HomeMy WebLinkAbout1982-3551
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RESOLUTION NO. 82-355
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZINGTHE
EXECUTION OF DISPOSITION AND JOINT DEVELOPMENT AGREEMENT, LYTLE
CREEK HOUSING DEVELOPMENT, WITH PEACOCK ENTERPRISES, LIMITED, FOR
THE DEVELOPMENT OF PROPERTY LOCATED ON THE OLD METCALF SCHOOL SITE
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS;
SECTION 1. Recitals.
(a) The Mayor and Common Council previously requested
proposals for development of the property located at the southwest
corner of Eureka Avenue and Poplar Street in the City of San
Bernardino, site of the old Metcalf School, to be developed into
seven units of residential housing for persons of low income.
Several proposals were received from prospective developers.
(b) After evaluating all proposals received, the
proposal of Peacock Enterprises, Limited, was determined to be
the best and most suitable, and an exclusive right to negotiate
a. Disposition and Joint Development Agreement between the City
and Peacock Enterprises, Limited, was authorized by the Mayor and
Common Council.
(c) Negotiations between representatives of the City
and Peacock Enterprises, Limited, and other interested parties,
have resulted in a proposed Disposition and Joint Development
Agreement satisfactory to both parties, a copy of which is annexed
Hereto as "Exhibit 1" and incorporated herein by reference.
(d) Government Code for the State of California,
Section 37364, provides that notwithstanding any provision of a
city's charter, or any other provision of law, whenever the legis-
lative body of a city determines that any real property or inter-
est therein owned by the city can be used to provide housing
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affordable to persons and families of low or moderate income, as
defined by Section 50093 of the Health and Safety Code or as
defined by the United States Department of Housing and. Urban
Development or its successors, and that such use is in the city's
best interests, the city may sell, lease, exchange, quitclaim,
convey, or otherwise dispose of such real property or interest
therein at less than fair market value to provide such affordable
housing under whatever terms and conditions the city deems best
suited to the provision of such housing.
SECTION 2. Findings.
(a) The Mayor and Common Council of the City of San
Bernardino do find that real property presently owned by the City,
located at the southwest corner of Eureka Avenue and Poplar Street
in the City of Sar. Bernardino, the legal description of which is
set forth in "Exhibit 2" annexed hereto and incorporated herein
by reference, can be used to provide housing affordable to persons
and families of low income, as defined by Section 50093 of the
Health and Safety Code or as defined by the United States Depart -
19 ent of Housing and Urban Development.
20 (b) The Mayor and Common Council do further find that
21 Iluse of such property for the development of seven units of resi-
22 dential housing for persons of low income as so defined is in the
23 City's best interests, and that the terms and conditions specified
24 in "Exhibit 1" for the sale and other disposition of such real
25 �property at less than fair market value to provide such affordable
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housing are reasonable terms and are best suited to the provision
of such housing.
28 II " ' .
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SECTION 3. Authorization.
The Mayor is hereby authorized and directed to sign and
execute on behalf of the City of San Bernardino the Disposition
and Joint Development Agreement with Peacock Enterprises, Limited,
a copy of which is annexed hereto and incorporated herein as
"Exhibit 1".
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a regular meeting thereof, held on
the 16th day of August 1982, by the following
vote, to wit:
AYES: Council Members Castaneda, Reilly, Hernandez,
Quiel, Strickler
NAYS. None
ABSENT: Council Member Hobbs
City Clerk
The foregoing resolution is hereby approved this -C/ day
of August , 1982.
Approved as to form:
ty Att(5rney
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ity or bar bernaraino
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DISPOSITION AND JOINT DEVELOPMENT AGREEMENT
LYTLE CREEK HOUSING DEVELOPMENT
BETWEEN THE CITY OF SAN BERNARDINO AND
PEACOCK ENTERPRISES, LTD.
