HomeMy WebLinkAboutR25-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCYORIGINAL
OF THE CITY OF SAN BERNARDINO
FROM:
Maggie Pacheco
Deputy Director
SUBJECT: JOINT PUBLIC HEARING - DISPOSITION
AND DEVELOPMENT AGREEMENT/LEASE
AGREEMENT- EL PASEO PETROLEUM, LLC
AND RELATED MATTERS (MT. VERNON
DATE: December 22, 2004 CORRIDOR REDEVELOPMENT PROJECT
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Svnopsis of Previous Commission/Council/Committee Action(s):
On November 2, 2004, Redevelopment Committee Members Estrada, Longville unanimously voted to recommend that
the Community Development Commission consider this action for approval.
Recommended Motion(s):
OPEN/CLOSE JOINT PUBLIC HEARING
(Communitv Development Commission)
MOTION A: A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT
AGREEMENT ("DDA") AND LEASE AGREEMENT ("LEASE") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND EL
PASEO PETROLEUM, LLC ("DEVELOPER") - 5TH & MT. VERNON IN THE MT. VERNON
CORRIDOR REDEVELOPMENT PROJECT AREA
MOTION B: THAT THE COMMUNITY DEVELOPMENT COMMISSION AUTHORIZE STAFF TO INITIATE
A CITY DEVELOPMENT CODE AMENDMENT TO SECTION 19.06.030 (G), RELATED TO
LOCATIONAL CRITERIA FOR CONVENIENCE STORES THAT ARE ANCILLARY TO A
SERVICE STATION, TO FACILITATE THE PROPOSED DEVELOPMENT PURSUANT TO THE
DDA BETWEEN THE AGENCY AND THE DEVELOPER AND TO FACILlATE ANY AND ALL
OTHER SIMILAR DEVELOPMENTS PROPOSED ON A CITY.WIDE BASIS
MOTION C: A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO APPROVING A CERTAIN REDEVELOPMENT COOPERATION AND
FINANCING AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND THE CITY OF SAN BERNARDINO, CALIFORNIA (EL PASEO
PETROLEUM, LLC - 5TH & MT. VERNON IN THE MT. VERNON CORRIDOR
REDEVELOPMENT PROJECT AREA)
Recommended Motions Continued to Next Pal!:e.....
Contact Person(s):
Project Area(s)
Gary Van OsdeI/Maggie Pacheco
Phone:
(909) 663-1044
MT. VERNON CORRIDOR
Ward(s):
Supporting Data Attached: I{) Staff Report I{) Resolution(s) I{) Agreement(s)/Contract(s) 0 Map(s) 0 Letters
Approx.
FUNDING REQUIREMENTS Amount: $ 1.5 Million Source:
SIGNATURE:
Commission/Council Notes:
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PlAg,ndaslComm Dev Comm;ss;onICDC 2005105-01-10 EI Pas,o. 5th & Mt. Vernon SRdoc COMMISSION MEETING AGENDA
Meeting Date: Ol/lO/2CQS
Agenda Item Number: n..s-_
Economic Development Agency Staff Report
EI Paseo DDA - Mt. Veroon Corridor
January 10, 2005
Recommended Motion(s):
OPEN/CLOSE JOINT PUBLIC HEARING
MOTION D:
(Mavor and Common Council)
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT
AGREEMENT ("DDA") AND LEASE AGREEMENT ("LEASE") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND EL
PASEO PETROLEUM, LLC. ("DEVELOPER") - 5TH & MT. VERNON IN THE MT. VERNON
CORRIDOR REDEVELOPMENT PROJECT AREA
MOTION E:
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO APPROVING A CERTAIN REDEVELOPMENT COOPERATION AND
FINANCING AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND THE CITY OF SAN BERNARDINO, CALIFORNIA (EL PASEO
PETROLEUM, LLC - 5TH & MT. VERNON IN THE MT. VERNON CORRIDOR
REDEVELOPMENT PROJECT AREA)
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P:\Agendas\Comm Dev Commission\CDC 2005\05-01-10 EI Paseo. 5th & Mt. Vernon SRdoc
COMMISSION MEETING AGENDA
Meeting Date: 01/10/2005
Agenda Item Number: !(;( 5'
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
JOINT PUBLIC HEARING - DISPOSITION AND DEVELOPMENT AGREEMENT/LEASE
AGREEMENT WITH THE REDEVELOPMENT AGENCY AND
EL PASEO PETROLEUM, LLC. AND RELATED MATTERS
(MT. VERNON CORRIDOR REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On August 21, 2003, the Redevelopment Committee recommended approval to the Community
Development Commission to authorize Staff to send out Owner Participation notices to certain property
owners who own property in the vicinity of the northwest comer of 5th and Mt. Vernon in the Mt.
Vernon Corridor Redevelopment Project Area (See Exhibit "B" - Project Site Map) advising them of
the preliminary commercial proposal submitted to the Agency from Tri Palm Development, Inc., also
known as El Pas eo Petroleum, LLC., ("Developer"). The Project Site (Phase I & II) is comprised of 8
vacant and underutilized parcels and 2 parcels that are occupied buildings.
On September 2, 2003, the Community Development Commission approved the Redevelopment
Committee's recommendation. On October 7, 2003, Staff sent out the official Statement of Interest to
Participate to all property owners within the Project Site. In accordance with the Adopted Owner
Participation Rules, Property Owners had 30 days in which to submit to the Agency a competing
proposal. No competing proposals were received. However, one property owner did submit a
Statement of Interest to Participate in the project by advising the Agency that although they do not have
an alternative proposal, they wish to remain in their present site. On October 6, 2003, an appraiser was
hired to commence the appraisal research and evaluation of the effected Project Site parcels.
On November 17,2003, the Community Development Commission approved and authorized execution
of a Redevelopment Project Study Agreement with the Developer for the Project Site which involved
studying the feasibility of a proposed development consisting of construction of an ARCO-brand retail
gasoline station, an AM/PM mini-mart and carwash ("Improvements") and a potential commercial/retail
Phase II to be located on the Project Site (See Exhibit "D" in the DDA).
On January 16, 2004, the appraisals were completed and the Agency made offers to purchase to all 8
property owners encompassing 9 private individualized parcels. To date, the Agency has acquired by
negotiations 1 parcel in Phase I (0138-115-03) and 2 parcels in Phase II (0138-114-09 & 18). The
Agency has commenced eminent domain proceedings on 2 tax defaulted parcels (0138-114-10 & 11).
To the extent possible, Agency Staff and Agency Special Counsel continue to work with or negotiate
with the remaining property owners or their legal counsel and will continue to do so until the acquisition
process is exhausted.
On January 8, 2004, the Developer submitted the Improvement Plan to the City's Development Review
for preliminary input. Because neither the Developer nor the Agency has complete control of the
Project Site parcels, the Developer is unable to proceed with the submittal of the necessary formal
Conditional Use Permit (CUP) application, in accordance with Section 19.06.030 (G) of the City's
Development Code, for formal consideration by the City.
Moreover, according to Section 19.09.030 (0) of the City's Development Code, convenience stores
must meet certain locational criteria such as no convenience store can be located less than 1,000 feet
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P:\Agendas\Comm Dev Commission\CDC 2005\05-01-10 EI Paseo - 5th & Mt. Vernon SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 0111012005
Agenda Item Number: ;(:{S
Economic Development Agency Staff Report
EI Paseo DDA - Mt. Vernon Corridor
Page 2
from existing or previously approved convenience store, etc., except service stations that are located
within the Freeway Corridor Overlay District, that include a convenience store as an ancillary use are
not subject to the 1,000 foot distance restriction. In order for the proposed development to materialize,
the City's Development Code, Section 19.06.030 (0) must be modified.
CURRENT ISSUE:
Over the course of the past few months, not only have Staff and Agency Special Counsel continued to
work towards obtaining control of the Project Site parcels but have also been working with the
Developer to finalize the business terms of a DDA and Lease for consideration by the Commission and
Common Council which is the subject of this Staff Report.
Presently, Developer, Agency Staff, and Agency Special Counsel have negotiated the following terms or
the salient points of the DDA and Lease:
. Under the proposed DDA, the Agency will continue to acquire or obtain control of the Project
Site parcels either through purchase negotiations or alternatively, by eminent domain
proceedings, if necessary. The initial Phase I Improvements encompasses 6 parcels on the north
west side of 5th & Mt. Vernon. Phase II encompasses 4 parcels, 2 of which are owned by the
Agency and 2 are tax defaulted and the Agency has initiated eminent domain proceedings (See
Map of Site).
. It is intended that the Agency will utilize Mt. Vernon Bond Proceeds to acquire the Project Site
parcels, as these are the only funds available to the Agency to accomplish the proposed
Improvements. This means that the use of Bond Proceeds come with certain restrictions such as
the Agency is unable to realize a profit on the proceeds or in the case of using the Bond
Proceeds for land acquisition, the Agency is restricted to selling the land at a profit. Under
federal tax law, the use of Bond Proceeds requires that the Agency either provide grants to
private parties or restrict the amounts received by the Agency as consideration to an amount that
is either 10% of the net amount of Bonds or 10% of the annual debt service on the Bonds. For
this reason, it is proposed that under the DDA the Agency will provide up to a $500,000 grant
for on-site work and off-site improvements to the Developer, to the extent that it is needed, plus
the Agency will absorb all the land assembly, business relocation and demolition costs; using the
annual debt service on the bonds, the Agency is restricting to receiving not more than $26,300
annually, which is the proposed lease payment under the proposed Lease noted below.
. The Agency will lease a portion of the Project Site parcels (Phase 1- 6 parcels) at this time to
the Developer for development of the ARCO gas station, AM/PM convenience store, and car
wash, at the annual rate of $26,300 during the 20 year lease period ("Lease Term") with 2 five
year options to renew; at the end of the Lease Term, the Developer will have the option of
purchasing the Project Site parcels (Phase I only) from the Agency at the appraised fair market
value as determined by a MAl appraiser; the Developer's construction investment is expected to
cost not less than $2.1 million.
. The Agency will pay for and relocate the 2 existing business owners and pay for the cost of
demolishing the 3 buildings.
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P:\Agendas\Comm Dev Commission\CDC 2005\05-01-10 EI Paseo - 5th & MI. Vernon SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 01/10/2005
Agenda Item Number: J(J5
Economic Development Agency Staff Report
EI Paseo DDA - Mt. Vernon Corridor
Page 3
. The Agency will assist the Developer in vacating the alley way, west ofMt. Vernon between 5th
and Spruce, adjacent to the existing shopping center on Herrington Avenue.
. The Agency will need to request that the City amend Section 19.06.030 (G) of the City's
Development Code, eliminating the locational criteria discussed under background of this Staff
Report, in order to accommodate the proposed development under the DDA. The justification
for the amendment is that presently under the code, the locational criteria does not apply to
developments within a Freeway Corridor Overlay District and the subject development will be
in fact located at the intersection of two major north-south, east-west corridors. In addition,
Staff believes that there are opportunities for similar projects at other non-freeway locations
throughout the City. Through the Conditional Use Permit process, the City's Planning
Commission has the ability to impose conditions, as necessary, or deny the application if the
specific location is not appropriate.
. The Agency will contribute not more than $500,000, on a reimbursable basis, to the Developer
for the installation of on and off-site improvements needed to facilitate the Improvements; if the
amount exceeds the Agency's $500,000 contribution, the Developer must make up the shortfall.
. The Developer and Agency will have the option, but under no obligation to proceed with the
development of the proposed Phase II; although, Phase II is merely a concept at this time, it may
involve the vacation of Spruce Street and the potential development of a new restaurant pad and
retail store for a gross total of 6300 sq. ft. When the time comes, the details of the development
will have to be negotiated between the parties and the matter brought forward to the
Commission.
. The Developer will be required under the DDA to commence the entitlement application process
as soon as the Agency obtains control of the Project Site Phase I parcels, expected to occur
around April 2005. Thereafter, the Developer is required to commence the CUP process and
obtain City approval and complete the Improvements by November 2005.
. The Developer has agreed that all aspects of the Improvements, including all on-site and off-site
work and the construction of the Improvements, will be subject to the payment of prevailing
wages due to the use of the Agency Bond Proceeds and the ownership of the land by the
Agency.
. The Developer has agreed to generate a minimum annual sales tax of $5 million and a minimum
assessed valuation of$2.5 million annually.
Although there are numerous responsibilities placed upon the Agency under the proposed DDA and
Lease, it is worthwhile to highlight that since the adoption of the Project Area in 1990, there has been no
tangible development interest by the development community in the Mt. Vemon Corridor
Redevelopment Project Area. It is therefore expected that the proposed Improvements will serve as a
major catalyst and an economic stimulus within the Project Area. The proposed Improvements will
result in new tax increment ($21,000 annually) and lease payments ($26,300 annually) to the Agency,
new sales tax (approximately $5 million annually) and the creation of new jobs for community residents.
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P:\Agendas\Comm Dev Commission\CDC 2005\05-0]-10 EI Paseo - 5th & Mt. Vernon SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 01110/2005
Agenda Item Number: /2JS'
Economic Development Agency Staff Report
EI Paseo DDA - Mt. Vernon Corridor
Page 4
ENVIRONMENTAL IMPACT:
An Initial Study was prepared for the DDAlLease Agreement and it was determined that a Mitigated
Negative Declaration should be adopted and a Notice of Determination should be filed with the County
Clerk in accordance with the California Environmental Quality Act (CEQA).
FISCAL IMP ACT:
In order to facilitate the Improvements, it is expected that the Agency expenditure will be in excess of
$1.4 million for both Phase I and a portion of II. This includes site acquisition for both phases,
relocation of 2 businesses in phase I, demolition of improvements in Phase I, alley vacation for Phase I,
Spruce Street vacation for Phase II, on and off site improvements and legal expenses; the estimated
Developer Improvement cost are in excess of $2 million; therefore, tax increment is approximately
$21,000 annually (See Exhibit "G" of the Agreement) (more than $750,000 for a period of36 years, the
life of the redevelopment plan) and lease payment of $26,300 annually (equaling $526,000 for 20 years)
and sales tax to the City estimated at a minimum of $5 million annually (See Exhibit "H" of the
Agreement). Moreover, it is not expected that the Agency will recapture its total investment from the
new tax increment generated from die Improvements and Lease payments during the 20-year period.
Therefore, Staff recommends that the City and Agency enter into a Cooperation & Financing
Agreement, whereby the Agency will receive 100% of the annual sales tax generated from the business
activity on the Site for a period of 10 years. The payments to be remitted by the City to the Agency
under the proposed Agreement are entirely new moneys to the City General Fund that would not have
been available to the City had it not been for the Agency's investment in the Project. Thereafter, the
City will receive 100% of their share of the annual sales tax. In return for the City's payment to the
Agency, the Agency will reinvest the new sales tax resources for other economic development or
redevelopment activities sorely needed in the Mt. Vernon Corridor Redevelopment Project Area.
RECOMMENDATION:
That the Community Development Commission and Mayor and Common Council adopt the Motion and
Resolutions.
/
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P:\Agendas\Comm Dev Commission\CDC 2005\05-01-10 El Paseo - 5th & Mt. Vernon SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 01/10/2005
Agenda Item Number: t:;;Z'S
1
RESOLUTION NO. t <<J) \P'1
2
A RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING
THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT
("DDA") AND LEASE AGREEMENT ("LEASE") BY AND BETWEEN
THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO ("AGENCY") AND EL PASEO PETROLEUM, LLC
("DEVELOPER") - 5TH & MT. VERNON IN THE MT. VERNON
CORRIDOR REDEVELOPMENT PROJECT AREA
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WHEREAS, the Redevelopment Agency of the City of San Bernardino is a public body
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corporate and politic, existing pursuant to California Health and Safety Code Sections 33100, e
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seq. (the "Agency"); and
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WHEREAS, the Community Development Commission of the City of San Bernardino
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(the "Commission") is the governing board of the Agency; and
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WHEREAS, the City of San Bernardino (the "City") is a charter city organized an
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existing under the Constitution and laws of the State of California; and
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WHEREAS, El Paseo Petroleum, LLC, is a California limited liability company (th
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Developer"); and
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WHEREAS, the Mayor and Common Council of the City (the "Common Council"), by
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adoption of Ordinance No. MC-733 on August 25, 1990, approved and adopted the
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Redevelopment Plan for the Mount Vernon Corridor Redevelopment Project (the
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"Redevelopment Plan"); and
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WHEREAS, the Mount Vernon Corridor Redevelopment Plan delineates the
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redevelopment project area for the Mount Vernon Corridor Redevelopment Project (the "Project
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Area"), which Project Area expires on June 25, 2030; and
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WHEREAS, the Commission has initiated proceedings for the adoption of a Disposition
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and Development Agreement (the "Agreement") relative to the Agency's acquisition of certain
4828-4804-9152.1 1
P:\Alu!ndas\llesolulions\Resolutions\200~\O.5-01.10 EI Pasco COC Reso Adoc
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properties located in the area of the north west corner of 5th and Mt. Vernon and within the
2
Project Area (the "Properties"), and the approval of a Lease Agreement by and between the
3
Agency and the Developer (the "Lease Agreement"), with respect to the completion of
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construction by the Developer of certain private, commercial improvements that the Developer
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proposes to construct on the Site, which improvements include an AReO-Branded Service
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Station consisting of nine multiple point dispensers which will provide 18 fueling stations and
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associated underground storage tanks, an AM/PM Mini-Mart, and a self-service car wash, and
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the proposed AM/PM Mini-Mart will include a license to sell beer and wine beverages intended
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for off-site consumption (the "Project"); and
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WHEREAS, the Agency currently owns the following parcel of Phase I Property: APN:
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0138-115-03; and
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WHEREAS, the Agency intends to acquire through negotiation or the exercise of the
power of eminent domain the following additional Phase I Properties: APN: 0138-115-02;
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APN: 0138-115-04; APN: 0138-115-05; APN: 0138-115-06; and APN: 0138-115-07; and
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WHEREAS, the Agency currently owns the following parcels of the Phase II Properties:
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APN: 0138-114-09 and APN: 0138-114-18; and
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WHEREAS, the Agency intends to acquire through negotiation or the exercise of the
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power of eminent domain the following additional Phase II Properties: APN: 0138-114-10 and
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APN: 0138-114-11; and
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WHEREAS, as a source of funding for the Project, the Agency intends to use a portion
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of the San Bernardino Joint Powers Financing Authority Tax Allocation Bonds Series 2002A
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(Mount Vernon Project) issued in the initial principal amount of Three Million Six Hundred
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Thirty-Five Thousand Dollars ($3,635,000) on or about January 1,2002 (the "Bonds"); and
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WHEREAS, in order to maintain the tax-exempt status of the Bonds, the Agency will
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comply with applicable provisions for the use of the proceeds of the Bonds as the same pertains
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P.\A&,endas\Resolutiow\ResoluIKms\200S\OS-OI-lO EI Pasco COC R.eso A.doc
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to any private business use and, the Agency will not loan Bonds proceeds to any other party nor
shall it use payments from any other private source for the payment of the debt service on the
2
3
Bonds; and
WHEREAS, the Developer has the background, experience and financial capability of
4
S
6
developing the Project and has been successful in securing a construction financial commitment
7
in the amount of approximately $2.1 million in support of the Project; and
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WHEREAS, the development of the Site pursuant to the Agreement and the Lease
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10
Agreement, and the fulfillment generally of the Agreement and the Lease Agreement, are in the
11
vital and best interests of the City and the welfare of its residents, and in accordance with the
12
public purposes; and
13
WHEREAS, the Initial Study (IS) prepared for the Project pursuant to the California
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Environmental Quality Act (Public Resources Code Section 21000 et seq., "CEQA") concluded
lS
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that the implementation of the Project with mitigation measures would not result in significant
17
adverse environmental impacts, and that accordingly, a Mitigated Negative Declaration
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("Mitigated N/D") would be prepared for the Project; and
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WHEREAS, the text of the draft Mitigated NID for the Project was made available to
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the public, responsible agencies and other interested persons for their review and comment
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between November 22, 2004 through December 13, 2004 as required by CEQA; and
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WHEREAS, the Commission has fully reviewed and considered the Final Mitigated.
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NID, as they relate to the Project and has authorized the filing of the Notice of Determination
2S
with the County Clerk; and
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WHEREAS, the Agency has prepared a report which contains an analysis of the
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Agreement and describes the manner in which the proposed disposition of the Properties to the
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Developer will assist in the elimination of blight (the "33433 Report") in accordance with
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Health and Safety Code Section 33433; and
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WHEREAS, it is appropriate for the Commission to take action with respect to the
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5
disposition of the Properties to the Developer and approve the Agreement as set forth in this
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Resolution.
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION
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ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
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BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
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Section 1.
Recitals. The above recitals are true and correct and incorporated herein
12 by reference.
13
Section 2.
Joint Public Hearinl!. On January 10, 2005, the Commission
14
commenced the conduct of a full and fair joint public hearing with the Mayor and Common
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Council of the City of San Bernardino relating to the disposition of the Properties. The minutes
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of the Agency Secretary for the January 10, 2005 meeting of the Commission shall include a
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record of all communication and testimony submitted to the Commission by interested persons
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relating to the joint public hearing, the 33433 Report and the approval of the Agreement and
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Lease Agreement.
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22
Section 3.
Findinl!s of Consistency with Redevelopment Plan. A copy of the
23 Agreement and Lease Agreement in the form submitted at the joint public hearing is on file with
24
the Agency Secretary.
The Commission hereby finds and determines as follows: "the
25
disposition of the Properties by the Agency to the Developer in accordance with the Agreement
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and Lease Agreement is consistent with the Redevelopment Plan".
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P:\Agcodas\ResolulKms\RcsolutKlIU\2005\OS.OI-IO EI Puca CDC Rcso A.dot
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Execution of Al!reement is Authorized. The Commission hereby
Section 4.
2
approves the disposition of the Properties to the Developer on the terms set forth in the
3
Agreement. The Executive Director is hereby authorized and directed to execute the Agreement
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5
and Lease Agreement on behalf of the Agency together with such technical and conforming
6
changes as may be recommended by the Executive Director and approved by Agency Special
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Counsel and is hereby authorized and directed to take all actions set forth in the Agreement on
8
behalf of the Agency for the disposition of the Properties to the Developer as described therein.
9
Section 5.
Section 33433 Findinl!s. This Resolution is adopted in order to satisfy
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the provisions of Health and Safety Code Section 33433 as those provisions relate to the
12
disposition of the Properties by the Agency to the Developer on the terms and conditions set
13
forth in the Agreement. The Commission hereby finds and determines as follows:
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(i) The Summary Report contains the information described in Health and Safety
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16
Code Section 33433(a)(2) (B);
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(ii)
The disposition of the Properties to the Developer on the terms set forth in the
18
Agreement and Lease Agreement shall assist in the elimination of conditions of
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blight in the Project Area.
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(iii) The terms and conditions of the Agreement contain assurances that the Phase I
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Properties will be redeveloped by the Developer in a manner that will, among
23
other things, alleviate blighted conditions and provide necessary commercial
24
facilities in the immediate area.
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Mitil!ated Nel!ative Declaration is Approved. The Facts and Findings
Section 6.
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are approved and adopted; the Mitigated N/D is hereby approved and the Executive Director of
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the Agency is hereby directed to file a Notice of Determination with the County of San
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P:\A&endas\RcsolutlolU\Resolutions\200S\OS-OI-IO EI Pasta CDC Reso Adoc
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Bernardino Clerk of the Board of Supervisors certifying the Commission's compliance, as the
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responsible agency under CEQA in reviewing and approving the Mitigated NID for the Project.
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Section 7.
Effectiveness. The Resolution shall become effective immediately upon
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its adoption.
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A RESOLUTIO:\' OF THE COMMVNITY DEVELOPMENT
COMl\HSSION OF THE CITY OF SAN BER~ARDINO APPROVING
THAT CERTAIN DISPOSITION AND DEVELOPMENT
AGREE:\IENT ("DDA") AND LEASE AGREEMENT ("LEASE") BY
AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO ("AGENCY") AND EL PASEO PETROLECM,
LLC ("DEVELOPER") - 5TH & MT. VER"lON IN THE :\IT. VERl\'ON
CORRIDOR REDEVELOPMENT PROJECT AREA
3
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
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7
8
9
10
II
Development Commission of the City of San Bernardino at a
meeting thereoC held
, 2005, by the following vote, to wit:
day of
on the
Abstain
Absent
Commission Members:
Nays
Aves
ESTRADA
LONGYILLE
MCGr\1\'IS
DERRY
KELLEY
.TO H1\' SOl\'
MCCA\1I\1ACK
12
13
14
15
16
17
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19
Secretary
20
The foregoing Resolution is hereby approved this _ day of
,2005.
21
77
Judith Yalles, Chairperson
Community Development Commission
Of the City of San Bernardino
23
24 Approved as to fonn
and legal content:
7-
-)
26
27
28
4S28-4~(i-1-91 ~21
2
A RESOLUTION OF THE COl\1;\,lUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BER~ARDINO APPROYIl\G
THAT CERTAIN DISPOSITION AND DEVELOP;\IENT
AGREEME1\T ("DDA") A:\D LEASE AGREE;\IENT ("LEASE") BY
AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BER.l\\ARDINO("AGENCY") AND EL PASEO PETROLEUM,
LLC ("DEVELOPER") - 5TH & MT. VERl\\ON IN THE :VIT. VERNON
CORRIDOR REDEVELOPMENT PROJECT AREA
3
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
6
7
8
9
10
II
Development Commission of the City of San Bernardino at a
meeting thereof, held
day of
,2005, by the following vote, to wit:
on the
Abstain
Absent
Commission Members:
~
Avcs
ESTR:\DA
LONGVILLE
MCGIl\:-\IS
DERRY
KELLEY
JOHI\SOI\
MCCAM\1ACK
12
13
14
15
16
17
18
19
Secretary
The foregoing Resolution is hereby approved this _ day of
20
,2005.
