the Phase III Property may be conducted by the Developer and/or its agents during any
normal business hours upon twenty-four (24) hours prior notice to the Agency, which notice will
include a reasonable description of any investigation work or tests to be conducted by the
Developer on the Phase I Property, on the Phase II Property and/or on the Phase III Property.
Upon the Agency's request, the Developer will provide the Agency with copies of any test
results.
(d) During the Due Diligence Period, the Developer shall also have the right to
investigate all matters relating to the zoning, use and compliance with other applicable laws
which relate to the use and development and improvement of the Phase I Property, of the Phase
II Property and/or of the Phase III Property. The Developer may submit an application to the
City and any other regulatory agency with jurisdiction for any and all necessary development
project approvals for the Project. The Agency hereby consents to the submission of such
development project approval applications by the Developer.
(e) The Agency shall cooperate fully to assist the Developer in completing such
inspections and investigations of the condition of the Phase I Property, of the Phase II Property
and/or of the Phase III Property. The Agency shall have the right, but not the obligation, to
accompany the Developer during such investigations and/or inspections. The Developer shall
pay for all costs and expenses associated with the conduct of all such Due Diligence
investigation including the cost of submitting any development project approval application as
relates to the Phase I Property Project, to the Phase II Property Project and/or to the Phase III
Property Project to any regulatory jurisdiction. The costs of such investigations and/or
inspections associated with the conduct of all such Due Diligence investigation are or may be
included in the Budget.
Section 2.1 O. Due Diligence Certificate. Within thirty (30) calendar days following the
Opening of Escrow in connection with the Phase I Property or within one hundred twenty (120)
calendar days following the Opening of Escrow in connection with the Phase II Property and/or
with the Phase III Property, the Developer shall complete its investigation of the Phase I
Property, the Phase II Property and/of the Phase III Property (subject to any extensions of time as
provided in Section 2.15 and deliver a due diligence certificate signed by the Developer (the
"Due Diligence Certificate") to the Escrow Holder which either:
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(i) indicates that the Developer accepts the condition of the Phase I Property,
the Phase II Property and/or the Phase III Property, or;
(ii) contains a description of the matters or exceptions relating to the condition
of the Phase I Property, of the Phase II Property and/or of the Phase III
Property which the Developer was not able to accept or resolve to its
satisfaction during the Due Diligence Period. In the event that there are
matters that the Developer is unable to accept or resolve, such matters
shall be deemed conditions to Closing for the benefit of the Developer and
the Closing Date shall automatically be deemed extended for such period
as maybe necessary to resolve such matters.
Section 2.1 I. Books and Records. As part of the Developer's due investigations during
the Due Diligence Period, the Developer shall be afforded full opportunity by the Agency to
examine all books and records which relate to either the Phase I Property, to the Phase II
Property and/or to the Phase III Property in the possession of the Agency and/or the Agency's
agents or employees, including the reasonable right to make copies of such books and records.
During the Due Diligence Period, the Agency will make sufficient staff available to assist the
Developer with obtaining access to information relating to the Phase I Property, to the Phase II
Property and/or to the Phase III Property which is in the possession or control of the Agency.
Section 2.12. Condition of the Pro\,ertv and the Developer's Release. The Developer
acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect
and investigate every aspect of the Phase I Property, the Phase II Property and/or the Phase III
Property during the Due Diligence Period. The Developer shall accept the delivery of possession
to the Phase I Property and the Phase II Property on the Close of Escrow in an "AS IS",
"WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and
represents to the Agency that by a date no later than the end of the Due Diligence Period, the
Developer shall have conducted and completed (or waived the completion) of all of its
independent investigation of the condition of the Phase I Property, the Phase II Property and/or
the Phase III Property, which the Developer may believe to be indicated. The Developer hereby
acknowledges that it shall rely solely upon its own investigation of the Property I Property, the
Phase II Property and/or the Phase III Property and its own review of such information and
documentation as it deems appropriate for the purpose of accepting the condition and possession
of the Phase I Property, the Phase II Property and the Phase III Property. The Developer is not
relying on any statement or representation by the Agency relating to the condition of the Phase I
Property, the Phase II Property and/or the Phase III Property unless such statement or
representation is specifically contained in this Agreement. Without limiting the foregoing, the
. Agency makes no representations or warranties as to whether the Phase I Property, the Phase II
Property and/or the Phase III Property presently complies with environmental laws or whether
the Phase I Property, the Phase II Property and/or the Phase III Property contains any hazardous
substance, as these terms are defined in Section 2.08 (b) hereof. Furthermore, to the extent that
the Agency has provided the Developer with information relating to the condition of the Phase I
Property, of the Phase II Property and/or of the Phase III Property, including information and
reports prepared by or on behalf of the City of San Bernardino, the Agency makes no
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representation or warranty with respect to the accuracy, completeness or methodology or content
of such reports or information.
Without limiting the above, except to the extent covered by an express representation or
warranty of the Agency set forth in this Agreement, the Developer, on behalf of itself and its
successors and assigns, waives and release the Agency and its successors and assigns from any
and all costs or expenses whatsoever (including, without limitation, attorneys' fees and costs),
whether direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to
the physical condition of the Phase 1 Property, of the Phase II Property and/or of the Phase III
Property, the condition of the soils, the suitability of the soils for the improvement of the Phase I
Property Project, of the Phase II Property Project and/or of the Phase III Property Project, as
proposed, or any law or regulation applicable thereto, including the presence or alleged presence
or harmful or hazardous substances in, at, on, above, under, from or about the Phase I Property,
the Phase II Property and/or the Phase III Property including, without limitation, any claims
under or on account of (i) CERCLA and similar statutes and any regulations promulgated
thereunder or (ii) any other environmental laws.
The Developer expressly waives any rights or benefits available to it with respect to the
foregoing release under any provision of applicable law which generally provides that a general
release does not extend to claims which the creditor does not know of suspect to exist in his or
her favor at the time the release is agreed to, which, if known to such creditor, would materially
affect a settlement. By execution of this Agreement, the Developer acknowledges that it fully
understands the foregoing, and with this understanding, nonetheless elects to and does assume all
risk for claims known or unknown, described in this Section 2.12 without limiting the generality
of the foregoing:
The undersigned acknowledges that it has been advised by legal counsel and is familiar
with the provisions of California Civil Code Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER, MUST HAVE
MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR."
The undersigned, being aware of this code section, hereby expressly waives any rights it
may have thereunder, as well as under any other statutes or common law principles of similar
effect.
Initials of the Developer:_
The provisions of this Section 2.12 shall survive the Close of Escrow for either the Phase
I Property, the Phase II Property and/or the Phase III Property.
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Section 2.13. Review and Approval of Condition of Title bv the Developer.
(a) Within fifteen (15) calendar days following the Opening of Escrow, the Agency
shall cause to be delivered to the Developer a preliminary title report or title commitment for a
CLTA coverage policy of title insurance issued by the Title Company describing the state of title
of the Phase I Property, the Phase II Property arid/or the Phase III Property, together with (i)
copies of all exceptions specified therein and with all easements plotted and (ii) a survey
prepared in compliance with ALTNASCM standards and in a form acceptable to the Title
Company for the deletion of the standard survey exception in the Phase I Property Title Policy,
the Phase II Property Title Policy and/or the Phase III Title Policy relating to boundaries, without
the addition of further exceptions unless the same are acceptable to the Developer in its sole and
absolute discretion (the "Preliminary Title Report"). The Developer shall notifY the Agency in
writing of any objections the Developer may have to the title exceptions contained in the
Preliminary Title Report for the Phase I Property, the Phase II Property and/or for the Phase III
Property (the "Developer's Objection Notice") prior to the expiration of the Due Diligence
Period in connection with the Escrow. The Developer may condition its approval on the
Agency's cure of any matters objected to by the Developer.
(b) The Agency covenants not to further encumber and not to place any further liens
or encumbrances on the either the Phase I Property, the Phase II Property and/or the Phase III
Property, including, but not limited to, covenants, conditions, restrictions, easements, liens,
options to purchase, options to lease, leases, tenancies, or other possessory interests without the
prior written consent of the Developer. Upon the issuance of any amendment or supplement to
the Phase I Property Preliminary Title Report, to the Phase II Property Preliminary Title Report
and/or to the Phase III Property Preliminary Title Report, whichever is the case, which adds
additional exceptions, the foregoing right of review and approval shall also apply to said
amendment or supplement (provided that the period for the Developer to review such
amendment or supplement shall be the later of the expiration of the Due Diligence Period for the
Escrow or ten (10) calendar days from receipt of the amendment or supplement) and the EscroW
shall be deemed extended by the amount of time necessary to allow such review and approval in
the time and manner set forth above.
Section 2. I 4. Survev. The Developer may at its sole cost and separate expense obtain a
survey of the Phase I Property, of the Phase II Property and/or of the Phase III Property prepared
by a land surveyor duly licensed by the State of California and in compliance with AL T N ASCM
standards (the "Survey"). The Survey shall be in a form acceptable to the Title Company for the
deletion of the standard survey exception in the Title Policy relating to boundaries, without the
addition of further exceptions unless the same are acceptable to the Developer in its sole and
absolute discretion. The Developer shall have until the end of the Due Diligence Period in
connection with the Phase I Property, with the Phase II Property and/or in connection with the
Phase III Property to complete and examine the Survey and to notifY Agency in writing of any
objections the Developer has to the Survey (the "Developer's Survey Objection Notice"). The
Agency shall have a period of five (5) calendar days after receipt of the Developer's Survey
Objection Notice in which to deliver written notice to the Developer (the "Agency's Survey
Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to
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the Close of Escrow for the Phase I Property, for the Phase II Property and/or for the Phase III
Property or (ii) decline to remove such items which shall then give the Agency the right to
terminate the Escrow for failure of the Developer to comply with the provisions of Section
2. I 7(b). If the Agency notifies the Developer of its intention to not remove the objectionable
items and to thereupon terminate the Escrow for failure of the condition as set forth in Section
2.17(b), the Developer shall have the right, by written notice delivered to the Agency within five
(5) calendar days after the Developer's receipt of Agency's Survey Notice, to agree to accept the
Phase I Property, the Phase II Property and/or the Phase III Property, subject to the objectionable
items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and
the Developer shall accept the Phase I Property, the Phase II Property and/or the Phase III
Property at the Close of Escrow for the Phase I Property, for the Phase II Property and/or for the
Phase III Property, subject to such objectionable items. Prior to the Closing, the Survey shall be
recertified to the Developer and the Title Company. The Survey will be performed at the
Developer's sole cost and expense.
Section 2.15. Extension of Due Diligence Period.
(a) In the event the Agency fails to provide to the Developer the documents and other
information required by Sections 2.08 and 2.11 by the date(s) set forth therein, the Due Diligence
Period for such information shall be extended by one (I) day for each day of the delay by the
Agency to permit the Developer to perform an adequate due diligence review not to exceed thirty
(30) calendar days in connection with the Phase I Property or one hundred twenty (120) calendar
days in connection with the Phase II Property and/or with the Phase III Property. The Developer
will use its best efforts to notifY the Agency of any documents the Agency has failed to deliver to
the Developer within the time periods provided in Sections 2.08 and 2.11.
(b) In the event that the Interim Executive Director makes a finding that the
Developer has undertaken substantial work to complete its investigation of either the Phase I
Property, the Phase II Property and/or the Phase III Property, the Interim Executive Director
shall upon the written request of the Developer, authorize an extension of the Due Diligence
Period for an additional sixty (60) calendar days upon written notice to the Agency on or before
the end of the Due Diligence Period in connection with the Escrow.
Section 2.16. Developer's Conditions Precedent to Close Escrow for the Phase I
Propertv. for the Phase II PropertY or the Phase III Propertv. The Developer's obligation to
complete the purchase of the Phase I Property, of the Phase II Property and/or of the Phase III
Property and to Close the Escrow(s) thereto shall be conditioned upon the fulfillment of the
following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to
Section 2.19) prior to the Close of Escrow for either the Phase I Property, the Phase II Property
and/or for the Phase III Property:
(I) The Agency shall not have defaulted on any material term of this
Agreement to be performed by the Agency hereunder, and each
representation and warranty made by the Agency in this Agreement shall
remain true and correct;
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(2) the Developer's approval of the Phase I Property Preliminary Title Report,
the Phase II Property Preliminary Title Report and/or the Phase III
Property Preliminary Title Report within the time period specified in
Sections 2.13 and cure of objectionable items by the Agency;
(3) the Developer's approval of the contents of all Due Diligence Items, and
the other investigations of the Phase I Property, of the Phase II Property
and/or of the Phase III Property made by the Developer and/or its
designees pursuant to Sections 2.08 and 2.09 herein on or before the
expiration of the Due Diligence Period in connection with the Escrow, or
such later date if such Due Diligence Period is extended pursuant to
Section 2.15 or any other provision hereof. The Developer shall be
deemed to have disapproved such Due Diligence Items unless they are
approved (conditionally or otherwise) on or before 5:00 p.m. on the day of
the Due Diligence Period in connection with the Escrow, or such later date
if such Due Diligence Period is extended pursuant to Section 2.15 or any
other provision hereof;
(4) the Developer's approval of any notice of change in representation or
warranty given by the Agency pursuant to Section 2.24(a) hereof;
(5) the Title Company has committed to issue the Title Policy in connection
with the Phase I Property, with the Phase II Property and/or in connection
with the Phase III Property, whichever applies, in favor of the Developer
in the form described in Section2.05;
(6) the Developer has received the Scope of Development and the Schedule of
Performance, as executed by the Agency; and
(7) the Developer has received purchase money and construction financing to
enable the Developer to purchase, to construct, to develop and to install
the Improvements in connection with the Phase I Property, with the Phase
II Property and/or with the Phase III Property.
(8) in connection with the Complaint (as defined below) all of the following
conditions must be met: (i) the Superior Court (as defined below) must
have rendered a final and non-appealable judgment or order in favor of the
Agency, and (ii) the Agency must have the absolute and unconditional
right to own, occupy and possess the Phase I Property, and (iii) the lease
(the "Lease") between the Agency, as successor landlord, and CinemaStar
Luxury Theaters, Inc., a Delaware corporation, as successor tenant
("CinemaS tar") for the use and occupancy by CinemaS tar of the Phase I
Property must be terminated pursuant to the following: (I) a written
termination agreement between the Agency, as successor landlord, and
CinemaS tar, as successor tenant, wherein the Lease is mutually
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terminated, or pursuant to (2) a final and non-appealable judgment from a
court oflast resort, wherein the Lease is terminated by such court.
Section 2.17. Agencv's Conditions Precedent to Close Escrow For the Phase I Propertv.