THIS DISPOSITION AND JOINT DEVELOPMENT AGREEMENT is made and
entered into this,::' day of r� , 1982, by and
between the CITY OF SAN BERNARDINO, a municipal corporation,
herein called "City", and PEACOCK ENTERPRISES, LTD., a California
limited partnership, whose address is 1313 West Civic Center
Drive, Suite 4, Santa Ana, California, 92703, herein called
"Developer".
City and Developer agree as follows:
1. Recitals.
(a) The parties recognize the objectives of the
Community Redevelopment Law of the State of California (Health &
Safety Code Sections 33000, et seq.) and the state policy that
?r_ovision of housing for all Californians is a concern of vitae
statewide importance, and the stress thereon established by the
Legislature in Government Code Section 37364 toward encouragement
of the development of affordable housing for families of low or
moderate income.
(b) City has requested proposals for the development of
affordable housing for persons of low and moderate income on
certain property owned by the City known as the Metcalf property,
located at the southwest corner of Poplar and Eureka Streets,
comprising 1.28 acres, the legal description of which is set forth
in full in Exhibit "I" which is annexed hereto and incorporated
;herein by reference. This property is hereinafter referred to as
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"the Property". The proposal put forth by Developer for such a
project has been determined to be the most favorable proposal, and
extended negotiations have been conducted between City and
Developer for the purpose of establishing all terms and conditions
under which the development of affordable housing on the Property
can be best completed.
(c) The Property was obtained by City with Community
Development funds, provided by the federal government, and
disposition of the Property therefore must be in compliance with
federal regulations.
(d) The provisions of Government Code Section 37364 have
preempted the provisions of the City's Charter as to sale of real
property where the purpose of such sale is to provide affordable
housing to persons and families of low or moderate income, and
said law provides that the City may sell, lease, exchange,
(quitclaim, convey or otherwise dispose of such real property or
interest therein at less than fair market value to provide such
affordable housing under whatever terms and conditions the City
deems best suited to the provision of such housing, subject to
restrictions that the Property must remain continually affordable
to such persons and families for a period of not less than thirty,
nor more than forty, years pursuant to a method prescribed by the
City.
(e) The parties have reached agreement as to the manner
in which the Property which is the subject of this agreement can
best be developed for purposes of providing affordable housing to
persons and families of low or moderate income, and City desires
to sell and Developer desires to purchase the Property in
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accordance with the provisions of this agreement.
2. Implementation. Now, therefore, it is agreed between the
parties hereto as follows:
(a) Sale of Property, Conveyance Terms. Subject to all
terms, covenants and conditions of this agreement, City agrees to
convey the Property to Developer at a total acquisition price of
Dne Dollar ($1.00). j
(b) Housing Units. Developer agrees to develop a seven -
unit "factory built" housing subdivision on the Property, complete
with irrigation, landscaping and fencing.
(c) Deed; Conditions for Delivery. The grant deed to
the Property shall be delivered to Developer upon submission by
Developer and the approval by City of
(1) Final subdivision plans,
(2) Sales agreement or accepted purchase order
between Developer and Hallmark Southwest Corp. for the purchase of
seven factory built housing units,
(3) A faithful performance bond or letter of credit
in the amount of $200,000.00, or an unconditional and irrevocable
commitment for a construction loan to assure repayment of the loan
provided for in (d) below,
(4) Evidence of permanent "take out" financing or
other commitment for permanent financing from a private lending
institution or any other reliable lending source.
(d) Loan; Terms; Repayment. At the time that Cite
executes its grant deed to the Property, City agrees to provide an
interest-free construction loan in an amount not to exceed
$190,000 from the joint City/County Community Development Block
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Grant Revolving Loan Fund administered by the County Housing
Authority of Sari Bernardino County. City shall make such loan
available at such time as Developer executes a promissory note in
form satisfactory to Developer and City's City Attorney assuring
repayment of the loan in full no later than eight months from the
date of the loan.
(e) Property; Vacation of Alley. City shall forthwith
proceed to abandon or vacate the alley running north to south
through the Property.