21
22
Judith Valles, Chairperson
Community Development Commission
Of the City of San Bernardino
")'>
~.J
24 Approved as to form
and legal content:
25
26
By:
27 City Attorney
28
48cS.4S0.l.915c.1
P :"""".-1':1'- Rpc"l".;r,.,c' R..o."I".;.-."o "I-'ll" n,,_nl _ 1 n 1="1 P-"-,,,. rTl(' lJ..c,,, ~ ,l.,,...
2
A RESOLUTIO~ OF THE COMMUNITY DEVELOPME:\'T
COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING
THAT CERTAIN DISPOSITION AND DEVELOPMENT
AGREEMENT ("DDA") A:\'D LEASE AGREE:\IE:\"T ("LEASE") BY
AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO (" AGENCY") ANDEL P ASEO PETROLEUM,
LLC ("DEVELOPER") - 5TH & !\fT. VERNON IN THE MT. VERNON
CORRIDOR REDEVELOPMENT PROJECT AREA
3
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
6
7
8
9
10
11
Development Commission of the City of San Bemardino at a
meeting thereof, held
,2005, by the following vote, to wit:
day of
on the
Abstain
Absent
~
Commission Members:
Ayes
ESTRADA
LONGVILLE
12
MCGI)lNIS
DERRY
KELLEY
JOHNSON
MCCAt'vlMACK
13
14
15
16
17
18
19
Secretary
20
The foregoing Resolution is hereby approved this _ day of
,2005.
21
22
Judith Valles, Chairperson
Community Development Commission
Of the City of San Bemardino
23
24 Approved as to form
and legal content:
25
26
By:
27 City Attomey
28
48:8-4804-915: 1
i
P .1n..",--l"c D",~^l""^"c..O"c^l"t;^nc J{)(I".n,,_nl_1n]::1 P"c..n rnr 0"",., A .~......"
1
ST ATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
2
3
4
I,
, Secretary of the Community Developmen
5
Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing an
6
7
attached copy of Community Development Commission of the City of San Bernardin
8
Resolution No.
is a full, true and correct copy of that now on file in this office.
9
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the officia
10
seal of the Community Development Commission of the City of San Bernardino this 10th day 0
11
January 2005.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Secretary of the
Community Development Commission
of the City of San Bernardino
4828-4804-9152.1 8
P lAil:cndas\Resolutions\Resolutions\200S\OS-OI-IO EI Pasco CDC Rcso Ad/;)(
(C~[Py
RESOLUTION NO.
2
A RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING A
CERTAIN REDEVELOPMENT COOPERATION AND FINANCING
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO AND THE CITY OF SAN BERNARDINO,
CALIFORNIA (EI Paseo Petroleum, LLC - 5th & Mt. Vernon in the Mt.
. Vernon Corridor Redevelopment Project Area)
3
4
5
6
WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") has
7
entered into that certain Disposition and Development Agreement ("Agreement") and Lease
8
Agreement ("Lease Agreement") with El Paseo Petroleum, LLC, ("Developer")as approved
9
and authorized for execution by the Community Development Commission of the City of San
10
Bernardino ("Commission") on January 10, 2005; and
11
WHEREAS, the Mayor and Common Council of the City of San Bernardino
("Council") authorized and approved the Agreement and Lease Agreement on January 10,2005;
12
13
and
14
WHEREAS, said Agreement and Lease Agreement provide that the Developer construct
15
certain private, commercial improvements on the site, which improvements include an ARCO-
16
Branded Service Station consisting of nine multiple point dispensers which will provide 18
17
fueling stations and associated underground storage tanks, an AMlPM Mini Mart, and a self-
18
service car wash, and the proposed AMlPM Mini-Mart will include a license to sell beer and
19
wine intended for off-site consumption ("Project"); and
20
WHEREAS, the Agency and Developer are committed to expending certain Agency and
21
Developer funds in order to implement the Project; and
22
WHEREAS, the City of San Bernardino ("City") will accrue new sale tax benefits as a
23
result of the Project, and the City desires to remit to the Agency a portion of the new sale tax
24
benefits for certain term, or any other available resources available to the City, based on the
25
P:\Agendas\Resolutions\Resolutions\200S\OS-OI-10 EI Pasco coc Reso c.doc: -1-
performance of the Developer, in accordance with the provisions of the Agreement and Lease
2 Agreement; and
3 WHEREAS, the Commission deems it desirable to approve and authorize the execution
4 of the Redevelopment Cooperation and Financing Agreement by and between the Agency and
5 City substantially in the form as attached hereto for the purpose of providing the source of funds
6 to the Agency to fulfill its obligations under the Agreement and Lease Agreement and to allow
7 the Agency to carry out its redevelopment and economic development responsibilities III
8 accordance with the Mount Vernon Corridor Redevelopment Plan ("Plan").
9 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION, AS
10 THE GOVERNING BODY OF THE CITY OF SAN BERNARDINO, DOES HEREBY
11 RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
12 Section 1. The Commission hereby find and determine that the recitals as contained
13 herein are accurate and correct in all respects.
14 Section 2. The Commission hereby approve the form of the Redevelopment
15 Cooperation and Financing Agreement substantially in the form as attached hereto and
16 authorize the execution of the final form of the Redevelopment and Financing Agreement by the
17 Executive Director of the Agency, together with such additional changes and modifications as
18 deemed necessary by the Executive Director of the Agency and Agency Special Counsel to
19 implement the intent of this Resolution.
20 Section 3. The approval, execution and implementation of the Redevelopment
21 Cooperation and Financing Agreement does not constitute a "Project" within the provisions or
22 meaning of the California Environmental Quality Act of 1970, as amended ("CEQA"), and no
23 environmental review is required in connection with the approval, execution and
24 implementation of the Redevelopment Cooperation and Financing Agreement.
25 Section 4. This Resolution shall become effective immediately upon its adoption.
P:\Allcndas\Rcsolutions\Resolutions\200S\05-01-IO EI Pasco COC Rcso Codoc -2-
3
A RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING A
CERTAIN REDEVELOPMENT COOPERATION AND FINANCING
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO AND THE CITY OF SAN BERNARDINO,
CALIFORNIA (EI Paseo Petroleum, LLC - 5th & Mt. Vernon in the Mt.
Vernon Corridor Redevelopment Project Area)
2
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by Community
6
Development Commission of the City of San Bernardino at a
meeting
7
thereof, held on the
8
9 Commission Members:
10 ESTRADA
11 LONGVILLE
12 MCGINNIS
DERRY
13
KELLEY
14 JOHNSON
15 MC CAMMACK
16
day of
, 2005, by the following vote to wit:
Abstain
Absent
Ayes
Nays
17
Secretary
18
19 The foregoing resolution is hereby approved this
day of
,2005.
20
21 Judith Valles, Chairperson
Community Development Commission
22 City of San Bernardino
23 Approved as to form and Legal Content:
24
By:
25 City Attorney
P:\Agendas\Resolutions\ResoIUlions\lOOS\OS-OI-IO EI Paseo CDC Reso C,doc -3-
RESOLUTION NO. (C ('0) [E>> Y
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERARNDINO APPROVING THAT CERTAIN
DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") AND
LEASE AGREEMENT ("LEASE") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") AND EL PASEO PETROLEUM, LLC. ("DEVELOPER")-
5TH & MT. VERNON IN THE MT. VERNON CORRIDOR
REDEVELOPMENT PROJECT AREA
3
4
5
6
7
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency")
is a public body corporate and politic; and
WHEREAS, the Agency and El Paseo Petroleum, LLC, a California limited liability
company (the "Developer") wish to enter into a Disposition and Development Agreement (the
"Agreement") and Lease Agreement (the "Lease Agreement") wherein the Agency will acquire
8
9
10
11
12
and assemble certain property located in the Mt. Vernon Corridor Redevelopment Project Area
13
(the "Phase I Properties") and allows for future acquisition and assemblage of certain additional
property located in the Mt. Vernon Corridor Redevelopment Project Area (the "Phase II
Properties"); and
WHEREAS, the Agency currently owns the following parcel of Phase I Property: APN:
14
15
16
17
0138-115-03; and
18
WHEREAS, the Agency intends to acquire through negotiation or the exercise of the
power of eminent domain the following additional Phase I Properties: APN: 0138-115-02;
19
20
APN: 0138-115-04; APN: 0138-115-05; APN: 0138-115-06; and APN: 0138-115-07; and
WHREAS, the Agreement provides that once the Agency has acquired and assembled all
21
22
of the Phase I Properties, it intends to lease the Phase I Properties (alternatively, the "Site") to
23
the Developer pursuant to the Agreement and Lease Agreement dated as of January 10, 2005,
24
wherein the Developer will construct certain private, commercial improvements on the Site,
25
which improvements include an ARCO-Branded Service Station consisting of nine multiple
P:\Aaendas\R.esolutions\Resolutions\200S\05-01-1O EI Pasco MCC Reso D.OOc
2
3
4
point dispensers which will provide 18 fueling stations and associated underground storage
tanks, an AM/PM Mini-Mart, and a self-service car wash, and the proposed AM/PM Mini-Mart
will include a license to sell beer and wine beverages intended for off-site consumption (the
"Project"); and
5
WHEREAS, the Developer shall develop and improve the Site as may hereafter b
6
transferred by the Agency to the Developer pursuant to the Agreement and Lease Agreement
7
using the design and improvement standards which will be consistent with all City conditiona
8
use development permit and entitlement requirements which will be formally applied for by th
9
Developer upon execution of the Lease Agreement and subject to approval by the Plannin
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Commission; and
WHEREAS, if the Phase II Properties are acquired and are available for disposition b
the Agency in the future to the Developer, in the sole and absolute discretion of the Agency,
separate public hearing will be conducted authorizing the disposition of such Phase II Propertie
for commercial development purposes pursuant to terms and conditions of a developmen
agreement; and
WHEREAS, the Agency has prepared and published a notice of joint public hearing i
The San Bernardino County Sun Newspaper on December 6, 2004 and December 13, 2004
regarding the consideration and approval of the Agreement; and
WHEREAS, pursuant to Health and Safety Code Section 33433(c), the Agency ma
transfer the Phase I Properties to he Developer subject to the Mayor and Common Counci
adopting a Resolution authorizing the Agency to transfer such property in light of the finding
set forth herein, pursuant to Health and Safety Code Section 33433; and
WHEREAS, the Agency has prepared a Summary Report that describes the salient point
of the Agreement and identifies the cost to the Agency of the disposition of the Phase
Properties and the development of the Project.
H~&endas\Resolutions\Reoolulionsl200S\OS-OI.lO EI Pasco MCC Ileso D.doc: 2
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED
BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS
FOLLOWS:
Section 1. Recitals. The Recitals of this Resolution are true and correct.
Section 2. Joint Public Hearine. On January 10, 2005, the Mayor and Commo
Council conducted a full and fair joint public hearing with the Community Developmen
Commission, and considered the written Agency Staff Report relating to the Agreement, th
Lease Agreement, the Summary Report and the testimony submitted relating to the dispositio
and redevelopment of the Project by the Developer pursuant to the terms and conditions of th
Agreement and Lease Agreement. The minutes of the City Clerk for the January 10, 2005, join
public hearing of the Common Council and the Commission shall include a record of al
communication and testimony submitted to the City Council and the Commission at the join
public hearing by interested persons relating to the Summary Report, the Project and th
approval of the Agreement.
Section 3. Section 33433 Findinl!s. This Resolution is adopted in order to satis
the provisions of Health and Safety Code Section 33433 as those provisions relate to th
disposition of the Phase I Properties to the Developer on the terms and conditions set forth in th
Agreement. The City Council hereby finds and determines as follows:
(i) The Summary Report contains the information described in Health and Safet
Code Section 33433(a)(2)(B); and
(ii) The disposition and redevelopment of the Phase I Properties by the Agency to th
Developer in accordance with the Agreement is consistent with the healthy, safet
and welfare of the community and the goals and objectives in the Agenc
Implementation Plan; and
(iii) The terms and conditions of the Agreement contain assurances that the Phase
Properties will be redeveloped by the Developer in a manner that will, amon
P:\Agcndas\Resolultons\RcsoIUlions\200S\OS-OI-IO EI Pasco MCC Rcso D.doc 3
2
3
4
5
6
7
8
9
10
11
12
13
14
15
other things, alleviate blighted conditions and provide necessary commerCIa
facilities in the immediate area.
Section 4. City not a Party to Aereement. The City is not a party to the Agreemen
and Lease Agreement, and nothing in this Resolution shall be deemed to constitute an approva
by the City of any application for a development project permit or approval which the Develope
may hereafter be required to obtain from the City as a condition precedent to the performance 0
the Developer's obligation under the Agreement and Lease Agreement with respect to th
redevelopment of the Project and/or the construction of the commercial facilities on the Site
The City hereby reserves its discretion under all applicable law to approve or reject, and t
impose any appropriate condition of its approval on any such development project permi
application as the Developer may hereafter submit to the City in connection with the Project.
Section 5. Approval of Disposition. The Mayor and Common Council hereb
approve the disposition of the Phase I Properties by the Agency to the Developer on the terms se
forth in the Agreement and Lease Agreement.
Section 6. Effectiveness of Resolution. This Resolution shall take effect upon it
adoption and execution in the manner as required by the City Charter.
16
III
17
III
18 III
19 III
20 III
21 III
22 III
23 III
24 III
25 /11
III
P:\Aaendas\Resolutions\Resolutions\200S\OS-OI-IO EI Pasco MCC Reso D.OOc 4
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERARNDINO APPROVING THAT CERTAIN
DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") AND
LEASE AGREEMENT ("LEASE") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") AND EL PASEO PETROLEUM, LLC. ("DEVELOPER")-
5TH & MT. VERNON IN THE MT. VERNON CORRIDOR
REDEVELOPMENT PROJECT AREA
3
4
5
6
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a
8 10th day of January 2005, by the following vote to wit:
meeting thereof, held on the
9 Council Members:
Ayes
Nays
Abstain
Absent
10
ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MC CAMMACK
11
12
13
14
15
16
17
Rachel G. Clark, City Clerk
18
19
The foregoing resolution is hereby approved this 10th day of January 2005.
20
21
22
Judith Valles, Mayor
City of San Bernardino
23
24
Approved as to form and Legal Content:
25
ByJ- t.P~
ity Attorney
P:\Agendas\Rcsolutions\Rcsolutions\200S\05-01.1O El Paseo MCC Rcso D.OOc 5
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERARNDINO APPROVING THAT CERTAIN
DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") AND
LEASE AGREEMENT ("LEASE") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") AND EL PASEO PETROLEUM, LLC. ("DEVELOPER")-
5TH & MT. VERNON IN THE MT. VERNON CORRIDOR
REDEVELOPMENT PROJECT AREA
2
3
4
5
6
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a
8 10th day of January 2005, by the following vote to wit:
9 Council Members:
Aves
Navs
10
ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MC CAMMACK
11
12
13
14
15
16
17
18
19
meeting thereof, held on the
Abstain
Absent
Rachel G. Clark, City Clerk
The foregoing resolution is hereby approved this 10th day of January 2005.
20
21
22
23
24
Approved as to form and Legal Content:
25
By:
City Attorney
PAgendas\Resolutions\Resolutions\2005\05.01-10 EI Pasco MCC Reso 0 doc 5
Judith Valles, Mayor
City of San Bernardino
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERARNDINO APPROVING THAT CERTAIN
DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") AND
LEASE AGREEMENT ("LEASE") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") AND EL PASEO PETROLEUM, LLC. ("DEVELOPER")-
5TH & MT. VERNON IN THE MT. VERNON CORRIDOR
REDEVELOPMENT PROJECT AREA
3
4
5
6
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a
8 lOth day of January 2005, by the following vote to wit:
meeting thereof, held on the
9 Council Members:
Ayes
Nays
Abstain
Absent
10
ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MC CAMMACK
II
12
13
14
IS
16
17
Rachel G. Clark, City Clerk
18
19
The foregoing resolution is hereby approved this 10lh day of January 2005.
20
21
22
Judith Valles, Mayor
City of San Bernardino
23
24
Approved as to form and Legal Content:
25
By:
City Attorney
PlAgcndas'.Rcsolulions\Rcsolutions\2005\05-01-10 EI Paseo Mec Reso 0 doc 5
RESOLUTION NO. t (Q) lPY
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING A CERTAIN
REDEVELOPMENT COOPERATION AND FINANCING AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND THE CITY OF SAN BERNARDINO, CALIFORNIA
(El Paseo Petroleum, LLC - sth & Mt. Vernon in the Mt. Vernon Corridor
Redevelopment Project Area)
3
4
5
6
WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") has
7
entered into that certain Disposition and Development Agreement ("Agreement") and Lease
8
Agreement ("Lease Agreement") with El Paseo Petroleum, LLC, ("Developer")as approved
9
and authorized for execution by the Community Development Commission of the City of San
10
Bernardino ("Commission") on January 10,2005; and
11
WHEREAS, the Mayor and Common Council of the City of San Bernardino
12
("Council") authorized and approved the Agreement and Lease Agreement on January 10,2005;
13
and
14
WHEREAS, said Agreement and Lease Agreement provide that the Developer construct
15
certain private, commercial improvements on the site, which improvements include an ARCO-
16
Branded Service Station consisting of nine multiple point dispensers which will provide 18
17
fueling stations and associated underground storage tanks, an AMlPM Mini Mart, and a self-
18
service car wash, and the proposed AMlPM Mini-Mart will include a license to sell beer and
19
wine intended for off-site consumption ("Project"); and
20
WHEREAS, the Agency and Developer are committed to expending certain Agency and
21
Developer funds in order to implement the Project; and
22
WHEREAS, the City of San Bernardino ("City") will accrue new sale tax benefits as a
23
result of the Project, and the City desires to remit to the Agency a portion of the new sale tax
24
benefits for certain term, or any other available resources available to the City, based on the
25
P:\Agendas\Resolwions\Resolulions\200S\OS-OI.l0 EI Puco MCC Reso E ,doc -1-
performance of the Developer, in accordance with the provisions of the Agreement and Lease
2 Agreement; and
3 WHEREAS, the Mayor and Common Council deems it desirable to approve and
4 authorize the execution of the Redevelopment Cooperation and Financing Agreement by and
5 between the Agency and City substantially in the form as attached hereto for the purpose of
6 providing the source of funds to the Agency to fulfill its obligations under the Agreement and
7 Lease Agreement and to allow the Agency to carry out its redevelopment and economic
8 development responsibilities in accordance with the Mount Vernon Corridor Redevelopment
9 Plan ("Plan").
10 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED
11 BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
12 FOLLOWS:
13 Section 1. The Mayor and Common Council hereby find and determine that the
14 recitals as contained herein are accurate and correct in all respects.
15 Section 2. The Mayor and Common Council hereby approve the form of the
16 Redevelopment Cooperation and Financing Agreement substantially in the form as attached
17 hereto and authorize the execution of the final form of the Redevelopment and Financing
18 Agreement by the Mayor and City Clerk, together with such additional changes and
19 modifications as deemed necessary by the City Attorney to implement the intent of this
20 Resolution.
21 Section 3. The approval, execution and implementation of the Redevelopment
22 Cooperation and Financing Agreement does not constitute a "Project" within the provisions or
23 meaning of the California Environmental Quality Act of 1970, as amended ("CEQA"), and no
24 environmental review is required in connection with the approval, execution and
25 implementation of the Redevelopment Cooperation and Financing Agreement.
Section 4. This Resolution shall become effective immediately upon its adoption.
P:\A&cndas\Resolutions\Resolutions\200S\OS-O I.) 0 EJ Pasco MCC Rc$o E _doc -2-
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING A CERTAIN
REDEVELOPMENT COOPERATION AND FINANCING AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND THE CITY OF SAN BERNARDINO, CALIFORNIA
(EI Pas eo Petroleum, LLC - 5th & Mt. Vernon in the Mt. Vernon Corridor
Redevelopment Project Area)
3
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
6
Common Council of the City of San Bernardino at a
meeting thereof, held
7
on the
day of
, 2005, by the following vote to wit:
8
9
Abstain
Absent
Nays
Council Members:
Ayes
10
ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MC CAMMACK
11
12
13
14
15
16
17
Rachel G. Clark, City Clerk
18
19 The foregoing resolution is hereby approved this
day of
,2005.
20
21
Judith Valles, Mayor
City of San Bernardino
22
23
Approved as to form and Legal Content:
24
BY~t'~
/ C ty Attorney
l/
25
P IAgendas\Resolulions\Resolutions\200S\OS-OI-IO EJ Paseo MCC Rew E doc .3.
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING A CERTAIN
REDEVELOPMENT COOPERATION AND FINANCING AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND THE CITY OF SAN BERNARDINO, CALIFORNIA
(El Pas eo Petroleum, LLC - 5th & Mt. Vernon in the Mt. Vernon Corridor
Redevelopment Project Area)
3
4
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
6
meeting thereof, held
Common Council of the City of San Bernardino at a
, 2005, by the following vote to wit:
Nays
Abstain
Absent
17
Rachel G. Clark, City Clerk
18
19 The foregoing resolution is hereby approved this
day of
,2005.
20
21
Judith Valles, Mayor
22 City of San Bernardino
23 Approved as to form and Legal Content:
24
By:
25
City Attorney
P:\Agcndas\Rcsolutions\Resolutions\200S\05-01-10 EI Pasco MCC Rcso E.OOc -3-
2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING A CERT AIN
REDEVELOPMENT COOPERATION AND FINANCING AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND THE CITY OF SAN BERNARDINO, CALIFORNIA
(EI Paseo Petroleum, LLC - 51h & Mt. Vernon in the Mt. Vernon Corridor
Redevelopment Project Area)
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
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Common Council of the City of San Bernardino at a
meeting thereof, held
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on the
day of
, 2005, by the following vote to wit:
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9
Abstain
Absent
Nays
Council Members:
Ayes
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ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MC CAMMACK
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Rachel G. Clark, City Clerk
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19 The foregoing resolution is hereby approved this
day of
,2005.
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21
Judith Valles, Mayor
22 City of San Bernardino
23 Approved as to form and Legal Content:
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By:
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City Attorney
P IAgendas\Resolutions\Resolulions\2005\OS-OJ .\0 El Paseo MCC Reso E doc .3-
CITY OF SAN BERNARDINO
AND
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
REDEVELOPMENT COOPERA nON AND FINANCING AGREEMENT
(Mt. Vernon Corridor Redevelopment Project Area)
THIS REDEVELOPMENT COOPERA nON AND FINANCING AGREEMENT (the
"Agreement") is dated as of January 10,2005, by and between the Redevelopment Agency of the
City of San Bernardino, a public body, corporate and politic (the "Agency"), and the City of San
Bernardino, California, a municipal corporation and charter city existing pursuant to the
provisions of the constitution of the State of California (the "City"), and is entered into with
reference to the facts set forth in the following Recital paragraphs:
- RECITALS -
WHEREAS, the Agency is entering into that certain Disposition and Development
Agreement dated as of January 10,2005 (the "DDA"), by and between the Agency and El Paseo
Petroleum, LLC, a California limited liability company (the "Developer"), for the acquisition by
the Agency and transfer to the Developer of certain lands within the City for the construction of,
at the minimum, an ARCO Service Station consisting of nine multiple point dispensers which
will provide 18 fueling positions and associated underground storage tanks, an AM/PM Mini-
Mart, and a self-service car wash or similar credit rated tenants to that of an ARCO Service
Station (the "Business"); and
WHEREAS, the implementation of the DDA will confer financial benefits to the City in
terms of redevelopment and reuse of the site of the Business and the creation of an aggregate of
not less than sixteen (16) new jobs within the City; and
WHEREAS. the DDA will also provide the City with a significant source of new tax
revenues from the establishment of the Business and the investment of Agency funds to cause
the acquisition of land, clearance thereof and to provide for certain off-site adjacent public
improvements; and
WHEREAS, the Agency shall incur certain financial obligations, described below as (the
"DDA Obligations"), in connection with the implementation by the Agency of the performance
items required of the Agency pursuant to the DDA and the expenditure of Agency funds to cause
the site acquisition, the site clearance and the payment of certain on-site and off-site
development related costs all to be paid from currently available Agency sources of funds; and
.826-8309-6320
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P:\l,!endasAgenda.....llachmcl11s.,Agrmls.:\mend 2005\05-01-]0 EI Paseo Coop and Financing. Agrmtrtf
WHEREAS, the anticipated tax increment revenues to be generated by the Business on
the Site, to be leased by the Agency to the Developer, will not be sufficient to reimburse the
Agency for the costs to be incurred by the Agency in furtherance of the DDA, and the Agency
does not presently have a source of tax increment revenues sufficient to reimburse the Agency
for those payments of the amounts required to satisfy the DDA Obligations; and
WHEREAS. it is necessary and desirable for the City and the Agency to enter into this
Agreement to provide the Agency with financial resources which will enable the Agency to
achieve a reasonable expectation of reimbursement for all or a portion of the amount of the DDA
Obligations, the payment of which in satisfaction of the DDA Obligations of the Agency will
hereafter be remitted by the Agency under the DDA.