for the Phase II Prooertv and for the Phase III Pronertv. The Agency's obligation to convey the
Property Phase I Property, the Phase II Property and/or the Phase III Property to the Developer
shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall
be satisfied (or waived in writing pursuant to Section 2. I 9) prior to the Close of Escrow:
(I) the Developer has accepted the condition of either the Phase I Property,
the Phase II Property and/or the Phase III Property and submitted its Phase
I Property Due Diligence Certification, the Phase II Property Due
Diligence Certification and/or its Phase III Property Due Diligence
Certification to the Escrow Holder within the time period set forth in
Section 2.03 of this Agreement, as such time period may be extended
pursuant to Section 2.15 or any other provision hereof;
(2) the Developer has accepted the condition of title of each of the Phase I
Property, of the Phase II Property and/or of the Phase III Property on or
before the date set forth in Section 2.13;
(3) the Developer shall not be in default of any material term of this
Agreement to be performed by the Developer hereunder and each
representation and warranty of the Developer made in this Agreement
shall remain true and correct;
(4) the Developer shall be satisfied (or waive satisfaction) of each of the
conditions precedent set forth in Section 2.16);
(5) The Developer shall have executed the documents contemplated in
Section 2.02(b) hereof in such form as to allow the recordation of the
Agency Grant Deed and the Notice of Agreement in the Official Records
of the County Recorder's Office for the County of San Bernardino, shall
have deposited the Phase I Property Purchase Price, the Phase I Property
Deposit and all other amounts due and owing by the Developer in
connection with this Agreement and the Closing of the Escrow relating to
the Phase I Property, and shall have executed and acknowledged, if
required, all other instruments, documents, agreements, certificates and
estoppels, as required by the Agency or the Escrow Holder to close the
Escrow relating to the Phase I Property;
(6) The Developer shall have executed the documents contemplated in
Section 2.02(b) hereof in such form as to allow the recordation of the
Agency Grant Deed in the Official Records of the County Recorder's
Office for the County of San Bernardino, State of California, shall have
deposited the Phase II Property Purchase Price, the Phase II Property
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Deposit and all other amounts due and owing by the Developer in
connection with this Agreement and the Closing of the Escrow in
connection with the Phase II Property, and shall have executed and
acknowledged, if required, all other instruments, documents, agreements,
certificates and estoppels, as required by the Agency or by the Escrow
Holder to close the Escrow relating to the Phase II Property;
(7) The Developer shall have executed the documents contemplated in
Section 2.02(b) hereof in such form as to allow the recordation of the
Agency Grant Deed in the Official Records of the County Recorder's
Office for the County of San Bernardino, State of California, shall have
deposited the Phase III Property Purchase Price, the Phase III Property
Deposit and all other amounts due and owing by the Developer in
connection with this Agreement and the Closing of the Escrow in
connection with the Phase III Property, and shall have executed and
acknowledged, if required, all other instruments, documents, agreements,
certificates and estoppels, as required by the Agency or by the Escrow
Holder to close the Escrow relating to the Phase III Property;
(8) the Escrow Holder is in a condition to close the Escrow in connection with
the Phase I Property fifty (50) calendar following the Opening of Escrow
or one hundred fifty (150) calendar days following the Opening of the
Escrow in connection with the Escrow relating to the Phase II Property
and/or the Phase III Property, subject to the provisions of Section 2.15 and
2.25;
(9) The Developer must have deposited the Scope of Development and the
Schedule of Performance, as executed by the Developer;
(10) Except for the HUD Loan Assumption (as defined below) which has been
approved by the Agency, the Agency must have reasonably approved the
following: (i) the HUD 108 Loan and all other loans, institutional lenders
and/or financings to enable the Developer to purchase the Phase I
Property, the Phase II Property and/or the Phase III Property, and to
construct, to develop, to install and to complete the Phase I Property
Project, the Phase II Property Project and/or the Phase III Property Project,
as appropriate, (ii) the Developer must have executed and acknowledged,
where required, in recordable form for recordation in the Official Records
of the County of San Bernardino, State of California, all agreements,
documents, and instruments evidencing, securing, guaranteeing and/or
relating to the Financing (as defined below), as amended from time to time
(singularly and collectively, the "Financing Loan Documents") or (iii) the
assumption by the Developer of the HUD 108 Loan (the "HUD Loan
Assumption") and all other loans, institutional lenders and/or financings to
enable the Developer to purchase the Phase I Property and to construct, to
develop, to install and to complete the Phase I Property Project (the
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matters identified in Section 2.17(1O)(i), in Section 2.17(1O)(ii) and in
Section 2.17(10)(iii) shall singularly and collectively be referred to as the
"Financing"); and
(11) In connection with the Complaint (as defined below) all of the following
conditions must be met: (i) the Superior Court (as defined below) must
have rendered a final and non-appealable judgment or order in favor of the
Agency, and (ii) the Agency must have the absolute and unconditional
right to own, occupy and possess the Phase I Property, and (iii) the lease
(the "Lease") between the Agency, as successor landlord, and CinemaStar
Luxury Theaters, Inc., a Delaware corporation, as successor tenant
("CinemaStar") for the use and occupancy by CinemaStar of the Phase I
Property must be terminated pursuant to the following: (I) a written
termination agreement between the Agency, as successor landlord, and
CinemaS tar, as successor tenant, wherein the Lease is mutually
terminated, or pursuant to (2) a final and non-appealable judgment from a
court oflast resort, wherein the Lease is terminated by such court.
Section 2.18. Distribution of Documents to the Developer. After the Closing Date by
Escrow Holder, the Escrow Holder shall deliver to the Developer within three (3) business days
following the Closing Date in connection with the Escrow for the Phase I Property, the Phase II
Property and/or for the Phase III Property, a conformed copy of the Agency Grant Deed in
connection with the transfer of the Phase I Property, of the Phase II Property or in connection
with the transfer of the Phase III Property, whichever applies, as recorded, and the policy of title
insurance issued by the Title Company in favor of the Developer.
Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing
conditions requires action by the Developer or by the Agency, each party shall use its diligent
best efforts, in good faith, and at its own cost, to satisfY such condition. Where satisfaction of
any of the foregoing conditions requires the approval of a party, such approval shall be in such
party's sole and absolute discretion.
Either party may waive any of the conditions set forth in this Agreement as to items that
are intended to be performed by the other party, but any such waiver as to performance by the
other party shall be effective only if contained in a writing signed by the applicable party and
delivered to the Escrow Holder.
Section 2.20. RESERVED.
Section 2.21. Prorations. Closing Costs. Possession.
(a) Real and personal property taxes for either the Phase I Property, the Phase II
Property and/or the Phase III Property shall be prorated by the parties to the applicable Closing
Date on the basis of a three hundred sixty-five (365) day year on the basis that the Agency is
responsible for (i) all such taxes (if any) fOr the fiscal year of the applicable taxing authority
occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes
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for the Current Tax Period to II :59 p.m. on the Closing Date, whether or not the same shall be
payable prior to the Closing Date. The phrase "Current Tax Period" refers to the fiscal year of
the applicable taxing authority in which the Closing occurs. All tax prorations shall be based
upon the latest available tax statement. If the tax statements for the fiscal tax year during which
Escrow closes do not become available until after the Closing Date, then the rates and assessed
values of the previous year, with known changes, shall be used, and the parties shall re-prorate
said taxes outside of Escrow following the Closing Date when such tax statements become
available. The Agency shall be responsible for and shall payor reimburse the Developer upon
demand for any taxes that were due and payable by the Agency, or were paid by the Developer
upon the Closing Date for taxes assessed and which were due and payable by the Agency, during
the period of Agency ownership of the Phase I Property, the Phase II Property and/or the Phase
III Property. The Agency shall have no responsibility for the payment of any costs at the Closing
Date for either the Phase I Property, the Phase II Property and/or the Phase III Property, and shall
not be responsible for any real or personal property taxes payable following the Closing Date
applicable to any period of time prior to the Closing Date as a result of any change in the tax
assessment by reason of reassessment, changes in use of the Phase I Property, of the Phase II
Property and/or of the Phase III Property, changes in ownership, errors by the Assessor or
otherwise.
(b) The Developer shall be entitled to exclusive possession of the Phase I Property,
the Phase II Property and/or of the Phase III Property immediately upon the Close of the Escrow.
(c) The Agency shall pay one hUndred percent (100%) of the cost of the premium for
the Title Policy equal to the cost of a CLTA owner's coverage policy of title insurance on the
Property Phase I Property for coverage in the amount of the Phase I Property Purchase Price, on
the Phase II Property for coverage in the amount of the Phase II Property Purchase Price and/or
on the Phase III Property for coverage in the amount of the Phase III Property Purchase Price
together with all title charges reasonably requested by the Developer to remove disapproved
items shown on the Phase I Property Preliminary Title Report, the Phase II Property Preliminary
Title Report and/or on the Phase III Property Preliminary Title Report pursuant to Sections 2.13
and 2.14 above) but subject to Section 2.05 above. The Developer shall pay one-half (1/2) of the
customary and reasonable escrow fees which may be charged by the Escrow Holder in
connection with the Close of Escrow.
The Developer shall be responsible for paying the difference in cost between a CLTA
policy of title insurance and the cost of an ALTA extended owner's policy of title insurance that
is to be delivered to the Developer at the Close of Escrow for either the Phase I property, the
Phase II Property and/or the Phase III Property in addition to the cost of all title endorsements,
plus one-half (1/2) of the cost ofrecording the Agency Grant Deed and the Notice of Agreement
_ in connection with the Escrow relating to the Phase I Property, together with one-half (1/2) of the
cost of the customary and reasonable escrow fees charged by the Escrow Holder in connection
with the Close of Escrow for either the Phase I Property, the Phase II Property and/or the Phase
III Property.
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Any other Escrow-related transaction expenses or escrow closing costs incurred by the
Escrow Holder in connection with this transaction shall be apportioned and paid for by the
parties to this Agreement in the manner customary in San Bernardino County, California.
No later than three (3) business days prior to the Closing Date in connection with the
Escrow, the Escrow Holder shall prepare for approval by the Developer and the Agency a
closing statement ("Closing Statement") on the Escrow Holder's standard form indicating,
among other things, the Escrow Holder's estimate of all closing costs, and pay-off amounts for
the release and reconveyance of all liens secured by the Phase I Property, the Phase II Property
and/or the Phase III Property, and prorations made pursuant to this Agreement. The Developer
and the Agency shall assist the Escrow Holder in determining the amount of all prorations.
Section 2.22. RESERVED.
Section 2.23. Breach bv the Develooer of Article II Liquidated Damages Pavable bv the
Develooer to the Agencv. IN THE EVENT THAT THE DEVELOPER COMMITS A
MATERIAL BREACH, WHICH REMAINS UNCURED OR WHICH DEVELOPER HAS
FAILED TO COMMENCE TO CURE, OF ITS OBLIGATIONS UNDER THIS ARTICLE II
PRIOR TO THE CLOSE OF ESCROW IN CONNECTION WITH THE PHASE I PROPERTY,
THE PHASE II PROPERTY OR THE PHASE III PROPERTY, WHICHEVER APPLIES, OR
FAILS TO CLOSE ESCROW IN CONNECTION WITH THE PHASE I PROPERTY, THE
PHASE II PROPERTY OR THE PHASE III PROPERTY, WHICHEVER APPLIES, THE
DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL
BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER
AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE
AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE
DEVELOPER HAVE AGREED THAT SUCH DAMAGES SHALL BE IN THE AMOUNT OF
ONE HUNDRED THOUSAND DOLLARS ($100,000) AS LIQUIDATED DAMAGES IN
CONNECTION WITH THE ESCROW RELATING TO THE PHASE I PROPERTY OR TEN
THOUSAND DOLLARS ($10,000) IN CONNECTION WITH THE ESCROW RELATING TO
THE PHASE II PROPERTY AND/OR TO THE PHASE III PROPERTY, WHICHEVER IS
APPLICABLE. DAMAGES OF SUCH SUMS SHALL BE PAID TO THE AGENCY IN THE
EVENT OF DEFAULT BY THE DEVELOPER AS LIQUIDATED DAMAGES, WHICH
DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW OR
IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE DEVELOPER.
WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE
AGENCY WAIVES ANY AND ALL RIGHTS WHICH THAT THE AGENCY WOULD
HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS
AGREEMENT. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE
THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS
SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS.
Initials of the Developer
Initials of the Agency's
Section 2.24. Rel)resentations and Warranties.
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(a) Warranties and Representations bv the Agencv. The Agency hereby makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Developer and the acquisition by the Developer of the Phase I Property, the
Phase II Property and/or the Phase III Property, whichever applies, will be made in material
reliance by the Developer on such covenants, representations and warranties:
(I) Warranties True. Each and every undertaking and obligation of the
Agency under this Agreement shall be performed by the Agency timely
when due; and that all representations and warranties of the Agency under
this Agreement and its exhibits shall be true in all material respects at the
Closing as though they were made at the time of Closing.
(2) Due Organization. The Agency is a community redevelopment agency,
duly formed and operating under the laws of California. The Agency has
the legal power, right and authority to enter into this Agreement and to
execute the instruments. and documents referenced herein, and to
consummate the transactions contemplated hereby.
(3) Requisite Action. The Agency has taken all requisite action and obtained
all requisite consents in connection with entering into this Agreement and
the instruments and documents referenced herein and the consummation
of the transactions contemplated hereby, and no consent of any other party
is required.
(4) Enforceabilitv of Agreement. The persons executing any instruments for
or on behalf of the Agency have been authorized to act on behalf of the
Agency and that this Agreement is valid and enforceable against the
Agency in accordance with its terms and each instrument to be executed
by the Agency pursuant hereto or in connection therewith will, when
executed, be valid and enforceable against the Agency in accordance with
its terms. No approval, consent, order or authorization of, or designation
or declaration of any other person, is required in connection with the valid
execution and delivery of and compliance with this Agreement by the
Agency.
(5) Title. Prior to the Closing for either the Phase I Property, the Phase II
Property and/or the Phase III Property, the Agency will be the owner of
(and the Developer will acquire hereunder) the entire right, title and
interest in the Phase I Property, in the Phase II Property and/or in the
Phase III Property to effectively vest in the Developer good and
marketable fee simple title either to the Phase I Property, to the Phase II
Property and/or to the Phase III Property, that the Developerwill acquire
the Phase I Property, the Phase II Property and/or the Phase III Property
free and clear of all liens, encumbrances, claims, rights, demands,
easements, leases or other possessory interests, agreements, covenants,
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conditions, and restrictions of any kind or character (including, without
limiting the generality of the foregoing, liens or claims for taxes,
mortgages, conditional sales contracts, or other title retention agreement,
deeds of trust, security agreements and pledges and mechanics lien)
except: (i) the matters described in Section 2.05, and (ii) the exceptions to
title approved by the Buyer pursuant to Section 2.13.
(6) No Litigation. Except for that certain Complaint for Unlawful Detainer
filed by the Agency against CinemaStar Luxury Theaters, Inc., with the
Superior Court for the County of San Bemardino, State of California on
October 20, 2008, Case Number UDSS 805892 (the "Complaint"), there
are no pending or, to the best of the Agency's knowledge, threatened
claims, actions, allegations or lawsuits of any kind, whether for personal
injury, property damage, property taxes or otherwise, that could materially
and adversely affect the value or use of the Phase I Property, the Phase II
Property and/or the Phase III Property or prohibit the sale thereof, nor to
the best of the Agency's knowledge, is there any governmental
investigation of any type or nature pending or threatened against or
relating to the Phase I Property, the Phase II Property and/or the Phase III
Property or the transactions contemplated hereby.
(7) Operation and Condition Pending Closing. Between the date of this
Agreement and the Close of Escrow, the Agency will continue to manage,
operate and maintain the Phase I Property, the Phase II Property and/or the
Phase III Property in the same marmer as existed prior to the execution of
this Agreement.
(8) Contracts. There are no contracts or agreements to which the Agency is a
party relating to the operation, maintenance, development, improvement
or ownership of either of the Phase I Property, the Phase II Property and/or
the Phase III Property which will survive the Close of Escrow except as
may be set forth in the Agency Grant Deed in connection with the transfer
of the Phase I Property, of the Phase II Property and/or of the Phase III
Property.
(9) Development ofProiect. Although the Agency makes no representation or
warranty that either the Phase I Property, the Phase II Property and/or the
Phase III Property is suitable for the development or operation of the
Phase I Property Project, of the Phase II Property Project and/or of the
Phase III Property Project, the Agency has no present knowledge of any
condition of the Phase I Property, of the Phase II Property and/or of the
Phase III Property which would prevent its development in accordance
with the Scope of Development.
(10) Soecial Studies Zone. The Phase I Property, the Phase II Property and/ or
the Phase III Property, whichever applies, is not located within a
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designated earthquake fault zone pursuant to California Public Resources
Code Section 262 \.9 and a designated area that is particularly susceptible
to ground shaking, liquefaction, landslides or other ground failure during
an earthquake pursuant to California Public Resources Code Section 2694.
(11) The Agencv's Knowledge. For purposes of this Section 2.24, the terms
"to the best of the Agency's knowledge" or "to the Agency's knowledge"
shaH mean the actual knowledge of Interim Executive Director Emil A.
Marzullo.
(12) Financing. The Agency has not consented to any Financing (except for
the approval by the Agency of the assumption by the Developer of the
HUD 108 Loan) and, to the best knowledge of the Agency, HUD has not
consented to the HUD Loan Assumption by the Developer nor has HUD
consented to the making of any New HUD Loan to the Developer and/or
to the Agency to enable the Developer to Purchase the Phase I Property,
the Phase II Property and/or the Phase III Property and/or to construct, to
develop, to install and to complete the Phase I Property Project, the Phase
II Property Project and/or the Phase III Property Project.
If the Agency becomes aware of any act or circumstance which would change or render
incorrect, in whole or in part, any representation or warranty made by the Agency under this
Agreement, whether as of the date given or any time thereafter through the Closing Date of the
Escrow and whether or not such representation or warranty was based upon the Agency's
knowledge and/or belief as of a certain date, the Agency will give immediate written notice of
such changed fact or circumstance to the Developer, but such notice shall not release the Agency
of its liabilities or obligations with respect thereto.
All representations and warranties contained in this Section 2.24( a) are true and correct
on the date hereof and on the Closing Date of the Escrow and the Agency's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow.
(b) Warranties and R(:Jlresentations bv the Developer. The Developer makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Agency made in material reliance by the Agency on such covenants,
representations and warranties:
(1) The Developer is a duly organized and validly existing Delaware
corporation. The Developer has the legal right, power and authority to
enter into this Agreement and the instruments and documents referenced
herein and to consummate the transactions contemplated hereby. The
persons executing this Agreement and the instruments referenced herein
on behalf of the Developer hereby represent and warrant that such persons
have the power, right and authority to bind the Developer.
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(2) The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the
instruments and documents referenced herein and the consummation of
the transactions contemplated hereby, and no consent of any other party is
required.
(3) This Agreement is, and all agreements, instruments and documents to be
executed by the Developer pursuant to this Agreement shall be, duly
executed by and are or shall be valid and legally binding upon the
Developer and enforceable in accordance with their respective terms.
(4) Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a
default under any other agreement, document, instrument or other
obligation to which the Developer is a party or by which the Developer
may be bound, or under law, statute, ordinance, rule, governmental
regulation or any writ, injunction, order or decree of any court or
governmental body applicable to the Developer or to the Phase I Property,
to the Phase II Property and/or to the Phase III Property.