(f) Fees; Reimbursement. City agrees to reimburse
Developer, following payment by Developer of such fees, an amount
equal to the development fees paid by Developer to City for
development of this project. Reimbursement of such funds shall be
accomplished through the establishment of a fund to be known as
the Lytle Creek Housing Development Fund for the purpose of
debiting permit, inspection and other service based fees.
(g) Sales; City Subsidy. Upon completion of the
construction contemplated by this agreement, Developer agrees to
sell each of the units to low income families whose gross annual
family incomes do not exceed eighty percent of the San Bernardino
County median family income, which has been established at
$22,150.00. Each unit shall be sold for a price not exceeding
$40,000.00 except that, at his or her sole option, any qualified
buyer who has financial means to pay a larger down payment than
would be required for the $40,000.00 price shall be permitted to
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contract for a price
in excess
of $40,000.00, with
any part
of the
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price over $40,000.00
deducted
from City's subsidy
interest
which
29 11will be secured by a second and subordinate trust deed or other
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security interest. The City agrees to use Community Development
funds to subsidize the difference between that amount paid by
buyer and the market value of each of such homes, or the cost to
develop each (including the developer's profit), whichever is
less, provided, however, that the total subsidy for all units
shall not exceed the sum of $122,150.00, nor shall the subsidy
exceed $20,000.00 for any one unit.
(h) Security for Subsidy; Subordination. Each deed to
be issued by Developer shall be subject to a second and
subordinate mortgage or trust deed, which mortgage or trust deed
shall be subordinate to the primary financing arranged for the
purchase of each of the homes. The exact form of such trust deed
shall be in form acceptable to Developer and the City Attorney of
City, and shall be in a form of equity sharing, contingent
interest, shared appreciation, or other suitable mortgage or trust
deed structure.
(i) Affordability for Thirty Years as Condition. Each
deed issued by Developer shall establish, as a condition running
with the land, the requirement that such home shall continue to be
affordable as required by Government Code Section 37364 for a
period of not less than thirty, nor more than forty, years
pursuant to the method prescribed by the City, which shall be
incorporated in the restrictions. The form of this restriction
shall be designated by the City Attorney, with approval of
Developer.
(j) Construction According to Approved Proposal. The
homes to be developed pursuant to this agreement shall be
constructed by or under the direction of Developer in full and
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complete compliance with the plan proposed by Developer by letter
dated May 3, 1982, except as modified by written agreement between
the parties. For purposes of plan changes only, approval on
behalf of the City may be granted by the Executive Director of the
Community Development Commission.
(k) Obligations of City. The City shall have no
obligation whatsoever toward Developer, other than as specifically
set forth in this agreement. Upon satisfactory completion of the
9 project, and sale of all homes to families of low income, City
10 shall release the faithful performance bond or letter of credit
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ovided to City, provided that satisfactory evidence is given
at all liens and claims have been paid in full.
(1) Obligations of Developer. Developer shall forthwith
commence the design of the project, and, within forty-five days
after signing of this agreement, shall submit tentative plans to
City and thereafter promptly and continuously prosecute to
17 completion, the planning review process, and cooperate fully with
18 City in securing approval of plans. Following final approval of
19 plans, and delivery of the deed, Developer shall complete the
20 project within eight months from the date of such final approval.
21 All improvements shall be constructed in accordance with
22 Japplicable state and local laws and regulations and shall conform
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to the provisions
of this agreement.
All work performed by
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Developer shall be
in accordance with
the proposal of Developer
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dated May 3, 1982,
a copy of which is
on file with the
26 JRedevelopment Agency of the City of San Bernardino, and which is
27 J�incorporated herein by reference. Any change from the
28 JIspecifications of that proposal shall be approved by the Executive
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Director of the Community Development Commission. Time is of the
very essence of this agreement. The method of selection of buyers
of the subsidized housing shall be established by Developer by
written proposal within six months from the date of this agreement.