NOW, THEREFORE, THE CITY AND THE AGENCY HEREBY AGREE AS
FOLLOWS:
Section 1. The City hereby authorizes and acknowledges that the Agency will incur
certain financial and performance obligations under the DDA Obligations, which are payable by
the Agency in whole from certain Agency funds which are presently available to the Agency.
The tax increment revenues to be generated to the Agency from the project to be constructed by
the Developer will be insufficient to fully repay the Agency for such initial payments of the
DDA Obligations within any financially reasonable period of time. To further encourage the
Agency to incur the DDA Obligations and to allow the Agency to timely fulfill all DDA
Obligations and the other financial obligations of the Agency, the City agrees to enter into this
Agreement to provide such long-term assistance to the Agency for the recapture of additional
revenues from an amount that is equivalent to the sales tax revenues that will be received by the
City from the operations of the Business on the site as shall be developed by the Developer For
the purposes of this Agreement, the words "DDA Obligations" mean and include any financial
and performance obligation that the Agency may undertake in furtherance of that certain DDA.
Section 2. Subject to the terms and conditions of this Agreement the City agrees to
provide redevelopment financing assistance to the Agency (the "City Assistance") each year
during the term of this Agreement in the amounts determined in the manner as provided in
Section 4 hereof. The City shall disburse the proceeds of the City Assistance in annual
installments (each a "City Assistance Payment", as further defined in Section 4) on each of the
first through the tenth anniversaries of the Opening Date (as defined herein). The receipt by the
Agency of each City Assistance Payment shall be deemed to be a partial reimbursement to the
Agency of the DDA Obligations.
Section 3. The City and the Agency each acknowledge. understand and intend that
the obligation of the City to pay each City Assistance Payment to the Agency each year during
term of this Agreement shall constitute a current expense of the City to support the
redevelopment activities of the Agency pursuant to the DDA. The obligation of the City to
provide City Assistance Payments to the Agency in each fiscal year during the term of this
Agreement is a general obligation of the City, subject to annual appropriation by the City.
Furthermore, the obligation of the City to the Agency arising under this Agreement shall not in
4826-8309-6320
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P \Agendas\Agenda AttachmentslAgrmts-Amend 2005\05.01-10 EI Pasea COOP and Financing Agrml.rtf
Furthermore, the obligation of the City to the Agency arising under this Agreement shall not in
any way be construed to be a debt of the City in contravention of any applicable constitutional
restriction of the State of California concerning the creation of indebtedness by the City.
Section 4.
(a) The first day of the calendar month next succeeding the date on which the
Business first opens for new business activities to the general public is referred to herein as the
"Opening Date", which date is presently intended to be on or before January 1,2006. The initial
City Assistance Payment shall be made on the first anniversary of the Opening Date, calculated
from first calendar day of the month following the actual opening for business as described
above, in an amount determined in accordance with Section 4(b), herein. Thereafter, on each
anniversary of the Opening Date occurring during the remainder of the term of this Agreement,
the City shall make the City Assistance Payments to the Agency, in accordance with the formula
set forth in Section 4(b), herein.
(b) The City Assistance Payments to the Agency shall be equal to One
Hundred Percent (100%) of the total amount of local sales and use taxes paid to the City, under
Revenue and Taxation Code Section 7200, et seq. (as may hereafter be amended, substituted or
modified by any successor local sales and use tax law), on the gross receipts of the Business
from the sale or lease of all tangible personal property from the Business during the first ten (10)
years of operation of the Business as presently anticipated to commence in Fiscal Year 2006 and
to terminate as of the conclusion of the Fiscal Year 2016 or portions thereof or within other fiscal
years of the City based upon the final determination of the Opening Date as defined in subsection
(a) above.
(c) The precise amount of the City Assistance Payments shall be determined
by the Agency for each Fiscal Year by reference to Revenue and Taxation Code Sections 7200,
et seq., and related remittance advice or information provided to the City by the State Board of
Equalization. If Revenue and Taxation Code Sections 7200, et seq., are amended, substituted or
modified, following the effective date of this Agreement, in a manner that affects the calculation
of the City Assistance Payments, as set forth above, then the City Assistance Payments shall be
computed in each Fiscal Year in which such amendment, substitution or modification is
effective, by reference to the Revenue and Taxation Code Sections 7200, et seq., then in effect.
(d) Provided the Business opens for retail sales business to the general
public, the City reasonably believes that funds shall be available each fiscal year for the payment
of each City Assistance Payment from legally available funds of the City. The City hereby
covenants that it shall do all things lawfully within its power to obtain funds from which to pay
City Assistance Payments to the Agency. The City further covenants and agrees to include
provisions in its budget for each fiscal year during the term of this Agreement for the payment of
the City Assistance Payments to the Agency and the City shall exercise best efforts to approve
such portion of the budget, subject to the funds then being available.
4826-8309-6320
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P'lA&endulAienda A.....menu\AamU-Amend 2OOS\OS-OI-IO EI Paseo Coop. and Fin. AimI.nf
Section 5. The Agency shall be deemed to use and apply each City Assistance
Payment to partially assist in the reimbursement to the Agency for funds advance by the Agency
as required pursuant to the DDA for fulfillment and satisfaction of the DDA Obligations of the
Agency. The Agency and the City hereby agree that the Agency shall have no obligation to
repay the City for any City Assistance Payments.
Section 6. The City shall pay City Assistance Payments to the Agency upon receipt
of a written invoice from the Agency stating that the Agency shall use and apply the City
Assistance Payment to reimburse for the DDA Obligations as incurred by the Agency. Each
such written invoice of the Agency shall set forth the current unpaid balance of the DDA
Obligations and provide an accounting of all payments made by the Agency towards the
reimbursement of the DDA Obligations during the term of this Agreement.
Section 7. This Agreement shall terminate on the earlier to occur of: (i) the tenth
(loth) anniversary of the Opening Date and the payment of the City Assistance Payment due on
the tenth (loth) anniversary of the Opening Date, if any; or (ii) the DDA Obligations are
reimbursed in full by the Agency from the City Assistance Payments and the tax increment
revenues generated by the development of the Developer upon which the Business is operated.
Section 8. This Agreement shall take effect from and after the date of adoption and
approval by the Common Council of the City and the Community Development Commission, as
the governing board of the Agency, pursuant to official action of the governing bodies thereof
and shall be effective for the period of time provided in Section 7.
[SIGNATURES ON FOLLOWING PAGEl
4826-8309-6320
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H~i<fIdaslA&cnda AnachmenlJ\Ajpnls-Amcnd 2005\O~ 1-10 EI PlIOCO Coop. and Fin. Apnt.rtf
IN WIT!\'ESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first abo\e written.
CITY
City of San Bernardino
Judith Valles
Mayor of the City of San Bernardino
(SEAL)
ATTEST:
City Clerk
APPROVED AS TO FORM:
b?~
,,c.ty Attorney
(/
I.-
AGENCY
Redevelopment Agency of the City
of San Bernardino
Gary Van Osdel
Executive Director
(SEAL)
ATTEST:
Agency Secretary
48"6-8309-63"0 I
5
IN WIT~ESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first above written.
CITY
City of San Bernardino
Judith Valles
Mayor of the City of San Bernardino
(SEAL)
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
AGEJ\'CY
Redevelopment Agency of the City
of San Bernardino
Gary Van Osdel
Executive Director
(SEAL)
ATTEST:
Agency Secretary
APPROVED AS TO FORM A~TI CONTE?\T:
Agency Counsel
48:6-8309-6320 J
5
IN WIT:\'ESS WHEREOF. the parties hereto have entered into this Agreement as
of the date first above written.
ClI"
City 0 f San Bernardino
Judith Valles
Mayor of the City of San Bernardino
(SEAL)
ATTEST:
City Clerk
APPROVED AS TO FOR,\1:
City Attorney
AGENCY
Redevelopment Agency of the City
of San Bernardino
Gary Van Osdel
Executive Director
(SEAL)
ATTEST:
Agency Secretary
APPROVED AS TO FORJ'vl ANTI CO!\TENT:
Agency Counsel
-l826-8309-6320 I
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SUMMARY REPORT PURSUANT TO SECTION 33433 CALIFORNIA COMMUNITY
REDEVELOPMENT LAW ON A DISPOSITION AND DEVELOPMENT AGREEMENT
AND LEASE AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO AND EL P ASEO PETROLEUM ,LLC
INTRODUCTION
The following Summary Report has been prepared pursuant to Section 33433 of the California
Health and Safety Code. The report sets forth certain details of the proposed Disposition and
Development Agreement ("DDA") and the Lease Agreement ("Lease") by and between the
Redevelopment Agency of the City of San Bernardino ("Agency") and EI Paseo Petroleum, LLC
("Developer").
The DDA between the Agency and the Developer is for the development of certain parcels of
land located at the northwest comer of 51h and Mt Vernon (AP# 0138-115-02,03,04,05,06 and
07 - Phase I) ( "Site"), consisting of approximately 41,000 square feet of land, by the Developer
of an ARCG-brand Service Station consisting of an 18 pump gasoline service island and
associated underground storage tanks, an AMlPM Mini-Mart, and a self service car wash,
including on-site and off-site improvements and all landscaping ("Improvements") in accordance
with the Site Plan shown as Exhibit "D" in the DDA which is located within the Mt. Vernon
Corridor Redevelopment Project Area ("Project Area").
This Summary Report is based upon information contained within the DDA and Lease, and is
organized into the following seven sections:
I. Salient Points of the A2reement: This section includes a description of the
Improvements, and the major responsibilities imposed on the Developer and the Agency
by the DDA and Lease. The Agenda Staff Report for the joint public hearing of January
10, 2005, pertaining to the DDA and Lease contain the specific details on the structure of
the DDA and Lease.
II. Cost of the A2reement to the A2enCy: This section details the total anticipated cost to
the Agency associated with implementing the DDA and Lease.
III. Estimated Value of the Interests to be Conveyed Determined at the Hi2hest Use
Permitted Under the Redevelooment Plan: This section estimates the value of the
interests to be conveyed determined at the highest and best use permitted under the
existing zoning, and the requirements imposed by the Mt. Vernon Corridor
Redevelopment Project Area ("Redevelopment Plan").
IV. Estimated Reuse Value of the Interests to be Conveyed: This section summarizes the
valuation estimate for the Site based on the required use, and with the conditions and
covenants required by the DDA and Lease.
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V. Consideration Received and Comparison with Established Fair Reuse Value: This
section describes the compensation to be received by the Agency, and explains any
difference between the compensation to be received and the established fair reuse value
of the Site.
VI. Blieht Elimination: This section describes the existing blighting conditions on the Site,
and explains how the DDA and Lease will assist in alleviating the blighting influence
pursuant to the redevelopment plan.
VII. Conformance with the Implementation Plan: This section describes how the DDA and
Lease achieves goals identified in the Agency's adopted Implementation Plan.
This report, the DDA and Lease are to be made available for public inspection prior to the
approval of the DDA and Lease.
I. SALIENT POINTS OF THE AGREEMENT
The DDA provides for the acquisition of certain parcels of land located on the Site to be
developed by the Developer with Improvements in accordance with the Site Plan attached to the
DDA as Exhibit "D".
A. Project Description:
The Developer intends to cause the development of the Improvements described above.
B. Developer Responsibilities:
The DDA requires the Developer to complete the following activities:
I. Developer shall lease the Phase I Site from the Agency in the amount of $26,300
annually for a period of not less than 20 years in accordance with the Lease.
2. Developer shall construct the Improvements in accordance with the Site Plan.
C. Agency Responsibilities:
Under the DDA, the Agency must complete or cause the following activities:
1. The Agency shall exercise its best efforts to acquire and assemble the Phase I Site for the
construction of the Improvements by the Developer.
2. The Agency shall lease the Phase I Site to the Developer in accordance with the terms of
the Lease.
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3. The Agency shall be responsible for providing certain financial assistance to the
Developer to assist with the development of certain off and on site improvements.
II. COST OF THE AGREEMENT TO THE AGENCY
The Agency costs to implement the DDA entails the costs to acquire the Phase I parcels,
relocation of two businesses, demolition of existing improvements, and contribution to certain on
and off site improvements. The approximate cost to the Agency in implementing the DDA is as
follows:
1. Acquisition Costs (based on negotiated sales and appraised values)
2. Relocation Costs (2 businesses)
3. Development On- Site Improvements (maximum)
4. Development Off-Site Improvements (maximum)
5. Demolition of Existing Buildings
7. Alley Vacation Application/Facilitation
8. Bill Board Buy Out
9. Legal Expenses
TOTAL
$579,973.00
$ 80,000.00
$250,000.00
$250,000.00
$ 60,000.00
$ 10,000.00
$120,000.00
$140.000.00
$1,480,973.00
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED
DETERMINED AT THE HIGHEST AND BEST USE PERMITTED UNDER THE
REDEVELOPMENT PLAN
Pursuant to Section 33433 of the California Health and Safety Code, this section presents an
analysis of the fair market value of the subject Site at the highest and best use, estimated to be
$579,973, which is based on an appraisal report dated December 3, 2004 conducted by (the
"Appraisal"). This Appraisal includes 6 parcels of which 2 parcels contain improvements.
In appraisal terminology, the highest and best use can be defined as the legal use (i.e., uses
allowed under the redevelopment plan) that will yield the highest value of the land. Therefore,
the definition of highest and best use is based on the value created as a result of the development
of the Site and the redevelopment goals and objectives that will be achieved under the DDA.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
The Appraisal valued the subject Site at $579,973. This value consists of vacant and
improvement land. The value of the underlying vacant Site to be conveyed to the Developer
under the Lease is $256,000.
V. CONSIDERATION RECEIVED AND COMPARISON WITH THE FAIR
REUSE VALUE
The Agency intends on using restricted bond proceeds to accomplish the acquisition and
assemblage of the Site parcels' and the Improvements. As such, the Agency is restricted under
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federal tax law to selling or leasing the Site for fair market value or for any consideration; under
federal tax law, the use of the bond proceeds requires that the Agency either provide grants to
private parties or restrict the amounts received by the Agency as consideration to an amount that
is either 10% of the net amount of bonds or 10% of the annual debt service on the Bonds. For
this reason, the Agency has set the annual Lease payments for the Site at the sum of $26,300
which is equal to the 10% of the annual debt service payments ($263,000) on the 2002 Tax
Allocation Bonds Series 2002A (Mt. Vernon Project) in the amount of$3, 635,000.
The Improvements to be developed on the Site will have an estimated construction value of $2.1
million, or an annual gross tax increment to the Agency of $21,000. Moreover, the
Improvements on the Site are expected to generate approximately $5 million in new annual sales
tax. The Agency and City of San Bernardino ("City") will enter into a cooperation agreement
whereby the City will pay to the Agency the sum of the annual sale tax generate from the
Improvements to the Agency for a period of 10 years. Assuming the $5 million annual sales, the
Agency anticipates receiving the sum of $50,000 yearly for a total of $500,000 for the lO-year
period. The proposed Improvements are consistent with the permitted uses under the
Redevelopment Plan.
VI. BLIGHT ELIMINATION
The proposed Site, which will be developed with the Improvements is currently comprised of
vacant underutilized parcels, and parcels occupied by dilapidated structures. In order to facilitate
the Improvements and development of the Site, the Agency proposes to eliminate and prevent
the spread of blight in the Project Area by:
. Installation, construction, reconstruction and redesign, or reuse of streets, utilities,
curbs, gutters, sidewalks, and other public improvements at the northwest comer
of 5th Street and Mt. Vernon Avenue;
. Acquisition and disposition of certain property for uses in accordance with the
Plan and Specific Plan for the Mt. Vernon Corridor Redevelopment Plan;
. Redevelopment of land by private enterprise for uses in accordance with the
Redevelopment Plan;
. Providing Financing of the construction of the Improvements, to the extent
permitted by applicable state and local laws, and increase the commercial base of
the City and number of temporary and permanent jobs within the City.
VII. CONFORMANCE WITH THE AB1290 IMPLEMENTATION PLAN
The primary ABI290 Implementation Plan program objective for the Mt. Vernon Corridor
Redevelopment Project Area is to eliminate conditions, which negatively impact economic
development of the community by acquiring, removing, and rehabilitating properties designated
as deficient, deteriorated, or dilapidated. To that end, the Agency plans to convey to the
Developer an approximate 41,000 square foot site for development of the Improvements.
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This Project, which will provide in excess of $5 million in new annual sales tax to the City, new
assessed valuation of $2.1 million, lease payments to the Agency in the amount of $26,300
annually, and generate 16 new permanent jobs for community residents; thus the Improvements
contemplated under the DDA will assist in the achievement of the following goals and objectives
which are contained in the Agency's Implementation Plan: elimination of blighting influences,
including deteriorating buildings, uneconomic land uses, obsolete structures, and other
environmental, economic and social deficiencies, to facilitate land assembly to prevent
piecemeal development that would leave economic potential underachieved; to re-plan, redesign,
and development of underdeveloped areas that are stagnant, or improperly utilized; and to
encourage private sector investment in the development of the Project Area.
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REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
DISPOSITION AND DEVELOPMENT AGREEMENT
(Mt. Vernon Corridor Redevelopment Project Area)
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is
dated as of January 10. 2005. and is entered into by and between the Redevelopment Agency of
the City of San Bernardino. a public body. corporate and politic. existing pursuant to California
Health and Safety Code Sections 33100. et seq. (the "Agency"), and EI Paseo Petroleum, LLC, a
California limited liability company (the "Developer"), with reference to the following recitals of
facts:
RECITALS:
A. This Agreement and the Exhibits hereto are intended to effectuate the
Redevelopment Plan for the Mount Vernon Corridor Redevelopment Project (the "Project Area")
by providing for the disposition and development of a portion of the Redevelopment Project
Area designated herein as the "Site" and the development of the "Project" thereon (as those
terms are defined in Section 1.1 herein);
B. The development of the Site pursuant to this Agreement, and the fulfillment
generally of this Agreement, are in the vital and best interests of the City of San Bernardino
CCity") and the welfare of its residents, and in accordance with the public purposes and
provisions of applicable federal, state and local laws and requirements;
C. Since the early 1970's, Agency Staff and Elected Public Officials have held
numerous meetings and discussions with prospective developers in an effort to generate
development interest and to stimulate economic development activities on the Site and
surrounding areas. Up until now, there have been no viable development proposals. The
development proposed in this Agreement will serve as a major catalyst and stimulate further
economic development interest with the Project Area.
D. Pursuant to the terms and conditions of this Agreement, the Agency proposes to
acquire certain real property specifically described in Exhibit "A" to this Agreement within the
Project Area (the "Site," as defined in Section 1.1), additionally, the Agency shall relocate
existing business-owners and assist the Developer;
E. On November 17, 2003, the Agency and Tri Palm Corporation, a California
corporation (the "Prior Developer") entered into a Redevelopment Project Study and
Redevelopment Assistance Agreement (the "Study Agreement") wherein, among other things,
the Agency was to consider and study the provision of certain redevelopment assistance to the
Prior Developer to facilitate the assembly of the certain Property, as detined hereinafter; and
wherein the Agency agreed not to negotiate with any other person or entity regarding the
P\Agendas\Agenda Anachments\Agrmts-Amend 2005\05.0]-10 EI Paseo.Sth Mt Vernon DDAdoc
4822-7696-9472.2
disposition of the certain Property. as defined hereinafter, pending the term of the Negotiation
Period as defined in the Study Agreement.
F. The Agency selected the Developer to perform these services due to its unique
qualifications and specialty training and experience in the development of the proposed project
and is competent to perform the special services required for the completion of the proposed
project.
G. This Agreement contemplates that the project proposed by this Agreement will be
developed in two separate phases on different parcels that will make up the overall Site if the
Developer elects to exercise the option to acquire the Phase II Parcels from the Agency.
H. The Site is comprised of multiple separate legal parcels of land under ownership
by eight different business owners. formally known, with respect to the Phase I Site, as Assessor
Parcel Numbers: 0138-115-02; 0138-115-04; 0138-115-05; 0138-115-06; and 0138-115-07 (the
"Phase I Properties"). and with respect to the Phase II Site, formally known as Assessor Parcel
Numbers: 0138-114-10 and 0138-114-11 (the "Phase II Properties") (collectively, the "Business
Owners").
I. The parcels of land owned by the Business Owners are generally depicted in
Exhibit "B" to this Agreement and are designated therein and in this Recital I as the Phase I
Parcels and the Phase II Parcels (collectively, the "Properties").
1. The Agency is the owner of Assessor Parcel Number 0 138-115-03 of the Phase I
Properties and Assessor Parcel Numbers 0 13 8-114-09 and 0138-114-18 of the Phase II
Properties (collectively, the "Agency-Owned Parcels"). The Agency has commenced
condemnation of Assessor Parcel Numbers 0138-114-10 and 0138-114-11, both located in Phase
II and tax defaulted properties, and adopted the requisite and respective Resolutions of Necessity
on ,2004 (collectively, the "Tax-Defaulted Parcels"). The Agency intends
to acquire the remaining Properties separately through negotiations for purchase and sale with
the subject Business Owners or alternatively, by eminent domain; regardless, the Agency shall
be responsible for payment of all costs and expenses for Site acquisition in accordance with the
terms and conditions of this Agreement.
K. After the Agency has completed the land assembly and has obtained legal
possession of the Site and of all Properties, the Agency intends to lease the Site to the Developer,
pursuant to a Lease Agreement, attached hereto as Exhibit "C".
L. Pursuant to the Lease Agreement, the Developer shall, among other things,
construct certain private, commercial improvements on the Site, specifically an AReO-brand
Service Station consisting of nine multiple point dispensers which will provide 18 fueling
positions and associated underground storage tanks, an AM/PM Mini-Mart, and a self-service car
wash, or similar credit-rated tenants, including all required on-site and off-site improvements, all
hardscape and all landscaping in accordance with the Site Plan set forth in Exhibit "D" to this
Agreement (the "Improvements," as defined in Section 1.1).
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PAgendas'Agenda AnachmemslAgrmrs-Amend :::005\O~-OI-1O El Paseo-5th 1\.1t Vernon DDt\"'doc
M. On August 22, 2003, BP West Coast Products LLC, a Delaware limited liability
company ("BPWCP") acknowledged a written request by the Prior Developer, for consideration
of a "Branding Agreement" regarding the acquisition and construction of the ARC a-branded
retail gasoline station and AM/PM Mini Market selling beer and wine to be located on the Site,
and related improvements and personal property owned by the Prior Developer, as the proposed
Franchisee. The Prior Developer made this request of BPWCP on a preliminary basis and is
prepared to assign any and all rights, title, and interest to the Branding Agreement and the
Franchise Agreement. if any, to the Developer upon the execution of this Agreement.
N. The Developer shall be responsible for payment of all costs and expenses for
construction of Improvements. in accordance with the terms of this Agreement and the Lease
Agreement.
O. The Developer estimates the total cost of construction of the Improvements at
Two Million Nineteen Thousand Dollars ($2,0 I 9,000), as set forth in detail in the "Project
Budget" (as defined in Section 1.1).
P. Contemporaneous with the execution of this Agreement and pursuant to the
California Environmental Quality Act ("CEQA"), the Agency shall consider an "Initial Study"
wherein a determination will be made that the Project qualifies for a Mitigated Negative
Declaration and will not impose a significant effect on the environment because revisions in the
Project have been made by or agreed to by the Developer.
Q. On or about January 1,2002, the Agency issued the San Bernardino Joint Powers
Financing Authority Tax Allocation Bonds Series 2002A (Mount Vernon Project) in the amount
of Three Million Six Hundred Thirty-Five Thousand Dollars ($3,635.000) (the "Bonds"). The
Bonds will be a source of funding for the Project.
R. In order to maintain the tax-exempt status of the Bonds the Agency must avoid
being deemed Private Activity Bonds pursuant to a two-prong test which is as follows: (i) may
not use more than ten percent (10%) of the proceeds of the Bond issue for any private business
use; and (ii) not more than ten percent (10%) of the payment of principal of and interest on the
Bonds may be secured by an interest in, or payments in respect of, property used for a private
business use. Accordingly, the Agency will be limited to and investment of only Twenty-Six
Thousand Three Hundred Dollars ($26,300) in the Project. Therefore, the proposed annual lease
payments from the Developer to the Agency, pursuant to the Lease Agreement (Exhibit "C"),
shall not exceed Twenty-Six Thousand Three Hundred Dollars ($26,300). The Agency will not.
loan Bonds proceeds to any other private party nor shall it use payments from any other private
source for this Project.
S. The disposition of the Site by the Agency and redevelopment of the Site by the
Developer, in accordance with this Agreement, is consistent with the goals and objectives of the
Agency Implementation Plan and will improve and alleviate blighted conditions; specifically,
abnormally high business vacancies, abnormally low lease rates, high turnover rates, abandoned
buildings, underutilized commercial property and a lack of necessary commercial facilities in the
immediate area.
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T. The Project will result in additional tax increment revenues to the Agency, will
eliminate blighted conditions on the Site, generate jobs for the local community, provide new
and modem land uses and services, and will be a stimulus of economic growth and activity in the
area which will result in new sales tax revenues for the City which is nonexistent in the Project
Area.