(5) The Developer shall notify the Agency in writing of any default under any
Financing, under the Financing Loan Documents, under the Construction
Financing (as defined below) and/or under the Permanent Financing (as
defined below). Further, in the event the Developer obtains a New HUD
Loan or the HOD Loan Assumption to enable the Developer to purchase
the Phase I Property and/or to construct, to develop, to install and to
complete the Phase I Property Project, the Developer, without limitation,
shall do the following: (i) on or prior to the date of the closing of the New
HUD Loan or the HUD Loan Assumption, the Developer shall cause an
unconditional letter of credit in the amount of $450,000 to be issued by
Wells Fargo Bank, by Bank of American or by such other commercial
lender reasonably acceptable to the Agency, in favor of the Agency, which
letter of credit shall have a minimum term of forty-two (42) months or the
Developer shall deliver a cash deposit in the amount of $450,000 to the
Agency to be held by the Agency as security for the obligations and
liabilities of the New HUD Loan or the HUD Loan Assumption, (ii) the
Developer shall fully discharge and payoff either the HUD 108 Loan or
the New HOD Loan, as applicable, at the of the third year of such loan,
and (iii) the Agency, without limitation, shall be permitted to draw against
the Letter of Credit or the Cash Deposit, in its entirety, and to apply the
proceeds of the Letter of Credit (as defined below) or the Cash Deposit (as
defined below), as appropriate, against the HUD 108 Loan or the New
HUD Loan, as applicable, in the event the Developer does not fully
discharge and payoff the HOD 108 Loan or the New HUD Loan, as
applicable, at the end of the third year of such loan.
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All representations and warranties contained in this Section 2.24(b) are true and correct
on the date hereof and on the Closing Date of the Escrow and the Developer's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Closing of the
Escrow.
Section 2.25. Damage. Destruction and Condemnation. Prior to the Agency's delivery
of possession of either the Phase I Property, the Phase II Property and/or the Phase III Property
to the Developer at the Close of Escrow, the risk ofloss or damage to the Phase I Property, to the
Phase II Property and/or to the Phase III Property shall remain upon the Agency. If either the
Phase I Property, the Phase II Property and/or the Phase III Property suffers damages as a result
of any casualty prior to the Close of Escrow which may materially diminish its value, then the
Agency shall give written notice thereof to the Developer promptly after the occurrence of the
casualty. The Developer can elect to either: (i) accept either the Phase I Property, the Phase II
Property and/or the Phase III Property in its damaged condition or (ii) the Developer may
terminate this Agreement and recover the Phase I Property Deposit (or portion thereof), the
Phase II Property Deposit (or portion thereof) and/or the Phase III Property Deposit (or portion
thereof), as set forth in Section 2.02. The Developer shall confirm the exercise of its election
under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days of its
receipt of notice from the Agency.
In the event that, prior to the Close of Escrow for either the Phase I Property, the Phase II
Property and/or the Phase III Property, any governmental entity shall commence any actions of
eminent domain or similar type proceedings to take any portion of the Phase I Property, the
Phase II Property and/or the Phase III Property, the Agency shall give prompt written notice
thereof to the Developer, and the Developer shall have the option either: (i) to elect not to
acquire the Phase I Property, the Phase II Property and/or the Phase III Property terminate this
Agreement and recover the Phase I Property Deposit (or portion thereof), the Phase II Property
Deposit (or portion thereof) and/or the Phase III Property Deposit (or portion thereof), as set
forth in Section 2.02; or (ii) the Developer may complete the acquisition of the Phase I Property,
the Phase II Property and/or the Phase III Property under this Agreement, in which case the
Developer shall be entitled to all the proceeds of such taking; provided however, that the Agency
agrees that it shall not settle or compromise the proCeedings before the Close of Escrow, without
the Developer's prior written consent, which consent will not be unreasonably withheld or .
. delayed. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii)
of the preceding sentence within thirty (30) calendar days of its receipt of notice from the
Agency.
ARTICLE III
DEVELOPMENT OF THE PROJECT
Section 3.01. Development of the Project bv the Developer.
(a) Scope of Development: Schedule of Performance. It is the intent of the parties
that promptly following the Close of Escrow for the Phase I Property, the Developer shall
commence the construction and development of the Phase I Property Project, subject to
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applicable City approvals. In connection with the Phase I Property Project, the Developer shall,
without limitation, design, construct, develop, install, assemble, attach and complete the Phase I
Property Improvements located at, on or in connection with the Phase I Property in accordance
with the terms, covenants and conditions of this Agreement (the "Phase I Property
Construction"). The scope of the Phase I Property Construction is generally described in the
Scope of Development. Further, prior to the Close of Escrow for the Phase II Property and/or for
the Phase III Property following the exercise by the Developer of its right to purchase the Phase
II Property and/or the Phase III Property, pursuant to the terms, covenants and conditions of this
Agreement: (i) the Developer and the Agency shall determine the scope of the construction,
development and improvements to be made and completed by the Developer in connection with
the Phase II Property (the "Phase II Property Construction" andlor with the Phase III Property
(the "Phase III Property Construction"), and (ii) the Developer and the Agency shall describe, in
detail, the Phase II Property Construction and/or the Phase III Property Construction in the Scope
of Development.
(b) The City's zoning ordinance and the City's building requirements will be
applicable to the use and development of the Phase I Property, of the Phase II Property and/or of
the Phase III Property. The Developer acknowledges that any change in the plans for the
development of the Phase I Property as set forth in the Scope of Development shall be subject to
the City's zoning ordinance and building requirements. No action by the Agency or by the City
with reference to this Agreement or related documents shall be deemed to constitute a waiver of
any City requirements which are applicable to the Phase I Property, to the Phase II Property
and/or to the Phase III Property or to the Developer, any successor in interest of the Developer or
any successor in interest pertaining to the Phase I Property, to the Phase II Property and/or to the
Phase III Property except by modification or variance approved by the City consistent with this
Agreement.
(c) The Scope of Development for the Phase I Property Project is hereby approved by
the Agency upon its execution of this Agreement as to the minimum requirements thereof subject
to the final development and building permit approvals to be obtained by the Developer from the
City prior to the Close of Escrow and approval by the Agency of the final Scope of Development
prior to the Close of Escrow. The Phase I Property Project shall be developed and completed by
the Developer in conformance with this Agreement and the approved Scope of Development for
the Phase I Property, all applicable Laws, and any and all other plans, specifications and similar
development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and between the Developer and the Agency. Prior to the
Close of Escrow for the Phase II Property and/or the Phase III Property, in the event the
Developer elects to purchase the Phase II Property and/or the Phase III Property in accordance
with the terms, covenants and conditions of this Agreement, the Agency and the Developer shall
determine the Scope of Development to be constructed and completed by the Developer at, on or
in connection with the Phase II Property and/or the Phase III Property. After the Close of
Escrow for the Phase II Property and/or for the Phase III Property, the Developer shall promptly
construct, develop and complete the Phase II Property Project and/or the Phase 111 Property
Project in conformance with the approved Scope of Development, all applicable Laws, and any
and all other plans, specifications and similar development documents required by this
Agreement, except for such changes as may be mutually agreed upon in writing by and between
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the Developer and the Agency. Subject to Section 3.05(d) of this Agreement, the construction of
the Phase II Property Project must be completed within three (3) years from the Close of Escrow
for the Phase I Property. The Phase III Property Project must be completed within five (5) years
from the Close of Escrow for the Phase I Property.
(d) The approval of the Scope of Development by the Agency hereunder shall not be
binding upon the City Councilor the Planning Commission of the City with respect to any
approvals of the Phase I Property Project, of the Phase II Property Project and/or of the Phase III
Property Project required by such other bodies. If any revisions of the Scope of Development as
approved by the Agency shall be required by another govemment official, agency, department or
bureau having jurisdiction over the development of the Phase I Property, of the Phase II Property
and/or of the Phase III Property the Developer and the Agency shall cooperate in efforts to obtain
waivers of such revisions, or to obtain approvals of any such revisions which have been made by
the Developer and have thereafter been approved by the Agency. The Agency shall not
unreasonably withhold approval of such revisions.
(e) Notwithstanding any provision to the contrary in this Agreement, the Developer
agrees to accept and comply fully with any and all conditions of approval applicable to all
permits and other governmental actions imposed by the City and all other governmental agencies
and regulatory agencies affecting the development of the Phase I Property, the Phase II Property
and/or the Phase III Property and consistent with this Agreement.
(f) The Developer shall cause landscaping plans in connection with development of
the Phase I Property, of the Phase II Property and/or of the Phase III Property to be prepared by a
licensed landscape architect. The Developer shall prepare and submit to the City for its
approval, preliminary and landscaping plans for the Phase I Property, the Phase II Property
and/or for the Phase III Property which are consistent with City Code requirements. These plans
shall be prepared, submitted and approved within the times respectively established therefor in
the Schedule of Performance and shall be consistent with the Scope of Development.
(g) The Developer shall prepare and submit to the City development plans,
eonstruction drawings and related documents for the development of the Phase I Property, the
Phase II Property and/or of the Phase III Property consistent with the Scope of Development.
The development plans, construction drawings and related documents shall be in the form of
drawings, plans and specifications. Drawings, plans and specifications are hereby defined as
those which contain sufficient detail necessary to obtain a building permit from the City.
(h) During the preparation of all drawings and plans in connection with the
development of the Phase I Property, of the Phase II Property and/or of the Phase III Property,
the Developer shall provide to the Agency regular progress reports to advise the Agency of the
status of the preparation by the Developer, and the submission to and review by the City of
construction plans and related documents. The Developer shall communicate and consult with
the Agency as frequently as is reasonably necessary to ensure that any such plans and related
documents submitted by the Developer to the City are being processed in a timely fashion.
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(i) The Agency shall have the right of reasonable architectural review and approval
of building exteriors and design of the structures to be constructed on the Phase I Property, on
the Phase II Property and/or on the Phase III Property to be constructed for the Phase I Property
Project, for the Phase II Property Project and/or for the Phase III Property Project which approval
shall not be unreasonably withheld or delayed. The Agency shall also have the right to review
all plans, drawings and related documents pertinent to the development of the Phase I Property,
of the Phase II Property and/or of the Phase III Property in order to ensure that they are
consistent with this Agreement and with the Scope of Development. If the Agency shall
determine that plans, drawings or related document are not consistent with this Agreement and
with the Scope of Development, it shall notifY the Developer in writing of such determination.
The Developer, upon receipt of such notice from the Agency, shall promptly revise the
applicable plans, drawings or related documents in a manner that addresses the inconsistency
with the Scope of Development and shall resubmit such revised plans, drawings or related
documents to the Agency no later than thirty (30) calendar days after its receipt of such notice
from the Agency. .
(j) The Developer shall timely submit to the City for its review and approval any and
all plans, drawings and related documents pertinent to the development of the Phase I Property,
of the Phase II Property and/or of the Phase III Property, as required by the City. Any failure by
the City to approve any of such plans or to issue necessary permits for the development of the
Phase I Property, of the Phase II Property and/or of the Phase III Property within thirty (30)
calendar days of receipt thereof shall constitute an enforced delay hereunder, and the Schedule of
Performance shall be extended by that period of time beyond said thirty (30) calendar day period
in which the City approves said plans; provided, however, that in the event that the City
disapproves of any of such plans, the Developer shall within thirty (30) calendar days after
receipt of such disapproval reasonably revise and resubmit such plans in accordance with the
City's requirements and in such form and substance so as to obtain the City's approval thereof.
(k) The Agency shall in good faith use its best efforts to cause the City to approve in
timely fashion any and all plans, drawings and documents submitted by the Developer which are
consistent with the Scope of Development.
(I) The Agency shall approve any modified or revised plans, drawings and related
documents for the Phase I Property Project, the Phase II Property Project arid/or for the Phase III
Property Project as long as such plans, drawings and related documents are generally consistent
with the Scope of Development and any other plans, which have been approved by the Agency.
Upon any disapproval of plans, drawings or related documents, the Agency shall state in writing
the reasons for such disapproval. The Developer, upon receipt of notice of any disapproval, shall
promptly revise such disapproved portions of the plans, drawings or related documents in a
manner that addresses the reasons for disapproval and reasonably meets the requirements of the
Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such
revised plans, drawings and related documents to-the Agency as soon as possible after its receipt
of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter.
The Agency shall approve or disapprove such revised plans, drawings and related documents in
the same manner and within the same times as provided in this Section for approval or
disapproval of plans, drawings and related documents initially submitted to the Agency.
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(m) If the Developer desires to make any change in the plans, drawings and related
documents after their review by the Agency for consistency with the Scope of Development, the
Developer shall submit the proposed change in writing to the Agency for its review for
consistency with the Scope of Development. The Agency shall notify the Developer in writing
of any determination that the change is not consistent with the Scope of Development, within
thirty (30) calendar days after submission to the Agency. If the Developer desires to make any
change in the plans, drawings and related documents after their approval by the City, the
Developer shall submit the proposed change to the City for approval. The Agency shall use its
best efforts to cause the City to review and approve or disapprove any such change as provided
in Section 3.01(k) hereof.
(n) The Developer, upon receipt of a notice of disapproval by the Agency and/or the
City, may revise such portions of the proposed change in construction drawings, plans and
specifications and related documents as are rejected and shall thereafter resubmit such revisions
to the Agency and/or the City for approval in the manner provided in Section 3.01(1) hereof.
(0) The Developer shall have the right during the course of construction to make
changes in construction of structures and "minor field changes" without seeking the approval of
the Agency; provided, however, that such changes do n6t affect the type of use to be conducted
within all or any portion of a structure. Said "minor field changes" shall be defined as those
changes from the approved construction drawings, plans and specifications which have no
substantial effect on the improvements and are made in order to expedite the work of
construction in response to field conditions. Nothing contained in this Section shall be deemed
to constitute a waiver of or change in the City's Building Code requirements governing such
"minor field changes" or in any and all approvals by the City otherwise required for such "minor
field changes."
(P) The cost of constructing privately owned components of the Phase I Property
Project, the Phase II Property Project and/or the Phase III Property Project in addition to all off-
site public improvements, shall be borne by the Developer which, if any, are required by the City
as a condition of approval for the Phase 1 Property Project, for the Phase II Property Project
and/or for the Phase III Property Project. The Developer shall comply with all applicable State
laws relative to the payment of prevailing wages with respect to those components of the Phase I
Property Project, of the Phase II Property Project and/or of the Phase III Property Project which
are public improvements or other public infrastructure intended to be dedicated to a
governmental agency, including the off-site public improvements, and the Developer shall
provide written verification of such compliance to the Agency upon written request from the
Agency to the Developer.
(q) The Developer shall at its expense cause to be prepared, and shall pay any and all
fees pertaining to the review and approval of the development project approvals by the City,
including the cost and preparation of all required construction, planning and other documents
reasonably required by governmental bodies pertinent to the development of the Phase I
Property, of the Phase II Property and/or of the Phase III Property, as appropriate, hereunder
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including, but not limited to, specifications, drawings, plans, maps, permit applications, land use
applications, zoning applications and design review documents.
(r) The Developer shall pay for any and all costs, including but not limited to the
costs of design, construction, relocation and securing of permits for utility improvements and
connections, which may be required in developing the Phase I Property, the Phase II Property
and/or the Phase III Property. The Developer shall obtain any and all necessary approvals prior
to the commencement of applicable portions of said construction, and the Developer shall take
reasonable precautions to ensure the safety and stability of surrounding properties during said
construction.
(s) The Developer shall commence the work of improvements in connection with the
Phase I Property Project, the Phase II Property Project and/or the Phase III Property Project
within sixty (60) calendar days following the issuance of building permits for the Phase I
Property Project, for the Phase II Property Project and/or for the Phase III Property Project and
thereafter shall diligently prosecute such construction to completion. The Developer shall
substantially complete the improvements of the Phase I Property Project no later than July I,
2009, unless extended by the Agency in its sole and absolute discretion; provided, however, that
notwithstanding said stated date the Developer shall have at least one hundred twenty (120)
calendar days from the Close of Escrow of the Phase I Property and receipt of all required
construction and building permits to complete all such activities. The Developer recognizes and
agrees to submit the required applications to the City in preparation for the receipt of all
construction and building pennits to timely commence and complete the Phase I Property Project
by the time limits required herein. Subject to Section 3.05(c) of this Agreement, the Developer
shall complete the improvements of the Phase II Property Project within three (3) years from the
Close of Escrow for the Phase I Property. The Developer shall complete the improvements of
the Phase III Property Project no later than five (5) years from the Close of Escrow for the Phase
I Property.
Any and all performance commitments hereunder shall be extended for any times
attributable to delays, which are not the fault of the performing party and are caused by the other
party, other than periods for review and approval or reasonable disapprovals of plans, drawings
and related documents, specifications or applications for permits as provided in this Agreement.
(t) Subject to Section 3.05(d) of this Agreement, if the Phase II Property
Improvements are not constructed, developed, installed and completed on the Phase II Property
within three (3) years from the Close of Escrow for the Phase I Property, the Developer shall
have no further right to construct, to develop, to install and to complete the Phase II Property
Improvements on the Phase II Property and shall have no right to construct, to develop, to install
and to complete the Phase III Property Improvements on the Phase III Property.