Such method is subject to approval by the Executive Director of
the Community Development Commission.
(m) Access to the Property. Prior to delivery of the
deed to the Property to Developer, City shall permit Developer
access thereto, whenever and to the extent necessary to carry out
the provisions of this agreement; subsequent to such delivery,
Developer shall permit access to the property to the City whenever
sand to the extent necessary to carry out the provisions of this
agreement. In no case shall there be any compensation payable or
charge made in any form by or to either party for any such access.
(n) Certificate of Completion. Promptly after
completion of the improvements in accordance with the provisions
of this agreement, City will furnish Developer with an appropriate
certificate of completion. Said certificate by the City shall be
a conclusive determination of satisfactory performance of this
agreement, except that this agreement shall remain in full force
and effect until all homes have been sold in accordance herewith.
(o) Restrictions on Use. The Developer agrees for
itself and its successors and assigns, and every successor in
interest to the property, or any part thereof, that the Developer
and such successors and assigns shall
(1) Devote the property to, and only to and in
accordance with the uses specified in this agreement.
(2) Not discriminate upon the basis of race, sex,
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marital status, color, creed, religion, national origin or
ancestry in the sale, lease, sublease, rental or transfer or in
the use, occupancy, tenure or enjoyment of the Property or any
improvements erected or to be erected thereon, 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 discimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees of the Property, or any part
thereof.
(3)
The parties
recognize
that this is a project
funded in part with
funds from
the United
States Department of
Housing and Urban Development, pursuant to a certain grant
agreement for a Community Development Block Grant Program, and the
15 Ilparties hereto agree that the terms and conditions of the grant
16 agreement imposed by the United States Department of Housing and
17 Urban Development are hereby made a part hereof, and Developer
18 accepts full responsibility for compliance with all terms and
19 conditions of said grant agreement, as fully and effectively as if
20 IDeveloper had itself executed such agreement. Violation of the
21 Ilterms of such grant agreement shall constitute a default in this
22 Ilagreement.
23 (p) Minimum and Prevailing Wage Rates for Laborers and
24 Mechanics and Penalty. All laborers and mechanics employed under
25 the work covered by this agreement shall be paid unconditionally
26 lland not less often than once each week, and without subsequent
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deduction or
rebate on any account (except
such payroll deductions
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as are made
mandatory by law and such other
payroll deductions as
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are permitted by the applicable regulations issued by the
Secretary of Labor, United States Department of Labor, pursuant to
the Anti -Kickback Act), the full amounts due at time of payment
computed at wage rates not less than those contained in the wage
determination decision of said Secretary of Labor regardless of
any contractual relationship which may be alleged to exist between
the Developer, any contractor or subcontractor and such laborers
and mechanics. Developer further agrees that this Section shall
inure to the benefit of the City and all laborers and mechanics
employed upon the work covered by this agreement as third party
beneficiaries and that the City or any aggrieved employee may filel
an action in any court of competent jurisdiction against Developer
or any of its contractors or subcontractors for the recovery of
the difference between wage rates actually paid and the wage rates]
legally required to be paid under the provisions of this section
and the applicable regulations, statutes and laws, and further
agrees to pay reasonable attorney fees and court costs if the Cityl
or employee prevails.
(q) Prohibitions Against Assignment and Transfer.
Developer represents and agrees that its acquisition of the
property, and its other undertakings pursuant to this agreement,
are and will be used for the purpose of development of the
property under the terms of this agreement, and not for
24 11speculation in land holding. The Developer further recognizes the
25 11importance of the development of the property to the general
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fare of the community, that the qualifications and identity of
the Developer are of particular concern to the community and to
the City, and that Developer was selected because of its
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particular qualifications as well as the terms of its proposal.
