HomeMy WebLinkAboutCDC/2011-01
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RESOLUTION NO. CDC/2011-1
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE THE NORTH ARDEN GUTHRIE REDEVELOPMENT PROJECT
STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT BY AND
AMONG THE AGENCY, HOME DEPOT USA, INC., AND MARK
DEVELOPMENT, INC. (IVDA REDEVELOPMENT PROJECT AREA)
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WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") is a
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community redevelopment agency duly created, established and authorized to transact business and
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10 exercise its powers, all under and pursuant to the California Community Redevelopment Law
11 ("CRL"), codified under Division 24, Part 1 of the California Health and Safety Code commencing
12 at Section 33000 and is authorized to construct improvements located within the approved
13 redevelopment project areas in the City of San Bernardino ("City") in accordance with the CRL; and
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WHEREAS, the Inland Valley Redevelopment Project Area ("Project Area") displays
substantial and pervasive symptoms of blight and cannot be remedied by private parties acting
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17 alone without community redevelopment assistance; and
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WHEREAS, the Community Development Commission of the City of San Bernardino (the
"Commission"), as the governing board of the Agency, has authorized the Agency to assemble,
acquire real property and demolish blighted structures for community redevelopment purposes in
the Project Area; and
WHEREAS, on October 28, 2008, the Agency acquired the last of 73 properties located in
the North Arden Guthrie Area south of Highland Avenue between Arden Avenue to the east, 20th
Street to the south and the alleyway adjacent to Guthrie Avenue to the west (the "Properties")
within the Project Area; and
WHEREAS, the 73 parcels, three streets and three alleyways, including all easements have
been converted into a single merged parcel; and
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WHEREAS, the Agency desires to sell and cause the development of the Property; and
WHEREAS, Home Depot U.S.A., Inc., and Mark Development, Inc. ("Developers"), desire
to enter into in a Redevelopment Project Study and Exclusive Right to Negotiate Agreement
("Agreement") with the Agency; and
WHEREAS, the Developers plan to construct a commercial development which is
anticipated to create 250 construction jobs, 363 permanent jobs, $37,200,000 in gross sales,
$1,458,000 in annual sales tax revenue and $30,000,000 in assessed valuation.
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
10 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
11 FOLLOWS:
12 Section 1. The information set forth in the above recitals of this Resolution is true and
13 correct.
14 Section 2. The Interim Executive Director of the Agency is hereby authorized by the
15 Commission to execute the Agreement on behalf of the Agency in substantially the form attached
16 hereto as Exhibit "A", together with such changes therein as may be approved by the Interim
17 Executive Director of the Agency, Agency Counsel and City Attorney. The Interim Executive
18 Director of the Agency or such other designated representative of the Agency is further authorized
19 to do any and all things and take any and all actions as may be deemed necessary or advisable to
20 effectuate the purposes of the Agreement and make non-substantive modifications to the
21 Agreement.
22 Section 3.
23 Commission.
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This Resolution shall take effect from and after its date of adoption by this
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE THE NORTH ARDEN GUTHRIE REDEVELOPMENT PROJECT
STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT BY AND
AMONG THE AGENCY, HOME DEPOT USA, INC., AND MARK
DEVELOPMENT, INC. (IVDA REDEVELOPMENT PROJECT AREA)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
7 Development Commission of the City of San Bernardino at a joint regular
meeting
8 thereof, held on the 10th
9 Commission Members:
10 MARQUEZ
11 DESJARDINS
12 BRINKER
13 SHORETT
14 KELLEY
15 JOHNSON
16 MC CAMMACK
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day of January
, 2011, by the following vote to wit:
Abstain
Absent
Ayes Nays
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Secretary
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20 The foregoing Resolution is hereby approved this /3 nt day of January
, 2011.
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25 Approved as to Form:
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27 By:
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c,;-~ {lk
A~ ~el
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1 EXHIBIT" A"
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REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REDEVELOPMENT PROJECT STUDY AND
EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
(ARDEN GUTHRIE HOME DEPOT COMMERCIAL PROJECT)
This Redevelopment Project Study and Exclusive Right to Negotiate Agreement is dated
as of January 10, 2011 (this "Agreement"), and is entered into by and among Home Depot
U.S.A., Inc., a Delaware corporation ("Home Depot"), the Redevelopment Agency of the City of
San Bernardino, a public body, corporate and politic (the "Agency") and Mark Development,
Inc., a California corporation ("MDI"). Home Depot and MDI are collectively referred to herein
as the "Developer."
RECIT ALS
A. The Agency desires to encourage and effectuate the redevelopment of certain real
property located within the area commonly referred to as the North Arden Guthrie Area of the
City of San Bernardino (the "City") and com~rising approximately 17.43 acres, generally
bounded by Highland A venue, Arden Avenue, 20t Street and Guthrie Avenue that is depicted on
the "Study Area Map" attached hereto as Exhibit "A" and is legally described on Exhibit "A-I"
attached hereto (the "Property"); and
B. The Property lies within the Redevelopment Project Area of the Inland Valley
Development Agency (the "Project Area"), and is subject to the Project Area's governing
redevelopment plan (the "Redevelopment Plan") and its Rules for Owner Participation as
adopted by the Inland Valley Development Agency ("IVDA"); and
C. The Agency is the fee owner of the Property; and
D. The Property is generally underutilized vacant land with all building structures
and infrastructure having been demolished, and the Property in both its prior condition and
present condition contributes to the blight that has existed within the Project Area since the date
of the adoption of the Redevelopment Plan to this date; and
E. The project concept plan (defined herein as the "Project Concept Plan") involves
the Property, and contemplates and proposes the purchase by the Developer from the Agency of
the Property. The Developer will negotiate with the Agency for the Property. If an Agreement
is reached between the Developer and the Agency, it shall be documented by a Project
Disposition and Development Agreement (the "Project DDA"). The Project Concept Plan
contemplates a commercial and retail center with a Home Depot store of approximately 137,000
square feet as the major anchor tenant and such other complimentary retail and commercial uses
including sit-down restaurants (collectively, the "Shopping Center"); and
F. The Property is situated within the Project Area of the IVDA, a joint powers
authority, which was formed pursuant to Health and Safety Code Sections 33492.40, et seq., as a
local redevelopment authority under the federal military base reuse laws for the purpose of
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assisting in the conversion and civilian reuse of the former Norton Air Force Base and the
elimination and prevention of blight affecting other lands within a three (3) mile radius of the
boundaries of the former Norton Air Force Base; and
G. The IVDA, the City and the Agency have entered into an agreement entitled the
"2003 Redevelopment Cooperation Agreement," dated as of October 8, 2003 (the
"Redevelopment Cooperation Agreement"), pursuant to which the IVDA has delegated to the
Agency the right, power and authority to act for and on behalf of the IVDA for the purposes of
exercising the redevelopment powers of the IVDA within a portion of the Project Area; and
H. The Agency is entering into this Agreement, without limitation, to foster the
community economic development goals and objectives of the Agency and the City, including
the elimination and the spreading of blight, as the same relates to the Project Area, and the
Agency has designated the area to be included for such study purposes to be Property; and
I. The Developer proposes developing the Shopping Center as generally depicted on
the site plan attached hereto as Exhibit "B" (the "Site Plan"). Home Depot is interested in
purchasing a portion of the Property as depicted on the Site Plan and labeled as the "HD Parcel."
MDI is interested in purchasing a portion of the Property as depicted on the Site Plan and labeled
as the "MDI Parcel." The Agency and the Developer acknowledge that the Site Plan is attached
for illustrative purposes only and the actual development of the buildings in the Shopping Center
are subject to modification by the parties hereto. Home Depot has represented to the Agency as
an inducement for the obtaining of this Agreement from the Agency, that, based upon the facts as
presently known to Home Depot, Home Depot intends to pay $2,288,000 for the HD Parcel.