(u) Prior to the issuance of a certificate of occupancy in connection with the office
building at the Phase II Property, the Agency will consider at its discretion whether to lease not
more than 5,000 square feet of second floor office space for a rental rate not to exceed market
rate per square net usable feet per month as a gross rental payment including all required tenant
improvements for the Agency based upon the then current market rate for similar properties in
the Downtown Area of the City pursuant to a process to determine the then current market rate
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and all other terms of such lease to be mutually agreed upon by the Agency and the Developer
each at their sole discretion.
(v) In the event the Developer fails to maintain and repair the Phase II Property and
the Phase III Property in as good a condition that existed on the Effective Date of the Agreement,
and is in material breach under the License Agreement which remains uncured or which
Developer has failed to commence to cure, the Developer shall have no further right to purchase
the Phase II Property and/or to purchase the Phase III Property, nor to construct, to develop, to
install or to complete the Phase II Property Improvements on the Phase II Property and/or the
Phase III Property Improvements on the Phase III Property. Further, the Agency shall have the
right to fully or partially draw against the Letter of Credit or draw against the Cash Deposit and
shall credit such proceeds against the outstanding principal balance, accrued and unpaid interest,
fees, charges and/or penalties then due and owing under the New HUD Loan (as defined below)
or the HUD Loan Assumption if the Developer has either obtained the New HUD Loan or the
HUD Loan Assumption to purchase the Phase I Property and to construct, to develop, to install
and to complete the Phase I Property Improvements on the Phase I Property,
(w) During the period of construction of the Phase I Property Project, of the Phase II
Property Project and/or of the Phase III Property Project, the Developer shall submit to the
Agency written progress reports when and as reasonably requested by the Agency but in no
event more frequently than every four (4) weeks. The reports shall be in such form and detail as
may reasonably be required by the Agency, and shall include a reasonable number of
construction photographs taken since the last such report submitted by the Developer. In
addition, the Developer will attend Agency meetings when requested to do so by Agency Staff.
(x) Prior to the commencement of any construction, the Developer shall furnish, or
shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public
indemnity and liability insurance in the amount of Three Million Dollars ($3,000,000.00)
combined single limit, naming the Agency and the City and the elected officials, officers,
employees, attorneys and agents of each of them as additional insureds. Said insurance shall
cover comprehensive general liability including, but not limited to, contractual liability; acts of
subcontractors; premises-operations; explosion, collapse and underground hazards, if applicable;
broad form property damage, and personal injury including libel, slander and false arrest. In
addition, the Developer shall provide to the Agency adequate proof of comprehensive
automobile liability insurance covering owned, non-owned and hired vehicles, combined single
limit in the amount of One Million Dollars ($1,000,000.00) each occurrence; and proof of
workers' compensation insurance. Any and all insurance policies required hereunder shall be
obtained from insurance companies admitted in the State of California and rated at least B+: XII
in the most current Best's Key Rating Insurance Guide. All said insurance policies shall provide
that they may not be canceled unless the Agency and the City receive written notice of
cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and
all insurance obtained by the Developer hereunder shall be primary to any and all insurance
which the Agency and/or City may otherwise carry, including self insurance, which for all
purposes of this Agreement shall be separate and apart from the requirements of this Agreement.
Any insurance policies governing the Property as obtained by the Agency shall not be transferred
from the Agency to the Developer. Appropriate insurance means those insurance policies
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approved by Agency Counsel consistent with the foregoing. Any and all insurance required
hereunder shall be maintained and kept in force until the Agency has issued a Certificate of
Completion in substantially the form set forth in Exhibit "F" hereof (the "Certificate of
Completion") in connection with the development of the Phase I Property, of the Phase II
Property and/or of the Phase III Property. The Developer waives subrogation and agrees that the
Developer and the Agency are co-insured. The Developer will use its best efforts to cause each
insurance carrier obtained by it to waive any subrogation claim.
(y) The Developer for itself and its successors and assigns agrees that in the
construction of the Phase I Property Project, of the Phase II Property Project and/or of the Phase
III Property Project, the Developer will not discriminate against any employee or applicant for
employment because of sex, marital status, race, color, religion, creed, national origin, or
ancestry. Notwithstanding the foregoing, the Developer will use its best efforts to offer
employment opportunities to local residents and will seek to acquire goods and services from
local vendors.
(z) The Developer shall carry out its construction of the Phase I Property Project, of
the Phase II Property Project and/or of the Phase III Property Project in conformity with all
applicable Laws, including, without limitation, all applicable state labor standards, requirements
and prevailing wage laws.
(aa) The Developer shall, at its own expense, secure or shall cause to be secured, any
and all permits which may be required for such construction, development or work by the City or
any other governmental agency having jurisdiction thereof. The Agency shall cooperate in good
faith with the Developer in the Developer's efforts to obtain from the City or any other
appropriate governmental agency any and all such permits and, upon applicable to the
development of the Phase I Property, of the Phase II Property and/or of the Phase III Property.
(bb) Officers, employees, agents or representatives of the Agency shall have the right
of reasonable access to the Phase I Property, to the Phase II Property and/or to the Phase III
Property without the payment of charges or fees, during normal construction hours during the
period of construction of the Phase I Property Project, the Phase II Property Project and/or the
Phase III Property Project for the purpose of verifying compliance by the Developer within the
terms of this Agreement. Such officers, employees, agents or representatives of the Agency shall
be those persons who are so identified by the Interim Executive Director. Any and all officers,
employees, agents or representatives of the Agency who enter the Phase I Property, the Phase II
Property and/or the Phase III Property pursuant hereto shall identify themselves at the job site
office upon their entrance on to the Phase I Property, the Phase II Property and/or the Phase III
Property, and shall at all times be accompanied by a representative of the Developer while on the
Phase I Property, the Phase II Property and/or the Phase III Property; provided, however, that the
Developer shall make a representative of the Developer available for this purpose at all times
during normal construction hours upon reasonable notice from the Agency. The Agency shall
indemnify and hold the Developer harmless from injury, property damage or liability arising out
of the exercise by the Agency and/or the City of this right of access, other than injury, property
damage or liability relating to the negligence of the Developer or its officers, agents or
employees.
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(cc) The Agency shall inspect relevant portions of the construction site prior to issuing
any written statements reflecting adversely on the Developer's compliance with the terms and
conditions of this Agreement pertaining to development of the Phase 1 Property, the Phase II
Property and/or the Phase III Property.
Section 3.02. RESERVED.
Section 3.03. Taxes and Assessments. The Developer shall pay prior to delinquency all
real property taxes and assessments assessed and levied on or against the Phase 1 Property, the
Phase II Property and/or the Phase III Property subsequent to the Close of Escrow for the Phase 1
Property, for the Phase II Property and/or for the Phase III Property. Nothing herein contained
shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax
assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect
thereto.
Section 3.04. Chane:e III Ownershio. Manag:ement and Control of the Develooer
Assie:nment and Transfer.
(a) As used in this Section 3.04, the term "Transfer" means:
(I) Any total or partial sale, assignment or conveyance, or any trust or power,
or any transfer in any other mode or form, by the Developer or an entity
controlled by it of more than a 49% interest (or series of such sales,
assignments and the like which in the aggregate exceed a disposition of
more than a 49% interest) with respect to its interest in this Agreement, the
Phase 1 Property, the Phase II Property and/or the Phase III Property or the
Phase 1 Property Project, the Phase II Property Project and/or the Phase III
Property Project, or any part thereof or any interest therein or of the
improvements constructed thereon, or any contract or agreement to do any
of the same; or
(2) Any merger, consolidation, sale or lease of all or substantially all of the
assets of the Developer or an entity controlled by it (or series of such
sales, assignments and the like which in the aggregate exceeded a
disposition of more than a 49% interest).
(b) This Agreement is entered into solely for the purpose of the development of the
Phase 1 Property Project on the Phase I Property, the Phase II Property Project on the Phase II
Property and/or of the Phase III Property Project on the Phase III Property, by the Developer in
accordance with the terms hereof. The Developer recognizes that the qualifications and identity
of the Developer are of particular concern to the Agency, in view of:
(1) the importance of the development of the Phase I Property, the Phase II
Property and/or the Phase III Property to the general welfare of the
community; and
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(2) the fact that a Transfer is for all practical purposes a transfer or disposition
of the responsibilities of the Developer, as applicable, with respect to the
development of the Phase I Property Project on the Phase I Property, the
Phase II Property Project on the Phase II Property and/or of the Phase III
Property Project on the Phase III Property.
The Developer further recognizes and acknowledges that it is because of the
qualifications and identity of the Developer that the Agency is entering into this Agreement with
the Developer, and, as a consequence, Transfers are permitted only as provided in this
Agreement.
(c) The limitations on a Transfer as set forth in this Section 3.04 shall apply until
such time as a Certificate of Completion is approved by the Agency and filed for recordation as
provided in Section 3.07. Except as expressly permitted in this Agreement, the Developer
represents and agrees that it has not made nor shall it create or suffer to be made or created, any
Transfer, either voluntarily or by operation of law without the prior written approval of the
Agency until such time as a Certificate of Completion has been recorded. After the date of
recordation of a Certificate of Completion, certain other provisions of this Agreement shall
nonetheless be applicable to subsequent conveyances of interest in the Phase I Property, the
Phase II Property and/or the Phase III Property, or portions thereof, as provided in Article IV of
this Agreement. Any Transfer made in contravention of this Section 3.04 shall be voidable at the
election of the Agency and shall then be deemed to be a default under this Agreement.
(d) The following types of a Transfer shall be permitted and approved by the Agency
and are referred to herein as a "Permitted Transfer":
(I) Any Transfer by the Developer creating a security interest in all or part of
the Phase I Property, of the Phase II Property and/or of the Phase III
Property for the acquisition of the Phase I Property, of the Phase II
Property and/or of the Phase III Property or any financing for the
construction and improvement of the all or part of the Phase I Property
Project, the Phase II Property Project and/or the Phase III Property Project
(singularly and collectively, a "Security Financing Interest");
(2) Any Transfer directly resulting from the foreclosure of a Security
Financing Interest created by the Developer in all or part of the Phase I
Property, the Phase II Property and/or of the Phase III Property or the
granting of a deed in lieu of foreclosure of a Security Financing Interest;
(3) Any Transfer of stock or equity of the Developer, which does not change
management, or operational control of the Phase I Property or of the Phase
I Property Project, and/or the Phase II Property and/or of the Phase II
Property Project and/or the Phase III Property and/or of the Phase III
Property Project;
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(4) Any Transfer of any interest in the Developer, irrespective of the
percentage of ownership to any entity in which the Developer owns a
controlling interest.
(e) Provided the particular transaction satisfies the applicable provisions of Section
3.04(d), the Developer is not required to give the Agency advance notice of such a Permitted
Transfer. The Agency may, in its reasonable discretion, approve in writing any other Transfer as
requested by the Developer, provided such proposed transferee can demonstrate successful and
satisfactory experience in the ownership, operation, and management of an operation similar to
the Phase I Property Project, to the Phase II Property Project and/or the Phase III Property
Project. Any such transferee for itself and its successors and assigns, and for the benefit of the
Agency shall expressly assume all of the obligations of the Developer to the Agency under this
Agreement. There shall be submitted to the Agency for review all instruments and other legal
documents proposed to effect any such other Transfer; and the approval or disapproval of the
Agency shall be provided to the Developer, in writing within thirty (30) calendar days of receipt
by the Agency of the request therefore, and the Agency approval of a transfer shall not be
unreasonably withheld or delayed.
(f) Following the issuance of a Certificate of Completion in connection with the
Phase I Property, the Phase II Property and/or the Phase III Property, the Developer shall be
released by the Agency pursuant to terms of the final Certificate of Completion to be issued by
the Agency for said properties from any liability under this Agreement which may arise from a
default of a successor in interest occurring after the date of such a Transfer; provided, however
that the covenants of the Developer as set forth in Article IV of this Agreement shall run with the
land for the term as provided in Article IV.
Section 3.05. Security Financing: Ril!:ht of Holders. The Developer will have the
obligation to obtain conventional financing, to obtain financing pursuant to a new HUD Section
108 loan (the "New HUD Loan") or to use its own equity funds to purchase the Phase I Property
and to construct, to develop, to install and to complete the Phase I Property Improvements on the
Phase I Property pursuant to this Agreement. The Developer will have the obligation to obtain
conventional financing or to use its own equity funds: (i) to purchase the Phase II Property and
to construct, to develop, to install and to complete the Phase II Property Improvements on the
Phase II Property, pursuant to this Agreement, an4l0r (ii) to purchase the Phase III Property and
to construct, to develop, to install and to complete the Phase III Property Improvements on the
Phase III Property, pursuant to this Agreement. The Agency shall use best efforts to cooperate
with the Developer to obtain the New HUD Loan or to obtain any other conventional loan
financing. The Agency has not approved the New HUD Loan, any other conventional loan
financing or the HUD underwriting criteria in connection with the purchase of the Phase I
Property and the construction, the development, the installation and the completion of the Phase I
Property Improvements on the Phase I Property. The Agency has not represented, warranted or
covenanted to the Developer that HUD has approved the New HUD Loan or that the Agency has
approved the terms of the New HUD Loan (which terms must be reasonably approved by the
Agency as a condition precedent to the Close of Escrow). Further, the Agency has not
represented, warranted or covenanted to the Developer that the terms of the New HUD Loan
from HUD to the Developer will be acceptable to the Agency.
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(a) In the event the Developer procures and obtains from HUD a New HUD Loan to
enable the Developer to purchase the Phase I Property and to construct, to develop, to install and
to complete the Phase I Property Improvements on the Phase I Property, the Developer shall
comply with the following terms, covenants and conditions:
(I) the New HUD Loan shall have a term of seven (7) years.
(2) the Developer shall remit to the Agency quarterly sinking fund payments
equal to (i) $45,000 per quarter ($180,000 per year) for the second year, commencing as of the
end of the first quarter of the second year (i.e., the end of the 151h month after the date of the
New HUD Loan), and (ii) $90,000 per quarter ($360,000 per year) for the third year, and (iii)
$112,500 per quarter ($450,000 per year) for years four (4) through seven (7) in the event the
Developer fails or is unable to refinance the New HUD Loan at the end of the third year.
(3) As an alternative to the seven-year term of the New HUD Loan term set
forth in (I) above, the Agency shall have the sole right to obtain a twenty (20)-year New HUD
Loan with interest only for three (3) years and amortized principal and interest for the remaining
seventeen (17) years. If the twenty (20) year option is either selected by the Agency or is
required by HUD, then the Developer must pay to the Agency the defeasance penalty for any
prepayment after the three (3) year date and prior to the ten (10) year call protection date for the
twenty (20) year New HUD loan. Any monetary savings resulting from such defeasance based
upon the then current interest rate market for Federal Treasury securities will accrue to the
Developer.
(4) The Developer shall deposit with the Agency: (i) an irrevocable letter of
credit in the amount of $450,000 in favor of the Agency issued by the Bank of America, by
Wells Fargo Bank or by any comparable commercial bank reasonably acceptable to the Agency
(the "Letter of Credit") which Letter of Credit shall have a term of forty-two (42) months from
the date of the New HUD Loan, or (ii) a cash deposit to the Agency in the amount of $450,000 to
secure the obligations and liabilities of the Developer under the New HUD Loan (the "Cash
Deposit"). If the Developer does not or is unable to refinance the New HUD Loan at the end of
the third year of the New HUD Loan, in whole or in part, if, subject to Section 3.05(d) of this
Agreement, the Developer has not completed the construction, the development, the installation
and the completion of the Phase II Property Improvements on the Phase II Property within
three(3) years from the Close of Escrow for the Phase I Property, if the Developer is in material
default under the License Agreement or if any other material default which remains uncured or
which Developer has not commenced to cure under this Agreement has occurred: (A) the
Agency shall have the right to fully or partially draw against the Letter of Credit and to use such
proceeds to pay and to offset against the outstanding principal, accrued and unpaid interest, fees,
charges and/or penalties then due and payable in connection with the New HUD Loan or the
HUD Loan Assumption, or (B) the Agency shall have the right to fully or partially draw against
the Cash Deposit and to use such proceeds to pay and to offset against the outstanding principal,
accrued and unpaid interest, fees, charges and/or penalties then due and payable in connection
with the New HUD Loan or the HUD Loan Assumption.
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(5) The Developer shall deposit $2,600,000 to the Escrow Holder one (I)
business day prior to the Close of Escrow in connection with the purchase of the Phase I
Property representing the equity contribution of the Developer or such greater amount as may be
required by HUD for the consummation of either the New HUD Loan or the HUD Loan
Assumption.
(6) The Developer and the Agency shall execute the License Agreement.
Pursuant to this Agreement and the License Agreement, the Developer, without limitation, shall
have the right of access to the Phase II Property and to the Phase III Property during the term
provided for in the License Agreement. The Developer, without limitation, and at its sole cost
and expense, shall have the duty and obligation to maintain and repair the Phase II Property
and/or the Phase III Property during the term of the License Agreement in at least as good a
condition as existed on the Effective Date of this Agreement. In the event of a material default
which remains uncured or which Developer has not commenced to cure under the License
Agreement, the Agency shall have the right to partially or fully draw against the Letter of Credit
or to partially or fully draw against the Cash Deposit to payor reimburse the Agency for all
direct and verifiable costs and expenses actually paid or incurred by the Agency to maintain and
repair the Phase II Property and/or the Phase III Property.