Developer represents and agrees for itself and its successors and
assigns that the Developer has not made or created, and that it
will not, prior to the proper completion of the improvements as
certified by the City, make or create, or suffer to be made or
created, any total or partial sale, assignment, conveyance, or any
trust or power, or transfer in any other mode or form of, or with
respect to, this agreement or the Property, or any part thereof or
any interest therein, or any contract or agreement to do any of
the same, without the prior written approval of the City except
that, by way of security for, and only for the purpose of
obtaining financing necessary to enable the Developer or any
13 11successor in interest to the property, or any part thereof, to
14 11perform its obligations with respect to making the improvements
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under this
agreement,
and for any other purpose
authorized by
this
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agreement,
and except
as to any individual parts
or parcels of
the
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roperty
upon which
the
improvements to
be constructed thereon
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1 ave been
completed,
and
which, by the
terms of this agreement,
19 (�Developer is authorized to convey as such improvements are
20 ompleted. However, prior to the issuance by the City of the
21 ertificate provided for herein as to the completion of the
22 onstruction of the improvements on the Property, Developer may
23 nter into any agreement to sell or otherwise transfer, after the
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issuance
of such
certificate, the Property
or
any part thereor or
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'nterest
therein,
under the specific terms
of
this agreement for
26 J�ow income housing. The parties contemplate that the Developer
27 Itself, and not any assignee or transferee thereof, shall be the
28 Darty performing this agreement. No change in the principal
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hereof shall be permitted except with the consent of City, and
under such terms and conditions as City may approve.
(r) Default Prior to Conveyance. In the event of any
default in, or breach of this agreement by Developer or any
successor prior to conveyance hereof, City may institute such
proceedings as may be necessary or desirable in its opinion to
cure or remedy such default or breach, including, but not limited
to, proceedings to compel specific performance, or in the event
that prior to the conveyance of the Property to the Developer and
in violation of this agreement, the Developer or any successor in
interest assigns or attempts to assign this agreement or any
rights therein or in the Property, or the Developer does not
submit evidence that it has the necessary capital and financing,
iin satisfactory form and in the manner and by the date
respectively provided in this agreement therefor, or the Developer
does not in a timely manner perform the other undertakings of this
agreement, then this agreement, any rights of the Developer, or
any assignee or transferee in this agreement, or rights arising
from this agreement, with respect to the Property, shall, at the
option of the City, be terminated by the City, in which event the
Property and any and all improvements made thereon shall be
retained by the City as liquidated damages and as its property
without any deductions, offset or recoupment whatsoever, and
neither the Developer or assignee or transferee nor the City sha1L
have any further rights against or liability to the other under
this agreement, except entitlement to repayment of the funds loane
if such funds have not been expended on improvements to the Proper
(s) Default by Developer Subsequent to Conveyance. In
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the event that subsequent to conveyance of the Property, or any
part thereof, to the Developer and prior to completion of the
improvements as certified by the City, the Developer (or successor
in interest) shall default in, or violate, .its obligations with
respect to the construction of the improvements (including the
nature and dates for the beginning and completion thereof), or
shall abandon or substantially suspend construction work, or the
Developer (or successor in interest) shall fail to pay real estate
taxes or assessments on the Property or any part thereof when due,
or shall place thereon any encumbrance or lien not authorized by
this agreement, or shall suffer any levy or attachment to be made,
or any materialmen's or mechanic's lien or any other unauthorized
encumbrance or lien to attach, and such taxes or assessments shall
not have been paid, or the encumbrance or lien removed or
discharged, or provision satisfactory to the City made for such
payment, removal or discharge, within ten days after written
demand by the City so to do; provided, however, the Developer
shall have the right to contest, in good faith, by appropriate
proceedings, any such lien or encumbrance, and to substitute an
appropriate bond in lieu of the payment, removal, or discharge of
such lien or encumbrance; or there is, in violation of this
agreement, any transfer of the Property, or any part thereof, the
City shall have the right to reenter and take possession of the
Property and to terminate (and revest in the City) the estate
conveyed by the deed to the Developer. It is the intent of this
subsection, together with the other provisions of this agreement,
(that the conveyance of the Property to the Developer shall be made
, and that the deed shall contain a condition subsequent to
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the effect that, in the event of any default, failure, violation,
or other action or inaction by the Developer specified in this
subsection, the City at its option may declare a termination in
favor of the City of the title, and of all the rights and interest
in the Property conveyed by the deed to the Developer.