MDI has represented to the Agency as an inducement for the obtaining of this Agreement from
the Agency, that, based upon the facts as presently known to MDI, MDI intends to pay
$2,175,600 for the MDI Parcel. The HD Parcel and the MDI Parcel comprise the entire 17.43
acres that make-up the Property, and the purchases are all subject to the final terms and
conditions of the Project DDA, if approved by the Agency; and
J. In connection with the preparation of the Project DDA and prior to consideration
of the approval of such Project DDA, the Agency will prepare and circulate an initial study (the
"Initial Study") in accordance with the California Environmental Quality Act of 1970, as
amended ("CEQA"); and
K. Based upon information furnished by the Developer to the Agency together with
further investigations conducted by the Agency, the Developer is qualified to assist the Agency
to undertake the study of and plans for a coordinated and economically sustainable
redevelopment project in the Project Area, including the Property, which will require further
specific study, evaluation and planning by the City and the Agency, as applicable, of appropriate
and feasible community redevelopment program alternatives; and
L. The Developer and the Agency believe it is appropriate for the Agency, in
consultation with the Developer, to review by agency staff (the "Agency Staff') those studies,
reports and investigations conducted by the Developer as the Project Concept Plan Study costs
(collectively, the "Project Concept Plan Study Costs") as part of a program for the study of
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feasible redevelopment programs for the Property, subject to the terms and conditions as set forth
below.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS
AND PROMISES SET FORTH HEREIN, THE DEVELOPER AND THE AGENCY
HEREBY AGREE, AS FOLLOWS:
1. The Ne2:otiation Period and the Term of A2:reement: Non-Refundable Deposit.
a. The rights and duties of the parties established by this Agreement shall commence
following the approval of this Agreement by the governing body of the Agency after such time
as this Agreement has been fully executed by the parties (such date being the "Effective Date").
This Agreement will continue in effect until a date which is twenty-four (24) months from the
Effective Date unless such date shall have been first extended as authorized under Section 1.b.(2)
or this Agreement is otherwise terminated as provided in Section l.b. or l.c. Such time period
during which this Agreement shall be in effect (including any extensions of time approved by the
Agency) is referred to as the "Negotiation Period."
b. This Agreement shall automatically terminate, without further notice or action,
and be of no further force or effect twenty-four (24) months following the Effective Date, unless
prior to that time:
(1) the parties execute the Project DDA, as described below, which will
include, without limitation, other relevant community redevelopment covenants acceptable to the
Agency and such other terms and conditions mutually acceptable to the parties, in which case
this Agreement shall terminate on the effective date of the Project DDA; or
(2) the parties each agree to extend the term of this Agreement in writing to a
specific date not later than six (6) months after the scheduled termination date, subject to the
Executive Director of the Agency first making a finding through reasonable discretion that
satisfactory progress is being made by the Developer to complete the Project DDA as set forth in
Section 3.
c. This Agreement can be terminated prior to the twenty-four (24) months following
the effective date only if a party terminates this Agreement as provided under Section 2.c.,
Section 20 or Section 21, as applicable.
d. Home Depot and the Agency previously entered into that certain Redevelopment
Project Study and Exclusive Right to Negotiate Agreement, dated as of November 20,2006 (the
"Original ERN"). Home Depot and the Agency confirm that the Original ERN has expired by its
terms and is no longer in force or effect. In addition, any other documents that may have been
executed by Home Depot and the Agency in connection with the Original ERN are similarly
deemed to be of no further force or effect. The Developer and the Agency agree that the
purchase and development of the Property shall be governed by the terms of this Agreement until
such time as the Project DDA is executed. In connection with the Original ERN, Home Depot
delivered to the Agency a check in the amount of $58,000 ("Original ERN Payment"). Home
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Depot acknowledges that the Original ERN Payment has been received by the Agency as partial
consideration for the Agency having been precluded from offering the Property as owned by the
Agency at that time and which is identified herein as the Property, to other prospective
purchasers and developers. Home Depot acknowledges that the Original ERN Payment is non-
refundable to Home Depot, shall be retained by the Agency and is not applicable towards the
purchase price for the HD Parcel.
2. Developer Acknowled2ments.
a. The Developer hereby acknowledges and agrees that no provISIOn of this
Agreement shall be deemed to be an offer by the Agency or an acceptance by the Agency of any
offer or proposal from the Developer to convey any interest in the Property to the Developer.
Any studies relating to the Property and the Project Concept Plan that may hereafter be
undertaken by the Developer, in its sole discretion, shall be the sole responsibility of the
Developer and shall not be deemed to be undertaken for the benefit of the Agency or the City.
b. The qualifications and identity of the Developer are of particular concern to the
Agency. The Agency has relied on these qualifications and identity in entering into this
Agreement with the Developer. During the term of this Agreement, no voluntary or involuntary
successor-in-interest of the Developer shall acquire any right or power under this Agreement.
The Developer shall not assign all or any part of this Agreement or any rights hereunder, without
the prior written approval of the Executive Director of the Agency (for purposes hereof the term
"Executive Director of the Agency" shall mean the "Executive Director of the Agency" or such
other title for the person who is then acting as the chief executive staff official of the Agency, or
his/her duly delegated representative), which approval shall not be unreasonably withheld,
provided that the Developer can demonstrate to the reasonable satisfaction of the Executive
Director of the Agency that the assignee has the financial capability and the experience necessary
to develop the project to the same standard of quality that would have been undertaken by the
Developer. Notwithstanding the foregoing, each Developer, respectively, shall have the right to
assign this Agreement and its rights hereunder; provided, however, MDI's right of assignment
shall be limited to an entity, which controls, is controlled by or is under common control with the
MDI or its principals, members or affiliates.
c. Each Developer shall promptly notify the Agency in writing of any and all
changes whatsoever in the identity of the business entities and individuals in control of such
Developer, as well as any and all material changes in the interest or the degree of control of such
Developer by any such party, of which information such Developer or any of its partners or
officers have been notified or may otherwise have knowledge or information. Upon the
occurrence of any material change in interest or control, whether voluntary or involuntary, in
membership, ownership, management or control of a Developer (other than such changes
occasioned by the death or incapacity of any individual) that has not been approved in writing by
the Executive Director of the Agency, prior to or subsequent to such change (after the Developer
has received reasonable notice and an opportunity to cure such change to the reasonable
satisfaction of the Executive Director of the Agency), the Agency may terminate this Agreement
by serving written notice of such termination, referencing this Section, on an individual
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Developer. In such event, Home Depot or MDI, as the case may be, shall continue as the sole
Developer of its respective portion of the Property.
3. Proiect Concept Plan Study.
a. As soon as practical following the Effective Date, the Developer shall retain the
services of a firm or firms of community redevelopment planning, engineers, architects, financial
consultants, land use planners and environmental consultants to produce all necessary reports,
studies and environmental documentation and other investigations, surveys and reports
appropriate in connection with development of the Shopping Center (the "Project Concept Plan
Study") and the evaluation of the Project Concept Plan proposed by the Developer and for the
processing of all entitlements required to be obtained from the City together with the required
environmental review and processing. All third party costs incurred by each Developer as part of
the preparation of the Project Concept Plan Study shall be paid solely by such Developer in
accordance with Section 4 of this Agreement.
The Agency shall undertake compliance with all requirements of CEQA including the
preparation of the Initial Study based upon the Project Description and Project Concept Plan
provided by the Developer. The Developer shall aid the City in the identification of appropriate
CEQA consultants and each entity comprising the Developer shall pay for its respective share of
the cost of those consultants based on land area (i.e., Home Depot's share is 51 % and MDI's
share is 49%).
b. The Developer may mutually modify the description of the Project Concept Plan
at any time; provided, however, that substantial modifications of the Project Concept Plan shall:
(i) be subject to the acceptance and approval of the Executive Director of the
Agency which approval shall not be unreasonably withheld, conditioned or delayed; and
(ii) depending on the nature of such a modification, a suitable modification of
the environmental and other elements of the Project Concept Plan Study as modified may
also be indicated.
The Agency and/or the Executive Director of the Agency may request that the Developer
consider modifications to the description of the Project Concept Plan from time-to-time. The
final form of each such modification shall be subject to the reasonable approval of the Executive
Director of the Agency and each Developer.
c. The Agency shall, on a best efforts basis during the course of the Project Concept
Plan Study, consider the specific terms and conditions of redevelopment assistance which the
Developer may propose to include in the Project DDA; provided, however, that the Agency
reserves the sole and absolute discretion to accept, reject or modify any such proposed term or
condition to the Project DDA and to approve or reject the Project DDA in its sole and absolute
discretion.
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d. All third-party consultants, if any, retained and paid for by the Agency to review
any study, report or document prepared by or on behalf of the Developer as part of the Project
Concept Plan Study shall be subject to the sole control and direction of the Agency. The work
product of any such person shall be the property of the Agency. The Agency shall have the right
to use and republish such work product for any purpose subject to the reasonable consent of
Developer.
e. The Developer in consultation with the Agency shall prepare a proposed
conceptual development plan for the Project Concept Plan, to include, without limitation:
(1) proposed land use categories on a parcel-by-parcel basis, including
proposed zoning and general plan changes, if any, necessary to
accommodate the Project Concept Plan to accommodate the intended
commercial development on the Property; and
(2) proposed time schedule and cost estimates for the development and
proposed public and private infrastructure upgrades, proposed publicly
owned facilities, public improvements, public infrastructure and private
development.