(7) If the Developer pays off the New HUD Loan or the HUD Loan
Assumption on or prior to the end of the third year of the New HUD Loan or the end of the third
(3rd) year after the HUD Loan Assumption and provided no material default remains uncured or
which Developer has not commenced to cure under this Agreement, the Agency will consider
using new market tax credits and/or Section 108 HUD financing for the purchase by the
Developer from the Agency of the Phase II Property and the construction, the development, the
installation and the completion of the Phase II Property Improvements at the Phase II Property
and/or for the purchase of the Phase III Property and the construction, the development, the
installation and the completion of the Phase III Property Improvements at the Phase III Property.
(b) In the event the Developer elects, with the approval of HUD, to assume the
existing HUD 108 Loan or to seek the issuance of a New HUD Loan, a condition precedent to
either alternative shall be the execution and delivery by and between the Developer and the
Agency of the "Section 108 Loan Covenant Agreement" that includes the following items and as
such Section 108 Loan Covenant Agreement shall be subject to approval by the Developer and
the Agency each at their sole and absolute discretion:
(I) the right of the Agency and its staff and consultants to conduct periodic
site inspections of the Phase I Property of the public areas at anytime and of the other areas upon
reasonable written or verbal notice to the Developer;
(2) the right of the Agency to review all records, accounting books and
operating records of the Developer as to the line item payments being made as to all operating
costs of the Phase I Property;
(3) the right of the Agency to review the dollar amounts of all reserve and
replacement figures for the normal repair, replacement and improvements of the Phase I Property
47
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and all components of the theater operations, including, concessions, projection and sound
equipment, seating, floor coverings and other fixtures, furnishings and equipment; and
(4) the Developer shall submit an annual summary on or before January 15 of
each calendar year demonstrating for the prior calendar year the fmancial operations of the
theater including gross revenues and all line item expenditures.
The Section 108 Loan Covenant Agreement shall also provide the Agency with the right
to make recommendations to the Developer in the event an independent consultant retained by
the Agency determines in its professional judgment that the Developer is not operating the
theater in a marmer that is consistent with industry standards.
Any default by the Developer pursuant to the Section 108 Loan Covenant Agreement
shall be a default under this Agreement and shall entitle the Agency to seek remedies as provided
herein. The Section 108 Loan Covenant Agreement shall no longer be outstanding upon
payment in whole of the either the HUD 108 Loan or the New HUD Loan, as applicable, or in
the event the Close the Escrow occurs without the requirement for either of said HUD 108 Loan
or the New HUD Loan as a financing condition of the Close or Escrow.
(c) If the Developer elects not to utilize a New HUD Loan or the Agency or HUD do
not approve a New HUD Loan, the Agency will allow the Developer to assume the existing
HUD 108 Loan with its current principal balance of $4,600,000 as of the Effective Date of this .
Agreement. Should the Developer assume the HUD 108 Loan, the Developer shall procure
additional conventional financing, or use its own funds, to construct, develop, install and
complete the Phase I Property Improvements as provided. for in the Budget. Should the
Developer assume the HUD 108 Loan and procure additional conventional financing, or use its
own funds, to construct, develop, install and complete the Phase III Property Improvements as,
the Agency agrees to use its best efforts to request that the City subordinate the HUD 108 Loan
to such additional conventional financing as obtained by the Developer.
(d) Notwithstanding anything to the contrary in this Agreement, if the Developer does
not obtain a New HUD Loan or the HUD Loan Assumption, regardless of the reason, or if the
Developer elects not to use the New HUD Loan or the HUD Loan Assumption financing
alternatives, then the Developer shall have no obligation (i) to purchase the Phase II Property
and/or the Phase III Property and/or (ii) to construct, to develop, to install and/or to complete the
Phase II Property Improvements and/or the Phase III Property Improvements within the three-
year or five-year period otherwise applicable for such Phase II Property or the Phase III Property.
The Developer, however, will have the right to purchase the Phase II Property and/or the Phase
III Property and to construct, develop, install and complete the Phase II Property Improvements
and/or the Phase III Property Improvements within five (5) years from the purchase by the
Developer from the Agency of the Phase I Property.
(e) Notwithstanding any provision of Section 3.04 to the contrary, mortgages, deeds
of trust, or any other fonn of lien required for any reasonable method of financing the
construction and improvement of the Phase I Property and/or the financing of the purchase,
construction and improvement of the Phase II Property and/or of the Phase III Property
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(singularly and collectively, the "Construction Financing") and one or more mortgages, deeds of
trust, or other forms of lien required for any reasonable financing that takes out the construction
financing (singularly and collectively, the "Permanent Financing") is permitted. The Developer
shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of
lien for Construction Financing or for Permanent Financing. The Developer shall not enter into
any such conveyance for Permanent Financing without the prior written approval of the Agency,
which approval shall not be unreasonably withheld, delayed or conditioned.
(f) The Developer shall promptly notify the Agency of any mortgage, deed of trust or
other refinancing, encumbrance or lien that has been created with respect to the Phase I Property,
the Phase II Property and/or to the Phase III Property whether by voluntary act of the Developer
or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's
liens need be given by the Developer to the Agency prior to suit being filed to foreclose such
mechanic's lien.
(g) The words "mortgage" and "deed of trust" as used herein shall be deemed to
include all other customary and appropriate modes of financing real estate construction and land
development.
(h) The holder of any mortgage, deed of trust or other security interest authorized by
this Agreement shall in no manner be obligated by the provisions of this Agreement to construct
or complete the improvement of the Phase I Property, the Phase II Property and/or of the Phase
III Property or to guarantee such construction or completion.
(i) Whenever the Agency shall deliver any notice or demand to the Developer with
respect to any breach or default by the Developer in the completion of construction of the
improvements, or any breach or default of any other obligations which, if not cured by the
Developer, entitle the Agency to terminate this Agreement or exercise its right to re-enter the
Phase I Property, the Phase II Property and/or the Phase III Property, the Agency shall at the
same time deliver to each holder of record of any mortgage, deed of trust or other security
interest authorized by this Agreement a copy of such notice or demand. Each such holder shall
(insofar as the rights of the Agency are concerned) have the right, at its option, to commence the
cure or remedy of any such default and to diligently and continuously proceed with such cure or
remedy, within one hundred twenty (120) calendar days after the receipt of the notice; and to add
the cost thereof to the security interest debt and the lien of its security interest. If such default
shall be a default which can only be remedied or cured by such holder upon obtaining
possession, such holder shall seek to obtain possession with diligence and continuity through a
receiver or otherwise, and shall remedy or cure such default within one hundred twenty (120)
calendar days after obtaining possession; provided that in the case of a default which cannot with
diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within
such one hundred twenty (120) calendar day period, such holder shall have such additional time
as is reasonably necessary to remedy or cure such default of the Developer. Nothing contained
in this Agreement shall be deemed to permit or authorize such holder to undertake or continue
the construction or completion of the improvements (beyond the extent necessary to conserve or
protect the improvements or construction already made) or to operate the Phase I Property
Project, the Phase II Property Project and/or the Phase III Property Project without first having
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expressly assumed the Developer's obligations by written agreement satisfactory to the Agency.
The holder in that event must submit evidence satisfactory to the Agency that it has the
qualifications and financial responsibility necessary to perform such obligations. Any such
holder that undertakes and completes construction of the improvements on the Phase I Property,
the Phase II Property andlor on the Phase III Property in accordance herewith shall be entitled,
upon written request made to the Agency, to be issued the Certificate of Completion by the
Agency.
(j) In any case where, one hundred eighty (I80) calendar days after default by the
Developer the holder of any mortgage, deed of trust or other security interest creating a lien or
encumbrance upon the Phase I Property, or any portion thereof, upon the Phase II Property, or
any portion thereof, andlor upon the Phase III Property, or any portion thereof, has not exercised
the option to construct the applicable portions of the Phase I Property Project, of the Phase II
Property Project andlor of the Phase III Property Project or to operate the Phase I Property, the
Phase II Property Project andlor the Phase III Property Project following completion of
construction, or has exercised the option but has not proceeded diligently and continuously with
construction or operation of the Phase I Property Project, the Phase II Property Project andlor the
Phase III Property Project as the case may be, the Agency may purchase the mortgage, deed of
trust or other security interest by payment to the holder of the amount of the unpaid debt,
including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts
payable to the holder by the Developer under the loan documents between holder and the
Developer. If the ownership of the Phase I Property, the Phase II Property andlor of the Phase III
Property has vested in the holder, the Agency may at its option (but does not have an obligation
to) seek a conveyance from the holder to the Agency upon payment to the holder of an amount
equal to the sum of the following:
(I) The unpaid mortgage, deed of trust or other security interest debt,
including principal, accrued and unpaid interest, late charges, costs,
expenses and other amounts payable to the holder by the Developer under
the loan documents between the holder and the Developer, at the time title
became vested in the holder (less all appropriate credits, including those
resulting from collection and application of rentals and other income
received during foreclosure proceedings).
(2) All expenses, if any, incurred by the holder with respect to foreclosure.
(3) The net expenses, if any (exclusive of general overhead), incurred by the
holder as a direct result of the subsequent ownership or management of the
Phase I Property, of the Phase II Property andlor of the Phase III Property
such as insurance premiums and real estate taxes.
(4) The cost of any improvements made by such holder.
(5) An amount equivalent to the interest that would have accrued on the
aggregate on such amounts had all such amounts become part of the
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mortgage or deed of trust debt and such debt had continued in existence to
the date of payment by the Agency.
(6) After expiration of the aforesaid one hundred eighty (180) calendar day
period, the holder of any mortgage, deed of trust or other security affected
by the option created by this Section, may demand, in writing, that the
Agency act pursuant to the option granted hereby. If the Agency fails to
exercise the right herein granted within sixty (60) calendar days from the
date of such written demand, the Agency shall be conclusively deemed to
have waived such right of purchase of the or the mortgage, deed of trust or
other security interest.
(k) In the event of a default or breach by the Developer of a mortgage, deed of trust
or other security interest with respect to the Phase I Property, or any portion thereof, to the Phase
II Property, or any portion thereof, and/or to the Phase III Property, or any portion thereof, where
the holder has not exercised its option to complete the development or to operate the Phase I
Property Project, the Phase II Property Project and/or the Phase III Property Project, the Agency
may cure the default but is under no obligation to do so prior to completion of any foreclosure.
In such event, the Agency shall be entitled to reimbursement from the Developer of all direct and
verifiable costs and expenses incurred by the Agency in curing the default. The Agency shall
also be deemed to have a lien of the Agency as may arise under this Section 3.05(k) upon the
Phase I Property, or any portion thereof, upon the Phase II Property, or any portion thereof,
and/or upon the Phase III Property, or any portion thereof, to the extent of such costs and
disbursements. Any such lien shall be subordinate and subject to mortgages, deeds of trust or
other security instruments executed by the Developer for the purpose of obtaining the funds to
construct and improve the Property or for the purpose of obtaining the Permanent Financing as
authorized herein.
Section 3.06. Right of the Agencv to SatisfY Other Liens on the ProoertY after
Convevance of Title. After the conveyance of title to the Phase I Property, to the Phase II
Property and/or to the Phase III Property by the Agency to the Developer and after the Developer
has had a reasonable time to challenge, cure or satisfy any unauthorized liens or encumbrances
on the Phase I Property, on the Phase II Property and/or on the Phase III Property the Agency
shall after one hundred twenty (120) calendar days prior written notice to the Developer have the
right to satisfy any such liens or encumbrances; provided, however, that nothing in this
Agreement shall require the Developer to payor make provisions for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith shall contest the validity or
amount thereof, and so long as such delay in payment shall not subject the Phase I Property, or
any portion thereof, the Phase II Property, or any portion thereof, and/or the Phase III Property,
or any portion thereof, to forfeiture or sale.
Section 3.07. Certificate of Completion.
(a) Following the written request therefore by the Developer and the completion of
construction of each phase of the Phase I Property Project, of the Phase II Property Project
and/or of the Phase III Property Project excluding any normal and minor building "punch-list"
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items to be completed by the Developer, the Agency shall furnish the Developer with a
Certificate of Completion for the Phase I Property, for the Phase II Property and/or for the Phase
III Property in the form set forth in Exhibit "F" which Exhibit is attached hereto and incorporated
herein by this reference.
(b) The Agency shall not unreasonably withhold the issuance of a Certificate of
Completion in connection with the Phase I Property Project, with the Phase II Property Project
and/or with the Phase III Property Project. A Certificate of Completion shall be, and shall SO
state, that it is a conclusive determination of satisfactory completion of construction of the
applicable phase of the Phase I Property Project, of the Phase II Property Project and/or of the
Phase III Property Project. After the recordation of the Certificate of Completion in connection
with the Phase I Property Project, with the Phase II Property Project and/or with the Phase III
Property Project, any party then owning or thereafter purchasing, leasing or otherwise acquiring
any interest in the Phase I Property identified in the Certificate of Completion, in the Phase II
Property identified in the Certificate of Completion or in the Phase III Property identified in the
Certificate of Completion shall not (because of such ownership, purchase, lease or acquisition)
incur any obligation or liability under this Agreement, except that such party shall be bound by
any covenants contained in the grant deed or other instrument of transfer which grant deed or
other instrument of transfer shall include the provisions of Section 4.01 through 4.04, inclusive,
ofthis Agreement.
(c) Any Certificate of Completion shall be in such form as to permit it to be recorded
in the Recorder's Office of the County where the Phase I Property, the Phase II Property and/or
the Phase III Property is located.
(d) If the Agency refuses or fails to furnish a Certificate of Completion in connection
with the Phase I Property Project, with the Phase II Property Project and/or with the Phase III
Property Project after written request from the Developer, the Agency shall, within the later of (i)
forty-five (45) calendar days after Agency receipt of the written request or (ii) within three (3)
business days after the second regular meeting as conducted by the Agency for which an agenda
item may by timely submitted for such regular meeting agenda, provide to the Developer a
written statement setting forth the reasons with respect to the Agency's refusal or failure to
furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of
the action the Developer must take to obtain a Certificate of Completion in connection with the
Phase I Property Project, with the Phase II Property Project and/or with the Phase III Property
Project. If the reason for such refusal is confined to the immediate unavailability of specific
items or materials for construction or landscaping at a price reasonably acceptable to the
Developer or other minor building "punch-list" items, the Agency may issue its Certificate of
Completion in connection with the Phase I Property Project, with the Phase II Property Project
and/or with the Phase III Property Project upon the posting of a bond or irrevocable letter of
credit, reasonably approved as to form and substance by the Agency Counsel and obtained by the
Developer in an amount representing a fair value of the work: not yet completed as reasonably
determined by the Agency. If the Agency shall have failed to provide such written statement
within the foregoing period, the Developer shall be deemed conclusively and without further
action of the Agency to have satisfied the requirements of this Agreement with respect to the
Phase I Property, to the Phase II Property and/or to the Phase III Property as if a Certificate of
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Completion had been issued therefore. For purposes of this subsection (d), it shall be considered
reasonable if the Agency response as to the failure or refusal to issue a Certificate of Completion
is based upon deficiencies or lack of compliance by the Developer with the building plans and
site plans as approved by the Development Services Department of the City.
(e) A Certificate of Completion shall not constitute evidence of compliance with or
satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a
mortgage securing money loaned to finance the improvements described herein, or any part
thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as
referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the
continuing covenants or conditions subsequent contained in the Agency Grant Deed.
Section 3.08. Right to Purchase the Phase II Pronerlv and/or the Phase III Property.
Upon prior written notice from the Developer to the Agency, the Developer may exercise the
right to purchase the Phase II Property at the Phase II Property Purchase Price and/or the Phase
III Property at the Phase III Property Purchase Price, subject to the terms, covenants and
conditions of this Agreement provided: (i) The Developer is not in default, which remains
uncured or which Developer has failed to commence to cure, under this Agreement, under any
Financing, under the Financing Loan Documents, under the Construction Financing, under the
Permanent Financing and/under the Security Financing Interest and (ii) the right is exercised by
the Developer within Three Hundred and Sixty Five (365) Days from the Effective Date of this
Agreement and the applicable Close of Escrow for the Phase II Property and the Phase II
Property shall occur with the time periods required by this Agreement. The right to purchase the
Phase II Property and/or the Phase III Property is personal to the Developer and may not be sold,
transferred, conveyed, assigned, encumbered or pledged by the Developer to any person or entity
without the prior written consent of the Agency which consent shall not be unreasonably
withheld, delayed or conditioned.
ARTICLE IV
USE OF THE SITE
Section 4.01. Uses.