U. The timing and development of the Project (as defined in Section 1.1 of this
Agreement) is subject to many variables including, but not limited to, property acquisition costs,
availability of financing, market conditions, and availability of commercial tenants.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND
THE COVENANTS, CONDITIONS, REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, THE AGENCY AND THE DEVELOPER AGREE AS
FOLLOWS:
ARTICLE I
DEFINITIONS
1.1 In addition to the definitions ascribed to certain words. phrases or terms in the
preamble. Recitals or other paragraphs, Articles or Sections of this Agreement, the following
words. phrases or terms shall be defined as follows:
Alley Vacation. The term "Alley Vacation" means and refers to the Agency assistance
to the Developer for vacation by the City of that certain alley as located adjacent to the
west side of the Phase I Parcels which is intended to be vacated by the City pursuant to
the provisions of State law with respect to the vacation of public rights-of-ways and
public alleys in furtherance of the assembly of the properties required for the Project on
the Site.
CEQA. The acronym "CEQA" means and refers to the California Environmental
Quality Act, Public Resources Code, Section 21000, et seq.
Certificate of Completion. The term "Certificate of Completion" means and refers to
that certain certificate to be executed and delivered by the Agency upon the completion
of all the Developer construction activities required by this Agreement with respect to the
construction, development and completion of the Project in accordance with the terms
and provisions of this Agreement.
City. The term "City" means and refers to the City of San Bernardino, California.
Condemnation Parcel. The term "Condemnation Parcel" means and refers to any of the
properties within the Phase I Site or the Phase II Site that the Agency has filed, or intends
to file, an action in eminent domain for the acquisition thereof.
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Conditional Use Permit. The term "Conditional Use Permit" ("CUP") means and refers
to the completed application(s) of the Developer for the review and discretionary
approval by the City of the plan of improvement of the Project to be undertaken by the
Developer, upon transfer of the Site from the Agency to the Developer. The CUP shall
include all of the information necessary for the City to issue its development project
approvals for the Project, including all development compliance conditions. Promptly
following the approval of the CUP by the City, the Developer shall prepare and complete
the Project-related development improvement plans and specifications, including without
.limitation exterior sign and lighting plans and landscape plans in sufficient detail to
obtain the issuance of any other necessary permits or entitlements from the City.
Construction Lender. The term '"Construction Lender" means and refers to the entity or
entities that provide the Construction Loan to the Developer.
Construction Loan. The term '"Construction Loan" means and refers to the loan or
loans that the Developer shall obtain in an aggregate principal amount not to exceed Two
Million Nineteen Thousand Dollars ($2,019,000) to be used and applied solely for
construction of the Improvements on the Site. The Construction Loan shall be obtained
by the Developer from a state or federally regulated third-party lending institution or
institutions reasonably acceptable to the Agency.
Construction Loan Deed of Trust. The term "Construction Loan Deed of Trust" means
and refers to a deed of trust or other security instrument required by the Construction
Lender to be recorded against the Site or any portion of the Site to secure the Developer's
performance under the Construction Loan or the Construction Loan Documents.
Construction Loan Documents. The term "Construction Loan Documents" means and
refers to the various documents and instruments by and between the Developer and the
Construction Lender or Construction Lenders that evidence the Construction Loan for the
construction of the Improvements and the security for repayment of the Construction
Loan.
Developer Equity Funds. The term "Developer Equity Funds" means and refers to the
funds that the Developer will be required to pay towards the aggregate costs of
construction of Improvements on the Site, excluding the Construction Loan, defined
above.
Developer Investigations. The term "Developer Investigations" means and refers to the
Developer's due diligence investigation of each Site Parcel to determine the suitability of
such lands for development. The Developer Investigations shall include an investigation
of environmental and geotechnical suitability of such lands as determined at the sole
discretion of the Developer.
Environmental Law. The term "Environmental Law" means and includes, without
limitation. all federal, state, local, or municipal laws, rules, orders, regulations, statutes,
ordinances. codes, decrees, or requirements of any governmental authority regulating,
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relating to, or imposing liability or standards of conduct concerning any Hazardous
Material. or pertaining to occupational health or industrial hygiene (to the extent that the
occupational health or industrial hygiene laws, ordinances, or regulations relate to
Hazardous Materials on, under, or about the Site or the Improvements), occupational or
environmental conditions on, under, or about the Site or the Improvements, as now or
may, at any later time, be in effect, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42
USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976
CRCRA') [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the
Federal Water Pollution Control Act CFWPCA") [33 USC Section 1251 et seq.]; the
Toxic Substances Control Act CTSCA") [15 USC Section 2601 et seq.]; the Hazardous
Materials Transportation Act CHMTA") [49 USC Section 1801 et seq.]; the Insecticide,
Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC
Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the
Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and
Reclamation Act [30 USC Section 101 et seq.]; the Emergency Planning and Community
Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health
Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous
Substances Act [Health and Safety Code Section 25288 et seq.]; the California Hazardous
Substances Account Act [Health and Safety Code Section 25300 et seq.]; the California
Safe Drinking Water and Toxic Enforcement Act [Health and Safety Code Section
24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et
seq.] together with any amendments of, or regulations promulgated under the statutes
cited above and any other federal, state, or local law, statute, ordinance, or regulation,
now in effect or later enacted, that pertains to occupational health or industrial hygiene,
and only to the extent the occupational health or industrial hygiene laws, ordinances, or
regulations relate to Hazardous Materials on, under, or about the Site or the
Improvements, or the regulation or protection of the environment, including ambient air,
soil, soil vapor, groundwater, surface water, or land use.
Environmental Matters. The term "Environmental Matters" shall have the meaning
ascribed to the term in Section 6.13.
Escrow Agent. The term "Escrow Agent" means and refers to
escrow department, or such successor entity as may be designated by the Agency. The
Escrow Agent shall administer the Site Transfer Escrow,
Event of Default. The term "Event of Default" shall have the meaning ascribed to the
term in Section 7.1 of this Agreement.
Evidence of Net Worth. The term "Evidence of Net Worth" means and refers to the
Developer's evidence, reasonably satisfactory to the Executive Director of the Agency,
that the Developer has sufficient funds to initiate the Project and construct the
Improvements, which evidence shall be provided pursuant to Section 2.6 of this
Agreement.
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Final Budget. The term "Final Budget" means and refers to Developer's final
calculation of total cost of constructing the Improvements on the Site, which is estimated
at Two Million Nineteen Thousand Dollars ($2,019,000), to be prepared by the
Developer and delivered to the Agency upon completion of the Project, as set forth in
Section 6.14 of this Agreement.
Hazardous Materials. The term "Hazardous Materials" shall mean and refer to any
hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials,
flammable explosives, chemicals known to cause cancer or reproductive toxicity,
emissions or wastes and any other chemical, material or substance, the handling, storage,
release, transportation, or disposal of which is or becomes prohibited, limited or regulated
by any federal, state, county, regional or local authority or which, even if not so
regulated, is or becomes known to pose a hazard to the health and safety of the occupants,
uses, guests or invitees of the Site including, without limitation, (i) asbestos, (ii)
petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv)
polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous
substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42
use. Sections 9601, et seq., as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33
U.S.e. Sections 1251 et seq. the Clean Air Act, 42 U.S.e. Sections 7401 et seq., the
Hazardous Materials Transportation Act, 49 U.S.e. Sections 1801 et seq., or the
Resource, Conservation and Recovery Act. 42 U.S.e. Sections 6901 et seq., (vi) all
substances now or hereafter designated as "hazardous wastes" in Section 25117 of the
California Health & Safety Code or as "hazardous substances" in Section 25316 of the
California Health & Safety Code, (vii) all substances now or hereafter designated by the
Governor of the State of California pursuant to the Safe Drinking Water and Toxic
Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or
(viii) all substances now or hereafter designated as "hazardous substances," "hazardous
materials" or "toxic substances" under any other federal, state or local laws or in any
regulations adopted and publications promulgated pursuant to said laws.
Improvements. The term "Improvements" means and refers to those certain private,
commercial improvements that the Developer proposes to construct on the Site under the
terms of the Lease Agreement, including all tenant improvements which are to be paid
for by the Developer through tenant improvement allowance or credit under the Lease
Agreement, and required on-site and off-site improvements, including an ARca AM/PM
fueling station with an automated drive through car wash and convenience store, all
hardscape and all landscaping in accordance with the Site Plan (Exhibit "D") and the
Project Budget and any conditions imposed by the City in its consideration of the
Developer's development application related to the Improvements.
Joint Powers Authority. The terms "Joint Powers Authority" means and refers to the
San Bernardino Joint Powers Financing Authority duly organized and existing under the
provisions of Articles 1 through 4 (commencing with Section 56500) of Chapter 45 of
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Division 7 of Title 1 of the Government Code of the State of California, of which the
Agency and the City are members.
Lease Agreement. The term "Lease Agreement" means and refers to the general form of
the Lease Agreement by and between the Agency and the Developer for the Site, for
development pursuant to the terms of this Agreement and the Lease Agreement, for a
term of twenty (20) years, and two (2) five (5) year options to renew, with an option to
purchase the Site at the end of the twenty (20) year period for fair market value
established by an MAl appraisal which shall comply with the limitations set forth in the
Indenture and any applicable state and federal laws. The general form of the Lease
Agreement is included as Exhibit "C" and the Lease Agreement will be subordinate to
the Construction Loan Deed of Trust in a principal amount not to exceed TWO
MILLION NINETEEN THOUSAND DOLLARS ($2,019,000), and the permanent
financing that is required to replace such Construction Loan in a principal amount not to
exceed TWO MILLION NINETEEN THOUSAND DOLLARS ($2,019,000), or such
lesser principal amount as may at any time be then outstanding and unpaid upon such
date of the permanent financing.
Lease Closing. The term "Lease Closing" means and refers to the time when the
conditions for the lease of the Site to the Developer have been satisfied and the applicable
form of the Lease Agreement is executed and other necessary documents are recorded.
Losses. The word "Losses" shall have the meaning ascribed to the term in Section 6.13.
Minimum Assessed Valuation Covenant. The term "Minimum Assessed Valuation
Covenant" shall have the meaning ascribed to the term in Section 6.4.
Minimum Assessed Value. The term "Minimum Assessed Value" shall have the
meaning ascribed to the term in Section 6.4.
Minimum Sales Tax. The term "Minimum Sales Tax" shall have the meaning ascribed
to the term in Section 6.5.
Minimum Sales Tax Covenant. The term "Minimum Sales Tax Covenant" shall have
the meaning ascribed to the term in Section 6.5.
Notice of Agreement. The term "Notice of Agreement" means and refers to a notice
setting forth the material terms of this Agreement that shall be recorded in the official
records of the Recorder of the County of San Bernardino, in accordance with Section
6.11, in substantially the form attached to this Agreement as Exhibit" E".
Notice of Cessation. The term "Notice of Cessation" has the same meaning as ascribed
to the term in California Civil Code Section 3092.
Notice of Completion. The term "Notice of Completion" has the same meamng as
ascribed to the term in California Civil Code Section 3093.
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Operating Costs Budget. The term "Operating Costs Budget" means and refers to the
estimated line-item budget prepared by the Developer -setting forth the annual operating
expenses of the Project after completion of the Improvements and occupancy by the
anticipated tenants, which will include. a service station consisting of an 18 pump
gasoline service island and associated underground storage tanks, an AM/PM Mini-Mart.
and a self-service car wash, or similar credit rated tenants, prepared by the Developer and
delivered to the Agency pursuant to Section 5.I.C of this Agreement.
Phase I Site. The term "Phase I Site" shall mean the Site as described herein to include
the Phase I Properties as referenced in the Recitals hereof. legally described in Exhibit
"A", and referenced in a portion of Exhibit "B".
Phase II Site. The Term "Phase II Site" shall mean those additional properties identified
in the Recitals hereof and in a portion of Exhibit "B" as attached hereto which may be
acquired by the Developer at its option and election in accordance with the provisions of
Article IV hereof.
Project. The term "Project"' means and refers to the Agency's acqUisItion of the
Properties upon the close of the Site Transfer Escrow, execution of Lease Agreement,
and pursuit to completion of construction by the Developer of the Improvements on the
Site. in accordance with the Plans, including the Alley Vacation, and occupancy of the
completed Improvements by, at a minimum, an ARCO Service Station consisting of nine
multiple point dispensers which will provide 18 fueling positions and associated
underground storage tanks. an AM/PM Mini-Mart. and a self-service car wash. or similar
credit rated tenants.
Project Area. The term "Project Area" means and refers to the Mount Vernon Corridor
Redevelopment Project Area of the Agency.
Project Budget. The term "Project Budget"' means and refers to the Developer's
estimate of the total cost of constructing the Improvements on the Site which is estimated
at Two Million Nineteen Thousand Dollars ($2,019,000) to be paid by the Developer.
The Project Budget was prepared by the Developer and delivered to the Agency pursuant
to Section 5.1.B of this Agreement.
Schedule of Performance.. The term "Schedule of Performance" means and refers to the-
development project list of "milestone dates" set forth in Exhibit "F" to this Agreement.
Site or Project Site. The term "Site" or "Project Site" means and refers to the area of
land created by assembly of, collectively. the Phase I Properties. all within the geographic
boundaries of the Project Area and the City, and more specifically described in the legal
descriptions set forth in Exhibit "A" to this Agreement and shall specifically exclude the
Phase II Properties.
~822-7696-9~n2
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Site Improvements Program. The term "Site Improvements Program" means and refers
to the program of redevelopment and construction of Improvements on the Site composed
of the Phase I Properties by the Developer and assistance to be provided by the Agency
on a best efforts basis to the Developer as set forth in Section 2.6.2.
Site Parcel. The term "Site Parcel" means and refers to each of the legal parcels of land,
which comprise the Site for Phase I of the Project (e.g., the Phase I Properties). As of the
date of this Agreement the Agency owns only Assessor Parcel Number 0138-115-03.
The Agency intends to lease Assessor Parcel Number 0138-115-03 to the Developer
along with the remaining Phase I Properties, pursuant to the terms and conditions of this
Agreement and the Lease Agreement. For all purposes of this Agreement, Site Parcel
shall refer to the Phase I Properties except for the commitments of the Agency pursuant
to Article IV hereof with respect to the development of the Phase II Site. The Agency
owns Assessor's Parcel Numbers 0138-114-09 and 0138-114-18 that are situated in the
Phase II Site. The Agency does not own or possess any equitable interest in any other
Site Parcel, other than the Assessor's Parcel Number 0138-115-03 and the Assessor's
Parcel Numbers 0138-114-09 and 0138-114-18. A legal description of all of the Site
Parcels. which comprise the Site for the Phase I Properties is included as Exhibit "A".
Site Parcel Escrow. The term "Site Parcel Escrow" means and refers to each of the
individual escrow transaction accounts established by the Agency with each Property
Owner of a Site Parcel within the Phase I Site for the acquisition of such Site Parcel by
the Agency for the Phase I Site. The Developer shall not be a party to a Site Parcel
Escrow.
Site Plan. The term "Site Plan" means and refers to the site plans and specifications for
construction of, which illustrates the various components, which comprise the
Improvements.
Title Company. The term "Title Company" means and refers to [Stewart Title
Insurance Company].
Title Insurance Policy. The term "Title Insurance Policy" means and refers to each of
the owner's policies of title insurance to be issued by the Title Company to the Agency at
the close of the Site Transfer Escrow, and any endorsements to such policies, whether
endorsed on the policies at the original time of issuance or subsequently, insuring
marketable, lien-free, fee title to the Site, vested in the name of the Agency for the full
amount of the purchase price paid for each of the properties which comprise the Site.
Unavoidable Delay. The term "Unavoidable Delay" means and refers to any delays
which occur following the date of the Lease Closing that are beyond the control of the
Developer, including delays caused by strikes, acts of God, weather, inability to obtain
labor or materials, inability to obtain governmental permits or approvals, governmental
restrictions, civil commotion, fire or similar causes, but excluding finapcial
circumstances or events that may be resolved by the payment of money and
circumstances subject to Section 6.9 of this Agreement.
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ARTICLE II
FINANCIAL PROVISIONS
2.1 Agency Financial Commitments.
A. The Agency hereby agrees to provide an amount not to exceed Two
Hundred Fifty Thousand Dollars ($250.000), on a reimbursable basis, from the proceeds of the
Bonds to be used by the Developer on and after the date of the Lease Closing for the payment of
the construction and installation of public improvements, including the payment of City
inspection fees and permits and civil engineering design costs incurred by the Developer, and
other similar ojf~site infrastructure costs which qualify for the use of such Bond proceeds in
accordance with the documents providing for the issuance, sale and delivery of the Bonds,
exclusive of any investor owned utilities required for the Project in connection with the
construction of the Improvements (the "Infrastructure Funds"). The Developer shall comply
with the provisions of Sections 3.1.4 (2) and 5.1 F hereof with respect to the payment of
prevailing wages for the work performed and materials installed for the requisite off-site public
improvements, and the Developer shall assure the Agency in a certification that a satisfactory
form of public bidding had been undertaken by the Developer which was substantially similar to
the process that would have been undertaken by the Agency to obtain the lowest responsible bid
for each labor and materials contract for which the Developer seeks to apply the Infrastructure
Funds for the payment of such labor and materials contracts. The final amount of the
Infrastructure Funds to be disbursed by the Agency shall not exceed the total amount of the
public works infrastructure costs required to be constructed and installed by the Developer. In
the event the costs of such public works infrastructure exceed the amount of the Infrastructure
Funds. the Developer shall be required to pay the excess amounts from other funds of the
Developer and not from any other Agency source of funds or increases to the Infrastructure
Funds.
B. In addition to the Infrastructure Funds as provided in subsection 2.1.A.
above, the Agency further agrees to provide an additional amount not to exceed Two Hundred
Fifty Thousand Dollars ($250,000), on a reimbursable basis, (the "Site Development Grant")
which shall be used and applied by the Developer on and after the date of the Lease Closing for
the payment or reimbursement of architectural and engineering costs associated with the
Improvements, the payment of City plan check fees, City building inspection fees, City water
and sewer capacity and connection charges and school development impact fees of the San
Bernardino City Unified School District. In the event the costs of such public works
infrastructure exceed the amount of the Infrastructure Funds, the Developer shall be required to
pay the excess amounts from other funds of the Developer and not from any other Agency source
of funds or increases to the Infrastructure Funds. In the event the costs of such architectural and
engineering costs associated with the Improvements exceed the amount of the Site Development
Grant, the Developer shall be required to pay the excess amounts from other funds of the
Developer and not from any other Agency source of funds or increases to the Site Development
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Grant.
C. All disbursements of the Infrastructure Funds and the Site Development
Grant shall be made by the Agency only (I) upon the receipt of a valid invoice, contract or
purchase order for the particular expense item directly to the vendor or provider of the labor or
materials in accordance with such invoice, contract or purchase order, or (2) as a reimbursement
to the Developer with respect to the prior payment by the Developer of the items specified in (I)
preceding, with verification to be provided by the Developer in the form of cancelled checks or
other evidence of payment, together with a copy of the actual invoice, contract or purchase order,
that all such amounts have been paid in accordance with an invoice, contract or purchase order
that complies with the provisions of this Section 2.1.
D. Any moneys attributable to the Infrastructure Funds or the Site
Development Grant that remain undisbursed upon the issuance of the Certificate of Completion
by the City as to the Improvements shall be retained by the Agency with no further obligations
thereafter to disburse any of said amounts under this Agreement and such undisbursed moneys
shall be retained by the Agency for other purposes of the Agency.
2.2
fRESERVEDl
') ~
_.J
fRESERVEDl
2.4 Fiscal Limitations Imposed Upon Agency By Provisions in the Bonds. The Joint
Powers Authority has covenanted to maintain the tax-exempt status of the Bonds and to comply
with other terms and conditions of the Indenture of Trust by and between the Joint Powers
Authority and U.S. Bank, N.A., Trustee (the "Indenture"). The Agency proposes to comply with
the terms and conditions of the Indenture and will assist in maintaining the tax-exempt status of
the Bonds. In order to maintain the tax-exempt status of the Bonds, the Agency agrees, in
accordance with the Internal Revenue Code, not to use more than ten percent (10%) of the
proceeds of the Bond issue for any private business use, and not more than ten percent (10%) of
the payment of principal of and interest on Bonds will be secured by an interest in, or payments
in respect of, property used for a private business use.
2.5 Covenants of Developer Regarding Availability of Developer Equity Funds for
the Proiect. Any money required in excess of the Construction Loan to fully pay all costs
incurred in constructing the Improvements and operating the Project and pursuing the Project to
completion shall be provided by the Developer in the form of Developer Equity Funds and the
Construction Loan.
2.6 Evidence of Funds Sufficient to Initiate Construction of Improvements on the
Site.
A. In addition to the use of the Infrastructure Funds and the Site
Development Grant as specified in Section 2.1 above, the Developer anticipates that the
Developer's costs to construct the Improvements will not exceed Two Million Nineteen
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Thousand Dollars ($2,019,000) for which the Developer intends to obtain the Construction Loan
for the payment of such costs for the construction of the Improvements.
B. The obligation of the Agency to exercise its best efforts to complete the
assembly of those Site Parcels and to cause the Site Transfer Escrow to be in a condition to
close, is contingent upon and subject to confirmation by the Agency that the Developer has
sufficient Developer Equity Funds for the Project, pursuant to Section 2.5, above.
C. As of the date of this Agreement the Developer has provided the Agency
with satisfactory evidence that the Developer is financially qualified to undertake the Project and
to provide all funds through current cash available to the Developer and loan commitments
sufficient to construct all Improvements on the Site.
D. As a condition precedent to the execution of the Lease Agreement, and
ninety (90) days prior to the execution of the Lease Agreement, the Developer shall submit to the
Agency evidence reasonably satisfactory to the Executive Director that the Developer: (1) has
obtained sufficient equity capital for the payment of the construction of Improvements on the
Site; (2) either has obtained or can obtain, as evidenced by a letter of intent or similar instrument,
sufficient equity capital and firm and binding commitments for construction financing for the
Project; and (3) either has obtained or can obtain, as evidenced by a letter of intent or similar
instrument, sufficient equity capital and firm and binding commitments for permanent financing;
all as may be necessary for the payment of the full amount of the construction of the
Improvements in accordance with this Agreement. In lieu of the foregoing, the Developer may
submit evidence to the Agency that it has sufficient funds of its own for the purposes set forth in
this Section, which evidence shall be acceptable to the Agency in its sole discretion.
E. Any and all Developer financing for the redevelopment of the Project shall
be obtained by the Developer from reputable, recognized and well-established financial
institutions or lending sources including, but not limited to, banks, savings and loan institutions,
insurance companies, real estate investment trusts. pension programs and the like. Whenever the
source of financing for all or part of the development is from other than the Developer, the
Developer shall promptly submit the following to the Agency:
(1) Copies of all construction commitments received by the
Developer; and
(2) Proof of acceptance of each such loan commitment by the
Developer and proof of payment of all up-front loan commitment
fees. if any.
F. The Executive Director shall approve or disapprove such documents
and/or financing commitments or sources within fifteen (15) business days of receipt by the
Agency of the documents and information required hereunder; provided, however, that the
failure of the Executive Director to disapprove any of the foregoing matters in writing within
said fifteen (15) business day period shall be deemed to constitute approval thereof.
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G. In the event that by the latest date set forth in the Schedule of
Performance, the Developer may not have submitted to the Agency the evidence of each of the
financing commitments as set forth in this Section 2.6, then in such event either party may
terminate this Agreement as provided in Section 7.3.
2.6.1 Lease of the Site bv the Agency to the Developer for Redevelopment. The
Site is comprised of the lands described in this Agreement as the Properties as more fully set
forth in Exhibit" A" and Exhibit "B" as the Phase I Properties. Each such separate legal parcel
of land is referred to as a "Site Parcel", which shall be fully acquired by the Agency through
negotiations for purchase and sale with Business Owners or by condemnation as a Condemnation
Parcel. As of the date of approval of this Agreement by the governing board of the Agency, the
Agency only owns Assessor Parcel Number 0138-115-03 within the Phase I Properties. The
Agency also owns Assessor Parcel Numbers 0138-114-09 and 0138-114-18 in the Phase II
Properties. The Agency does not own any other parcels other than and described herein. It is the
intent of the Developer and the Agency that the Agency shall use its best efforts to acquire each
of the Site Parcels directly from the current owners thereof by negotiated purchase, subject to the
terms and conditions of the Agreement, in the event that following due and diligent effort, the
Agency may not be able to directly acquire any such Site Parcel from the owner thereof, then the
Agency shall consider the facts and evidence as presented to it in the manner required by law and
then may authorize the exercise of the power of eminent domain to acquire such Site Parcel as a
Condemnation Parcel. Nothing in this Agreement shall require the Agency to incur a cost or
expense, which the Agency has determined, based upon its approved real property appraisal
report for such Site Parcel, exceeds the fair market value for such Site Parcel. The obligation of
the Developer to construct and complete the Improvements shall not arise until such time as the
Site Transfer Escrow is in a condition to close, such assembly of each of the Site Parcels in the
Site is completed and the execution of the Lease Agreement by the Agency and the Developer.
If the necessary Site Parcels for the Site cannot be assembled, and the Site Transfer Escrow
placed in a condition to close on or before December 31, 2005, subject to such extensions of
time as may be approved by the Developer and the Agency, this Agreement shall be subject to
termination by either party as provided in Section 7.3.
2.6.2 The Agency hereby agrees to exercise its best efforts to assemble such Site
Parcels for the Phase I Site, and to lease such Site Parcels for the Phase I Site as the Agency may
hereafter acquire to the Developer, pursuant to the Lease Agreement, and the Developer hereby
agrees to:
(1) pay the applicable Lease Payments to the Agency; and
(2) cause the Improvements to be constructed on the Site following
the Lease Closing in accordance with the CUP and the other
provisions of this Agreement.