The conceptual development plan for the Project Concept Plan as described above
may be revised from time-to-time in accordance with a schedule of preparation and revisions as
may be mutually approved by the parties.
4. Proiect Concept Plan Study Costs.
For the purposes of this Agreement, "Project Concept Plan Study Costs" shall mean and
refer to the costs and expenses of third party consultants who are engaged by the Developer
under written contract to undertake one or more elements of the Project Concept Plan Study
including the environmental review and processing and the preparation of all required studies
and reports in furtherance of the entitlements to be requested by the Developer from the City or
the Agency. Project Concept Plan Study Costs shall include third party costs incurred by the
Developer in connection with the preparation or submission of any information relating to the
Project Concept Plan on which any element of the Project Concept Plan Study may be based,
including civil engineering expenses, traffic consultant fees, architectural fees, financial
consultants, accounting fees and similar expenditure items. In addition to the Project Concept
Plan Study Costs incurred and paid by the Developer, Home Depot, MDI and the Agency shall
each bear its own fees and costs for legal services, consultants and other service providers which
such party engages.
5. Obli2ations of the Developer.
During the Negotiation Period, the Developer shall proceed diligently and in good faith to
perform the following:
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a. Consider the redevelopment of the Project Concept Plan, including without
limitation, the selection of the design of improvement elements as appropriate for the Project
Concept Plan in addition to any commercial or retail elements of the Project Concept Plan;
b. Review and provide the Project Concept Plan Study information described in
Section 3 and submit an executed copy of the final form of the Project DDA to the Executive
Director of the Agency on or before the end of the Negotiation Period (or such later date
corresponding to an authorized extension of the Negotiation Period in accordance with Section
1); and
c. Consult with the Agency and the Executive Director of the Agency on a regular
basis and keep the Agency and the Executive Director of the Agency advised on the progress of
the Developer in completing its obligations under this Agreement.
6. A2:encv Acknowled2:ments.
The Agency hereby acknowledges and agrees that no provision of this Agreement shall
be deemed to be an offer by the Developer or as an acceptance by the Developer of any offer or
proposal from the Agency to purchase any interest in the Property. Any studies undertaken by
the Agency not relating to the Property shall be the sole responsibility of the Agency.
7. Obli2:ations of A2:encv.
a. The Agency currently deems the disposition of the Property and the
redevelopment of the Property for a feasible Project Concept Plan to be appropriate, and the
Developer appears to be well qualified to undertake the task of planning the details for the
acquisition of the Property.
b. During the Negotiation Period, and subject to the Agency's compliance with the
California Community Redevelopment Law ("CRL") and the Owner Participation Rules of the
IVDA pursuant to the Redevelopment Plan regarding the rights of owners and tenants within the
Project Area, the Agency shall negotiate exclusively with the Developer with respect to the
Property during the Negotiation Period. The Agency shall not negotiate with any other person or
entity regarding either the disposition of any of the Property or the redevelopment of the Project
Concept Plan on the Property. The term "negotiate," as used herein, shall be deemed to preclude
the Agency from accepting any other offer or proposal from a third party to either acquire from
the Agency any interest in any of the Property (in whole or in part) or redevelop the Property,
and from considering other redevelopment proposals for the Property with third persons or
entities; provided, however, any person may submit to the Agency and the Agency may consider
any proposal for the disposition and/or redevelopment of any lands adjacent to the Property and
nothing shall preclude other persons from submitting proposals to the Agency for the
redevelopment of the Property provided that the Agency merely accepts such proposals as
documents submitted to a public agency as public records and shall be prohibited from
negotiating the sale of the Property to such persons as provided herein.
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c. Notwithstanding any other provision of this Agreement, during the Negotiation
Period, the Agency shall not be precluded from furnishing, to persons or entities umelated to the
Developer, information in the possession of the Agency relating to the redevelopment of any
other land owned or controlled by the Agency in close proximity to the Property. Consideration
of the redevelopment of the Project Area under the terms of the Redevelopment Plan shall
remain in the sole and exclusive purview of the Agency. The Agency may also provide any
other information in its possession that would customarily be furnished to persons requesting
information from the Agency concerning its activities, goals and matters of a similar nature, or as
required by law to be disclosed upon request.
8. A2;enCY Cooperation.
During the Negotiation Period, the Agency shall:
a. Within five (5) business days after the Effective Date, the Agency shall deliver to
the Developer copies of all due diligence materials in its possession, including without
limitation, copies of all title, survey, ad valorem tax statements, and environmental, geotechnical,
permitting, approval and development materials or studies.
b. Use its best efforts to provide appropriate comment to the Developer with respect
to one or more conceptual development plans, as may be proposed by the Developer for the
Project Concept Plan, and the redevelopment of the Property, including, but not limited to,
conceptual plans or studies of the vacation, realignment or abandonment of public property,
rights-of-way and facilities, the installation and improvement of public improvements and
environmental evaluation of the Project Concept Plan.
c. Provide the Developer with limited access to the Property during the Negotiation
Period for the purpose of conducting customary due diligence investigations thereon, including
environmental investigations of the subsurface or any structure thereon. These rights will be
subject to the terms and conditions of a separate environmental investigation and inspection
license agreement in the form attached hereto as Exhibit "C".
d. Use its best efforts to provide the Developer with information or copies of studies
performed or to be performed relative to the Project Area.
e. Use its best efforts to formalize the Project DDA with the Developer, wherein the
Agency will include within the Project DDA a transfer to the Developer of the Property for the
total purchase price of $4,463,600.00 subject to compliance with the CRL and public hearing and
notice requirements pursuant to the CRL.
f. Use its best efforts to assist the Developer in obtaining the entitlements necessary
to develop the Project Concept Plan on the Property.
g. Use its best efforts to utilize Agency Staff personnel to expedite compliance under
CEQA for the Project Concept Plan in addition to the CEQA compliance for any zoning changes,
adoption of a specific plan if required by the Developer, general plan amendments and all other
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entitlements necessary for the development of the Project Concept Plan on the Property,
suggested by the Developer in its proposed conceptual development plans or at any other time
during the Negotiation Period.
9. Ne2:otiation of Proiect DDA.
During the Negotiation Period, the Agency and the Developer shall negotiate diligently
and in good faith to prepare and attempt to enter into a Project DDA. The parties shall exercise
best efforts to complete discussions relating to the final terms and conditions of the Project DDA
and such other matters, as may be mutually acceptable to the parties for the redevelopment of the
Project Concept Plan on the Property, prior to the expiration of the Negotiation Period, but
neither party, after such diligent and good faith negotiations, shall be bound by any term or
provision of this Agreement to complete any such negotiations or to execute any final Project
DDA. The Project DDA shall contain the general terms set forth in Exhibit "D" attached hereto.
1 O. Consideration for this A2:reement and Reservation of Ri2:hts.
In consideration for the Agency's entering into this Agreement, the Developer will
undertake its obligations under this Agreement and provide the Agency with copies of all studies
and reports and other non-confidential or non-attorney-client privileged information generated by
the Developer or its consultants regarding the Project Concept Plan or the Property.
Notwithstanding the foregoing, the Developer shall provide all information required under
Section 3. in its entirety as set forth therein and in accordance with Section 12. All information
as may be provided by the Developer to the Agency which is of a confidential nature shall be
subject to the provisions of Section 12 which provides that the Agency agrees to maintain the
confidentiality of any financial and/or proprietary information of the Developer that is exempt
from disclosure as a Public Record pursuant to Government Code Sections 6254.15 and 6255.
The parties agree that, if this Agreement terminates for any reason, the Agency fails to extend the
Negotiation Period or the Project DDA is not finally approved by the Agency for any reason,
neither party shall be under any further obligation to the other party regarding the disposition,
acquisition, reuse, redevelopment or development of the Project Concept Plan or the Property.
11. Plannin2: and Desi2:n; Related Acknowled2:ments of the Parties.
Certain development standards and design controls for the Project Concept Plan may be
established between the Developer and the Agency in negotiation of, or in the final form of, the
Project DDA, but it is understood by both parties that the Project Concept Plan and the
redevelopment of the Property must conform to the City's development, design and architectural
standards. The Agency Staff shall use best efforts to cooperate with the Developer's
professional associates in providing information and assistance in connection with the
Developer's preparation of drawings, plans and specifications. Nothing in this Agreement shall
be considered approval of any plans or specifications for the Project Concept Plan or the
Property, itself, by either the Agency or the City.