(a) The Developer covenants and agrees for itself, its successors and assigns, that
upon completion of the development of the Phase I Property Project, of the Phase II Property
Project and/or of the Phase III Property Project that the portion of the Phase I Property, the Phase
II Property and/or the Phase III Property that is to be improved as a commercial, restaurant,
office and/or retail center or as may otherwise be permitted by the applicable City zoning and
City Development Code requirements and shall be used solely for such purposes. The covenant
of this Section 4.01 (a) shall run with the land as set forth in the Agency Grant Deed.
(b) The Developer further covenants and agrees for itself, its successors and assigns,
that the Phase I Property, the Phase II Property and/or the Phase III Property shall be improved
and developed in accordance with this Agreement, the Scope of Development and/or the
Schedule of Performance. The Developer covenants to develop the Phase I Property, the Phase
II Property and the Phase III Property in conformity with all applicable Laws. The covenants of
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this Section 4.01(b) shall also run with the land until the date on which: (i) the Certificate of
Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date
of recordation of the Agency Grant Deed in connection with the Phase I Property, (ii) the
Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th)
anniversary date of recordation of the Agency Grant Deed in connection with the Phase II
Property, or (iii) the Certificate of Completion in connection with the Phase III Property is
recorded or the fifth (5th) anniversary date of recordation of the Agency Grant Deed in
connection with the Phase III Property.
(c) Neither the Developer, nor its assigns or successors, shall use or otherwise sell,
transfer, convey, assign, lease, leaseback or hypothecate the Phase I Property, or any portion
thereof, the Phase II Property, or any portion thereof, and/or the Phase III Property, or any
portion thereof, to any entity or party, or for any use of the Phase I Property, the Phase II
Property and/or the Phase III Property that is partially or wholly exempt from the payment of real
property taxes pertinent to the Phase I Property, or any portion thereof, to the Phase II Property,
or any portion thereof, and/or to the Phase III Property, or any portion thereof, or which would
cause the exemption of the payment of all or any portion of such real property taxes. The
covenant of this Section 4.01(c) shall run with the land for the term as set forth in the Agency
Grant Deed in connection with the Phase I Property, the Phase II Property and/or the Phase III
Property.
Section 4.02. Maintenance of the ProDertv. The Developer covenants and agrees for
itself, its successors and assigns, to maintain: (i) the Phase I Property consistent with the
maintenance level of a first class multiple screen movie theater or as shall be reasonably required
by other commercial, restaurant, office and/or retail centers in the metropolitan areas of the City,
(ii) the Phase II Property and/or the Phase III Property in a first class condition as commercial,
restaurant, office and/or retail center all as shall be determined by the Agency at its sole
discretion. The Developer covenants and agrees that for itself, its successors and assigns, to
maintain the Phase I Property, the Phase II Property and/or the Phase III Property in a good
condition free from any accumulation of debris or waste material, subject to normal construction
job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the
landscaping required to be planted in accordance with the Agreement, the Scope of Development
and/or the Schedule of Performance. In the event the Developer, or its successors or assigns,
fails to perform the maintenance as required herein, the Agency shall have the right, but not the
obligation, to enter the Phase I Property, the Phase II Property and/or the Phase III Property and
undertake, such maintenance activities. In such event, the Developer (or such successor as may
then own the Phase I Property, the Phase II Property and/or the Phase III Property) shall
reimburse the Agency for all reasonable sums incurred by it for such maintenance activities as
set forth in the Agency Grant Deed for the Phase I Property, the Phase II Property and/or for the
Phase III Property. The covenant of this Section 4.02 shall run with the land for the term as set
forth in the Agency Grant Deed for the Phase I Property, for the Phase II Property and/or for the
tenn as set forth in the Agency Grant Deed for the Phase III Property.
Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and
agrees for itself, its successors, its assigns and every successor in interest to the Phase I Property,
or any part thereof, the Phase II Property, or any part thereof, and to the Phase III Property, or
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any part thereof, that there shall be no discrimination against or segregation of any person, or
group of persons, on account of age, disability, sex, marital status, race, color, religion, creed,
national origin or ancestry, including all other protected classes of persons and groups of persons
as may be considered as such by any local, State or Federal law and as shall be required pursuant
to Health & Safety Code Section 33435 and Section 33436, in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the Phase I Property, or any part thereof, the Phase II
Property, or any part thereof, and the Phase III Property, or any part thereof; nor shall the
Developer, itself or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the Phase I
Property, or any part thereof, the Phase II Property, or any part thereof, and the Phase III
Property, or any part thereof. The covenant of this Section 4.03 shall run with the land for the
term as set forth in the Agency Grant Deed for the Phase I Property, for the Phase II Property and
for the term as set forth in the Agency Grant Deed for the Phase III Property.
Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer
covenants and agrees for itself, its successors, its assigns, and every successor in interest to the
Phase I Property, or any part thereof, to the Phase II Property, or any part thereof, and to the
Phase III Property, or any part thereof, that the Developer, such successors and such assigns,
shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or
enjoyment of the Phase I Property, or any part thereof, the Phase II Property, or any part thereof,
and the Phase III Property, or any part thereof, on the basis of age, disability, sex, marital status,
race, color, religion, creed, ancestry or national origin of any person, including all other
protected classes of persons and groups of persons as may be considered as such by any local,
State or Federal law and as shall be required pursuant to Health & Safety Code Section 33435
and Section 33436. All deeds, leases or contracts pertaining thereto shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(1) In deeds: "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of, any person or group
of persons on account of age, disability, race, color, creed, religion, sex,
marital status, national origin, or ancestry, including all other protected
classes of persons and groups of persons as may be considered as such by
any local, State or Federal law and as shall be required pursuant to Health
& Safety Code Section 33435 and Section 33436, in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the premises
herein conveyed, nor shall the grantee or any person claiming under or
through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessee, or
vendees in the premises herein conveyed. The foregoing covenants shall
run with the land."
(2) In leases: "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease
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is made and accepted upon and subject to the following conditions: That
there shall be no discrimination against or segregation of any person or
group of persons, on account of age, disability, race, color, creed, religion,
sex, marital status, national origin, or ancestry, including all other
protected classes of persons and groups of persons as may be considered
as such by any local, State or Federal law and as shall be required pursuant
to Health & Safety Code Section 33435 and Section 33436, in the leasing,
subleasing, transferring, use, occupancy, tenure, or enjoyment of the
premises herein leased nor shall the lessee itself, or any person claiming
under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants lessees, sublessee, subtenants, or
vendees in the premises herein leased."
(3) In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of age, disability, race, color,
creed, religion, sex, marital status, national origin, or ancestry, including
all other protected classes of persons and groups of persons as may be
cOnsidered as such by any local, State or Federal law and as shall be
required pursuant to Health & Safety Code Section 33435 and Section
33436, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed or leased, nor shall the
transferee or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants,
lessees, sublessees, subtenants, or vendees of the premises herein
transferred." The foregoing provision shall be binding upon and shall
obligate the contracting party or parties and any subcontracting party or
parties, or other transferees under the instrument. The covenant of this
Section 4.04 shall run with the land in perpetuity.
ARTICLE V
DEFAULTS, REMEDIES AND TERMINATION
Section 5.01. Defaults - General.
(a) In the event that a breach or default may occur prior to the Close of Escrow, the
remedies of the parties shall be as set forth in Article II of this Agreement.
(b) From and after the Close of Escrow for either the Phase I Property, the Phase II
PropertyandJor the Phase III Property, and subject to the extensions of time set forth in Section
6.05 hereof, failure or delay by either party to perform any term or provision of this Agreement
shall constitute a default under this Agreement; provided, however, that if a party otherwise in
default conunences to cure, correct or remedy such default within thirty (30) calendar days after
receipt of written notice specifying such default and shall diligently and continuously prosecute
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such cure, correction or remedy to completion (and where any time limits for the completion of
such cure, correction or remedy are specifically set forth in this Agreement, then within said time
limits), such party shall not be deemed to be in default hereunder. Further, a default under this
Agreement shall occur whenever: (i) the Developer fails to comply with the terms, covenants
and conditions of the Financing, the Financing Loan Documents, the Construction Financing, the
Permanent Financing and/or under any Security Financing Interest, or (ii) any representation or
warranty made by the Developer or by the Agency under this Agreement or by the Developer
under the Financing, the Financing LoaIl-pocuments, the Construction Financing, the Permanent
Financing and/or under the Security Financing Interest is or becomes false; provided, however,
that if Developer commences to cure, correct or remedy a curable default within thirty (30)
calendar days after receipt of written notice specifYing such default and shall diligently and
continuously prosecute such cure, correction or remedy to completion (and where any time limits
for the completion of such cure, correction or remedy are specifically set forth in any Financing,
the Financing Loan Documents, the Construction Financing, the Permanent Financing and/or
under the Security Financing Interest then within said time limits), Developer shall not be
deemed to be in default hereunder.
(c) The injured party shall give written notice of default to the party in default,
specifYing the default complained of by the nondefaulting party. Delay in giving such notice
shall not constitute a waiver of any default nor shall it change the time of default.
(d) Any failure or delays by either party in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies.
Delays by either party in asserting any of its rights and remedies shall not deprive either party of
its right to institute and maintain any actions or proceedings which it may deem necessary to
protect, assert or enforce any such rights or remedies. .
(e) Any failure or refusal by the Developer to repay the New HUD Loan or the HUD
Loan Assumption at the end of the seven-year term of the New HUD Loan or at the end of seven
(7) years from and after the HUD Loan Assumption shall be a default under this Agreement,
without any further notice by the Agency to the Developer and the Developer will: (i) deliver a
deed in lieu of foreclosure to the Agency, (ii) immediately terminate its occupancy and
possession of the Phase I Property and/or of the Phase I Property Improvements, (iii) transfer to
the Agency by bill of sale all equipment and fixtures that are subject to the lien of the New HUD
Loan or the HUD Loan Assumption, and (iv) quit claim to the Agency all right, title and interest
of the Developer in the undeveloped pads located at the Phase I Property. The Developer
recognizes that HUD may require as a condition to obtaining either the New HUD Loan or the
IUD Loan Assumption, that the documents specified in items (i) and (iii) of the immediately
preceding sentence be delivered to the Agency or to an escrow holder in an executed and undated
form in the event such default should occur. After a default by the Developer, the Developer and
the Agency may consider a lease for the Phase I Property and for the Phase I Property
Improvements after the end of either of the above referenced seven-year terms of the New HUD
Loan or the HUD Loan Assumption but neither the Developer nor the Agency will be obligated
to lease, occupy or operate the Phase I Property and/or the Phase I Property Improvements unless
mutually agreed upon in the sole and absolute discretion of the Agency and of the Developer.
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(f) Upon a default by the Developer of the seven-year refinancing and failure by the
Developer to repay the New HUD Loan or the HUD Loan Assumption, as applicable, this
Agreement will be terminated immediately upon notice from the Agency to the Developer. The
Developer shall remain liable to the Agency for all reasonable attorneys' fees, court costs and all
other fees, costs and expenses required to defend any actions of the Developer or any other
challenges to the termination by the Agency of this Agreement.
(g) If the Developer has constructed buildings on one (I) or more of the pads located
at the Phase II Property and/or at the Phase III Property and a certificate of occupancy was issued
prior to a termination of this Agreement, the Developer shall retain title to such pads at the Phase
II Property and/or on the Phase III Property for which a certificate of occupancy was issued prior
to any termination of this Agreement. If the Developer commences construction on one (I) or
more of the pads at the Phase II Property and/or at the Phase III Property prior to the termination
but has not received a certificate of occupancy by the termination date of this Agreement, the
Agency shall have the right to repurchase the pads at the Phase II Property and/or at the Phase III
Property at zero land cost. The Agency shall additionally assume any construction loan in
connection with such pads located at the Phase II Property and/or at the Phase III Property and
the Agency shall have no further obligation to make any additional payments to the Developer
for the Developer's invested equity in such Phase II Property Project and/or in such Phase III
Property Project.
(h) A default shall be deemed to have occurred in the event the Developer has not
completed the Phase I Improvements or the Phase IA Improvements on or before July 1,2009,
except as otherwise provided pursuant to Section 3.01(s), and has not received certificates of
occupancy or other final City approvals for the completion of such intended construction by said
date in the event neither a New HUD Loan or a HUD Loan Assumption has been undertaken to
finance in whole or in part the costs of the construction for the Phase I Improvements and the
Phase IA Improvements. The Agency shall be entitled at its option to terminate this Agreement
and/or pursue all other rights and remedies as set forth in this Agreement.
(i) A default shall be deemed to have occurred for failure of the Developer to comply
with the provisions of Section 2.03(g), regardless of whether the Phase I Improvements and/or
the Phase IA Improvements have been completed by said date, in the event a Close of Escrow for
the Phase I Property has not occurred on or before July I, 2009, upon notice of default being
delivered after said date by the Agency to the Developer without any right to cure such default
by the Developer after July I, 2009. The Agency shall be entitled at its option to terminate this
Agreement and/or pursue all other rights and remedies as set forth in this Agreement.
Section 5.02. Legal Actions.
(a) In addition to any other rights or remedies, either party may institute legal action
to cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in
the Superior Court of the County of San Bernardino, State of California, in any other appropriate
court in that County, or in the Federal District Court in the Central District of California.
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(b) The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
(c) In the event that any legal action is commenced by the Developer against the
Agency, service of process on the Agency shall be made by personal service upon the Interim
Executive Director or the Chair of the Agency or in such other manner as may be provided by
law.
(d) In the event that any legal action is commenced by the Agency against the
Developer, service of process on the Developer shall be made by personal service on Moctesuma
Esparza at the address set forth in Section 1.03(b) (or such other Agent for service of process and
at such address as may be specified in written notice to the Agency), or in such other manner as
may be provided by law, and shall be valid whether made within or without the State of
California.
Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights
and remedies expressly declared to be exclusive in Article II of this Agreement as relates to a
default or breach occurring before the Close of Escrow for either the Phase I Property, the Phase
II Property and/or the Phase III Property, the rights and remedies of the parties as set forth in this
Article V following the Close of Escrow for the Phase I Property, the Phase II Property and/or
the Phase III Property are cumulative and the exercise by either party of one or more of such
rights or remedies shall not preclude the exercise by it, at the same or different times, of any
other rights or remedies for the same default or any other default by the other party.
Section 5.04. Damages: Specific Performance. If either party defaults with regard to
any provision of this Agreement, the nondefaulting party shall serve written notice of such
default upon the defaulting party. If the defaulting party does not diligently commence to cure
such default after service of the notice of default and promptly complete the cure of such default
within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may
otherwise be specified in this Agreement for default) after the service of written notice of such a
default, then the non-defaulting party shall be entitled to maintain an action for damages or an
action for specific performance in addition to such other remedies as it may have at law or in
equity; provided, however, that in the event of a breach by the Developer of its obligations under
Article II of this Agreement prior to the Close of Escrow for either the Phase I Property, the
Phase II Property and/or the Phase III Property, the Agency shall not be entitled to bring an
action against the Developer for specific performance and shall be entitled only to the liquidated
damages set forth in Section 2.23 hereof.
Section 5.05. RESERVED.
Section 5.06. Agencv Rights of Termination Following Close of Escrow.
(a) Unless otherwise permitted pursuant to the terms of this Agreement and subject to
written notice of default which shall specifY the Developer's default and the action required to
commence cure of same and upon ninety (90) calendar days notice to the Developer of the
Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option
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may terminate this Agreement if the Developer in breach of this Agreement assigns or attempts
to assign this Agreement, or any right therein, or attempts to make any total or partial sale, lease
or leaseback, transfer or conveyance of the Property either the Phase I Property, the Phase II
Property and/or the Phase III Property and the Developer does not correct such violation within
sixty (60) calendar days from the date of receipt of such notice.
(b) Subject to written notice of default, which shall specifY the Developer's default
and the action required to commence cure of same and upon ninety (90) calendar days notice to
the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the
Agency at its option may terminate this Agreement if the Developer: (i) does not within the time
limits set forth in this Agreement or as specifically provided in the Schedule of Performance,
subject to extensions authorized by this Agreement due to force majeure or otherwise, submit
development plans, construction drawings and related documents acceptable to the Planning
Department and Building Division of the City for plan check purposes and in order to obtain
building permits for the Phase I Property Project, the Phase II Property Project and/or the Phase
III Property Project together with applicable fees therefore, all prepared to the minimum
acceptable standards as required by the Planning Department and Building Division of the City
for commencement of formal review of such documents and as required by this Agreement, or
(ii) does not carry out its other responsibilities under this Agreement or in accordance with any
modification or variance, precise plan, design review and other environmental or governmental
approvals and such default is not cured or the Developer does not commence and diligently and
continuously proceed with such cure within sixty (60) calendar days after the date of receipt of
written demand therefore from the Agency.
(c) Subject to written notice of default which shall specifY the Developer's default
and the action required to commence cure of same and upon ninety (90) calendar days notice to
the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the
Agency at its option may terminate this Agreement if upon satisfaction of all conditions
precedent and concurrent therefore under this Agreement, the Developer does not take title to
either the Phase I Property, the Phase II Property and/or the Phase III Property under tender of
conveyance by the Agency, and such breach is not cured within sixty (60) calendar days after the
date of receipt by the Developer of written demand therefore from the Agency.
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. Notices. Demands and Communications Between the Parties.