2.6.3 Commencing upon the approval of this Agreement by the governing board
of the Agency, the Developer and Agency staff shall conduct regular meetings at the Agency
offices to review the status of each of the following matters of mutual interest as applicable:
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(I) Phase I Site assembly by the Agency;
(2) the Developer Investigations;
(3) the preparation of the CUP, and the submission of an application to
the City for approval of a parcel map or the issuance of one or
more certificates of subdivision compliance at the time of close of
the escrow for the Phase I Site; and
(4) review and confirmation of the dates and times set forth in the
Schedule of Performance for the performance of certain
obligations and satisfaction of various conditions precedent with
respect to the redevelopment of the Project.
2.6.4 The Schedule of Performance, Exhibit "F" herein and incorporated by
reference, sets forth various dates and times relating to the accomplishment of the various tasks
for the satisfactory construction and completion of the Project by the Developer upon the close
of the escrow for the Phase I Site. The parties agree and declare that time is of the essence in the
performance of such tasks and the satisfaction of conditions precedent in view of the large
investment of resources, which both parties recognize will be required for the redevelopment of
the Site and the undertaking of the Project. In the event that the date or time for the performance
of a task set forth either in the text of this Section 2.6 or in the Schedule of Performance may not
be achieved, then prior to such date or time set forth in the Schedule of Performance, the parties
shall, as part of their consultations under Section 2.6.2, consider whether a modification to the
Schedule of Performance may be indicated. Any decision to approve a modification to a time or
date as provided in either this Agreement or the Schedule of Performance shall be subject to the
sole discretion of each party.
2.6.5 The Developer and the Agency have jointly prepared and approved a
Project Budget, which sets forth a detailed itemization and estimate of the costs of construction
of Improvements including a reasonable contingency reserve.
2.6.6 Provided the Agency commences acquisition of a Site Parcel, the Agency
shall take all necessary and appropriate steps to provide for the relocation of occupants of each
affected Site Parcel. The relocation of each such occupant of the affected portions of the Site
shall be accomplished in accordance with the provisions of Government Code Section 7260, et
~.. and other applicable law.
2.6.7 Prior to the time of the close of each Site Parcel Escrow, the occupant or
occupants of the affected Site Parcel shall be given an appropriate written notice of displacement
by the Agency which instructs the occupant to vacate the premises and surrender possession
thereof to the Agency (or to the Developer, if applicable), within the following times: (I) ninety
(90) days following the date of such notice of displacement, or (2) ninety (90) days following the
close of such escrow; or (3) such other date designated by the Agency. Each notice of
displacement shall advise the occupant that the Agency shall pay relocation assistance benefits to
each qualifying occupant in accordance with applicable law.
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2.7 Site Parcel Escrows.
2.7.1 The Escrow Agent has served and shall continue to serve as the escrow
agent for each Site Parcel Escrow, which the Agency has caused and may hereafter cause to be
opened with one or more owners of the Site Parcels. The Agency shall be responsible for paying
for all of the costs, fees and charges of the Escrow Agent in connection with the performance of
its duties as escrow agent for each Site Parcel Escrow.
2.7.2 The Agency has reviewed and approved certain preliminary title reports
for the particular Site Parcel (together with legible copies of the recorded exceptions to title
noted in such report). The Agency has made offers to certain Business Owners and anticipates
making offers to additional Business Owners for the acquisition of lien- free merchantable title of
~ach respective Site Parcel, subject only to utility service easements and other matters approved
by the Agency. and the possessory interests of month-to-month tenants in lawful possession of
each such Site Parcel.
2.8 Conditions for Lease Closing and Lease Post-Closing.
2.8.1 The Developer shall not be obligated to execute the Lease Agreement and
cause the Lease Closing to occur until the following conditions have been satisfied:
(1) the Developer has approved the environmental condition of each
Site Parcel;
(2) the Agency shall have acquired fee title to the Phase I Site or shall
have obtained an order for immediate possession in an action of
condemnation for the acquisition of any Site Parcel within the
Phase I Site:
(3) the Agency shall have relocated all tenants, business owners, and
business tenants and shall have caused all demolition of buildings, above
ground and below ground structures to be removed, except below ground
utility lines shall not be disturbed or removed by the Agency nor shall the
Agency complete any level of soil compaction work:
(4) the Agency has confirmed to the Developer the satisfaction
of its conditions under Section 2.8.2; and
(5) the Agency is not then in default under this Agreement.
2.8.2 The Agency shall not be obligated to execute the Lease Agreement and
cause the Lease Closing to occur until the following conditions have been satisfied:
(I) the Site Parcel Escrow has closed or is in a condition to close; .
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(2) the Developer has confirmed to the Agency the satisfaction of its
conditions under Section 2.8.1;
(3) the Developer has delivered Evidence of Financing to the
Executive Director of the Agency pursuant to Section 2.6 of this
Agreement: and
(4) the Developer is not then in default under this Agreement.
2.8.3 Upon Post-Closing of the Lease, and within thirty (30) days from the
execution of the Lease between the Developer and the Agency. the Developer shall diligently
pursue and apply for all requisite entitlements and approvals from the City for the Project
including, but not limited to, the CUP and the Alley Vacation on terms and conditions
reasonably acceptable to the Agency. The Agency, through the Executive Director of the
Agency, reserves the sole and exclusive right to extend the terms of this condition 2.8.3.
2.8.4 Upon Post-Closing of the Lease, and within one hundred-twenty (120)
days from the execution of the Lease between the Developer and the Agency, the Developer
shall have been granted and shall have obtained all requisite entitlements and approvals from the
City, in final form including, but not limited to, the CUP and the Alley Vacation for the Project
on terms and conditions reasonably acceptable to the Agency, and has commenced the grading
activities on the Phase I Site and the development of the Project. The Agency, through the
Executive Director of the Agency, reserves the sole and exclusive right to extend the terms of
this condition 2.8.4.
2.9 Obligation of the Agencv to Provide Leasehold Interest.
2.9.1 As of the date of this Agreement, the Agency only owns fee title to
Assessor Parcel Number 0138-115-03 within the Phase I Site; the Agency does not own fee title
or have other equitable interest to any other Phase I Property. The parties intend that the Agency
shall exercise its best effort to cause the condition of title in each Site Parcel as may hereafter be
referred to it by the Developer for construction of Improvements to be in a marketable condition
for the purposes of the redevelopment of the Project by the Developer.
2.9.2 If by July 31, 2005, the Agency is not able to provide marketable
leasehold interest to the Developer. then either party may upon thirty (30) days written notice to
the other party. which references this Section 2.9.2, terminate this Agreement.
2.10. Due Diligence Period and Developer Investigations. The Developer shall have
thirty (30) days following the date of the opening of each Site Parcel Escrow to complete all of
its Developer Investigations at its sole cost and expense. All of the tasks, work. review or
analysis relating to its Developer Investigations of the condition and suitability of each Site
Parcel including any intrusive testing or engineering study of the Site or intrusive sampling of
any structure on the Site shall be subject to the applicable provisions of the Lease Agreement for
the particular Site Parcel on which the Developer may hereafter undertake its Developer
Investigations. The Agency makes no representation or warranty to the Developer relating to the
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suitability of Site or any Site Parcel or any Condemnation Parcel for use by the Developer. The
Developer shall rely solely and exclusively upon the results of its Developer Investigations of the
Site including geotechnical soil conditions and compliance with applicable laws pertaining to the
use of the Site by the Developer and any other matters relevant to or arising from the suitability
of the Site for the Project, including without limitation, a construction loan commitment in favor
of the Developer from a third party construction lender on terms satisfactory to the Developer, as
the Developer may deem necessary and proper.
ARTICLE III
3.1 Agreement to Subordinate to Construction Loan. The Agency agrees to
subordinate the Lease Agreement to the Construction Loan Deed of Trust as provided in this
Section 3.1. subject to the satisfaction of the following conditions:
3.1.1 The maximum principal amount of the Construction Loan shall not exceed
Two Million Nineteen Thousand Dollars and No Cents ($2,019,000.00);
3.1.2 At the time of the Agency's execution ofa subordination agreement, there
shall be no default of the Developer under this Agreement;
3.1.3 No provision of the subordination agreement shall require the Agency to
waive or suspend their rights to receive payments pursuant to the Lease Agreement, when due, or
enforce any right of the Agency under this Agreement, including without limitation, the
enforcement of the Minimum Assessed Valuation Covenant (as said term is defined in Section
6.4) in the event of a default by the Developer under this Agreement; and in the event of a
default by the Developer under the Construction Loan or this Agreement, no provision of the
Construction Loan shall require the Agency to first obtain the consent of such Construction
Lender before the Agency may assert any such remedy against the Developer or realize upon the
value of any security given by the Developer to the Agency under this Agreement;
3.1.4 The Construction Loan Documents shall contain provisions reasonably
satisfactory to the Agency. which assure the Agency that:
(l) an independent lender's disbursement control service shall be used
to perform the customary functions of a construction lender
disbursement control and payment verification;
(2) the Construction Lender, and the construction lender disbursement
control service, shall require the Developer to provide the
Construction Lender as part of each application for a disbursement
of funds under the Construction Loan for labor performed on the
Site, a written certification (with a copy to the Agency) that all
labor and construction trades personnel employed by either the
Developer or the Developer's contractors and all subcontractors of
either of them who perform work on the Site have been paid not
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less than "prevailing wages" as this term is defined under Labor
Code Section 1720, et seq., and applicable federal law.
3.2 Agreement to Subordinate to Permanent Financing.
subordinate the Lease Agreement to a permanent loan and deed
satisfaction of the following conditions:
The Agency agrees to
of trust, subject to the
3.2.1 The maximum principal amount cif the permanent loan shall not exceed
the lesser of (1) the aggregate sum of the outstanding amount owed under the Construction Loan
expended directly on the Project or (2) Two Million Nineteen Thousand Dollars and No Cents
($2.019.000.00): and
3.2.2 At the time of the Agency's execution of a subordination agreement for
the permanent loan, there shall be no default of the Developer under this Agreement or the
Construction Loan Documents.
ARTICLE IV
OPTION TO LEASE PHASE II SITE
4.1 Exercise of Option to Lease Phase II Site.
A. In the event the Developer at anytime after the completion of the Project
upon the Phase I Site elects to proceed with the expansion of the Project on the Phase II Site, but
in any event on or before December 31, 2007, the Agency and the Developer shall negotiate in
good faith in the attempt to determine the economic feasibility of proceeding with a Phase II Site
development and determining all procedural and economic factors with respect thereto. The
Developer may at anytime after the issuance of a Certificate of Occupancy by the City for the
Project deliver a notice to the Agency stating that the Developer does thereby exercise its option
to proceed with the negotiation for the expansion of the Project on the Phase II Site. Neither
party shall be bound to unconditionally agree to any elements of a disposition and development
agreement, lease agreement or any other similar project agreement or financing document except
at their sole and absolute discretion.
B. In the event the Agency seeks to develop the Phase II Site for other uses or
has another proposal for the development thereof, the Agency shall give the Developer notice of
such substitute use for the Phase II Site and the Developer shall have thirty (30) calendar days to
either exercise its option to lease the Phase II Site or to forever thereafter relinquish any
development rights that the Developer may have as to the Phase II Site. If the Developer should
provide the notice to the Agency that the Developer thereby elects to exercise its option to
develop the Phase II Site, in the event a final and binding agreement is not executed and
approved by and between the Developer and the Agency within one hundred eighty (180)
calendar days after the delivery of the notice of election to exercise the option to lease the Phase
II Site, the Developer shall thereafter forever relinquish any and all rights for any use or
development of the Phase II Site. Thereafter, the Agency shall be permitted to enter into such
agreements with any other private parties or public entities for the use of the Phase II Site
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without any further restrictions being imposed pursuant to either this Agreement or the Lease
.
Agreement.
ARTICLE V
DEVELOPER'S REPRESENTATIONS AND WARRANTIES
5.1 The Developer represents and warrants to the Agency, as follows:
A. Organization of Developer; Authority to Enter Into Agreement.
Developer is a corporation organized and existing under the laws of the State of California. Each
individual executing this Agreement on behalf of the Developer represents and warrants that they
are duly authorized to execute and deliver this Agreement on behalf the corporation in
accordance with the Developer's Articles ofIncorporation and Bylaws, as in effect on the date of
their execution and delivery of this Agreement. This Agreement and all documents referenced in
or attached to this Agreement will when executed and delivered, constitute valid and binding
obligations of the Developer, each enforceable in accordance with their terms.
B. Proiect Budget. The Project Budget is true and correct in all material
respects and was prepared by the Developer in accordance with generally accepted construction
budget estimation practices and commercial development project accounting principles.
C. Operating Costs Budget. The Operating Costs Budget is true and correct
in all material respects and was prepared by the Developer in accordance with generally accepted
construction budget estimation practices and commercial development project accounting
principles.
D. Compliance with Agreements. The execution, delivery and performance
of this Agreement and all documents referenced in or attached to this Agreement does not and
will not constitute a breach or default under any other agreements, law or court order by which
the Developer is or may be bound or affected or which may affect the Site or the construction,
use, occupancy or operation of all or any part of the Improvements.
E. Prohibited Interest of Officials and Employees of Agency and Developer.
No member of the governing board of the Agency nor any other officer or employee of the
Agency, or their agents during their tenure, employment or engagement, and for one (I) year
thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the
proceeds thereof, for work to be performed pursuant to this Agreement. The Developer shall
incorporate or cause to be incorporated, in all contracts and subcontracts relating in any manner
to the construction of the Improvements, a provision prohibiting such interests.
F. Labor Standards Provisions. The Developer and each of its contractors
and all subcontractors engaged under contracts in excess of ONE THOUSAND DOLLARS
($1,000) for the construction, alteration, and/or repair of the Improvements shall comply with
State of California Labor Code Sections 1720, et seq., pertaining to public works projects and the
applicable requirements of the regulations of the State of California Department of Industrial
Relations under Title 8 California Code of Regulations Sections 16000, et seq., governing the
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payment of wages and the ratio of apprentices and trainees to journeymen. If wage rates higher
than those required under such regulations are imposed by the State of California, nothing in this
Agreement shall relieve the Developer of its obligation to require payment by its contractors and
subcontractors of such higher wage rates. The Developer shall instruct in writing each contractor
and subcontractor engaged to perform construction work related to the Improvements, or such
portion thereof as constructed or installed by such person, to keep accurate payroll records for
the Improvements as provided in Labor Code Section 1776. The Developer for itself and for
each such contractor and subcontractor engaged for the construction of the Improvements shall
cause to be delivered to the Agency a certified copy of the payroll records enumerated in Labor
Code Section 1776(a) related to the Improvements performed by the Developer, contractor or
subcontractor. as applicable. within ten (10) days after receipt of a written request from the
Agency for a certified copy of such records. The Developer shall provide the Agency promptly
upon its written request with a current listing of all contractors and subcontractors who are
engaged in connection with construction of the Improvements on the Site.
G. No De-Barred Contractors. The Developer shall not utilize or allow to be
utilized in the construction of the Improvements any contractor or sub-contractor that is
ineligible to bid on or perform such work under the provisions of any applicable regulations of
the State of California Department of Industrial Relations or the United States Department of
Labor.
H. Nondiscrimination Requirements. The Developer is subject to all
applicable requirements of the following Acts, promulgations and regulations with respect to its
activities under this Agreement:
(1) Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and the
regulations issued pursuant thereto (24 CFR Subtitle A, Part I), which provides that no person in
the United States shall on the grounds of race, color, or national origin, be excluded from
participation in. be denied the benefits of, or be otherwise subjected to discrimination under any
program or activity for which the applicant receives federal financial assistance and will
immediately take any measures necessary to effectuate this assurance. Where the federal
financial assistance is to provide or is in the form of personal property or real property interest or
structures thereon, this assurance shall obligate the applicant, or in the case of any transfer of
such property, any transferee, via the instrument effecting any disposition by the applicant or
transferee, in the case of a subsequent transfer, of such real property, structures or improvements
thereon, or interest therein, to require a covenant running with the land assuring
nondiscrimination for the period during which the real property or structure is used for a purpose
for which the federal financial assistance is extended or for another purpose involving the,
provision of similar services or benefits, or for as long as the applicant retains ownership or
possession of the property, whichever is longer. Under this assurance the United States shall
have the right to seek its judicial enforcement. The Developer is required to take all measures
necessary to effectuate this Title in the manner set forth in Section 1.5 of the above-mentioned
regulation.
(2) Title VIII of the Civil Rights Act of 1968 (P.L. 90-284) as
amended, administering all programs and activities relating to housing and community
development in a manner to affirmatively further fair housing; and requiring action to
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affirmatively further fair housing in the sale, lease or rental of housing, the financing of housing,
and the provision of brokerage services within the jurisdiction of the City.
(3) Executive Order 11063, as amended, and the regulations issued
pursuant thereto (24 CFR Part 107) which require that all actions necessary and appropriate be
taken to prevent discrimination because of race, color, creed, or national origin in the sale, rental,
leasing or other disposition of residential property and related facilities or in the use or
occupancy thereof where such property or facilities are owned or operated by the federal
government, or provided with federal assistance by HUD, and in the lending practices with
respect to residential property and related facilities of lending institutions insofar as such
practices relate to grants insured, guaranteed or purchased by HUD.
1. Equal Emplovment Opportunitv. During the course of the planning,
design, and construction of the Improvements, and during subsequent operation of the
Improvements and the Site, the Developer shall not discriminate against any employee or
applicant for employment because of race, color, religion, sex, or national origin. The Developer
shall take affirmative action to insure that applicants for employment are employed, and that
employees are treated during employment, without regard to their race, color, religion, sex, or
national origin. Such affirmative action shall pertain to, but not be limited to, the following:
employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or
termination; rates of payor other forms of compensation; and the selection for training, including
apprenticeship. The Developer shall post in conspicuous places, available to employees and
applicants for employment, notices to be provided by the Agency setting forth the provisions of
this nondiscrimination clause. The Developer shall state, through such nondiscrimination clause,
that all qualified applicants will receive consideration for employment without regard to race,
color, religion. sex, or national origin. Except as otherwise provided for in Parts II, III and IV of
Executive Order 11246, dated September 24, 1965, as amended, and in attendant Code of
Federal Regulation provisions, the Developer shall require to be included in each contract
entered into by the Developer and modification thereof, if not included in the original contract,
the "Equal Opportunity" clause contained in Section 202 of Executive Order 11246 (48 CFR
52.222-26). The Developer agrees that it shall assist and cooperate actively with the Agency,
HUD and the Secretary of Labor in obtaining the compliance of contractors and subcontractors
with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary
of Labor; that it will furnish the Agency such information as they may require for the supervision
of such compliance; and that it will otherwise assist the Agency in the discharge of their primary
responsibilities for securing compliance. The Developer agrees that it will refrain from entering
into any contract or contract modification subject to Executive Order 11246 of September 24,
1965, with a contractor debarred from, or who has not demonstrated eligibility for, government
contracts and federally assisted construction contracts pursuant to the Executive Order and will
carry out such sanctions and penalties for violation of the equal opportunity clause as may be
imposed upon contractors and subcontractors by the Secretary of Labor pursuant to Part II,
Subpart D of the Executive Order.
1. Incorporation of Representations and Warranties. The Developer's
submission or consent to the submission of any Grant Disbursementwritten Rrequest for
disbursements of the Infrastructure Funds and the Site Development Grant under this Agreement
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shall constitute a certification by the Developer that the each of the representations and
warranties set forth in this Article IV are true and correct in all material respects as of the date of
such request.
K. Survival of Representations and Warranties. All of the representations and
warranties contained in this Article IV shall be true and correct in all material respects from the
date of this Agreement until the Lease Agreement is terminated.
L. Continuing Accuracy. During the entire term of this Agreement, the
Developer shall promptly notify the Agency of any event that would render any of the
representations or warranties in this Article V untrue or misleading in any material respect.
ARTICLE VI
SPECIAL COVENANTS OF THE DEVELOPER
6.1 General. From the date of this Agreement and continuing until such time as a
Certificate of Completion is issued to the Developer under the Lease Agreement, the Developer
covenants and agrees that it will:
A. Promptly pay principal and interest and all other sums falling due under
the Construction Loan (and later the permanent loan) as and when the same become due and
payable;
B. Maintain, preserve and keep its personal property and equipment situated
on the Site in good repair, working order and condition and from time to time make all needful
and proper repairs, renewals, replacements and additions thereto so that at all times the efficiency
thereof shall be fully preserved and maintained;
C. Pay when due and before any penalty attaches all general taxes and all
special taxes, special assessments, water charges, drainage and sewer charges and all other
charges of any kind whatsoever, ordinary or extraordinary which may be lawfully levied,
assessed, imposed or charged on or against the Site or the Improvements, and will, upon written
request, provide the Agency official receipts evidencing such payments;
D.
Agreement; and
Obtain and maintain the insurance coverage required in Section 6.2 of this
E. Pay all taxes, filing and recording expenses (including stamp taxes, if
any), all title insurance charges, all escrow fees and expenses, all appraisal fees and expenses, if
any, the fees and commissions lawfully due to brokers and consultants in connection with the
transactions contemplated in this Agreement.
6.2 The Developer, to protect the Agency, its governing board, commissions, agents,
officers, employees and authorized representatives, against all claims and liability for death,
injury. loss and damage resulting from the Developer's actions in connection with the use and
disbursement of the Infrastructure Funds, the Site Development Grant, the development and
operation of the Site, and the construction and operation of the Improvements, shall secure and
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maintain insurance, as described below. No Grant Disbursement of the Infrastructure Funds or
the Site Development Grant shall be paid to the Developer, until the Developer provides the
required policies and/or certificates evidencing the insurance required by this Agreement to the
Agency and the Agency approves such evidence of insurance. The Developer shall pay any
deductibles and self-insured retentions under all insurance policies in satisfaction of the terms of
this Agreement.
A. Workers' Compensation Insurance Requirement. The Developer shall
submit written proof that the Developer is insured against liability for workers' compensation in
accordance with the provisions of section 3700 of the Labor Code. By executing this
Agreement. the Developer makes the following certification, required by section 1861 of the
Labor Code:
"I, the undersigned authorized representative of the Developer, am
aware of the provisions of section 3700 of the Labor Code which
require every employer to be insured against liability for workers'
compensation or to undertake self-insurance in accordance with the
provisions of that code, and I will comply with such provisions
before commencing the performance of the work of the
Agreement. "
The Developer shall require each contractor and sub-contractor to provide
workers' compensation coverage for all of such contractor's or sub-contractor's employees,
unless the employees of the contractor or sub-contractor are covered by workers' compensation
insurance provided by the Developer. If any class of employees engaged in work or services
performed in connection with the Improvements is not covered by Labor Code Section 3700, the
Developer shall provide and/or require each contractor or sub-contractor to provide adequate
workers' compensation insurance covering such employees.
B. Liability and Permanent Insurance Requirements.
(1) The Developer shall maintain in full force and effect, at all times
during the term of this Agreement, the following insurance:
(a) Commercial General Liability Insurance. Commercial
General Liability Insurance coverage shall include, but not limited to, Premises-Operations,
Contractual Liability Insurance (specifically concerning the indemnity provisions of this
Agreement), Products-Completed Operations Hazards, Personal Injury (including bodily injury
and death), and Property Damage for liability arising out of the construction of the
Improvements and/or the Developer.s operation of the Site or the Improvements. Said insurance
coverage shall have minimum limits for Bodily Injury and Property Damage liability of ONE
MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS
($2,000,000) aggregate.
(b) Automobile Liability Insurance. Automobile Liability
Insurance shall include, but is not limited to, coverage against claims of Personal Injury
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(including bodily injury and death) and Property Damage covering all owned. leased. hired and
non-owned vehicles used by the Developer with minimum limits for Bodily Injury and Property
Dan1af:!e of O:\'E MILLI01\' DOLLARS ($ 1.000.000) each occurrence and ONE MILLION
DOLLARS (Sl.OOO.OOO) aggregate. Such insurance shall be provided by a business or
commercial vehicle policy.
(c) Consultant Coverage. If the Developer hires a consultant to
provide design services. such as architectural or engineering services in connection with the
Improvements. the Developer shall require such consultant to provide Professional Liability
(Errors and Omissions) Insurance. for liability arising out of. or in connection with. the
performance of such design services. with limits of not less than ONE MILLION DOLLARS
(Sl.OOO.OOO).
(d) Fire and Extended Coverage. Upon acceptance of the
Improvements by the Developer. or any portion thereof, from each contractor. the Developer
shall maintain Fire and Extended Coverage Insurance on the Improvements on a blanket basis or
with an agreed amount clause in amounts not less than one hundred percent (100%) of the
replacement \'alue of the Improvements so accepted.
C. Construction Period Coverage. During the construction of the
Improvements. the Developer shall require that all contractors performing work on the
Improvements maintain the following insurance coverage at all times during the performance of
said work:
(1) Builder's Risk Insurance. Builder's Risk Insurance to be written
on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed
insurable value of the Improvements.
(2) Commercial General Liabilitv Insurance. Commercial General
Liability Insurance shall include limits of not less than ONE MILLION DOLLARS (Sl,OOO,OOO)
per occurrence and TWO MILLION DOLLARS (S2.000.000) aggregate to protect the Developer
during the construction of the Improvements from claims involving bodily injury and/or death
and damage to the property of others.