9
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12. Developer Financial Disclosures.
Each Developer acknowledges that it may be requested to make certain confidential
financial disclosures to the Agency, its staff or legal counsel, as part of the financial due
diligence investigations of the Agency relating to the potential disposition of the Property to such
Developer. The parties recognize that such financial disclosures may contain sensitive
information relating to other business transactions of a Developer, that the disclosure of such
information to third parties could impose commercially umeasonable and/or anti-competitive
burdens on a Developer and, correspondingly, diminish the value or fiscal benefit that may
accrue to the Agency upon the disposition of the Property to a Developer, if the terms for such
disposition are mutually agreed upon. Accordingly, the Agency agrees to maintain the
confidentiality of any of the Developer's financial and/or proprietary information that is exempt
from disclosure as a Public Record pursuant to Government Code Sections 6254.15 and 6255. In
the event that the Agency refuses to disclose records at the request of a Developer, such
Developer shall indemnify, defend, and hold harmless, including payment of attorneys' fees, the
City and the Agency from any action, lawsuit or other proceeding initiated to obtain access to
documents that may be determined to be exempt from disclosure pursuant to the applicable
provisions of the Public Records Act.
13 . Nondiscrimination.
Each Developer shall not discriminate against nor segregate any person, or group of
persons on account of race, color, creed, religion, sex, marital status, handicap, national origin,
sexual orientation, or ancestry in undertaking its obligations under this Agreement.
14. Compliance with Law.
Each Developer acknowledges that the Project DDA, if mutually agreeable terms are
established, may require such Developer (among other things) to carry out the construction of
certain improvements in conformity with all applicable laws, including all applicable planning
and zoning laws, environmental planning and safety laws and federal and state labor and wage
laws that will require the payment of the prevailing wage rates all as shall be further set forth in
the Project DDA.
15. Reauired Approvals.
No Project DDA between the parties shall have any force or effect, nor shall the Agency
be deemed to be a party to any agreement for the disposition of any real or personal property to
the Developer, until the terms and conditions of the Project DDA are considered and approved
by the governing body of the Agency, following the conclusion of a noticed public hearing, as
required by the CRL.
16. Press Releases.
The Developer agrees to discuss any press releases it may propose relating to the
Property with the Executive Director of the Agency or his/her designee, prior to publication, to
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assure accuracy and consistency of the information. The Agency shall not issue press releases or
make public disclosure of information concerning the Property or the Developer's proposals
(unless the Developer has consented thereto) except as may be required by applicable law.
17. Notices.
All notices required hereunder shall be presented in person (such as hand delivery or
recognized overnight couriers (e.g., UPS or FedEx), by fax or by First Class certified or
registered United States mail with return receipt requested. Notice by personal service or
certified or registered mail shall be deemed effective upon delivery. All notices sent by facsimile
shall be deemed to have been received upon machine confirmation (by the receiving party's
facsimile machine) of receipt, but if the party receives the notice after 5 :00 p.m., then the date of
receipt shall be the next judicial day after the date of receipt. Any party may change their
address for receipt of notice by notifying the other parties in writing.
TO HOME DEPOT:
Home Depot U.S.A., Inc.
Attn.: Erika Strawn, Senior Attorney
3800 West Chapman Avenue
Orange, California 92868
Tel: (714) 940-3620/Fax: (714) 940-3632
Home Depot U.S.A., Inc.
Attn.: Jeffrey Hardman, Real Estate Manager
3 800 West Chapman Avenue
Orange, California 92868
Tel: (714) 940-3662/Fax: (714) 940-3579
and
Robert H. Nagle
Nagle Law Group, P.C.
4530 East Shea Boulevard, Suite 140
Phoenix, Arizona 85028-6065
Tel: (602) 595-6951/Fax: (602) 445-9306
TO MDI:
Mark Development, Inc.
Attn: Mr. Mark Sandoval
P.O. Box 507
Redlands, California 92373
Tel: (909) 335-0330
TO THE AGENCY:
Redevelopment Agency of the City of San Bernardino
Attention: Emil A. Marzullo, Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
Tel: (909) 663-1 044/Fax: (909) 663-2294
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18. Acceptance of Ae:reement bv the Developer.
Each Developer shall acknowledge its acceptance of this Agreement by delivering four
(4) counterpart executed copies of this Agreement signed by an authorized party on behalf of the
Developer to the Agency. The delivery by the Developer to the Agency of the executed
counterpart copies of this Agreement shall be completed either prior to or within thirty (30)
calendar days following the approval of this Agreement by the Agency's Board or thereafter this
Agreement shall have no further force and effect with respect to any party.
19 . Authority.
This Agreement may be executed in counterparts, and when fully executed by the parties,
each such counterpart shall be deemed to be one original document. Each signatory to this
Agreement represents and warrants that he or she has the authority to execute this Agreement on
behalf of the principal whom he or she purports to represent.
20. Optional Termination bv Developer and Ae:ency.
Provided the Developer is not in default, the Developer may, in its sole and absolute
discretion, exercise an election to suspend the Project Concept Plan Study, and thereafter this
Agreement shall terminate and the parties shall be mutually released from any further obligations
hereunder; provided, however, that the Developer gives thirty (30) calendar days' prior written
notice to the Agency. Notwithstanding the foregoing, in the event MDI elects to terminate its
obligations as a Developer hereunder, Home Depot, at its sole and absolute election, may take
the place of MDI hereunder by delivering written notice to the Agency within thirty (30)
calendar days after receipt of a termination notice issued by MDI.
Provided the Agency is not in default, the Agency may in its sole and absolute discretion
exercise an election to suspend the Project Concept Plan Study, and this Agreement shall
terminate and the parties shall be mutually released from any further obligation hereunder thirty
(30) calendar days following written notice by the Agency to the Developer.
21. Defaults and Breach - General.
a. Failure or delay by any party to perform any material term or provision of this
Agreement shall constitute a default under this Agreement; provided, however, that if the party
who is otherwise claimed to be in default by the other party cures, corrects or remedies the
alleged default within thirty (30) calendar days after receipt of written notice specifying such
default such party shall not be deemed to be in default hereunder.
b. Any failure or delay by a party in asserting any of its rights and remedies as to
any default shall not operate as a waiver of any default or of any rights or remedies associated
with such a default.
c. In the event that a default of any party may remain uncured for more than thirty
(30) calendar days following written notice, as provided above, a "breach" shall be deemed to
have occurred unless such party who is alleged to be in default is in the process of diligently
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prosecuting the cure of such default, such cure was commenced immediately upon receipt of
notice as above set forth and such breach cannot be cured within said thirty (30) calendar days
even though the cure was commenced in a timely manner.
d. In the event of a breach, the party who is not in default shall be entitled to seek
any other appropriate remedy by initiating legal proceedings. The successful party in any such
legal proceeding shall be entitled to recover its reasonable attorneys' fees as an element of its
damages, either as part of such legal proceedings or in a separate legal action to recover such
attorneys' fees.
e. In the event that a breach has occurred under this Section 21, the party who is not
then in default may terminate this Agreement by serving the other party with a written notice of
termination, and thereafter the Agreement shall terminate thirty (30) calendar days following the
date of service of the notice of termination on the other party.
f. The obligations of Developer hereunder are not joint and several. Enforcement
against a "Developer" shall be pursued solely against the party in default hereunder.
22. Governin2: Law~ Venue.
The parties hereto acknowledge that this Agreement has been negotiated and entered into
in the State of California. The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in accordance with the laws of the
State of California. Further, the parties to this Agreement hereby agree that any legal actions
arising from this Agreement shall be filed in California Superior Court, in the Court of San
Bernardino, Central District.
23. Partial Invalidity.
If any term, provision or portion of this Agreement or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision or portion thereof to persons or
circumstances other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each such term and provision of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
24. No Intent to Create Third Party Beneficiaries.
The parties intend that the rights and obligations under this Agreement shall benefit and
burden only the parties hereto, and do not intend to create any rights in, or right of action to or
for the use or benefit of any third party, including any governmental agency, who is not one of
the parties to this Agreement.
13
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25. Waivers.
No waiver of any breach of any covenant or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof, or of any other covenant or provision
herein contained. No extension of the time for performance of any obligation or act to be
performed herein shall be deemed to be an extension of the time for performance of any other
obligation or act to be performed under this Agreement.