(a) Any and all notices, demands or communications submitted by any party to
another party pursuant to or as required by this Agreement shall be proper if in writing and
dispatched by messenger for immediate personal delivery, or by registered or certified United
States mail, postage prepaid, return receipt requested, to the principal office of the Agency and
the Developer, as applicable, as designated in Section 1.03(a) and Section 1.03(b) hereof. Such
written notices, demands and communications may be sent in the same manner to such other
addresses as either party may from time to time designate as provided in this Section. Any such
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notice, demand or communication shall be deemed to be received by the addressee, regardless of
whether or when any return receipt is received by the sender or the date set forth on such return
receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2)
calendar business days after it is placed in the United States mail as heretofore provided.
(b) In addition to the submission of notices, demands or communications to the
parties as set forth above, copies of all notices shall also be delivered by facsimile as follows
provided copies to other than the Developer shall be informational only and delivery of such
informational or courtesy copies shall not be required to perfect delivery of any notices pursuant
to this Agreement:
To the Developer:
Maya Cinemas North America, Inc.
Attn.: Moctesuma Esparza, Chief Executive Officer
1201 West 5th Street, Suite T-21O
Los Angeles, California 90017
Telephone: (213) 542-4420
with copy to:
Maya Entertainment Group, Inc.
Attn.: Jose Martinez, Jr., General Counsel
1201 West 5th Street, Suite T-21O
Los Angeles, California 90017
Telephone: (213) 542-4420
To the Agency:
Redevelopment Agency of the City
of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attn.: Interim Executive Director
Telephone: (909) 663-1044
Fax: (909) 888-9413
with copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Attn.: Timothy J. Sabo
Telephone: (909) 387-1130
Fax: (909) 387-1138
Section 6.02. Conflict of Interest. No member, official or employee of the Agency
having any conflict of interest, direct or indirect, related to this Agreement and the development
of the Phase I Property, the Phase II Property and/or the Phase III Property shall participate in
any decision relating to this Agreement. The parties represent and warrant that they do not have
knowledge of any such conflict of interest.
Section 6.03. Warranty Against Payment of Consideration for Agreement. The
Developer warrants that it has not paid or given, and will not payor give, any third party any
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money or other consideration for obtaining this Agreement. Third parties, for the purposes of
this Section, shall not include persons to whom fees are paid for professional services if rendered
by attorneys, financial consultants, accountants, engineers, architects and the like when such fees
are considered necessary by the Developer.
Section 6.04. Nonliabilitv of Agency Officials and Emoloyees. No member, official or
employee of the Agency shall be personally liable to the Developer, or any successor in interest,
in the event of any default or breach by the Agency or for any amount which may become due to
the Developer or to its successor, or on any obligations under the terms of this Agreement,
except for gross negligence or willful acts of such member, officer or employee.
Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to
specific provisions of this Agreement, performance by either party hereunder shall not be
deemed to be in default, or considered to be a default, where delays or defaults are due to the
force majeure including, without limitation, events of war, insurrection, strikes, lockouts, riots,
floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics,
quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays,
inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or
supplier, which are not attributable to the fault of the party claiming an extension of time to
prepare or acts or failure to act of any public or governmental agency or entity, or any delay
caused by a third party, including, without limitation, independent vendors and suppliers, whose
performance is not within the control of the Developer. An extension of time for any such force
majeure cause shall be for the period of the enforced delay and shall commence to run from the
date of occurrence of the delay; provided, however, that the party seeking to invoke such force
majeure provision has duly given written notice to the other party within ten (10) calendar days
of the date that the force majeure event has occurred specifying (i) the date from which the
enforced delay shall commence and the actual or the expected final date, as applicable, for which
an enforced delay extension of time of performance is then being sought, and (ii) the detailed
description of the particular circumstances, events, facts or occurrences which have give rise to
the force majeure; provided, however, that the provisions of this Section shall not apply to (i) the
final date for the Close of Escrow of July 1, 2009, pursuant to Sections 2.03(g) and 5.01(i), (ii)
the date of three (3) years from and after the Close of Escrow and the assumption of the existing
HUD 108 Loan or the issuance of the New HUD Loan, as applicable, as provided in Section
3.05(d) (iii) the date that is seven (7) years from the Close of Escrow and the assumption of the
existing HUD 108 Loan or the issuance of the New HUD Loan, as applicable, as provided in
Sections 3.05(a)(I) and 5.01(f).
The inability of the Developer to obtain a satisfactory commitment from a construction
lender for the improvement of the Phase 1 Property, the Phase II Property and/or the Phase III
Property, whichever applies, or to satisfy any other condition of this Agreement relating to the
redevelopment of the Phase I Property, of the Phase II Property and/or of the Phase III Property,
whichever applies, shall not be deemed to be a force majeure eyent or otherwise provide grounds
for the assertion of the existence of a delay under this Section 6.05. The parties hereto expressly
acknowledge and agree that changes in either general economic conditions or changes in the
economic assumptions of any of them which may have provided a basis for entering into this
Agreement and which occur at any time after the execution of this Agreement, are not force
62
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majeure events and do not provide any party with grounds for asserting the existence of a delay
in the performance of any covenant or undertaking which may arise under this Agreement. Each
party expressly assumes the risk that changes in general economic conditions or changes in such
economic assumptions relating to the terms and covenants of this Agreement could impose an
inconvenience or hardship on the continued performance of such party under this Agreement, but
that such inconvenience or hardship is not a force majeure event and does not excuse the
performance by such party of its obligations under this Agreement.
Section 6.06. Inspection of Books and Records. The Agency shall have the right at all
reasonable times at the Agency's cost and expense to inspect the books and records of the
Developer pertaining to the Phase I Property, to the Phase II Property and/or to the Phase III
Property, whichever applies, and/or the development thereof as necessary for the Agency, in its
reasonable discretion, to enforce its rights under this Agreement including the right to review the
financial records of the Developer. Matters discovered by the Agency shall not be disclosed to
. third parties unless required by law or unless otherwise resulting from or related to the pursuit of
any remedies or the assertion of any rights of the Agency hereunder. The Developer shall also
have the right at all reasonable times to inspect the books and records of the Agency pertaining
to the Phase I Property, to the Phase II Property and/or to the Phase III Property and/or the
development thereof as pertinent to the purposes of this Agreement.
Section 6.07. Approvals.
(a) Approvals required of the Agency or the Developer, or any officers, agents or
employees of either the Agency or the Developer, shall not be unreasonably withheld and
approval or disapproval shall be given within the time set forth in the Schedule of Performance
or, if no time is given, within a reasonable time.
(b) All amendments or modifications to this Agreement whether substantive or those
which are of routine or technical nature, including minor adjustments to the Schedule of
Performance, shall require the official action of the governing body of the Agency to approve
any and all such items.
Section 6.08. Real Estate Commissions. The Agency shall not be liable for any other
real estate commissions, brokerage fees or finder fees which may arise from or related to this
Agreement.
Section 6.09. Indemnification. The Developer agrees to indemnifY, defend with legal
counsel reasonably acceptable to the Agency, protect and hold the City and the Agency, and their
directors, officers, members, managers, consultants, contractors, employees, agents and
attorneys, and the successors and assigns of each of them (collectively, the "Agency Parties"
which defined term shall also include the Agency), harmless from and against all actions, causes
of action, claims, demands, liabilities, damages, judgments, costs, expenses and fees (including,
without limitation, reasonable attorneys' fees and court costs), now or hereafter arising from or
related to a: (i) any act or omission of the Developer, and/or of any of the Developer's directors,
officers, members, managers, consultants, contractors, employees and agents, and the successors
and/or assigns of each of them (collectively, the "Developer Parties" which defined term shall
63
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also include the Developer), in performing, or failing to perform, its obligations hereunder, (ii)
any default by the Developer under this Agreement, subject to any applicable cure period, (iii)
any violation by the Developer Parties of any applicable Law, including, without limitation, the
violation of any applicable Environmental Law, relating to, in connection with, without
limitation, the Phase I Property, the Phase II Property and/or the Phase III Property or the
maintenance and/or operation of one (I) or more businesses now or hereafter conducted on or at
the Property, or any part thereof, (iv) the discharge or presence of, or the threat of discharge or
presence of, one (1) or more hazardous substances located at, in, on, above, below, from, and/or
about the Phase I Property, the Phase II Property and/or the Phase III Property, or (v) any
warranty or representation made in this Agreement that becomes false and untrue. The Agency
agrees to indemnifY, defend, protect and hold the Developer Parties harmless from and against
all damages, judgments, costs, expenses and fees (including, without limitation, reasonable
attorneys' fees and court costs) (collectively, the "Developer Party Claims"), now or hereafter,
arising from or related to any act or omission of the Agency in performing its obligations
hereunder; provided, however, the Agency shall have no liability under this Section 6.09 should
one (I) or more of the Developer Party Claims result directly or indirectly from the gross
negligence or wrongful conduct of the Developer Parties, or anyone of them. This indemnity
provision shall survive the execution, delivery, performance and early termination of this
Agreement.
Section 6.10. Release of the Develoner from Liabilitv. Notwithstanding any provision
herein to the contrary, the Developer shall be relieved of any and all liability for the obligations
of the Developer hereunder with regard to the Phase I Property Project, the Phase II Property
Project and/or the Phase III Property Project when the Certificate of Completion for the Phase I
Property Project, the Phase II Property Project and/or for the Phase III Project has been issued by
the Agency hereunder with respect thereto, other than any covenants and obligations contained in
the grant deed by which the Phase I Property, the Phase II Property and/or the Phase III Property
is conveyed to the Developer.
Section 6.11. Attornevs' Fees. If either party hereto files any action or brings any action
or proceeding against the other arising out of this Agreement, seeks the resolution of disputes
pursuant to Section 5.02 hereof, or is made a party to any action or proceeding brought by the
Escrow Holder, then as between the Developer and the Agency, the prevailing party shall be
entitled to recover as an element of its costs of suit or resolution of disputes pursuant to Section
5.02 hereof, and not as damages, its reasonable attorneys' fees as fixed by the Court or other
forum for resolution in such action or proceeding or in a separate action or proceeding brought to
recover such attorneys' fees. The costs, salary and expenses of the City Attorney and members
of his office in enforcing this Agreement shall be considered as "attorneys' fees" for purposes of
this Section.
Section 6.12. Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators, legal representatives,
successors and assigns.
64
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ARTICLE VII
ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH AGENCY GRANT
DEED; WAIVERS AND AMENDMENTS
Section 7.01. Entire Agreement: CounteIJlarls.
(a) This Agreement integrates all of the terms and conditions mentioned herein or
incidental hereto, and supersedes all negotiations or previous agreements between the parties
with respect to all or any portion of the Phase I Property, of the Phase II Property and/or of the
Phase III Property and the development thereof. This Agreement cancels and supersedes the
following agreements: (i) the Redevelopment Project Study and Exclusive Right to Negotiate
Agreement, dated as of October 20, 2008, by and between the Agency and the Developer and (ii)
the Temporary License Agreement, dated as of October 20, 2008, by and between the Agency
and the Developer.
(b) This Agreement shall be executed in four (4) duplicate originals each of which is
deemed to be an original.
Section 7.02. No Merger: Waivers and Amendments.
(a) None of the terms, covenants, agreements or conditions set forth in this
Agreement shall be deemed to be merged with the Agency Grant Deed conveying title to the
Phase I Property, to the Phase II Property and/or to the Phase III Property and this Agreement
shall continue in full force and effect before and after such conveyance.
(b) All waivers of the provisions of this Agreement and all amendments hereto must
be in writing and signed by the appropriate authorities of the Agency and the Developer.
ARTICLE VIII
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION
Section 8.01. Execution and Recordation.
(a) Following its execution by the Developer and prompt delivery thereafter to the
Agency, this Agreement shall be subject to the review and approval by the governing board of
the Agency in its sole and absolute discretion within forty-five (45) calendar days after the date
of signature by the Developer. In the event that the Agency has not approved, executed and
delivered this Agreement to the Developer within the foregoing period, then no provision of this
Agreement shall be of any force or effect for any purpose. The date of this Agreement shaIl be
the date when this Agreement shall have been approved by the Agency.
(b) The Developer and the Agency agree to permit recordation of this Agreement, or
the Notice of Agreement, concurrently upon the Close of Escrow for the Phase I Property in the
Office of the County Recorder for San Bernardino County.
III
65
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the dates set forth below.
AGENCY
Dated: J'J-j;qo~
Redevelopment Agency of the
City of San Bernardino,
a public body, corporate and politic
BY~
Emil A. Marzullo
Interim Executive Director
Approved as to Form and Legal Content:
BY:\p~
Agency I
DEVELOPER
Dated:
,lt~dV1
( {
a
()En
[ALL SIGNATURES MUST BE NOTARIZED]
66
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EXHffiIT"A-I"
LEGAL DESCRIPTION OF PHASE I PROPERTY
The land referred to in the Agreement is situated in the County of San Bernardino, State of
California, and is described as follows:
Parcell of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per
plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County together
with the Phase IA Property to be provided when available.
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EXHIBIT "A-2"
LEGAL DESCRIPTION OF PHASE IA PROPERTY
[To be provided when available]
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EXHffiIT "A-3"
LEGAL DESCRIPTION OF PHASE II PROPERTY
[To be provided when available]
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EXHIBIT "A-4"
LEGAL DESCRIPTION OF PHASE III PROPERTY
[To be provided when available]
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EXHIBIT "B"
BUDGET
See Schedule of Performance "EXHIBIT C" for Details
PHASE I
Fixtures, Furnishings and Equipment (FF&E)
Building Repairs and Code Compliance
Upgrades
(To include Lobby extension and I-Max equipment)
Soft Costs
Total Phase I
PHASE I A
Public gathering place and/or fountain
TOTAL PHASE lAND PHASEIA
PHASE II
To be determined at time of construction
PHASE III
To be determined at time of construction
$2,172,650
$1,264,500
$3,795,000
$ 895,000
$8,127,150
$1,200,000
$9.327.150
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EXHIBIT "c"
SCOPE OF DEVELOPMENT
PHASE I
FF&E IMPROVEMENTS:
. Projection and Sound Equipment
. Carpet - Lobby & Auditoriums
. Seats - 4,158 Chairs
. Lobby Tile and Base
. Wall Coverings
. Auditorium Wall Carpet
. Masking - Screens
. Lighting
. Concession Equipment
. Box Office System
. Poster Cases
. Aisle Lighting
. Acoustical Wall Panels
. Security Cameras
. Flat Screens
. Menu Boards
BUILDING REPAIRS & CODE COMPLIANCE:
. HV AC Repair
. Roof Repair
. Concession Counters Repair
. Restroom Stalls & Upgrades
. Misc. Tile Repairs
. Paint Exterior and Interior
. Step Stairways Correction to Comply with Code ADA Correction
UPGRADES:
. New Concession Stand in Front of the Theater
. Demo Concession & New Game Room
. New Blade Signs
. Lobby Extension
. Retrofit Screen #9 to !MAX Configuration
. 3D Digital Projectors
. Digital Projector
. !MAX Licenses and Projector
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EXHIBIT "C" (Continued)
PHASE IA
· Construction of a public gathering place to the front of the theatre which could consist of
a water feature and or public art and or amphitheatre with the intention of creating a
signature gathering place.
PHASE II AND PHASE III
Improvements to the Vacant Parcels Adjacent to the 20-plex Theater Structnre
· Construction of a two story retail/restaurant building of approximately I 1,000 square foot
adjacent to the California Theatre with potential linkage into the California Theatre itself
from the second story so incorporating the California. Theatre into the
restaurant/retail/entertainment area from its current south facing aspect.
· Construction of a single story retail/restaurant pad of approximately 12,000 square foot
on the southwest comer of 4th Street and "E" Street.
· Construction of a retail/restaurant pad of approximately 7,500 square foot adjacent to the
main theater building to the south on "E" Street.
. Development of the Common Area linking 4th Street, "E" Street and the parking lot to the
west with hardscape, landscaping and a common area amphitheater situated at the
convergence oftbe pathways.
· Installation of a water feature at the comer of 4th Street and "E" Street.
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EXHIBIT "D"
SCHEDULE OF PERFORMANCE
Three (3) months from date Finance Commitment is issued the following shall be completed:
(i) Relocation of all concession booths,
(ii) Provide access to the Phase I Property in compliance with the Americans With
Disabilities Act (the "ADA"),
(iii) Modifications to the risers in each theater to assure conformity,
(iv) Replacement of all seating,
(v) Installation of digital project and sound systems.
Six (6) months from date Finance Commitment is issued the following shall be completed:
(i) Remodeling and re-branding of the theater,
(ii) Establishment of the I-Max theater,
(iii) Expansion of the entry area into a public access lobby.
Nine (9) months from date Finance Commitment is issued the following shall be completed:
(i) Removal and relocation of the ticket booth,
(ii) Installation of water feature (Phase 1 A).