(3) Automobile Liabilitv Insurance. Automobile Liability Insurance
against claims of personal injury (including bodily injury and death) and property damage
covering all owned. leased, hired and non-owned vehicles used in the performance of the.
contractor's obligations with minimum limits for bodily injury and property damage of ONE
MILLION DOLLARS (S1.000,OOO) each occurrence and ONE MILLION DOLLARS
(S 1.000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle
policy.
D. The Commercial General Liability Insurance required in sub-paragraph B,
above, shall include an endorsement naming the Agency, the Agency's board members, HUD,
and their officials, officers, agents. and employees as additional insureds for liability arising out
of this Agreement and any operation related to this Agreement.
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E. If any of the insurance coverage required under this Agreement is written
on a claims-made basis. such insurance policy shall provide an extended reporting period
continuing through the fifth (5th) anniversary of the date of acceptance of the Improvements by
the Developer.
F. Receipt of evidence of insurance that does not comply with the above
requirements shall not constitute a waiver of the insurance requirements of this Agreement.
G. The above stated insurance coverage shall be maintained by the
De\'eloper or its contractors. as required by the terms of this Agreement. until the completion of
all of the Dewloper's obligations under this Agreement. and shall not be reduced. modified. or
canceled \\ithout thirty (30) days' prior written notice to the Agency. Also. phrases such as
"endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any
kind upon the company" shall not be included in the cancellation wording of any Certificates of
Insurance or any coverage for the Agency. the Agency's board members, its officials, agents, and
employees. The Developer shall immediately obtain replacement coverage for any insurance
policy that is terminated. canceled, non-renewed, or whose policy limits are exhausted or upon
insolvency of the insurer that issued the policy.
H. All insurance to be obtained and maintained by the Developer under this
Agreement shall be issued by a company or companies listed in the current "Best's Key Rating
Guide, Property/Casualty"' publication with a minimum of a "B+/Vn" rating and be a California
admitted insurance company.
1. If the Developer is or becomes self-insured. during the term of this
Agreement. the Developer shall provide coverage equivalent to the insurance coverages and
endorsements required above, The Agency will not accept such coverages unless the Agency
determines. in its sole discretion and by written acceptance. that the coverage proposed to be
provided by the Developer is equivalent to the above-required coverages. A determination by
the Agency that proposed self-insurance coverage is not equivalent to required coverages will be
communicated to the Developer in ""Titing by the Agency. along with the reasons for such
determination.
1. All insurance obtained and maintained by the Developer in satisfaction of
the requirements of this Agreement shall be primary to and not contributing to any other
insurance maintained by the Agency.
K. Insurance coverage in the minimum amounts set forth in this Agreement
shall not be construed to relieve the Developer of any liability, whether within, outside, or in
excess of such coverage. and regardless of solvency or insolvency of the insurer that issues the
coverage: nor shall it preclude the Agency from taking such other actions as are available to it
under any other provision of this Agreement or otherwise at law.
L. Failure by the Developer to maintain all insurance required by this
Agreement in effect at all times shall be an Event of Default by the Developer. The Agency, at
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its sole option. may exercise any remedy available to it in connection with such an Event of
Default. Additionally. the Agency may purchase such required insurance coverage and the
Agencv shall be entitled to immediate payment from the Developer for any premiums and
as~oci~ted costs paid by the Agency for such insurance. Any election by the Agency not to
purchase insurance for the Developer shall not relieve the Developer of its obligation to obtain
and maintain the insurance coverage required by this Agreement.
6.3 Construction Start and Completion of Improvements. The Developer shall
commence construction of the Improvements within thirty (30) days following the granting of all
entitlements and applications from the City including. but not limited to. the CUP and the Alley
Vacation. and thereafter shall diligently proceed to complete the construction of Improvements.
in a good and workmanlike manner in accordance with the Plans. The Improvements shall be
completed within one hundred eighty (180) days following the Lease Closing (the "Completion
Date'"). subject to reasonable extensions at the sole and exclusive discretion of the Executive
Director of the Agency. The Agency acting by and through its Executive Director may extend
the Completion Date for up to an additional one hundred eighty (180) days. The Developer will,
promptly upon completion of the Improvements. cause the Improvements to be inspected by
each governmental body with jurisdiction over the Site or the Improvements. shall correct any
defects and deficiencies that may be disclosed by any such inspection and shall cause to be duly
issued all occupancy certificates and other licenses. permits and authorizations necessary for the
operation and occupancy of the completed Improvements. The Developer shall do and perform
all of the foregoing acts and things and cause to be issued and executed all such occupancy
certificates. licenses and authorizations on or before the Completion Date. After commencement
of the work of construction of the Improvements, the Developer shall not permit the work of
construction of the Improvements to cease or be suspended for a time period in excess of thirty
(30) calendar days, either consecutively or in the aggregate. for any reason. Notwithstanding the
foregoing. such thirty (30) calendar day period may be extended by the Agency acting by and
through its Executive Director. up to an additional aggregate maximum of ninety (90) calendar
days upon the occurrence of an Unavoidable Delay: provided. however. that the Developer has
notified the Agency of such asserted Unavoidable Delay within ten (10) days of the occurrence
of such asserted Unavoidable Delay and an Unavoidable Delay shall automatically extend
scheduled performance obligations for a period of time equal to the time lost due to the
occurrence of such Unavoidable Delay. For the purposes of this Section 6.3. an Unavoidable
Delay shall have the meaning set forth in Section 8.15.B. herein.
6.4 Minimum Assessed Valuation of the Site with the Improvements. The Developer
covenants to and for the benefit of the Agency that. upon completion of the construction of the
Improvements. the Site and the Improvements shall. collectively. be assessed by the Assessor of
[he County of San Bernardino. for general property tax purposes. at a minimum assessed value of
Two Million Five Hundred Thousand Dollars and No Cents ($2.500.000.00) (the "Minimum
Assessed Value"). If. upon completion of the construction of the Improvements, the Site and the
Improvements are. collectively, assessed by the Assessor of the County of San Bernardino, for
general property tax purposes, at a value less than the Minimum Assessed Value, the Developer
shall pay to the Agency the dollar amount of the difference between the property tax revenues
received by the Agency from the property taxes assessed against the Site and the Improvements
and the amount of property tax revenues that would have been received from the property taxes
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ass~ss~d aQainst th~ Site and the Improvements. if the Site and the Improvements were assessed
at the Mi;imum Assessed Value. This Minimum Assessed Value covenant of the Developer
shall b~ evidenced bv the recording in the official records of the Recorder of the County of San
Bernardino of a "Mi~imum Assessed Valuation Covenant", in substantially the form as attached
to this Agreement as Exhibit "G". The Developer agrees to execute the Minimum Assessed
Valuation Covenant by and through the signatures of its duly authorized representatives, with
notarv acknowledgments of each such signature. The Developer further authorizes the Agency
to re~ord the Minimum Assessed Valuation Covenant in the official records of the Recorder of
the-Countv of San Bernardino against the Site and the Improvements or any portion thereof. The
recorded Minimum Assessed V~aluation Covenant shall be in first position against the Site and
th~ Improvements. superior to any other security interests in the Site or the Improvements,
including the Construction Loan Deed of Trust and the Construction Loan Documents. The
Agency shall not subordinate its inter~sts in the recorded Minimum Assessed Valuation
Covenant.
6.5 Minimum Sales Tax Covenant. The Developer covenants to, and for the benefit
of the Agency that. upon completion of the construction of the Improvements, the Site and the
Improvements shall. collectively. generate retail sales tax, as maintained by the State Board of
Equalization, at Five Million Dollars ($5.000,000.00) for each and every year of operation of the
Project pursuant to the Lease Agreement until the expiration of the Lease Agreement regardless
of whether the Term of Lease Agreement is extended (the "Minimum Sales Tax"). If, upon
completion of the construction of the Improvements. the Site and the Improvements are.
collectively. as determined by the State Board of Equalization, at a value less than the Minimum
Sales Tax. the Developer shall pay to the City the dollar amount of the difference between the
sales tax revenues actually received by the City and generated by the Improvements and the Site
and the Improvements and the amount of sales tax revenues that would have been received from
the sales taxes generated by the Improvements, if the Site and the Improvements were assessed at
the Minimum Sales Tax. This Minimum Sales Tax Covenant of the Developer shall be
~videnced by the recording in the official records of the Recorder of thc County of San
Bernardino of a "Minimum Sales Tax Covenant'". in substantially the form as attached to this
Agreement as Exhibit "H". The Developer agrees to execute the Minimum Sales Tax
Covenant. by and through the signatures of its duly authorized representatives, with notary
acknowledgments of each such signature. The Developer further authorizes the Agency to
record the Minimum Sales Tax Covenant in the official records of the Recorder of the County of
San Bernardino against the Site and the Improvements or any portion thereof. The recorded
Minimum Sales Tax Covenant shall be in first position against th~ Site and the Improvements.
superior to any other security interests in the Site. or the Improvements. including the
Construction Loan Deed of Trust and the Construction Loan Documents. The Agency shall not
subordinate its interests in the recorded Minimum Sales Tax Covenant.
6.6 Recordation of Construction Loan Deed of Trust. The Developer covenants to the
Agency that the Developer shall cause the Construction Loan Deed of Trust to be recorded
against the Site, within thirty (30) days after the Lease Closing.
6.7 Construction Inspections. The Agency and its representatives shall have the right
at all reasonable times during regular business hours (and at any time in the event of an
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emergency) to enter upon the Site and inspect the work of construction of the Improvements to
determine that the same is in conformity with the Plans and all of the requirements of this
Agreement. If in the Agency's reasonable judgment it is necessary. the Agency shall have the
further right. from time to time, to retain a consultant or consultants, at the Developer's expense.
to inspect the work and verify compliance by the Developer with the provisions of this
Agreement. The Developer understands and agrees that any such Agency inspections are for the
sole purpose of protecting the interests of the Agency in the Phase I Site and are made solely for
the Agencv's benefit and that the Agency's inspections may be superficial and general in nature,
prima;ily;o inform the Agency of the progress of construction of the Improvements and that the
Developer shall not be entitled to rely on any such inspection or inspections as constituting the
Agency's approvaL satisfaction or acceptance of any materials. workmanship. conformance to
the Plans or otherwise. The Developer agrees to make its own regular inspections of the work of
construction of the Improvements to determine that the quality of the Improvements and all other
requirements of the work of construction of the Improvements are being performed in a manner
satisfactory to the Developer. The Developer also agrees to immediately notify the Agency in
writing should the Developer's inspections show any work to be unsatisfactory in any manner.
Without limiting the foregoing. the Developer shall permit the Agency to examine and copy all
books and account records and other papers relating to the Site and the construction of the
Improvements; and the Developer will use commercially reasonable efforts to cause all
contractors. subcontractors and materialmen to cooperate with the Agency to enable such
examination.
6.8 Compliance with Laws. All work performed in connection with the
Improvements shall comply with all applicable laws. ordinances. rules and regulations of federal,
state. county or municipal govermnents or agencies now in force or wnich may be enacted
hereafter. and with all applicable directions. rules and regulations of the fire department, health
department building department or other departments of every govermnental agency now having
or hereafter acquiring jurisdiction over the Site or construction or operation of the Improvements.
6.9 Developer Covenant to Defend Proiect The Developer acknowledges that the
Agency is a "public entity" and/or a "public agency" as defined under applicable California and
federal law. Therefore, the Agency must satisfy the requirements of certain California and
federal statutes relating to the actions of public entities, including. without limitation, the
California Enviromnental Quality Act Public Resources Code Sections 21000, et seq.
CCEQA"). Also. as a public body. the Agency's action in approving this Agreement may be
subject to proceedings to invalidate this Agreement The Developer hereby assumes the risk of
delays and damages that may result to the Developer from any such third-party legal actions
related to the Agency's approval of this Agreement or the pursuit of the activities contemplated
by this Agreement even in the event that an error. omission or abuse of discretion by the Agency
is determined to have occurred. If a third-party files a legal action regarding the Agency's
approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the
Agency may terminate this Agreement on sixty (60) days written notice to the Developer of the
Agency's intent to terminate this Agreement, referencing this Section 6.9. without any further
obligation to perform the terms of this Agreement and without any liability to the Developer
resulting from such termination, unless the Developer unconditionally agrees to indemnify and
defend the Agency against such third-party legal action, as provided hereinafter in this Section
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6.9. Within thirty (30) days of receipt of the Agency's notice of intent to terminate this
Agreement. as pr~vided in the preceding sentence. the Developer may offer to defend the
Auenc\ in the third-party legal action and pay all of the court costs. attorney fees, monetary
a~'ard~. sanctions. attorney fee awards. expert witness and consulting fees. and the expenses of
any and all financial or performance obligations resulting from the disposition of the legal action.
Any such offer from the Developer must be in writing and in a forn1 reasonably acceptable to the
Agency. Nothing contained in this section shall be deemed an express or implied admission that
the Agency is liable to the Developer or any other person or entity for damages alleged from any
alleged or established failure of the Agency to comply with any statute, including without
limitation CEQA.
6.10 Developer Indemnification of the Agencv. The Developer agrees to indemnify.
defend (upon written request by Agency) and hold harmless the Agency. its governing board,
commissions. agents. officers. employees. attorneys and authorized representatives. from any
and all losses. liabilities. charges. damages, claims, liens, causes of action, awards. judgments,
costs and expenses. including. but not limited to reasonable attorney's fees of counsel retainea by
the Agency. expert fees. costs of staff time, and investigation costs. of whatever kind or nature,
which are in any manner directly or indirectly caused, occasioned or contributed to in whole or
in part. through any act. omission. fault or negligence. whether active or passive, of the
Developer or the Developer's officers. agents. employees. independent contractors.
subcontractors of any tier. or authorized representatives. relating in any manner to this
Agreement. any work to be performed by the Developer related to this Agreement. or any
authority or obligation exercised or undertaken by the Developer under this Agreement.
Without limiting the generality of the foregoing. the Developer's obligation to indemnify the
Agency shall include injury or death to any person or persons, damage to any property,
regardless of where located, including the property of the Agency. any workers' compensation
claim or suit or any other matter arising from or connected with any services performed pursuant
to the Agency Infrastructure Funds. the Site Development Grant. the Improvements or the Site
on behalf of Developer by any person or entity.
6.11 Notice of Agreement. The Developer agrees to execute in recordable form the
Notice of Agreement. including notary acknowledgement of the signatures of the duly authorized
representatives of the Developer executing the Notice of Agreement. The Developer also
authorizes the Agency to record the Notice of Agreement in the official records of the Recorder
of the County of San Bernardino against the Phase I Site. or any portion thereof. immediately
upon the execution by the Developer of the Lease Agreement.
6.12 Permanent Financing and Future Refinancings. The Developer shall obtain a
permanent loan to re-finance the Construction Loan. upon completion of the Improvements, in
an amount not to exceed the aggregate sum of the outstanding amount owed under the
Construction Loan expended directly on the Project or Two Million Nineteen Thousand Dollars
($2,019.000). whichever is less, plus customary and reasonable expenses directly related to
obtaining any such permanent loan ("Permanent Financing"). At any time during the term of this
Agreement. the Developer may also seek to refinance the Permanent Financing and obtain more
favorable rates ("Future Refinancings'} Any proceeds of any such Permanent Financing or
Future Refinancings obtained by the Developer in excess of the limitations set forth in this
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section 6. 1:2 shall be deemed to be proceeds of sale or refinancing of the Site or the
Improvements and shall be paid immediately upon receipt by the Developer to the Agency.
6. I 3 Environmental Indemnitv of the Agencv bv the Developer. The Developer
agrees, at its sole cost and expense, to fully indemnify, protect hold harmless, and defend (with
counsel selected by the Developer and approved by the Agency. which approval shall not be
unreasonably withheld) the Agency and its trustees. elected officials. officers. attorneys, agents
and employees and each of them. from and against any and all claims. demands. damages. losses,
liabilities. obligations, penalties. fines. actions. causes of action. judgments, suits, proceedings.
costs. disbursements and expenses. including. without limitation. attorney fees, disbursements
and costs of attorneys. environmental consultants and other experts. and all foreseeable and
unforeseeable damages of any kind or of any nature whatsoever (collectively. "Losses") that
may. at any time. be imposed upon. incurred or suffered by. or claimed, asserted or awarded
against. the Agency directly or indirectly relating to or arising from any of the following
"Environmental Matters" existing or occurring during or arising from the Developer's ownership
of the Site or the Improvements or construction or operation of the Improvements:
A. The presence of Hazardous Materials on, in. under. from or affecting all or
any portion of the Site or the Improvements;
B. The storage. holding, handling, release, threatened release. discharge,
generation. leak, abatement removal or transportation of any Hazardous Materials on, in, under,
from or affecting the Site or the Improvements;
C. The violation of any law, rule. regulation, judgment order. permit license,
agreement covenant restriction, requirement or the like by the Developer. its agents or
contractors. relating to or governing in any way Hazardous Materials on. in. under. from or
atfecting the Site or the Improvements:
D. The failure of the Developer, its agents or contractors, to properly
complete. obtain, submit and/or file any and all notices, pern1its, licenses. authorizations,
covenants and the like in connection with the Developer's activities on the Site or regarding the
Improvements:
E. The implementation and enforcement by the Developer, its agents or
contractors of any monitoring, notification or other precautionary measures that may, at any
time. become necessary to protect against the release. potential release or discharge of Hazardous
Materials on. in. under, from or atfecting the Site or the Improvements:
F. The failure of the Developer, its agents or contractors, in compliance with
all applicable Environmental Laws. to la\\fully remove, contain, transport or dispose of any
Hazardous Materials existing. stored or generated on, in, under or from the Site or the
Improvements:
G. Any investigation. inquiry, order. hearing. action or other proceeding by or
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before any governmental agency in connection with any Hazardous Materials on. in. under. from
or affecting the Site or the Improvements or the violation of any Environmental Law relating to
the Site or the Improvements;
H. The Developer shall pay to the Agency all costs and expenses including,
without limitation. reasonable attorneys fees and costs. incurred by the Agency in connection
\\ith enforcement of the aforementioned environmental indemnity.
6. I -+ Final Proiect Budf!et Audit Bv A2encv.
A. Within ninety (90) days following the date of the issuance by the City of a
Certificate of Completion for the Project. the Developer shall prepare and deliver to the Agency
a suitably detailed written accounting of Final Project Budget. Such an accounting shall be
prepared in accordance with generally acceptable principals of accounting.
B. The Agency shall have the right at its own cost and expense, to conduct an
audit of the Developer's books and accounting records relating to Actual Project Costs. Such an
audit by the Agency shall be undertaken and completed. subject to the cooperation of the
ARTICLE VII
DEF AUL T AND REMEDIES
7. I E vent of Default. The occurrence of any of the following events shall constitute
an Event of Default under this Agreement:
A. Any default by the Developer under the Construction Loan Documents for
any purpose or reason.
B. Any breach by the Developer of any of the non-monetary covenants and
conditions of this Agreement, other than the covenant of the Developer in Section 6.6. that is not
cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of
the breach to the Developer from the Agency or the expiration of an applicable shorter cure
period set forth in this Agreement.
C
in Section 6.6.
Any failure of the Developer to satisfy the Developer's covenant set forth
D. Any representation. warranty or disclosure made to the Agency by the
Developer regarding this Agreement is materially false or misleading, whether or not such
representation or disclosure appears in this Agreement.
E. The Developer fails to make any payment or deposit of funds required
under this Agreement or to pay any other charge set forth in this Agreement. following seven (7)
days' written notice to the Developer from the Agency of such failure.
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F. Any material deviation in the work of construction of the Improvements
from the Plans, without the prior written approval of the Agency. or the appearance of defective
\vorkmanship or materials and such defects are not corrected or substantially corrected within
thirty (30) days after receipt of \\Titten notice thereof from the Agency to the Developer.
G. Any of the Improvements encroach over the Site or setback lines or violate
anv easement rights. or any structure upon adjoining lands encroaches upon the Site and the
co~dition is not corrected within thirty (30) days follO\ving \\Titten notice of such encroachment
or violation to the Developer from the Agency.
H. The work of construction of the Improvements is delayed or suspended for
a period in excess of that permitted under Section 6.3 of this Agreement: or the work of
construction of the Improvements does not proceed with due diligence, subject to the occurrence
of an Unavoidable Delay: or the work of construction of the Improvements is not completed by
the Completion Date.
1. A stop notice is served on the Agency and is not released or an acceptable
counter-bond provided to the Agency within ten (10) days of the Developer's receipt of \\Titten
notice from the Agency that such stop notice was served on the Agency.
J. There occurs any event: (1) of dissolution or termination of the Developer
or its general partner(s). (2) that adversely and materially affects the business or financial
condition of the Developer, or (3) that adversely and materially affects the operation or value of
the Site or the Improvements, and such event is not corrected within five (5) days following
\\Tinen notice of such event from the Agency to the Developer.
K. The discovery of Hazardous Materials or toxic substances on, under or
about the Site or the Improvements in violation of applicable laws or ordinances that makes the
Improvements impossible to construct or complete.
L. The Developer sells. transfers. hypothecates. encumbers or assigns its
ownership interest in the Site or the Improvements. or any portion thereof. whether voluntarily or
involuntarily or by operation oflaw. without the prior written consent of the Agency.
~.1. Either the ARCO Service Station. the AM/PM Mini Market. or a self-
service car wash fails to obtain a Temporary Certificate of Occupancy from the City for the
applicable leasehold space in the completed Improvements. as set forth in each of their leases
with the Developer. within sixty (60) days of recordation of a Notice of Completion for the
Improvements.
7.2 Remedies. Upon the occurrence of an Event of Default. the Agency may. in
addition to any other remedies that the Agency has under this Agreement. at law or in equity, at
its option and without prior demand or notice, take any or all of the following actions:
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A. Enter upon the Site and complete construction of the Improvements in
accordance with the Plans, with such changes as the Agency may from time to time and in its
judgment deem appropriate. all at the risk and expense of the Developer. The Agency shall have
the right. at any time, to discontinue any work commenced by it in respect to the Improvements
or to change any course of action undertaken by it and not be bound by any limitations or
requirements of time. whether set forth in this Agreement or otherwise. The Agency shall have
the right and power (but not the obligation) to assume any construction contract made by or on
benalf of the Developer in any way relating to the Improvements and to take over and use all or
Jny part of the labor. materials. supplies and/or equipment contracted for by or on behalf of the
Developer. whether or not previously incorporated into the Improvements, all in the discretion of
the Agency. In connection with any work of construction undertaken by the Agency pursuant to
the provisions of this Section 7.2.A.. the Agency may (1) engage builders. contractors. architects,
engineers and others for the purpose of furnishing labor. materials and equipment in connection
with the work of construction, (2) pay. settle or compromise all bills or claims that may become
liens against the Site or the Improvements or that have been or may be incurred in any manner in
connection with completing construction of the Improvements or for the discharge of liens,
encumbrances or defects in title of the Site, (3) take such other action. including the employment
of watchmen to protect the Site or the Improvements, or refrain from taking action under this
Agreement as the Agency may in its discretion determine from time to time. The Developer shall
be liable to the Agency for all sums paid or incurred for completing construction of the
Improvements. whether the same shall be paid or incurred pursuant to the provisions of this
Section 7.2.A. or otherwise. and all payments made or liabilities incurred by the Agency of any
kind whatsoever shall be paid by the Developer to the Agency upon demand. with interest at the
maximum rate allowed by applicable law. For the purpose of carrying out the provisions and
exercising the rights. powers and privileges granted by this Section 7.2.A.. the Developer
unconditionally and irrevocably constitutes and appoints the Agency its true and la\\;ful attorney-
in-fact to enter into such contracts. perform such acts and incur such liabilities as are referred to
in this Section 7.2.A. in the name and on behalf of the Developer. This power of attorney is
coupled with an interest.
B. Where substantial deviations from the Plans appear that have not been
approved by the Agency, as required in this Agreement. or defective or unworkmanlike labor or
materials are being used in the construction of the Improvements. or upon receipt of knowledge
of encroachments to which there has been no consent by the Agency. the Agency shall have the
right to immediately order the stoppage of further construction on the Improvements and demand
that such condition(s) be corrected. After issuance of such a stop order in writing, no further
\vork shall be done on the Improvements. except for such work of correction. without the prior
written consent of the Agency. unless and until said condition is fully corrected.
C. The Agency. in its sole and absolute discretion. may elect to cure any
Event of Default. The Developer unconditionally and irrevocahly constitutes and appoints the
Agency its true and la\\;ful attorney-in-fact to assume any contracts. perform any acts and incur
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any liabilities in furtherance of the Project. as referred to in this Section 7.'2.C. in the name and
on behalf of the Agency. This power of attorney is coupled with an interest.
7.3 Termination of Agreement.
A. The Developer may terminate this Agreement in its sole discretion at any
time prior to the Lease Closing. provided that the Developer is not then in material default. by
(Jivina the Agencv written notice of such termination. which references this Section 7.3.
e e ......,
Thereafter. the parties shall be mutually released and discharged from any further obligation.
which arises under this Agreement except as set forth in Section 6.9. Section 6.10. and Section
6.13.
B. The Agency may terminate this Agreement in its sole discretion at any
time prior to the Lease Closing, provided that the Agency is not then in material default, if: (l)
the Executive Director does not or is unable to confirm that the matters described in Section
2.6.1 have been satisfied no later than December 31, 2005; (2) the Site Transfer Escrow is not in
a condition to close no later than June 30, 2005. and does not in fact close on or before such
date: or (3) if the Lease Closing has not occurred for any reason whatsoever no later than July
31,2005.