26. Entire A2reement.
This Agreement (including all Exhibits attached hereto) is the final expression of, and
contains the entire agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not be modified,
changed, supplemented or terminated, nor may any obligations hereunder be waived, except by
written instrument signed by the party to be charged or by its agent duly authorized in writing or
as otherwise expressly permitted herein. This Agreement may be executed in one or more
counterparts, each of which shall be an original, and all of which together shall constitute a
single instrument.
27. Time of Essence.
Except as provided in Section 20 of this Agreement, time is strictly of the essence with
respect to each and every term, condition, obligation and provision hereof and that failure to
timely perform any of the terms, conditions, obligations or provisions hereof by any party shall
constitute a default under this Agreement by the party so failing to perform subject to such
failure to timely perform being waived by the non-defaulting party at their sole option and
discretion.
28. Construction.
Headings at the beginning of each section, paragraph and subparagraph are solely for the
convenience of the parties and are not a part of this Agreement. Whenever required by the
context of this Agreement, the singular shall include the plural and the masculine shall include
the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by
one of the parties, but rather as if all parties had prepared the same. Unless otherwise indicated,
all references to Sections are to this Agreement. All Exhibits referred to in this Agreement are
attached hereto and incorporated herein by this reference.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates
indicated next to each of their signatures as appear below.
DEVELOPER:
Home Depot U.S.A., Inc., a Delaware corporation
Dated: I-:;J--C{-/(
B&~C\~
Name: Frik(J M Stra\J\'n
Its: Sr. Attar [lev
Dated:
1(1//1 /1
ment, r Califo
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//
By:
Na
Its:
AGENCY:
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Date:
1.9//1
Approved as to Form and Legal Content:
r- ~7/~ Ii
'\ 1/.7__/~/ \i r
Agerity Counsel (
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15
CDC/2011-1
EXHIBIT "A"
Study Area Map
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EXHIBIT "A-I"
LEGAL DESCRIPTION OF PROPERTY
PARCEL NO.1:
Lots 22 to 54 inclusive of Tract No. 6898 in the City of San Bernardino, County of San
Bernardino, State of California, as per Plat recorded in Book 88 of Maps, Pages 34 and 35
PARCEL NO.2:
Lots 1 to 40 inclusive of Tract No. 7106 in the City of San Bernardino, County of San
Bernardino, State of California, as per Plat recorded in Book 90 of Maps, Pages 61 and 62
PARCEL 3:
That portion of Lot 6, Block 3, as shown on the map of West Highlands, recorded in Book 5 of
Maps, Page 77, described as follows:
Beginning at the northwesterly comer of Lot 9, Tract 7106, as per map recorded in Book 90 of
Maps, Page 62, in said recorder's office, thence easterly along the north line of said Lot 9 a
distance of 120 feet to the west line of a 20 foot alley as shown on said Tract 7106; thence along
said west line north 0 degrees 31 minutes 24 seconds 16.63 feet; thence north 64 degrees 07
minutes 32 seconds west 132.65 feet to an intersection with that certain 20 foot radius curve
concave southeasterly in the northwesterly comer of that certain parcel ofland designated as "not
a part" on said map of Tract 7106 and lying between Dumbarton Avenue and said 20 foot alley;
thence southerly along said curve 6.90 feet to the point of tangency thereof with the tangent
portion of the east line of said Dumbarton Avenue 60 feet wide as shown on said map, thence
southerly along said east line of Dumbarton Avenue to the point of beginning.
PARCEL 4:
That portion of Lot 6, Block 3, in the City of San Bernardino, County of San Bernardino, State of
California, as shown on the map of West Highlands, recorded in Book 5 of Maps, Page 77, in the
office of the County Recorder of said County, described as follows:
Commencing at the northwesterly comer of Lot 8, Tract 71096, as per map recorded in Book 90
of Maps, Pages 61 and 62, in the office of the County Recorder of Said County; thence South
890 43' 56" East along the northerly line of said Lot 8 a distance of 0.10 feet to the Point of
Beginning; thence continuing along the northerly line of said Lot 8 a distance of 119.91 feet to
the east line of a 20 foot alley as shown on said Tract 7106; thence along said east line North 000
31'19" West 30.56 feet to the beginning of a 100 foot radius curve, concave easterly; thence
along said curve through a central angle of 22032'37" a distance of 39.35 feet; thence North
22001' 18" East 25.49 feet to the beginning of a 60 foot radius curve, concave westerly; thence
along said curve through a central angle of 22052'39" a distance of 23.96 feet to the
southwesterly right of way line as shown on California Department of Highway's Right of Way
Map No. 423013; thence along said southwesterly right of way line South 64007'32" East 107.16
feet; thence along said right of way line, South 02007'57" East 68.72 feet to the Point of
Beginning.
Contains 10,602 square feet, more or less.
CDC/2011-1
EXHIBIT "B"
SITE PLAN
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EXHIBIT "C"
TEMPORARY LICENSE AGREEMENT
Recital
Upon acceptance of the terms and conditions of this TEMPORARY LICENSE
AGREEMENT (this "License") dated as of , 2010, is entered into by and
among the Redevelopment Agency of the City of San Bernardino, a public body, corporate
and politic (the "Agency"), Home Depot U.S.A., Inc., a Delaware corporation ("Home
Depot"), Mark Development, Inc., a California corporation ("MDI") (Home Depot and MDI
are herein collectively the "Developer"), at the place as indicated in this License, the
Developer shall have a right to utilize certain lands owned by the Agency, for the purpose of
conducting surveying and environmental assessments of the property, commencing on the
Effective Date of that certain Exclusive Right to Negotiate ("ERN"), between Developer and
the Agency, and expiring two years thereafter (the "Period").
Terms and Conditions
1. Definitions.
Certain words and phrases used in this License shall have the meanings described below:
. "Agency Property" means and refers to the real property comprising approximately
seventeen and 43/100 (17.43) acres ofland located between Highland Avenue to the north,
20th Street to the south, Arden Avenue to the east and Newcombe Avenue to the west in the
City of San Bernardino, California and legally described on Exhibit "A" attached hereto.
. "City" means and refers to the City of San Bernardino.
. "Participant" means the Developer and its authorized representatives and agents.
2. License.
The Agency hereby grants to the Developer the right to use the Agency Property during the
Period for the purpose of conducting any or all of necessary physical investigation activities in,
on, over or under the Agency Property, including, but not limited to, survey work and
environmental assessments, and for no other purpose unless expressly authorized in writing by
the Interim Executive Director of the Agency.
The Developer shall be responsible for any illegal disposal of waste products from any vehicle
parked on the Agency Property or by any Participant during the term of this License and shall
defend, indemnify and hold harmless the Agency and the City from any claims, losses or
damages, including environmental restoration and other environmental laws and regulations,
C-1
CDC/2011-1
caused by a Participant, during the term of this License. The Developer shall return the Agency
Property to the Agency in its original condition.
This License does not create any possessory interest in the Property nor does it create any
landlord tenant relationship between the Agency with the Developer, but this License is merely
granting to the Developer the right to use the Property in the limited manner as provided herein.
3. Safety
Safety is the primary consideration and the Developer shall take all necessary steps to
assure that each condition that may be imposed by the City related to the use of the Agency
Property is implemented and strictly enforced. The Developer shall abide by the orders and
directions of all state and local government agencies having authority over the temporary use of
the Agency Property, including, but not limited to, orders and directives concerning unsafe
conditions or practices on the Agency Property. The Developer shall comply with all orders and
duties of the City in the course of their activities.
4. Insurance.
The Developer and the Agency are legally insured or self-insured, as applicable, for their
respective financial and performance obligations created by this License.
5. Indemnification.
(a) The Developer shall indemnify, defend (if requested by the Agency and/or the
City), and hold harmless the Agency and the City, their officials, officers, employees, agents,
volunteers, representatives and successors against any and all liability, demands, claims, costs,
liens, losses, damages, lawsuits, recoveries, settlements and expenses (including interest,
penalties, reasonable attorneys' fees, accounting fees, expert witness fees, costs and expenses),
known or unknown, contingent or otherwise arising out of, or in any way related to any use of, or
entry onto, the Agency Property by the Developer under this License, including environmental
damages and hazardous substance remediation caused by the Developer. The duty of the
Developer to defend and indemnify, created by this License, shall remain in full force and effect
despite any allegations that the Agency or the City or any of their officers, directors, managers,
employees or agents is solely negligent, partially negligent, jointly negligent, or otherwise at
fault, or somehow contributed to cause any claim, damage or loss. The indemnity and defense
obligations created by this License shall survive expiration or termination of this License until all
such potential claims are resolved and/or barred by applicable statutes of limitation. Pursuant to
the obligations set forth in this Section 5(a), the Developer agrees to reimburse the City and the
Agency for any costs and attorneys' fees that the City or the Agency may be required by a court
to pay as a result of actions by the Developer under this License, but such participation shall not
relieve the Developer of its obligation under this condition. The costs, salaries, and expenses of
the City Attorney and employees of his office shall be considered as "attorneys' fees" for the
purpose of this condition.