If the City records in the office of the County Recorder of
San Bernardino County a written Declaration of Forfeiture
referring to the deed by which the Property is conveyed to the
Developer, then said deed and conveyance is null and void, and al?.',
interest thereby conveyed shall forthwith and without further
notice to the Developer become forfeited and shall revert to the
City; provided, that such condition subsequent and any revesting
of title as a result thereof in the City shall always be subject
to and limited by, and shall not defeat, render invalid, or limit
in any way (i) the lien of any mortgage authorized by this
agreement and executed for the purpose of obtaining funds to
acquire and/or develop the Property, and (ii) any rights or
interests provided in this agreement for the protection of the
holders of such mortgages.
(t) Default by City Subsequent to Conveyance. In the
event that the City is unable to comply with each and every
condition hereinabove set forth, with the exception of those
conditions which are to be performed by the Developer, the
veloper and its successors and assigns may initiate an action to
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compel the
City to repurchase
the Property at
the purchase
price
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J specified
in Section 2(a) with
interest, and,
in addition,
to
27 11compel the City to reimburse the Developer for any and all sums
28 11reasonably expended by the Developer for development of the
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Property.
(u) Interest of City Employees or Officers. No officer,
official, or employee of the City, nor of the Community
Development Commission of the City, shall have any financial
interest, direct or indirect, in this agreement or the Property,
nor shall any such officer, official or employee participate in
any decision relating to this agreement or to the Property which
affects his financial interests or the interests of any
corporation, partnership or association in which he is directly or
indirectly interested. No officer, official or employee of the
City, nor of the Community Development Commission of the City,
shall be personally liable to the Developer or any successor in
interest in the event of any default or breach by the City or any
amount which may become due to the Developer or successor or on
any obligations under the terms of this condition.
(v) Notices. Any notice to be given by either party to
the other shall be given by certified mail, return receipt
requested, postage prepaid, addressed as follows:
City of San Bernardino Peacock Enterprises, Ltd.
Community Development Com. 1313 West Civic Center Drive,
Third Floor, City Hall Suite 4
San Bernardino, CA 92418 Santa Ana, CA 92703
(w) Modification, Termination, Amendment. This
agreement may be terminated, extended, modified or amended as to
all or any part thereof, with the consent of both parties. No
such termination, extension, modification or amendment shall be
effective until a written instrument setting forth the terms of
the same has been executed and acknowledged by both parties.
i
j IN WITNESS WHEREOF, the parties have executed this agreement
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on the date and year first above wr;ffan_
ATTEST:
ty Cler
proved as to form:
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ty 4ttorney
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PEACOCK. ENTERPRISES, LTD.,
a California Limited Partnership
By
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EXHIBIT
LEGAL DESCRIPTION
(METCALF SITE)
Lots 1, 2, 3, 4, S, 6, 11 and 12, Block "D", W. A. Boren's Subdivision as per plat
hereof recorded in Book 2 of Maps, page 9, records of the County Recorder of San
Bernardino County, State of California.
EXCEPTING THEREFROM, the East 10 feet of said Lots 1, 2, 3 and 4.
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EXHIBIT
LEGAL DESCRIPTION
(METCALF SITE)
Lots 1, 2, 3, 4, S, b, 11 and 12, Block "D", W. A. Boren's Subdivision as per plat
hereof recorded in Book 2 of Maps, page 9, records of the County Recorder of San
Bernardino County, State of California.
EXCEPTING THEREFROM, the East 10 feet of said Lots 1, 2, 3 and 4,
10 It 12 Jag.
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9�
10.
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