C. The Developer may terminate this Agreement after the Lease Closing, but
prior to completion of construction of the Improvements. provided that the Developer reimburses
the Agency for any and all advances of Agency funds. including the Infrastructure Funds and the
Site Development Grant, and the other Agency costs incurred to said date in furtherance of the
demolition and relocation of tenants on the Phase I Site.
D. Any other rights of termination by the Developer. if any. not referenced
above. shall be governed by the Lease Agreement.
7.4 Attornev Fees Provision. If either party hereto files any action or brings any
action or proceeding against the other arising out of this Agreement. or is made a party to any
action or proceeding brought by the Escrow Agent. then as between the Developer and the
Agency. the prevailing party shall be entitled to recover as an element of its costs of suit. and not
as damages. its reasonable attorneys' fees as fixed by the Court in such action or proceeding or in
a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
expenses of the City Attorney and members of his office in enforcing this Agreement shall be
considered as "attorney fees" for purposes of this Section.
ARTICLE VIII
MISCELLANEOUS
8.1 No Waiver. No waiver of any default or breach by the Developer under this
Agreement shall be implied from any failure by the Agency to take action on account of such
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default. if such default persists or is repeated during a period of time when the Developer is in
default or breach of its obligations under this Agreement. and no express waiver shall affect any
default other than the default specified in the waiver and shall be operative only for the time and
to the extent therein stated. Waivers of anv covenant. term or condition contained in this
. .
Agreement shall not be construed as a waiver of any subsequent breach of the same covenant.
term or condition. The consent or approval by the Agency to or of any act by the Developer
requiring further consent or approval shall not be deemed to waive or render unnecessary the
consent or approval to or of any subsequent similar act.
8.2 Successors and Assi!lns. This Agreement is made and entered into for the sole
protection and benefit of the Agency and the Developer. their successors and assigns. and no
other person or persons shall have any right or right of action under this Agreement. The terms of
this Agreement shall inure to the benefit of the successors and assigns of the Agencv and the
'- ..... ........
Developer: provided. however. that the Developer's interest in this Agreement cannot be
assigned or otherwise transferred without the prior consent of the Agency.
8.3 Notices. Notices shall be sufficiently given under this Agreement. if personally
served upon the Agency Executive Director, or if sent by United States maiL postage prepaid,
and addressed as follows:
If to the Developer:
El Paseo Petroleum. LLC
27403 Ynez Road, Suite 218
T emecula. CA 92591
Attention: Managing Member
If to the Agency:
Redevelopment Agency of the City of San Bernardino
201 North 'E' Street. Suite 301
San Bernardino. California 92401
Attention: Executive Director
Notices shall be deemed given upon receipt at the address set forth above. Notice of any
changes of address or of the person to whom notices are to be sent shall be given in the manner
set forth in this Section 8.3.
8.4 Time. Time is of the essence of each provision of this Agreement.
8.5 fReserved - No Textl.
8.6 Amendment. No amendment. modification. termination or waiver of any
provision of this Agreement, nor consent to any departure by the Developer therefrom, shall in
any event be effective. unless the same shall be in writing and signed by the Agency, and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given.
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8.7 Headings. The article and section headings set forth in this Agreement are for
convenience of reference only and in no way define. limit, extend or interpret the scope of this
Agreement or of any particular Article or Section of this Agreement.
8.8 Number and Gender. When the context in which words are used in this
Agreement indicate that such is the intent. words in the singular number shall include the plural
an-d vice-versa. References to anyone gender shall also include the other gender. if applicable
under the circumstances.
8.9 Validity. In the event that any provision of this Agreement shall be held to be
invalid. the same shall not affect in any respect v.;hatsoever the validity of the remainder of this
Agreement.
8.10 Governing Law. This Agreement shall be governed by and construed In
accordance with the laws of the State of California.
8.11 Survival of Warranties. All agreements, representations and warranties made by
the Developer in this Agreement shall survive the execution and delivery of this Agreement and
any of the documents referenced or described in this Agreement and continue in full force and
effect until the obligations of the Developer under this Agreement are fully performed and
discharged.
8.12 Incorporation of Exhibits. All Exhibits referenced in or attached to this
Agreement are incorporated into this Agreement by this reference. as if fully set forth herein.
8.13 Venue and Forum. In the event that any legal action should be filed by any party
to this Agreement against any other party to this Agreement, the venue and forum for such action
shall be the Superior Court of the State of California for the County of San Bernardino. Each of
the persons and entities who are shareholders or partners or members of the Developer also agree
to said venue and forum and further agree that. if they are not residents of California at the time
of such actions, service of process may be made upon them by delivery via United States
registered or certified mail.
8.14 Legal Relationships. The relationship between the Developer and the Agency is
that of the Agency and the Developer. and no partnership, joint venture, or other similar
relationship shall be inferred from this Agreement. The Developer shall not have the right or
authority to make representations. to act. or to incur debts or liabilities on behalf of the Agency..
The Developer is not executing this Agreement as an agent or nominee for an undisclosed
principal. and no third party is intended to be benefited by the execution of this Agreement.
8.15 Force Maieure and Unavoidable Delav.
A. Prior to the date of the Grant Disbursement Lease Closing, neither party
to this Agreement shall be liable for any failure or delay in performance under this Agreement
(other than for delay in the payment of money due and payable hereunder) to the extent said
failures or delays are proximately caused by causes beyond that party's reasonable control and
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occurring without its fault or negligence. including. but not limited to. war, strikes. fires. floods,
acts of God. governmental restrictions. power failures, or damage or destruction of any network
facilities or servers. failure of suppliers. subcontractors. and carriers to substantially meet its
performance obligations under this Agreement, provided that, as a condition to the claim of
nonliability. the party experiencing the difficulty shall give the other prompt written notice. with
full details following the occurrence of the cause relied upon. Dates by which performance
obligations are scheduled to be met will be extended for a period of time equal to the time lost
due to any delay so caused. if reasonable. Otherwise. all performance obligations shall be
waived and forever cease to exist: provided however, that no extensions or series of extensions
shall cause the date by which the Lease Closing to occur to be scheduled to a date later than July
31. 2005.
B. After the date of the Lease Closing, neither party to this Agreement shall
be liable for any failure or delay in performance under this Agreement (other than for delay in
the payment of money due and payable hereunder) to an Unavoidable Delay; provided that, as a
condition to the claim of nonliability. the party experiencing the Unavoidable Delay shall give
the other prompt written notice. with full details following the occurrence of the cause relied
upon. Dates by which performance obligations are scheduled to be met will be extended for a
period of time equal to the time lost due to any delay so caused not to exceed in the aggregate
ninety (90) days attributable to the Unavoidable Delay.
{SIGNATURES ON SUBSEQUENT PAGEl
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1:\ WIT:\ESS WHEREOF. the: Redc\e10pmcnt Agency of the City of San Bemardino
and E1 Paseo Petroleum. LLC. han: exccuted this Agreement as of the date first written abow by
and throu\!h theIr duly authorized rcpresental1\'es.
- .
AGE:\CY:
Redc\clopment Agency of the City of San Bemardino
By:
Gary Van Osdel
Executi\"e Director
APPROVED AS TO FOR\I:
By:
~w
DEVELOPER:
EI Paseo Petroleum. LLC
By:
\Ianaging '.!ember
';\.22- -bLlh-q-l ~=2
-39-
I~ WIT~ESS WHEREOF. the Rede\elopment Agency of the City of San Bernardino
and EI Paseo Petroleum. LLC. ha\e e\:ccuted this Agreement as of the date first written aboye by
and through their duly authorized representatiyes.
AGE~CY:
Redc\clopment Agency of the City of San Bernardino
By:
Gary Yan Osdel
E\:ecuti\(? Director
APPRO\.ED AS TO FOR.\):
By:
Agency Counsel
DEYELOPER:
E! Paseo Petroleum. LLC
By:
\lanaging \lember
~~:~-~o':i(~-~i-+-2 ~
-39-
I:\ WIT:\ESS WHEREOF. the Rcdc\clopment A.gency of the City of San BemJrdmo
and El Paseo Petroleum. LLC. ha\e executed this Agreement as of the date first written abo\'e by
and throu~h their duly authorizcd reprcsemames.
- .
AGE:\CY:
Rede\elopmem Agency of the City of San BcmJrdino
By:
Gary \'an Osdel
Executi\'c Director
APPROYED AS TO FOR\I:
By:
Agency Counsel
DEYELOPER:
El Paseo Petroleum. LLC
By:
\lanaging \lember
":~~22--oY6-\j~-2 :.
-~9-
EXHIBIT "Au
LEGAL DESCRIPTIO)\; OF THE PHASE I SITE
Parcels referred to as assessors parcel numbers: 0138-115-02, 03, 04, 05, and 07 situated on Mt.
Vernon Avenue.
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EXHIBIT --S"
ASSSESSOR PARCEL MAP OF THE PHASE I SITE A?\D PHASE II SITE
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Legend:
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- . . - Mt. Vernon Corridor Project Area
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Proposed Project Site Phase 1
APN: 138-115-02 138-115-04 138-115-06
138-115-03 138-115-05 138-115-07
Proposed Project Site Phase 2
APN: 138-114-09 138-114-10 138-114-11
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PROJECT .SITE
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138-114-09
138-114-10
138-114-11
Exhibit "8"
October 28, 2004
EXHIBIT "C
LEASE AGREDIE'\T
~822-7696-9~ 72.2 C - 1
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NEIGHBORHOOD REDEVELOPMENT LEASE
BY A~D BETWEE~ THE
REDEVELOP\IE~T AGEl\CY OF THE CITY OF SA~ BER,\;ARDIl\O
AND
EL P ASEO PETROLEUM, LLC
(Mt. Vernon Corridor Redevelopment Project Area)
THIS NEIGHBORHOOD REDEVELOPMENT LEASE (the "Lease") is dated as of
January 10. 2005. by and between the Redevelopment Agency of the City of San Bernardino (the
"Agency") and EI Paseo Petroleum. LLC. a California Limited Liability Company (the "Tenant"
or "Developer"). and this Lease is entered into in light of the facts set forth in the Recitals.
RECITALS
A. This Lease and the Disposition and Development Agreement (5th & Mount
Vernon - EI Paseo Petroleum. LLC) (the "Agreement") and the Exhibits thereto are intended to
effectuate the Redewlopment Plan for the Mount Vernon Corridor Redevelopment Project (the
"Project Area") by providing for the disposition and development of a portion of the
Redevelopment Project Area designated herein as the "Site" and the development of the
"Project" thereon (as those terms are defined in the Agreement):
B. The development of the Site pursuant to the Agreement. and the fulfillment
generally of the Agreement. are in the vital and best interests of the City of San Bernardino
("City") and the welfare of its residents. and in accordance \vith the public purposes and
provisions of applicable federal. state and local laws and requirements:
C. The Agreement contemplates that the Project will be developed in two phases
(Phase I and Phase II) on the Agency Property:
D. The Agency proposes to acquire certain real property specifically described in
E:-;hibit "A" to the Agreement within the Project Area (the "Site:' as defined in the Agreement)
additionally: the Agency shall relocate existing tenants and assist the Developer with a certain
Alley Vacation:
E. Pursuant to this Lease. the Agency shall lease approximately forty thousand
(40.000) square feet of land area to the Developer, including rights of ingress and egress and
reciprocal parking privileges on the Site.
t. Pursuant to this Lease. the Developer shall. with the assistance of the Agency,
construct certain private. commercial improvements on the Site, including all required on-site
~8~5-08~ 7-0272.1
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and oft:'site improvements. all hardscape and all landscaping in accordance with the Agreement
and the specitications set forth in Exhibit "D" to the Agreement (the "Improvements." as
ddined in the Agreement):
G. The Dewloper shall be responsible for payment of all costs and expenses for
construction of Improvements. in accordance with the terms of the Agreement and this Lease:
and
H. The Developer estimates the total cost of construction of Improvements at Two
Million Nineteen Thousand Dollars ($2.019.000). as set forth in detail in the "Project Budget'".
NOW. THEREFORE. THE TENANT AND THE AGENCY FOR THEMSELVES AND
THEIR SUCCESSORS AND ASSIGNS DO HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
I. I Definitions.
In addition to the definitions of certain terms and phrases set forth in the Recital and
elsewhere in this Lease. the words. which appear below in bold text. shall have the following
meamngs:
Agency means and refers to the Redevelopment Agency of the City of San Bernardino, a
public body corporate and politic.
Agency Property means and refers to all real property currently owned or which may
hereafter be acquired by the Agency that is a part of the Project.
Agreement means and refers to that certain Disposition and Development Agreement (5th
& Mount Vernon - EI Paseo Petroleum. LLC) and the Exhibits thereto executed by the Agency
and the Developer on or about January 10.2005.
Bonds means and refers to that ce11ain issuance of tax allocation bonds issued by the San
Bernardino Joint Powers Financing Authority on or about January 24. 2002. designated as the
$3,635,000 San Bernardino Joint Powers Financing Authority. Tax Allocation Bonds. Series
2002A (Mount Vernon Project).
Business means and refers to the use and operation of the Improvements on the Agency
Property by the Tenant for an ARCO-brand Service Station consisting of nine multiple point
dispensers which will provide 18 fueling positions, an AM/PM Mini-Mart. with beer and wine
license and the sale of items typically found in such ARCO-branded AM/PM Convenience
Stores. a self-service car wash and no other uses or business activities unless approved in writing
by the Agency at its sole discretion.
~g~5-08H-02nl 2
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City means and refers to the City of San Bernardino. The City is not a party to this
Lease.
Commencement Date means and refers to the day on which the Agency delivers
possession of the Agency Property to Tenant. . The Commencement Date shall be confirmed
when the Agency issues its delivery notice to Tenant for the Agency Property or any portion
thereof.
Contractor means and refers to
contractor. The Contractor shall construct the Project.
. a licensed California general
First Extension Term is defined in Section 3.2.2.
Improvements means and refers to all buildings, structures and improvements and all
additions to or improvements of. or in. now or at any time hereafter, to be constructed on the
Agency Property, and including but not limited to all the foundations and footings therefore,
underground storage tanks, environmental containment structures, underground piping. drainage
structures and clarifiers, machinery. engines. motors. compressors. dynamos. finings. equipment
and fixtures of every kind and description now or hereafter affixed or attached to or incorporated
in the Project and any building. structure or improvements, including all machinery and
equipment used or procured for use in connection with. or for. the heating. cooling, lighting,
plumbing, ventilation. air conditioning. refrigeration, cleaning, or general operation of the
Project.
Lease Term is defined in Section 3.2.1.
Lease/wid j}lortgagee means and refers to the beneficiary unde.r a mortgage executed and
recorded in the Office of the County Recorder, which mortgage encumbers. in part, Tenant's
interest under this Lease.
Mortgage means and refers to the mortgage encumbering Tenant's leasehold interest in
this Lease. in favor of the Leasehold Mortgagee. as the same may be amended or supplemented
from time to time.
Project means and refers to the design, construction, and financing of the Improvements
by the Tenant and thereafter. the continuous operation of the Business on the Agency Property,
as contemplated by this Lease. The functional elements of the Project are more particularly
described in Exhibit "D" to the Agreement.
Second Extension Term is defined in Section 3.2.2.
Site means and refers to the Agency Property.
Site Plan means and refers to the site plan that illustrates the various components that
comprise the Improvements to be constructed on the Site as set forth in Exhibit "D" to the
Agreement.
4845-0847-02721
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P 'Ag,nd,,\Ag,nda Allachm,nt>'Ag,mt>-Am,nd :005.05-01-10 EI P",o-L"" Ag,mt doc j
Tenant means and refers to EI Paseo Petroleum. LLC. as the Tenant pursuant to this
L~Js~.
Trade Fixtures means and refers to personal property as further defined in section 7.1.3
which the Tenant shall cause to be installed on the Agency Property as part of the Project and
shall be removable.
ARTICLE II
PROJECT PURPOSE
2.1 Purpose of the Proiect.
The purpose of this Lease is to provide for the redevelopment. use and occupancy of the
Site by the Tenant for the operation of the Business subject to the terms and conditions of this
Lease. The Agency has determined that the development and use of the Site contemplated by
this Agreement are consistent with the Redevelopment Plan for the Mount Vemon
Redevelopment Project.
ARTICLE III
THE LEASE
3.1 Agreement to Lease.
For and in consideration of promises and covenants of the Tenant under this Lease,
Agency agrees to lease the Agency Property. to Tenant. and Tenant agrees to lease the Agency
Property or such portion as the Agency may acquire. from the Agency. on the terms and
conditions set forth in this Lease.
, '1
J..;.
Term of the Lease.
3.2.1 Lease Term.
Provided the Delivery Date has occurred, the term of this Lease shall be for a
period of twenty (20) years follo\\-'ing the Commencement Date unless terminated earlier as .
provided in this Lease (the "Lease Term").
3.2.2 Extension of Lease Term.
Subject to the conditions set forth in Section 11.6 and so long as Tenant is not
then in default under any of the provisions of this Lease, the Tenant may extend the Lease Term
on the terms and conditions set forth herein for two (2) additional five (5) year periods of time
upon ninety (90) days' prior v,ritten notice, for each additional term, as the case may be, received
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in \\Titing by the Agency from the Tenant (respectively, the "First Extension Term" and the
"Second Extension Term'').
3.3 Rental Rate.
3.3.1 Tenant agrees to pay to Agency annual rent of Twenty-Six Thousand Three
Hundred Dollars ($26,300), payable monthly in the amount equal to Two Thousand One
Hundred Ninetv-One Dollars and Sixty-Seven Cents ($2,191.67) per month for months one
(I) through twel~e (12) of each year during the Lease Term, which payment shall be due on the
first day of each month commencing thirty (30) days after the issuance of the Certificate of
Occupancy by the City. and monthly thereafter for each year during the Lease Term. The
A"enc\ reserYes the ri"ht to request an increase in the Rental Rate. at its discretion. based upon
lh~ C;nsumer Price iI;dex for All Items--U.S. Average ('"CPI"). provided such increase is in
c:ol11pliance \\ith state and federal laws governing the Agency and the tax-exempt status of the
Bonds.
ARTICLE IV
USE
4.1 Use of the Site.
Tenant shall use the Site solely for the purpose of constructing, maintammg, and
operating the Business. Thereafter and until the end of the Lease Term. or any extended term
thereof. Tenant shall not change the use of the Site without first obtaining the \Hitten consent of
the Agency. The Tenant shall not use and shall not permit or suffer the Site or any portion of the
Site to be used in any manner that would violate the provisions of any certificate of occupancy
issued with respect to any of the Improvements. or any other license. permit. or other
~oYernmental authorization that is required for the lawful use or occupancy of all or any portion
or'the Site or the Improvements.
4.2 Petroleum Products Marketing A!Ireement.
Tenant shall maintain an ARCO Branding Agreement or similar agreement with a
gasoline supplier, in full force and effect continuously during the Lease Term. to enable it to
operate a gasoline dispensing facility Business on the Site.
.+.3 Utilities.
Upon the COffi!nenCement Date. the Tenant shall fully and promptly pay when due for all
water. gas. electric, telephone and other public utilities of every kind furnished to the Site
throughout the term of this Lease. and all other costs and expenses of every kind whatsoever of
or in connection with the use. operation. and maintenance of the Site. the Improvements and the
Business. and all activities conducted thereon, and Agency shall have no responsibility of any
kind tor same.
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ARTICLE V
CO:\STRUCTION OF lMPROVEME:\TS
5.1 Tenant's Construction Obligations.
The Agency and Tenant acknowledge and agree that prior to the Delivery Date of this
Lease. Tenant shall cause to be prepared Site Plan and working drawings (the "Site Plan") for
construction of the Improvements by Tenant in accordance with the Agreement. The
effectiveness of the Construction Contract is conditioned only on the joint execution of this
Lease by the Tenant and the Agency. The Construction Contract contains. among others. the
provisions required pursuant to the Agreement. each of which is hereby also made a part of and
an obligation of Tenant under this Lease.
5. I.l [Reserved]
5.1.2 Change in Site Plan. Construction shall be in accordance with the Site Plan. and no
change may be made in such plans or the construction that constitutes a material change in
design. operational elements of the Improvements, exterior appearance of the Improvements, or
any portion thereof. or that involves a single change resulting in a decrease of construction costs
in excess of Ten Thousand Dollars ($ I 0.000) or that involves changes in the aggregate that
decrease construction costs equal to or in excess of Fifty Thousand Dollars ($50.000) without the
Agency's prior written consent and approval. The Agency agrees to not unreasonably withhold
or delay approval. and the failure of the Agency to approve or disapprove a proposed change
within ten (10) business days after a request therefor. shall constitute the Agency's approval of
the change. provided the Agency has received with the request for the proposed change, adequate
copies of the change order, drawings. and other information necessary for the Agency to make an
informed decision as to whether to appro\e or disapprove a change. Tenant's construction of the
Improvements shall be subject to all of the requirements set forth in the Agreement and in this
Lease.
- ')
).-
Pavment of Construction Costs.
Tenant shall pay all costs of constructing the Improvements. including but not limited to
fees and costs charged by architects. engineers. general contractor. subcontractors. and laborers
and materialmen. Tenant shall also pay all costs of landscaping. all off-site improvements
required for construction of the Improvements. and all costs of permits. licenses, and bonds
required for construction of the Improvements. Agency shall have no obligation to pay any costs
or fees in any way related with construction required by Tenant under this Lease except as set
forth in the Agreement as the Infrastructure Funds and the Site Development Grant.
5.3 Condition of Agencv Property: No Warranties.
The Agency makes no covenant or warranty respecting the condition of the soil or subsoil
or any other condition of the Agency Property, or any plans and specifications previously
4845-0847-0272.1 6
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approved by Agency at the commencement of this Lease or approved by the Agency under this
Lease.
ARTICLE VI
DUTY TO MAINTAIN
6.1 Dutv to Maintain First-Class Condition.
Throughout the Lease Term and any extended term thereof. Tenant shall. at Tenant's sole
cost and expense. and at no cost and expense to the Agency. maintain the Site in first-class
condition and repair (defined in Section 6.5), and in accordance with (a) all applicable laws,
permits. licenses and other governmental authorizations, rules, ordinances. orders. decrees and
regulations now or hereafter enacted. issued, or promulgated by federal. state. county. municipal.
and other governmental agencies. bodies. and courts having or claiming jurisdiction and all their
respective departments, bureaus. and officials ("Laws"); (b) rules, orders, regulations, and
requirements now or hereafter enacted. issued, or promulgated by the insurance underwriting
board or insurance inspection bureau having or claiming jurisdiction and all insurance companies
insuring all or any part of the Site (the "Insurance Requirements").
6.2 Prompt and Diligent Repair.
Tenant shall promptly and diligently repair. restore. alter. add to, remove. and replace, as
required. the Site and all Improvements thereon to maintain or comply as above, or to remedy all
damage to or destruction of all or any part of the Improvements. Any repair. restoration,
alteration, addition, removal. maintenance, replacement, and other act of compliance under this
Section 6.2 (hereafter collectively referred to as "Restoration") shall be completed by Tenant
whether or not funds are available from insurance proceeds, condemnation proceeds or
Subtenant contributions. The Restoration shall satisfy the requirements of any Sublease then in
effect for the Improvements with respect thereto or. if no Sublease is then in effect. shall be
repaired or restored at least to the building standard and quality of the Improvements in existence
prior to the date of such damage or destruction.
6.3 Election to Terminate.
If during the last five (5) years of the term of this Lease. a casualty occurs for which
insurance is not required under this Lease and which causes damages in excess of one-half of the
then fair market value of the Improvements. then the Agency may elect to terminate this Lease.
6.4 Limitation of Article.
Nothing in this Article defining the duty of maintenance shall be construed as limiting
any right given elsewhere in this Lease to alter. modify, demolish. remove, or replace any
Improvement. No deprivation, impairment, or limitation of use resulting from any event or work
contemplated by this Article shall entitle Tenant to any abatement. deduction, diminution, offset,
or reduction in rent nor to any termination or extension of the term. except as provided herein.
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6.5 First-Class Condition Defined.
"First-class condition and repair", means Restoration that is necessary to keep the Site
and Improvements in efficient and attractive condition, at least substantially equal in quality to
the condition of the original Expansion Improvements constructed by Tenant. The Agency and
Tenant do not intend by the immediately preceding sentence that a property item is not in first-
class condition and repair merely because of ordinary and reasonable wear and tear that does not
materiallv reduce the attractiveness or utilitv of the item. Tenant's obligation to maintain the
. . . "-
Site and all Improvements in first-class condition and repair also require that Tenant employ
Tenant's best efforts to cause to be operated by itself and any Subtenant in a manner that will
produce at all times the Minimum Assessed Valuation and Minimum Sales Tax as defined in the
Agreement and as set forth in the Minimum Assessed Valuation Covenant and the Minimum
S;\es Tax Covenant. as provided in Exhibits 'r and "r, respectively, to the Agreement.
6.6 Contest bv Tenant.
On prior written notice to the Agency. Tenant has the right to contest by appropriate
judicial or administrative proceedings. without cost or expense to the Agency. the validity or
application of any Laws requiring Tenant to repair, maintain, alter, or replace the Improvements
in whole or in part. and Tenant shall not be in default for failing to do such work until a
reasonable time following final determination of Tenant's contest: provided. however, this right
shall not abridge, minimize, or otherwise modify any other applicable provision of this Lease
which provision is to remain in full force and effect. If Tenant gives notice of contest, Tenant
shall first furnish the Agency with security satisfactory to the Agency in its sole and arbitrary
discretion or with a bond. satisfactory to the Agency in its sole and arbitrary discretion in form,
amount. and insurer. guaranteeing compliance by Tenant with the contested Laws and
indemnifying the Agency against all liability and expenses that the Agency may sustain or incur
by reason of Tenant's failure or delay in complying with the Laws. including attorneys' fees.