C-2
CDC/2011-1
(b) In the event approval of this License is legally challenged, the Agency will
promptly notify the Developer in writing of any claim, action, or proceeding and shall terminate
this License within ten (10) calendar days after the date of delivering such notice to Developer
(the "Notice Period"), subject to the further provisions of this Section 5. Once notified, the
Developer may either (i) prior to the expiration of the Notice Period, agree to defend, indemnify
and hold harmless the City, the Agency, any departments, agencies, divisions, boards or
commission of either the City or the Agency as well as predecessors, successors, assigns, agents,
directors, elected officials, officers, employees, representatives and attorneys of either the City or
the Agency from any claim, action or proceeding against any of the foregoing persons or entities,
or (ii) take no action so as to allow for the termination of this License. In the event Developer
agrees to indemnify the Agency as set forth in this Section 5(b), the Developer agrees to
reimburse the City and the Agency for any costs and attorneys' fees that the City or the Agency
may be required by a court to pay as a result of such action, but such participation shall not
relieve the Developer of its obligation under this condition.
6. Dama2e to A2encv Property.
The Developer shall cause to be repaired or replaced, at its own expense, any and all
damage to the Agency Property, including any environmental contamination that occurs on the
Agency Property by the Developer, where such damage is caused by a Participant who may be
on the Agency Property for any purpose connected with the related activities.
7. Liens.
The Developer shall not suffer or permit any liens to stand against the Agency Property,
or any part thereof, by reason of any work, labor, services or materials done for, or supplied to
the Developer or a Participant. If any such lien shall at any time be filed against the Agency
Property, the Developer shall cause such lien to be discharged of record no later than thirty (30)
calendar days after written notice is received by the Developer from the Agency.
8. No Assi2nment Dele2ation.
The Developer may not assign or delegate any of its rights or obligations under this
License.
9. Surrender.
On the cancellation, expiration or termination of this License, the Developer shall
peaceably and quietly leave and surrender the Agency Property and release all of its rights as
arise under this License. In the event the ERN is terminated by either party, this License shall
automatically terminate.
10. Hazardous Materials.
The Developer is specifically prohibited from storing, using and/or disposing of any
Hazardous Material on or at the Agency Property. As used herein; the words "Hazardous
C-3
CDC12011-1
Materials" shall mean any hazardous toxic or radioactive substance, material, matter of waste
which is or becomes regulated by any federal, state or local governmental restriction or
requirement and shall include but not be limited to asbestos, petroleum products and "Hazardous
Substances" and "Hazardous Wastes" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") as amended 42 U.S.C. 9661, et seq.
The Developer shall indemnify, defend and save harmless the Agency, its directors, officers,
employees, agents, and representatives from and against any and all liability, loss, claims and
damages, including environmental damages caused by or related to Hazardous Materials and
costs of clean-up and remediation used by the Developer or a Participant, or arising out of the
activities of the Developer or a Participant, including, without limitation, any disposal from
waste tanks on motor vehicles, discharges from portable restroom facilities, motor vehicle fuels
or oils spilled on or to the Agency Property by any Participant during the term ofthis License.
11. Notices.
Notice pursuant to this License shall be given in writing by delivery service (such as
FedEx or UPS), United States mail (postage prepaid), or confirmed by FAX and addressed to the
parties hereto as follows:
TO HOME DEPOT:
Home Depot U.S.A., Inc., a Delaware Corporation
Attn.: Erika M. Strawn, Senior Attorney
3800 West Chapman Avenue
Orange, California 92868
Phone: (714) 940-3620
Fax: (714) 940-3632
TO MDI:
Mark Development, Inc.
Attn: Mr. Mark Sandoval IJ S u7
+H-Nt"llih Fifth Str~st, 8tlit~ f () piC
Redlands, California 92373
Tel: (909) 335-0330IFaK.: (909) ll5--7127-.1
(Y
TO THE AGENCY:
Redevelopment Agency of the City of San Bernardino
Attn.: Emil A. Marzullo, Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
Phone: (909) 663-1044
Fax: (909) 663-2294
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WHEREFORE, the authorized representatives of the Agency and the Developer are
authorized to execute this License and have executed this License as of the date indicated below,
and this License is dated as of the date set forth in the introductory paragraph hereof.
AGENCY
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
Dated:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
ACCEPTANCE OF LICENSE
The undersigned officer of Home Depot U.S.A., Inc. hereby accepts this License on the
terms and conditions as set forth herein.
Dated:
By:
Its:
The undersigned officer of Mark Development, Inc., hereby accepts this License on the terms
and conditions as set forth herein.
Dated:
By:
Its:
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EXHIBIT "A" TO LICENSE AGREEMENT
Legal Description of Agency Property
PARCEL NO.1:
Lots 22 to 54 inclusive of Tract No. 6898 in the City of San Bernardino, County of San Bernardino,
State of California, as per Plat recorded in Book 88 of Maps, Pages 34 and 35
PARCEL NO.2:
Lots 1 to 40 inclusive of Tract No. 7106 in the City of San Bernardino, County of San Bernardino,
State of California, as per Plat recorded in Book 90 of Maps, Pages 61 and 62
PARCEL 3:
That portion of Lot 6, Block 3, as shown on the map of West Highlands, recorded in Book 5 of
Maps, Page 77, described as follows:
Beginning at the northwesterly comer of Lot 9, Tract 7106, as per map recorded in Book 90 of Maps,
Page 62, in said recorder's office, thence easterly along the north line of said Lot 9 a distance of 120
feet to the west line of a 20 foot alley as shown on said Tract 7106; thence along said west line north
o degrees 31 minutes 24 seconds 16.63 feet; thence north 64 degrees 07 minutes 32 seconds west
132.65 feet to an intersection with that certain 20 foot radius curve concave southeasterly in the
northwesterly comer of that certain parcel of land designated as "not a part" on said map of Tract
7106 and lying between Dumbarton Avenue and said 20 foot alley; thence southerly along said curve
6.90 feet to the point of tangency thereof with the tangent portion of the east line of said Dumbarton
Avenue 60 feet wide as shown on said map, thence southerly along said east line of Dumbarton
Avenue to the point of beginning.
PARCEL 4:
That portion of Lot 6, Block 3, in the City of San Bernardino, County of San Bernardino, State of
California, as shown on the map of West Highlands, recorded in Book 5 of Maps, Page 77, in the
office of the County Recorder of said County, described as follows:
Commencing at the northwesterly comer of Lot 8, Tract 71096, as per map recorded in Book 90 of
Maps, Pages 61 and 62, in the office of the County Recorder of Said County; thence South 890 43'
56" East along the northerly line of said Lot 8 a distance of 0.10 feet to the Point of Beginning;
thence continuing along the northerly line of said Lot 8 a distance of 119.91 feet to the east line of a
20 foot alley as shown on said Tract 7106; thence along said east line North 000 31' 19" West 30.56
feet to the beginning of a 100 foot radius curve, concave easterly; thence along said curve through a
central angle of 22032'37" a distance of 39.35 feet; thence North 22001' 18" East 25.49 feet to the
beginning of a 60 foot radius curve, concave westerly; thence along said curve through a central
angle of 22052'39" a distance of 23.96 feet to the southwesterly right of way line as shown on
California Department of Highway's Right of Way Map No. 423013; thence along said
southwesterly right of way line South 64007' 32" East 107.16 feet; thence along said right of way
line, South 02007'57" East 68.72 feet to the Point of Beginning.
Contains 10,602 square feet, more or less.
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EXHIBIT "B" TO LICENSE AGREEMENT
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EXHIBIT "D"
TERMS OF PROJECT DDA
. Home Depot desires to purchase approximately 8.93 acres (51%) of the Property.
. MDI desires to purchase 8.5 acres (49%) of the Property.
. Upon approval of the Agreement, the (a) Project DDA shall be prepared by the Agency
outlining the respective obligations of all parties, (b) Home Depot shall prepare a draft REA
(as defined below) and a Development Agreement (as defined below).