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EXHIBIT "E"
AGENCY GRANT DEED
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RECORDING REQUESTED BY AND )
AFTER RECORDING MAIL TO: )
)
Maya Cinemas North America, Inc. )
1201 West 5th Street, Suite T-21O )
Los Angeles, California 90017 )
Attn.: )
)
Exempt from Recording Fee )
pursuant to Gov't Code Section 27383 )
(Space Above for Recorder's Use)
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AGENCY GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged, the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic of the State of California (the "Grantor") hereby grants to MAYA
CINEMAS NORTH AMERICA, INC., a Delaware corporation (the "Grantee"), all of its right,
title and interest in and to the real property legally described in Exhibit "A" and by this reference
incorporated herein (the "Property").
1. The Property is conveyed subject to that certain 2008 Disposition and
Development Agreement, dated as of , 2008 (the "Agreement"), by and between the
Grantor, as seller, and the Grantee, as buyer. The provisions of the Agreement are incorporated
herein by this reference and shall be deemed to be a part hereof as if set forth at length herein.
Capitalized terms shall have the meaning provided for. in the Agreement unless otherwise
specifically defined in this Agency Grant Deed.
2. The Grantee covenants by and for itself, its heirs, executors,
administrators and assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in or on the Property.
All deeds, leases or contracts made relative to the Property shall contain the
following nondiscrimination clauses: r update followinl! at time of delivery of deed as to then
current compliance with all local. State and Federa11aws I
(a) In deeds: "The grantee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of any person or group of persons on account of
age, disability, race, color, creed, religion, sex, age, marital status, national origin or ancestry in
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the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein
conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, locations, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in or on the land herein conveyed. The foregoing covenants shall run with the land."
(b) In leases: "The lessee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through them, and this
lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex, age, marital status, national
origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of
the land herein leased, nor shall the lessee itself, or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sub lessees or
vendees in the land herein leased."
( c) In contracts: "There shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex, age,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the land."
3. No violation or breach of the covenants, conditions, restrictions,
provisions or limitations contained in this Agency Grant Deed shall defeat or render invalid or in
any way impair the lien or charge of any mortgage, deed of trust or other financing or security
instrument permitted by the Agreement; provided, however, that any successor of Grantee to the
Property shall be bound by such remaining covenants, conditions, restrictions, limitations and
provisions, whether such successor's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale or otherwise.
4. The covenants contained in this Agency Grant Deed against
discrimination and segregation shall remain in effect in perpetuity.
S. The Grantor covenants and agrees for itself, its successors and assigns,
that upon completion of the development of the Phase I Property Project, the Phase II Property
Project and/or of the Phase III Property Project that the portion of the Phase I Property, of the
Phase II Property and/or of the Phase III Property that is to be improved as a commercial,
restaurant, office and/or retail center shall be used solely for such purposes or as may otherwise
be permitted by the applicable City zoning and City Development Code requirements. The
covenants of this Section S shall also run with the land until the date on which: (i) the Certificate
of Completion in connection with the Phase I Property is recorded or the fifth (SIh) anniversary
date of recordation of this Agency Grant Deed in connection with the Phase I Property, (ii) the
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Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th)
anniversary date of recordation of this Agency Grant Deed in connection with the Phase II
Property and/or (iii) the Certificate of Completion in connection with the Phase III Property is
recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in
connection with the Phase III Property.
6. The Grantor further covenants and agrees for itself, its successors and
assigns, that the Phase I Property, the Phase II Property and/or the Phase III Property shall be
improved and developed in accordance with the Agreement, the Scope of Development and the
Schedule of Performance. The Grantor covenants to develop the Phase I Property, the Phase II
Property and/or the Phase III Property in conformity with all applicable Laws. The covenants of
this Section 6 shall also run with the land until the date on which: (i) the Certificate of
Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date
of recordation of this Agency Grant Deed in connection with the Phase I Property, (ii) the
Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th)
anniversary date of recordation of this Agency Grant Deed in connection with the Phase II
Property and/or (iii) the Certificate of Completion in connection with the Phase III Property is
recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in
connection with the Phase III Property.
7. Neither the Grantor, nor its assigns or successors, shall use or otherwise
sell, transfer, convey, assign, lease, leaseback or hypothecate the Phase I Property, or any portion
thereof, the Phase II Property, or any portion thereof, or the Phase III Property, or any portion
thereof, to any entity or party, or for any use of the Phase I Property, or any portion thereof, of
the Phase II Property, or any portion thereof, and/or for of the Phase III Property, or any portion
thereof, that is partially or wholly exempt from the payment of real property taxes pertinent to
the Phase I Property, or any portion thereof, the Phase II Property, or any portion thereof, or to
the Phase III Property, or any portion thereof, or which would cause the exemption of the
payment of all or any portion of such real property taxes. The covenants of this Section 7 shall
also run with the land until the date on which: (i) the Certificate of Completion in connection
with the Phase I Property is recorded or the fifth (5th) anniversary date of recordation of this
Agency Grant Deed in connection with the Phase I Property, or (ii) the Certificate of Completion
in connection with the Phase II Property is recorded or the fifth (5th) anniversary date of
recordation of this Agency Grant Deed in connection with the Phase II Property and/or (iii) the
Certificate of Completion in connection with the Phase III Property is recorded or the fifth (5th)
anniversary date of recordation of this Agency Grant Deed in connection with the Phase III
Property.
8. The Grantor covenants and agrees for itself, its successors and assigns, to
maintain the Phase I Property consistent with the maintenance level of a first class multiple
screen movie theater or as shall be reasonably required by other commercial or retail centers in
the metropolitan areas of the City, and to maintain the Phase II Property and/or the Phase III
Property as a first class commercial, restaurant, office and/or retail center. The Grantor
covenants and agrees that for itself, its successors and assigns, to maintain the Phase I Property,
the Phase II Property and/or the Phase III Property in a good condition free from any
accumulation of debris or waste material, subject to normal construction job-site conditions, and
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shall maintain in a neat, orderly, healthy and good condition the landscaping required to be
planted in accordance with this Agreement, the Scope of Development and the Schedule of
Performance. In the event the Grantor, or its successors or assigns, fails to perform the
maintenance as required herein, the Agency shall have the right, but not the obligation, to enter
the Phase I Property, the Phase II Property and/or the Phase III Property and undertake, such
maintenance activities. In such event, the Grantor (or such successor as may then own the Phase
I Property, the Phase II Property and/or the Phase III Property shall reimburse the Agency for all
reasonable sums incurred by it for such maintenance activities as set forth in the Agency Grant
Deed for the Phase I Property, the Phase II Property and/or for the Phase III Property. The
covenants of this Section 8 shall also run with the land until the date on which: (i) the Certificate
of Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary
date of recordation of this Agency Grant Deed in connection with the Phase I Property, (ii) the
Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th)
anniversary date of recordation of this Agency Grant Deed in connection with the Phase II
Property and/or (iii) the Certificate of Completion in connection with the Phase III Property is
recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in
connection with the Phase III Property.
9. The covenants contained in this Agency Grant Deed shall be binding for
the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of
the Grantor for the entire period during which such covenants shall be in full force and effect,
without regard to whether the Grantor is or remains an owner of any land or interest herein to
which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall
have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits
in equity or other proper proceedings, to enforce the curing of such breach as provided in the
Agreement or by law. The covenants contained in this Agency Grant Deed shall be for the
benefit of and shall be enforceable only by the Grantor and its successors.
END OF PAGE
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IN WITNESS WHEREOF, the Grantor and the Grantee have caused this
instrument to be executed on their behalf by their respective officers thereunto duly authorized
this _ day of ,2009.
GRANTOR:
Redevelopment Agency of the City of San
Bernardino,
a public body, corporate and politic
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
P:\AgeDdas\Agemla AttachJnents\Agenda AnKfunenu\Agmda Attachmcnts\AgnnAmelsd 2008\12-15-01 Maya DDA - ANAL (Colll'd).doe
ACCEPTANCE OF AGENCY GRANT DEED
THE PROVISIONS OF THIS AGENCY GRANT DEED ARE HEREBY APPROVED
AND ACCEPTED.
GRANTEE:
Maya Cinemas North America, Inc.,
a Delaware corporation
By:
Name:
Title:
NOTARY ACKNOWLEDGMENT
State of California
County of
)
) SS.
)
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name{s) is/are subscribed to the within
instrument, and acknowledged to me that he/she/they executed the same in hislher/their
authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF .PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary Public
Place Notary Seal Above
P:\AeaKbs~ Al14Chmalts\A;mdro A~ctld& Attachutents\Acrmtf-Amc:od 200S\12.IS..oa M.ya DDA. FINAL (Co..'d).doc:
NOTARY ACKNOWLEDGMENT
State of California )
) SS.
County of )
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument, and acknowledged to me that helshelthey executed the same in hislher/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certifY under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary Public
Place Notary Seal Above
P:\Agenda$\Agenda Attathmcnu\Agenda Anaehmem.s\Ageada Attadunmts\Agnms-Ammd 2003\12-15-0& Maya DDA - ANAL (Conl'd).doc
EXHIBIT "A"
Legal Description for Agency Grant Deed
The land referred to in the Agreement is situated in the County of San Bernardino, State of
California, and is described as follows:
Parcel 1 of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per
plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County and the
Phase IA Property to be provided when available.
P:Y.gendas\Agc:nda Attad1ments\Agenda Attaclunmts\Agenda ^nKhmenu\Agnnts-Amend 2001\12-15-08 MI)'lI DCA. ANAL (Coat'd).doc
EXHffiIT "F"
CERTIFICATE OF COMPLETION
P:\Agendas\Agc:nda Anacbmcnts\Agallb Attachmans\Agenda Anaclun~ts-Aftlend 2008\12.15-08 Maya DDA. F1NAL (Colll'd).doc
CERTIFICATE OF COMPLETION
WHEN RECORDED, MAIL TO:
(Space Above Line For Use By Recorder)
CERTIFICATE OF COMPLETION
I , , the Interim Executive Director of the
Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the
"Agency") hereby certify as follows:
Section I. The improvements required to be constructed in accordance with that
certain Disposition and Development Agreement (the "Agreement") dated ,200-, by and
between the Agency and Maya Cinemas North America, Inc., a Delaware corporation (the
"Developer"), on Assessor's Parcel Number and Assessor's Parcel Number
(the "Property") more fully described in Exhibit "A" attached hereto and
incorporated herein by this reference has been completed in accordance with the provisions of
said Agreement. A Notice of Agreement has been recorded with the County Recorder's Office
for the County of San Bernardino, State of California, on , as Instrument Number
Section 2. This Certificate of Completion shall constitute a conclusive
determination of satisfaction of the agreements and covenants contained in the Agreement with
respect to the obligations of the Developer, and its successors and assigns to construct and
develop the Project (as defined in the Agreement), of the following items:
excluding any normal and customary tenant improvements and minor
building "punch-list" items, and including any and all buildings and any and ail parking,
landscaping and related improvements necessary to support or which meet the requirements
applicable to the Project and its use and occupancy of the Property, whether or not said
improvements are on the Property or on other property subject to the Agreement, ail as descnoed
in the Agreement, and to otherwise comply with the Developer's obligations under the
Agreement with respect to the Property and the dates for the beginning and completion of
construction of improvements thereon under the Agreement. The Certificate of Completion shaiI
not affect the rights of the Agency to enforce any covenant in the Agency Grant Deed pursuant
to which the Property was conveyed under the Agreement. Said Agreement is an officiai record
of the Agency and a copy of said Agreement may be inspected in the office of the Secretary of
the Redevelopment Agency of the City of San Bernardino located at 201 North "E" Street, Suite
301, San Bernardino, California, during regular business hours.
P:\Asend.i:s\Agenda Anadunents\Asenda AttadllDCDU\Agenda An.d1menulAgnms.Arnend'ZOO8\12-15-oS Maya DDA _ FINAL(Confd).doc
Section 3. The Property to which this Certificate of Completion pertains is more
fully described in Exhibit "A" attached hereto.
DATED AND ISSUED this
day of
,200_.
Redevelopment Agency
of the City of San Bernardino
By:
Emil A. Marzullo, Interim Executive Director
NOTARY ACKNOWLEDGMENT
State of California )
) SS.
County of )
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument, and acknowledged to me that helshe/they executed the same in hislher/their
authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certifY under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal Above
Signature of Notary Public
P:\A~\Agenda Anaehmenls\Agenda Altachmerrts\Agenda: Artachmeuts\Agrmts-Amc:nd 2008\12-IS-08 Maya DDA. FINAL (Cont'd).doc
EXHIBIT "A"
Legal Description of the Property for Certificate of Completion
The land referred to in the Agreement is situated in the County of San Bernardino, State of
California, and is described as follows:
Parcel of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per plat
recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County and the Phase IA
Property to be provided when available.
P:\Agmdas\Agcnda AttadunCllu\Agendl AttKhmmts\A;cmD An~ts\Agnms-Amc:nd 2008\12-15-08 Maya ODA _ FINAL (Conl'd).doc
EXHIBIT "G"
NOTICE OF AGREEMENT
P;\A~das\Agenda Art.achnums\Agenda AnachmentMb'CDda Altadunents\Apm1S-Amcnd 2001\12-15-08 Maya DDA - ANAL (Cont'd).dGc
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Exempt from Recording Fee per
Government Code Section 27383
(Space above for Recorder's Use)
NOTICE OF AGREEMENT
The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic (the "Agency"), and MAYA CINEMAS
NORTH AMERICA, INC., a Delaware corporation (the "Developer") are parties to that certain
2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement"), dated as of
, ~ 200-, for reference purposes only, by and between the Agency and the
Developer. Said Agreement contains obligations, covenants and restrictions affecting certain
real property (the "Property") which is legally described on Exhibit "A" attached hereto and
incorporated herein by this reference. The Agreement is a public record of the Agency and is
available for inspection and copying at the Agency's offices located at 201 North "E" Street,.
Suite 301, San Bernardino, California.
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Date:
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
P:iAgendu\Agenda Atbc:b.rneats\Agcnda An.ehmaJtS\Agc:nda Attachmans\Agnnts.ARlend 2008\12-15-08 May. DDA _ flNAL (Com'd).doc:
NOTARY ACKNOWLEDGMENT
State of California
County of
)
) SS.
)
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument, and acknowledged to me that he/she/they executed the same in hislher/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certifY under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary Public
Place Notary Seal Above
P:\Aj:endas\Age:DdaAttachments\AlendaAttaduncrIls\AgendaA~AJnetwf2008\12.IS..08 Maya DDA. FINAL (Coal'd).doc
.;._b::.;~
EXHIBIT "A"
Legal Description of Property
The land referred to in the Agreement is situated in the County of San Bernardino, State of
California, and is described as follows:
Parcels I, 2, 3, 4, and 5 of Parcel Map No. 15038, in the County of San Bernardino, State of
California, as per plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said
County and the Phase I A Property to be provided when available.
f':\AgeDdas\Agenda Attadunents\Agcnda Artaduuc:ms\Agc:ndro AUlldvncnts\Agrmts-Ammd 2008\12.15.0& ~ DDA. FINAL (CoIW'd).doe
Exhibit F - Maya Cinemas' Proposed and Current Developments
32
;-
" .
~
~11~
MAY A CINEMAS. ·
.l~~_1o..-.' '~'~'~"___
~ ~--- - -~ --- - _.-
.
-
Maya Cinemas is developing and operating new, state-of-the-art
multiplex theatres throughout the United States. The theatres will be
located in area.s with so-oog movie-going demographics. particularly
in latin-centric, family oriented communities in underserved urban
and rural areas. The company's theatres will offer mainstream
first-run Hollywood movies, utilizing state-of. the-art technology and
providing a comprehensive first-rate entertainment experience for
the overall trade area population.
On July 29,2005, Maya Cinemas opened its first location. a 14.screen,
2, 916-seat theatre in the historic downtown district of Salinas. CA.
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Each Maya Cinema is tailored to complement the surrounding
architecture of its neighborhood. while maintaining its Mayan theme
within the interior with a grand lobby. Maya Cinemas are equipped
with stadium seating. state-of-the-art film and sound technologies,
and fiber optics to accommodate any future conversion to digital
media.
Through its partnership with Maya Cinemas, Urban Retail Properties
Co. will research and select the sites best suited for development.
Maya Cinemas' first five projects total 65 screens and are located in
highly desirable secondary markets in California and New Mexico.
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La.tinos, comprising 40 million people, are a significant segment of the movie-going population. Latinos are:
. The fastest growing segment of the U.S. population;
. The segment with the highest percentage of frequent moviegoers: and
. Often dwell in areas that are underserved by existing theatre chains.
16-screen theatre
Bakersfield, CA
2008
14-screen theatre
Fresno, CA
2008
14-screen theatre
Glendora, CA
2008
14-screen theatre
Ing/ewood, CA
2008
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12-screen theatre
Santa Fe, NM
2008
16-screen theatre
EI Monte, CA
2009
16-scre~n theatre
North Las Vegas, NV
2008
I
Houston,TX
Tucson,AZ
Chicago,IL
NewYork,NY
Albuquerque, NM
Los Angeles, CA
Dallas,TX
~~I
Maya Cinemas North America, Inc.
120 I West Fifth Street
Suite 1'21 0
Los Angeles. CA 900 17
(213) 534-3845
(213) 534-3846 fax
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