. Aggregate purchase price shall be $4,463,600 (the "Purchase Price"). Home Depot's share
of the Purchase Price shall be $2,288,000 and MDI's share of the Purchase Price shall be
$2,175,600.
. Home Depot agrees to deposit $50,000 ("Earnest Money") into Escrow with Lawyers Title
Insurance Company ("Title Company"), which is non-refundable following expiration of the
Inspection Period (as defined below), but applicable to Home Depot's share of the Purchase
Price.
. In the event MDI is unable to fulfill the obligations of the Project DDA, the Development
Agreement or the REA, the Agency shall either assume the responsibilities of MDI or assign
MDI's rights to a new development company approved by Home Depot, in Home Depot's
sole and absolute discretion, or, at Home Depot's sole option, to Home Depot.
. Timelines in the Project DDA shall commence upon the later of (a) execution of the Project
DDA, (b) execution of the Development Agreement, or (b) conceptual approval of the REA
(the "Commencement Date").
. Home Depot and MDI shall each have 180 calendar days after the Commencement Date (the
"Inspection Period") to conduct due diligence.
. Home Depot and MDI shall each have the right, at its election, to extend the Inspection
Period for 2 periods of 60 calendar days each by notice to the Agency and the other party on
or before the last day of the Inspection Period or the then current extension thereof, as the
case may be.
. Home Depot and MDI shall each have the right, in its sole and absolute discretion, to
terminate the Project DDA as to such entity for any reason on or before the expiration of the
Inspection Period.
. Home Depot and MDI shall each have 18 months after the expiration of the Inspection
Period, as may be extended (the "Entitlement Period") within which to pursue all
"Entitlements" necessary or desirable to construct, occupy and operate (i) for Home Depot, a
prototypical Home Depot Home Improvement Store, and (ii) for MDI, additional retail
buildings as shown on the Site Plan (collectively, the "Project") upon terms and conditions
acceptable to such part, in its respective sole and absolute discretion. The Entitlement Period
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shall be extended by 6 months if either Home Depot or MDI has made commercially
reasonable efforts to obtain all the approvals necessary to construct the proposed
development. In the event that Home Depot requests the Entitlement Period be extended for
6 months, Home Depot agrees to deposit an additional $50,000 into Escrow with the Title
Company, which is non-refundable following expiration of the Entitlement Period, but
applicable to Home Depot's share of the Purchase Price. The Entitlement Period shall be
automatically extended in the event that either party is engaged in any legal litigation over
the Project. The "Entitlements" shall include, without limitation: (i) producing, with the
help of city staff, a comprehensive site design and elevations, and sign program that are
similar to those found in a first class shopping center of this nature. (ii) rezoning and
variances necessary to permit the construction (which includes any and all building permits
and approvals from all of the utility companies or agencies that are required to construct the
Project) and operation of the Project at the respective party's sole cost and expense.
. The Agency and Developer shall cooperate and use commercially reasonable efforts to
process entitlements for the Project and to obtain all applicable zoning and other required
approvals to permit (i) the construction of approximately 70,000 square feet of general retail
buildings on the MDI Parcel, and (ii) a 107,000 square foot Home Depot building with an
approximate 30,000 square foot garden center (final size to be determined by final approved
site plan) on the HD Parcel, including the sale of typical home improvement items found in
Home Depot stores nationally, and incidental rights to (a) stage and temporarily store
merchandise around the perimeter of the building, (b) unload product off of flatbed trucks,
(c) sell Christmas and other seasonal items in the parking lot, (d) have rights to display
products from the front sidewalk, and (e) if allowed by the City, have the right to sell food
for on premises consumption both indoors and outdoors in an area not to exceed 1,000 square
feet per food sales area
. Each Developer shall pay for processing ofthe entitlements unique for its respective use.
. If a Developer has not obtained all entitlements for its portion of the Property within 48
months from the Commencement Date, such Developer shall have the option to cancel the
Project DDA with respect to its portion of the Project.
. The Closing on the Property shall be subject to receipt by a Developer of all necessary
building permits.
. Each Developer shall have until the expiration of the Inspection Period to examine a survey
of and title to the Property and to notify the Agency of any objectionable matters. The
Agency shall have until 10 calendar days following receipt of a Developer's objections to
cure the same to the satisfaction of such Developer or to agree in writing to do so at Closing.
In the event the Agency is unable to cure any objections to the satisfaction of a Developer,
such Developer shall have the right to (i) take title to its portion of the Property despite the
existence of such matter, or (ii) terminate its obligations under the Project DDA.
. The closing shall be held within 45 calendar days (the "Closing") after any and all
Entitlements have been received for the Project. At Closing, the Agency shall (a) convey fee
simple title to the respective portions of the Property by grant deed, subject only to those
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exceptions to title accepted by such Developer, (b) cause possession of the Property to be
delivered to the Developer unoccupied, free of any right of possession or claim to right of
possession by any party other than Developer, (c) deliver the Property in a rough graded
condition with all utilities from previous structures removed with re-compaction of acres
where utilities were removed and with all environmental conditions remedied and/or
mitigated, if and as required by the terms of the Project DDA.
. The Developer and Agency acknowledge that the timelines for each Developer under the
Project DDA may not run concurrently.
. Home Depot anticipates closing its existing store located at 1055 West 21 st Street on or
before January 31, 2014; provided, however, Home Depot shall be under no obligation to
close such store and will not provide a covenant that such store will be closed.
. At Closing, the Agency shall be responsible for: (i) the Agency's attorneys' fees; (ii) all
recording and transfer taxes and tax collection fees; (iii) all recording fees on recordable
documents; (iv) the basic premium for a standard owner's title policy (a "Title Policy"); and
(v) all "greenbelt", "roll-back" and other deferred taxes.
. At Closing, each Developer shall be responsible for: (i) such Developer's attorneys' fees;
(ii) any endorsements to its Title Policy; and (iii) the cost of any examinations, test, studies
and investigations of the Property performed by or on behalf of such Developer.
. Home Depot shall draft a restriction and easement agreement ("REA"). The REA will
contain certain restrictions and obligations governing the development and operation of the
Project, including, without limitation, a restriction prohibiting any portion of the MDI Parcel
from being used as home improvement center or for any business which sells, displays,
leases, rents or distributes certain items or materials, singly or in any combination detailed in
the REA. An excerpt is attached as "Schedule 1". The REA shall also include general use
restrictions encumbering the Project, which contain Home Depot's standard list of prohibited
and objectionable uses. Further, the REA shall contain provisions which provide for
seasonal sales areas; parking and vehicle and pedestrian access easements; critical access
drives; self-help rights; remedies on default; prohibitions against the use and disposal of
hazardous substances; maximum building areas; height restrictions on improvements
constructed within the Project; possible "no build" areas or view corridors required to protect
visibility of improvements; restrictions on the location and size of outlots or outparcels
within the Project and the height of improvements constructed thereon; and such other
matters commonly addressed in similar agreements affecting retail shopping centers of
similar class in the market area.
. Home Depot shall draft a development agreement (the "Development Agreement")
governing the Agency's responsibilities for certain demolition and minimal site work, Home
Depot's construction of off-site improvements and Home Depot/MDI's obligations for
sharing soft costs during the Inspection Period, Entitlement Period and during post-Closing
design and construction of the off and on-site work. During the Inspection Period, a
predevelopment budget shall be prepared and the required holdback amount by the Agency
shall be estimated to be deposited in a joint escrow with the Title Company for its pro rata
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share of the estimated soft costs, permits, fees, and construction costs necessary to complete
demolition work that the Agency began, but has not completed and is requesting be
completed by Home Depot, pursuant to an escrow agreement between Home Depot, the
Agency and the Title Company (the "Escrow Agreement"). After the Project is entitled, a
further holdback deposit by the Agency pursuant to the Development Agreement shall be
estimated to pay for the design and development of all plans, for plan check fees and any
other costs related to the approval of any and all plans necessary to construct the off and on-
site work and extension of all utilities required to build the Project, and the release of the
funds to Home Depot shall be made via progress payments as the work is completed, as
governed by the Development Agreement and Escrow Agreement. In the event the Agency
sells the MDI Parcel to MDI, or another party, then such party shall reimburse the Agency at
its Closing for all holdbacks or amounts disbursed to Home Depot by the Title Company
pursuant to the Escrow Agreement. Further, MDI shall deposit with the Title Company the
estimated funds to complete the Project. The scope of the work provided by the Agency
shall be:
1. Demolition of all existing improvements/infrastructure above and below grade
and all clearing and rough grading of the Property pursuant to Home Depot's
requirements. The Agency shall maintain site in compliance with all NPDES
requirements.
2. Impact fees shall be negotiated and will be fixed in the Project DDA.
3. Utilities of a sufficient size and capacity to meet Home Depot criteria shall be
brought to the Property line at such locations determined by Home Depot.
. Home Depot shall be responsible for the construction of its own building at its own cost.
MDI shall be responsible for the construction of its buildings at its own cost.
. Home Depot shall not covenant that it will construct a building nor will it covenant to open
or operate. Home Depot shall guarantee completion of its building once construction has
started. The Agency shall furnish to Home Depot evidence that its existing loans have been
modified to eliminate any form of a covenant by Home Depot to build, open or operate. If
Home Depot has not started construction of the Home Depot building within 24 months after
Closing, the Agency shall have the option but not the obligation to re-purchase the Home
Depot site at the same price. If for some reason Home Depot decides not to move forward
with the Project, then Home Depot agrees that it will forfeit all plans, reports and studies, that
Home Depot has prepared for the Project to the Agency, at no cost to the Agency.
. If Hazardous Substances are determined to be present on the Property (other than Hazardous
Substances introduced by a Developer), the Agency shall take all steps necessary to promptly
remove or otherwise abate all such Hazardous Substances in accordance with all applicable
requirements up to an amount of $500,000. The Agency and Developer will approve any
remediation of hazardous materials affecting the operation or development of the Property.
If cost of remediation exceeds $500,000 to the Agency, and the Agency elects not to pay for
the overage, the Agency shall have the right to terminate the Project DDA unless either or
both Developers agree to assume the cost of such overage. The Agency shall be responsible
for cost associated with any environmental remediation not caused by Home Depot and MDI.3
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Schedule 1 to Exhibit D
5. RESTRICTIONS ON USE
5.1 Home Improvement Store Restrictions: No portion of the Shopping Center other
than the HD Parcel shall be used for a home improvement center or for any business which sells,
displays, leases, rents or distributes the following items or materials, singly or in any
combination: lumber, hardware, tools, plumbing supplies, pool supplies, electrical supplies,
paint, wallpaper and other wall coverings, window treatments (including draperies, curtains and
blinds), kitchen or bathrooms or components thereof (including tubs, sinks, faucets, mirrors,
cabinets, showers, vanities, countertops and related hardware), windows, hard and soft flooring
(including tile, wood flooring, rugs and carpeting), siding, ceiling fans, lawn and gardening and
garden nursery supplies, equipment (including, without limitation, lawnmowers) and products,
artificial and natural plants, outdoor cooking equipment and accessories, patio furniture and patio
accessories, Christmas trees, indoor and outdoor lighting systems and light fixtures, cabinets and
unfinished and finished furniture, kitchen and household appliances, closet organizing systems,
pictures or picture framing, interior design services, or other products generally sold in a retail
home improvement center, except for the incidental sale of such items. An "incidental sale of
such items" as to any occupant is one in which there is no more than the lesser of (i) five percent
(5%) of the total Floor Area of such business, or (ii) 1,000 square feet of sales and/or display
area, relating to such items individually or in the aggregate.
5.2 Shopping Center Restrictions:
(a) No portion of the Shopping Center other than the HD Parcel shall be used
for non-retail use or for any of the following purposes: a surplus store; gun range; the sale of
guns as a primary use; car wash facility; a warehouse; an animal kennel; theater, auditorium,
sports or other entertainment viewing facility (whether live, film, audio/visual or video); bowling
alley; skating rink; fitness center, workout facility, gym, health spa or studio, or exercise facility;
restaurants which derive more than 25% of their gross sales from alcohol sales; business office
usage (defined as any office that does not provide services directly to a consumer); other than
incidental in connection with non-prohibited uses, retail office usage (defined as any office
which provides services directly to consumers, including but not limited to financial institutions,
real estate, stock brokerage and title companies, travel and insurance agencies, and medical,
dental and legal clinics).
(b) No portion of the. Shopping Center shall be used for any of the following
purposes: a flea market or business selling so-called "second hand" goods (the term "second
hand" shall mean stores which sell good primarily as a service to the public rather than to a retail
customer for a profit); cemetery; mortuary; any establishment engaged in the business of selling,
exhibiting or delivering pornographic or obscene materials; a so-called "head shop"; off-track,
betting parlor; junk yard; recycling facility or stockyard; motor vehicle or boat dealership, repair
shop (including lubrication and/or service center) that stores vehicles outdoors overnight, a body
and fender shop, or motor vehicle or boat storage facility (neither the foregoing restriction nor
anything else in this Agreement to the contrary shall preclude the owner of the HD Parcel to
undertake the sale or rental of delivery vehicles and trailers to its customers as part of its home
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improvement business); a mini-storage or self-storage facility; a laundromat or dry-cleaning
facility (but this shall not be deemed to prohibit nominal supportive facilities for on-site service
oriented to pickup and delivery by the ultimate consumer or so-called "green technologies" that
are environmentally friendly); a bar, tavern or cocktail lounge; a discotheque, dance hall, comedy
club, night club or adult entertainment facility; billiard or pool hall; massage parlor, game parlor
or video arcade (which shall be defined as any store containing more than three (3) electronic
games); a beauty school, barber college, reading room, place of instruction or any other
operation catering primarily to students or trainees and not to customers (but shall specifically
not prohibit a school which is incidental to a primary retail purpose); office usage other than
incidental in connection with non-prohibited uses; industrial, residential or manufacturing uses,
school or house of worship.
(c) Without the prior written consent of Home Depot, the following shall not
be allowed to operate in the Shopping Center or Common Area, except as otherwise permitted in
this Agreement: traveling carnivals, fairs, auctions, shows, kiosks, booths for the sale of
fireworks, sales by transient merchants utilizing vehicles or booths and other promotions of any
nature. Except as otherwise permitted in this Agreement, in the event that unauthorized Persons,
including without limitation tenants or invitees of tenants occupying Buildings now or at any
future time located in the Shopping Center, utilize the parking area for other than temporary
parking by customers while shopping in the Shopping Center, Developer shall, at its sole
expense, upon written request by Home Depot, take whatever action as shall be necessary to
prevent said unauthorized use.
(d) No portion of the Shopping Center shall be used for a business or use
which creates strong, unusual or offensive odors, fumes, dust or vapors; emits noise or sounds
which are objectionable due to intermittence, beat, frequency, shrillness or loudness; creates
unusual fire, explosive or other hazards, or materially increases the rate of insurance for any
other parcel, owner or occupant; provided, however, the operation of a typical Home Depot
home improvement store shall not be deemed to be in violation of this Section 5.2( d).
(e) No oil development operations, oil refining, quarrying or mmmg
operations of any kind shall be permitted or in any portion of the Property, nor shall oil wells,
tanks, tunnels, or mineral excavation or shafts be permitted upon the surface of any portion of the
Property, or within five hundred (500) feet below the surface of any portion of the Property. No
derrick or other structure designed for use in boring for water, oil, natural gas or other minerals
shall be erected, maintained or permitted on any portion of the Shopping Center.
(f) No portion of the Common Area shall be used for the sale, storage or
display of merchandise or food; provided, however, that (i) the display of delivery vehicles for
sale and/or rental to its customers as part of the owner of the HD Parcel's home improvement
business shall be permitted, and (ii) the sale of merchandise by the owner or occupant of the HD
Parcel shall be permitted from the parking lot located on the HD Parcel.
(g) For purposes of this Agreement, all service areas shall be the sole
exclusive property of the owners of the buildings associated with such areas and each owner
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thereof shall have the exclusive right to use such areas for whatever purpose such owner deems
appropriate, including, without limitation, the sale and display of merchandise.
(h) For purposes of this Agreement, persons who are not owners or occupants
engaging in the following activities in any portion of the Shopping Center
will not be considered to be permittees under this Agreement; (i)
exhibiting any placard, sign, or notice that does not advertise an existing
business in the Shopping Center; (ii) distributing any circular, handbill,
placard, or booklet promoting an existing business in the Shopping Center;
(iii) soliciting memberships or contributions for an existing business in the
Shopping Center; (iv) parading, picketing, or demonstrating; and (v)
failing to follow regulations relating to the use of the Shopping Center.
This Agreement is not intended to, and does not, create or impose any obligation on a party to
operate, continuously operate, or cause to be operated a business or any particular business in the
Shopping Center or on any portion ofthe Property.
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