The Agency may. but is not required to. contest any such Laws independently of Tenant, and
may take positions inconsistent with those of Tenant. Tenant shall not take any position with
respect to any such Law that. in the Agency's sole and arbitrary discretion. might result in an
interpretation that Agency is required to repair, alter, or replace all or any portion of the
Expansion Improvements.
6.7 Minor Construction.
The Agency's approval is not required for Tenant's minor restoration. "Minor" means an
expenditure for restoration that does not exceed Fifty Thousand Dollars ($50,000) ("Minor
Amount"). The Minor Amount shall be increased (or decreased) proportionately to any increase
(or decrease) in the Consumer Price Index for Allltems--U.S, Average ('"CPI"), as published by
the United States Department of Labor, Bureau of Labor Statistics. The increase (or decrease) in
the Minor Amount shall be determined by multiplying the sum of Dollars
($ ) by a fraction. the numerator of which is the adjustment index (as hereinafter
defined) and the denominator of which is the base index (as hereinafter defined). The term "base
index" as used in this Lease is the cpr figure as of the date of this Lease. The term "adjustment
index" as used in this Lease shall be the CPI figure closest to the date on which restoration is
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scheduled to commence. as this figure is recorded in the United States Department of Labor's
most comprehensive official index then in use and most nearly similar and corresponding to the
base index. If the adjustment index is calculated from a base d.ifferent from the base used herein
for the base index, the base index used for calculating the new Minor Amount shall first be
converted to correspond to the adjustment index under a formula supplied by the Department of
Labor. If the United States Department of Labor shall discontinue publication of the base index.
in that event a consumer price index of the same type and character shall be determined and
published by another department of the United States government. then the index most nearly
similar to the base index shall be used for the computation contemplated herein. In the absence
of any such official consumer price index published by a United States governmental agency.
then the most nearly similar index published by a responsible private organization shall be used.
"Major"' means all other restoration. Restoration cost shall include the actual cost to Tenant for
any demolition and any removal of existing Improvements or parts of Improvements as well as
for preparation. construction. and completion of all new Improvements or parts of
Improvements.
6.8 Maior Construction/Change in Plans.
Except as provided for the construction of the Expansion Improvements, before any
major restoration or change in the Site Plan (as defined in Section 5. I) is commenced on the Site
or Improvements, including, without limitation. the delivery of any building materials to the Site
in connection with such work and the entering into and the commencement of work under any
contract covering both off-site and on-site work ("Major Work of Improvement'.) Tenant shall
comply with all the following conditions:
6.8.1 Site Plan. Tenant shall deliver and assign to the Agency for the Agency's approval
and use two sets of the Site Plan prepared by an architect or engineer licensed to practice as such
in the State of California. Said Site Plan shall provide for the construction of all Improvements
within the exterior property lines of the Site: provided. however. that work beyond the Site
required by the Laws or work on utilities serving the Site or affected by the contemplated
construction. work on access areas. and work required by conditional use requirements will not
violate this provision. With the Site Plan, Tenant shall deliver to the Agency the certificate of the
person or persons who prepared the Site Plan acknowledging and accepting assignment of the
Site Plan to, and their use by, the Agency and certifying that Tenant has fully paid for them or
waiving payment and waiving any right to a lien for preparing them and otherwise acceptable to
the Agency in its sole and arbitrary discretion.
6.8.2 Agencv's Consent Required. The Agency shall not unreasonably disapprove the
Site Plan. Approval or disapproval shall be communicated in the manner provided for notices,
and disapproval shall be accompanied by specification of the grounds for disapproval; provided
that the Agency's failure to disapprove within thirty (30) days after receipt by the Agency shall
be conclusively considered to be approval by the Agency. Following the Agency's first or any
subsequent disapproval. Tenant may elect to (a) to submit revised plans and specifications or (b)
to give notice contesting the reasonableness of the Agency's disapproval. If the reasonableness
of the Agency's disapproval is sustained, Tenant shall perform as in (a) above; if it is not
sustained, the plans and specifications shall be considered approved. Disapproval and election to
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submit revised plans and specifications shall extend the time to commence and complete
construction by the longer of (a) thirty (30) days or (b) the period of time attributable to
resolution of any dispute over the reasonableness of the Agency's disapproval of the plans and
specifications.
6.8.3 Governmental Agencv Approvals. Tenant shall submit the Site Plan to the
appropriate governmental agencies for approval. and deliver and assign to the Agency for the
Agency's approval and use one complete set as approved by the governmental agencies.
Changes from the Site Plan shall be considered to be within the scope of such plan if they are not
subst~tial or if they are made to comply with suggestions. requests. or requirements of a
governmental agency or official in connection with the application for permit or approval. and if
thev do not diminish substantiallv in size. utility, or value the Improvements as the same that
the~ exists or are contemplated i~ the Site Plan previously approved by Agency. With the Site
Plan. Tenant shall deliver to Agency the certificate of the person or persons who prepared the
Site Plan acknowledging and accepting assignment of the Site Plan to, and their use by, the
Agency, and certifying that Tenant has fully paid for them or waiving payment and waiving-any
right to a lien for preparing them and otherwise acceptable to the Agency in its sole and arbitrary
discretion.
6.8.4 Notice of Commencement of Construction. Tenant shall notify the Agency of
Tenant's intention to commence any Major Work of Improvement at least ten (10) days before
commencement of any such work. The notice shall specify the approximate location and nature
of the intended work. The Agency shall have the right to post and maintain on the Site any
notices of nonresponsibility provided for under applicable law. and to inspect the Site or
Improvements in relation to such work at all reasonable times.
6.8.5 General Contractor. Funds to Complete. Tenant shall contract with a general
contractor licensed by the State of California for any Major Work of Improvement. Tenant shall
furnish the Agency with a true copy of Tenant's contract with the general contractor, together
with evidence of the general contractor's financial condition and evidence that Tenant has
sufficient funds committed to complete the construction. The general contract shall (i) give the
Agency the right, but not the obligation, to assume Tenant's obligations and rights under that
contract if Tenant should default under the contract or this Lease: and (ii) provide that the
Agency. its agents and representatives. may enter the Site or Improvements at any reasonable
time thereafter to cause completion of the construction. Tenant shall assign to the Agency for its
use the general contract and all of said bonds. and Tenant shall deliver to the Agency an
acknowledgment and acceptance by the general contractor and issuer of the bonds to the
assignment to the Agency, said acknowledgment and acceptance to be in such form as the
Agency in its sole and arbitrary discretion may require. The Agency may disapprove the
Tenant's contract with the general contractor or the general contractor's financial condition by
giving written notice thereof to Tenant. The notice shall specify the grounds for disapproval.
The Agency shall not unreasonably disapprove and shall be considered to have approved in the
absence of notice of disapproval given within thirty (30) days after Tenant furnishes the contract
and evidence specified above.
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6.8.6 Compliance with Laws. Tenant shall procure. and on prior request of the
Agency, deliver to the Agency at Tenant's expense evidence of compliance with all the Laws.
including. without limitation. all permits. licenses. and other governmental authorizations.
6.8.7 Insurance Required. Tenant shall deliver to the Agency (a) certificates of
insurance, (b) evidence of workers' compensation insurance covering all persons employed in
connection with the work and with respect to whom death or bodily injury claims could be
asserted against the Agency or any of the Agency Property. or the Agency's interest in the
Agency Property. the Improvements and this Lease or any of them or against Tenant. the
Improvements and the leasehold estate of Tenant. and (c) evidence that Tenant has paid or
caused to be paid all premiums for the coverage described above in this Section and insurance
provided for in Section 6.2 of the Agreement. sufficient to assure maintenance of all insurance
required under this Lease and the Agreement during the anticipated course of the work and
thereafter as required pursuant to the Agreement. Tenant shall maintain, keep in force, and pay
all premiums required to maintain and keep in force all insurance required under this Section
6.8.7 at all times during \vhich such work is in progress.
ARTICLE VII
OWNERSHIP OF IMPROVEMENTS/LEASEHOLD FINANCING
7.1 Ownership ofImprovements and Personalitv.
7.1.1 Ownership of Improvements During Lease Term. Title to Improvements to be
constructed on the Agency Property by Tenant shall be owned and may be depreciated for
income tax purposes by Tenant until expiration of the Lease Term, or any extended term thereof,
or sooner termination of this Lease; provided. however. the Agency disclaims any warranty of
title or any representation or warranty that depreciation may be available to Tenant.
7.1.2 Ownership of Improvements at Termination. All Improvements on the Agency
Property at the expiration of the Lease Term or any extended term thereof. or sooner termination
of this Lease shall. without compensation to Tenant. then automatically and without any act of
Tenant or any third party become the Agency's property. Unless the Tenant has duly exercised
the option to purchase the Agency Property as provided in Article XVIII hereof. Tenant shall
surrender the Improvements to the Agency at the expiration of the Lease Term or any extended
term thereof, or sooner termination of this LeaSe. in good condition and repair. ordinary wear and
tear excepted. free and clear of all liens and encumbrances. other than those, if any, permitted
under this Lease or otherwise created or consented by the Agency. Tenant agrees to execute,
acknowledge. and deliver to the Agency any instrument requested by the Agency as necessary in
the Agency's opinion to perfect the Agency's right, title, and interest to the Agency Property.
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7.1.3 Trade Fixtures. Any property that may be removed by the Tenant. or any
Subtenant pursuant to a Sublease approved by the Agency under Section 8.2, herein. may be
remoyed by such party when permitted thereunder subject to all the terms of this Lease.
including. without limitation. repair of damage caused by such removal. Excluding the property
described in the preceding sentence. Tenant agrees that the following items are real property or,
if personalty, shall be treated as real property and shall not be removable for purposes of this
Section 7.1:
All machines. equipment. material. appliances. and fixtures now or hereafter
installed or placed by Tenant on or in the Agency Property or the Improvements
for the (feneration and distribution of air. water. heat. electricity. light. fuel or
c . ....
refrigeration. or for ventilating or air-conditioning purposes. or for sanitary or
drainage purposes. or for the exclusion of vermin. or insects. or for the removal of
dust. refuse. or garbage, and including all awnings, \vindow shades, drapery rods
and brackets. screens. floor coverings, incinerators. carpeting and all furniture and
fixtures used in the operation of the intended business operations and other
Improvements together with all additions to. substitutions for. changes In or
replacements of. the whole or any or all of said articles of property.
7.1.4. Real Estate Covenant. The Agency and Tenant covenant and agree that all the
Improvements shall at all times be. and remain. real property notwithstanding Tenant's
ownership of the Improvements.
7.2 Leasehold Financing bv Tenant.
7.2.1. Tenant's Right to Finance. Tenant may at any time during the Lease
Term or any extended term thereof. subject Tenant's leasehold estate and attendant rights created
under this Lease to one or more Mortgages as security for a loan or loans or other obligations of
Tenant solely for the purpose of constructing. maintaining or replacing the Improvements or any
portion thereof on the Site. provided that any such Mortgage shall be subject to all covenants,
conditions, and restrictions set forth in this Lease and to all rights and interests of the Agency
except as may be otherwise provided herein, and further provided that Tenant shall give the
Agency prior written notice of any Mortgage. together with a copy of the mortgage instrument
and the promissory note. Any proceeds of any such financing or refinancings obtained by the
Tenant in excess of the limitations set forth in section 6.12 (i.e.. $2.019,000) of the Agreement
shall be deemed to be proceeds of sale or refinancing of the Site or the Improvements and shall
be paid immediately upon receipt by the Tenant to the Agency.
7.2.2. Leasehold Mortgagee. The holder or holders of any lien created by a mortgage
secured by Tenant's leasehold estate are the Leasehold Mortgagees. Upon written consent of the
Agency. a Leasehold Mortgagee or its assigns may enforce its lien and acquire title to the
leasehold estate in any lawful way and. pending foreclosure of the lien. the Leasehold Mortgagee
may take possession of and operate the Site, performing all obligations performable by Tenant,
and on foreclosure of the lien by power of sale, judicial foreclosure. or on acquisition of the
leasehold estate by deed in lieu of foreclosure, the Leasehold Mortgagee may, on notice to the
Agency. sell and assign the leasehold estate hereby created.
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Notwithstanding the provisions set forth herein. and prior to the exercise of any rights by
am Leasehold Mortgagee. the Af!encv shall have the right. but not the obligation. to cure anv
'- .... ...."' .... ....'.
default and may enforce any lien and acquire title to the leasehold estate in any lawful way and.
pending foreclosure of the lien. the Agency may take possession of and operate the Site.
performing all obligations performable by Tenant. and on foreclosure of the lien by power of
sale. judicial foreclosure. or on acquisition of the leasehold estate by deed in lieu of foreclosure.
the Agency may sell and assign the leasehold estate hereby created. The Leasehold Mortgagee
or any person or entity acquiring the leasehold estate. as applicable. shall be liable to perform
Tenant"s obligations under this Lease only during the period. if any. in which such person has
ownership of the leasehold estate or possession of the Site. A Leasehold Mortgagee shall have
such further rights and responsibilities as hereinafter set forth in Section 16.9 of this Lease.
ARTICLE VIII
SUBLEASES
8.1 Requirements for Sublease.
Tenant shall have the right after the Commencement Date of this Lease to enter any
sublease (the "Sublease") after first providing the Agency with a written Sublease Notice (the
"Sublease Notice") at least forty-five (45) days before the proposed effective date of the
Sublease. The Sublease Notice shall include all of the following:
8.1.1 Information regarding the proposed Subtenant. including the name, address and
ownership of Subtenant: the nature of the Subtenant" s business; the Subtenant's character and
reputation: and. the Subtenant" s current financial statements (certified by an officer. partner or
owner of the Subtenant). bank account statements. tax returns and a detailed business plan
acceptable to the Agency: and
8.1.2 All the material terms of the proposed Sublease. including the consideration
payable by the Subtenant: the portion of the Site that is subject to the Sublease (the "Subject
Space"): a general description of any planned alterations or Expansion Improvements to the
Subject Space: the proposed use of the Subject Space: the effective date of the Sublease; and a
copy of all documentation concerning the proposed Sublease: and
8.1.3 Any other information or documentation reasonably requested by the Agency.
8.1.4 The Developer shall be responsible for any relocation costs of Subtenant(s) in the
event of relocation by Developer or any other third party. Agency shall not be responsible for
any relocation costs of Subtenant(s).
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8.2 AgenC\'s Consent.
The Agency shall haw thirty (30) days to approve or disapprow. in \\Titing. the Sublease
set forth in th~ Sublease Notice. Failure of the Agency to respond to such Sublease Notice with
the time frame shall be deemed to be approval by the Agency of the Sublease. In the event the
Agency does not approve any such Sublease. it shall state the reasons in writing at the time of the
submission of the disapproval of the Sublease. The Agency may not unreasonably withhold its
consent to any proposed Sublease that complies with this Article VIII. Reasonable grounds for
denying consent to a Sublease include any of the following:
8.2.1 Subtenant" s character. reputation. credit history. business or proposed use is not
consistent with the character or quality of the Improvements: or
8.2.2 Subtenant \\ould be a significantly less prestigious occupant of the Improvements
than other Subtenants and the Tenant: or
8.2.3 Subtenant" s intended use of the portion of the Site IS inconsistent with the
permitted uses set forth in this Lease: or
8.2.4 Subtenant" s financial condition is or may be inadequate to support the its
obligations under the Sublease and/or this Lease: or
8.2.5 The Sublease would cause the Agency to violate another lease or agreement to
which the Agency is a party.
8.3 Tenant"s Remedies.
If the Agency \\Tongfully denies or conditions its consent. Tenant may seek only
declaratory and injunctive relief. Tenant specifically wal\'es any damage claims against the
Agency in connection with the withholding of consent.
8.4 Sublease Terms.
Each Sublease shall be reasonably satisfactory to the Agency and shall contain a
provision requiring the Subtenant to attorn to the Agency on the termination of this Lease. The
Sublease shall also provide that if Tenant defaults under this Lease. the Subtenant will make
payments directly to the Agency after receipt of notice of Tenant" s default and. notwithstanding
any dispute between the Agency and Tenant. any such payment which complies with the terms
and conditions of the Sublease shall constitute full satisfaction of the Subtenant" s obligation to
Tenant under the Sublease. The Sublease shall further provide that in the event of a Tenant
default under the Sublease the Subtenant will not terminate the Sublease until the Agency has
received notice of the default. The Agency shall not be required or obligated to cure any default.
The Agency shall have thirty (30) days following receipt of notice to determine whether it
wishes to cure the default and thereafter. if it does wish to cure. the Subtenant may not terminate
the Sublease so long as the Agency is diligently prosecuting the cure to completion.
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8.5 Acceptance of Rent.
Tenant shall not accept. directly or indirectly. more than one (1) month's prepaid rent
from any Subtenant.
8.6 Exclusive Occupancv.
Each Sublease shall be to a Subtenant for actual possession and shall require the
Subtenant to exclusively occupy the portion of the Site and Improvements so leased within
ninety (90) da\s after the monthly rent becomes payable. Tenant shall not be in default.
how;yer. if \\ithin ninety (90) days after such Subtenant was required to pay monthly rent.
Tenant at Tenant's sole expense commences an action to terminate such Sublease and diligently
pursues such action to completion.
8.7 Consistency of Sublease.
The Sublease shall not be inconsistent with any provision of this Lease and shall require
the payment ofrent equal to the fair market rental value of that portion of the Site leased.
8.8 Cost of Subtenant Improvements.
The cost of all restoration. and all construction allowances agreed to be paid by Tenant or
on behalf of the Subtenant. in connection \vith the Sublease and any Expansion Improvements
shall be secured to the satisfaction of the Agency. If requested by the Agency. the Subtenant
shall have entered into a written agreement with the Agency agreeing to complete any tenant
improvement work. including any Expansion Improvements. required of it under the Sublease.
8.9 Inducements to Enter Sublease.
All inducements to enter the Sublease shall have been fully satisfied and the Tenant shall
have been offered no rental concession or agreement other than as stated in the Sublease to
induce Subtenant to enter the Sublease.
8.10 Waiver of Collection of Securitv Deposit.
Subtenant has agreed to waive collection of the security deposit. if any. against the
Agency. unless the Agency actually receives the security deposit from the Tenant and fails to
refund it to the Subtenant.
8.11 Agencv Recognition of Sublease on Lease Termination.
In connection with any proposed Sublease:
8.11.1 Tenant may request as part of the Sublease Notice under subsection 8.1 regarding
a proposed Sublease that the Agency give the Subtenant under such Sublease a recognition
agreement (the "Recognition Agreement") providing that if this Lease is terminated as a result of
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Tenant's default the Agencv shall recognize that such Sublease is a direct lease betv,;een the
. ~. ~
Agencv and that Subtenant. The Agencv shall not be required to grant that request and execute a
~ . .
Recognition Agreement for such a Sublease unless:
(a) All other conditions and requirements for the granting of the Agency's
consent to such Sublease have been satisfied: and
(b) Such Sublease lease is solely for the business of selling merchandise and
services consistent with this Lease: and
(c) The Agency has determined in good faith that the reputation. character,
and financial strength of the Subtenant under such Sublease equals or exceeds the
criteria for those attributes that the Agency would then apply in determining
whether to enter into a direct lease of that portion of the Site that is subject to such
Sublease on terms and conditions that are acceptable to Landlord at that time.
8.11.2 When the Agency is required to execute a Recognition Agreement. the following
conditions and limitations shall be reflected in the Recognition Agreement:
(a) The Agency shall not be bound by any terms or conditions of such
Sublease that are inconsistent with the terms and conditions of this Lease. The
economic terms of such Sublease may be more favorable to the Agency than
those stated in this Lease and the Agency may reserve the right to adjust the rent
under such Sublease on termination of this Lease to an amount equal to the then
fair market rental value of the portion of the Site to be leased under such
Sublease, as determined by the Agency in good faith: and
(b) The Agency shall not be liable for any act or omission of Tenant; and
(c) The Agency shall not be subject to any setoffs or defenses that the
Subtenant might have as to Tenant or to any claims for damages against Tenant;
and
(d) The Agency shall not be required to credit the Subtenant with any rent or
security deposit paid by the Subtenant to Tenant pursuant to the terms of such
Sublease: and
(e) The Agency shall be responsible for performance of only those covenants
and obligations of Tenant under such Sublease accruing after the termination of
this Lease: and
(f) The Subtenant shall agree, on termination of this Lease. to make complete
attornment to the Agency, as lessor, under a written agreement executed by the
Agency and the Subtenant, to establish direct privity of contract between the
Agency and the Subtenant with the same force and effect as thought such
Sublease was originally made directly between the Agency and the Subtenant.
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8.11.3 On the Agency's written request given any time after the termination of this
Lease. the Subtenant shall execute a new lease for such portion of the Site on the same terms and
conditions as in the Recognition Agreement. Despite any other provision of this Lease. when
Tenant requests a Recognition Agreement the Agency's deemed consent to any such Sublease
under Section 8.2 shall not be construed as consent to or agreement to execute the requested
Recognition Agreement.
8 .12 Performance.
Tenant shall comply with and perform each of the covenants. terms. and conditions of
anv Sublease affecting the Site or Improvements and shall not alter. amend. cancel, terminate, or
m~dify any such Sub~ase without first obtaining the written consent of the Agency. Approval of
the alteration. amendment. cancellation. termination. or modification of a Sublease shall be
deemed given by the Agency unless \vithin thirty (30) days after the request for approval is
submitted to the Agency. the Agency gives Tenant written notice of its objection.
ARTICLE IX
ASSIGNMENT BY TENANT
9.1 Assignment of Lease.
Tenant may assign this Lease or any interest herein, subject to the prior written consent of
the Agency. which consent shall be in the Agency's sole and absolute discretion. The proposed
assignee must be financially qualified and have sufficient experience in the operation and
management of facilities and a business as contemplated by this Lease for the use of the
Improvements. be able to perform all the agreements, undertakings. and covenants of this Lease
and all other agreements entered into by Tenant that relate to the management. operation,
maintenance. construction. and restoration of the Improvements and the Site. To assist the
Agency in determining whether or not the proposed assignee is so qualified, Tenant shall furnish
to the Agency at no expense to the Agency. prior to such assignment. detailed and complete
financial statements of the proposed assignee, audited by a certified public accountant reasonably
satisfactory to the Agency (if the proposed transferee causes its statements to be so audited in its
normal course of business). together with detailed and complete information about the business
of the proposed assignee, including its experience in operating businesses similar to that as
contemplated by this Lease for the use of the Improvements, the use to be made of the Agency
Property and Improvements by the proposed assignee, projections by the proposed assignee of
the sources of funds to be used to repay any indebtedness of Tenant that the proposed assignee
will assume or take subject to, or agree to pay to Tenant, and other claims on and requirements
for such funds, together with such other information as the Agency may reasonably require to
assist the Agency in determining whether or not the proposed assignee is so qualified. The
Agency shall have thirty (30) days after receipt of the information described above to notify
Tenant of whether it consents or does not consent to the proposed assignment. Absent any such
notification by the Agency during said 30-day period, the Agency shall be conclusively deemed
to have not consented to the assignment. Consent by the Agency to one assignment shall not be
deemed to be a consent to an)' subsequent assignment. Any assignment made contrary to the
-18-1).0847.0272.1 17
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terms of this subsection shall be null and void: provided. however. that the parties hereto
acknowledge and agree that Tenant may assign all of its right. title and interest in this Lease to
an entity (the "Approved Assignee") (a) at least twenty five percent (25%) of which is owned
directly or indirectly by Tenant or an entity that owns or is in common o\vnership with Tenant
(the "Tenant Member: and, (b) the managing member or manager of which is the Tenant
Member. Any Approved Assignee shall expressly assume the obligations of Tenant under this
Lease and agree to be subject to the conditions and restrictions to which Tenant is subject under
this Lease and. upon such assumption. the Approved Assignee shall become Tenant hereunder
forallpurposes.
9.2 Leasehold \'lorUlaQees.
Notwithstanding an:1hing to the contrary contained in Section 9.1. the consent of the
Agency shall not be required for any transfer, conveyance, or assignment resulting from a
foreclosure or acceptance of a deed in lieu of foreclosure of any Leasehold Mortgage. or for any
transfer. conveyance. or assignment by any Leasehold Mortgagee following its acquisition of this
Lease and the leasehold estate of Tenant created hereby as a result of foreclosure or acceptance
of a deed in lieu of foreclosure.
ARTICLE X
PUBLIC WORKS PROJECT
10.1 Prevailing Wage! Public \V orks Proiect.
The parties hereto acknowledge and agree that any construction performed for the benefit
of the Project shall be deemed a "Public Works" project as defined in the California Labor Code
and therefore subject to the provisions of the California Labor Code.
I 0.2 The Tenant shall carry out the construction of the Project in conformity with the
California Labor Code provisions requiring payment of general prevailing rate of per diem
wages and other applicable state labor standards and requirements.
10.3 The Tenant shall provide the Agency with certified payroll records in accordance with
the requirements set forth in California Labor Code Section 1776 for all aspects of construction
of the Project.
ARTICLE XI
ACCOUNTING AND BOOKKEEPING
11.1. Accounting Required.
On or before May 15th of each year during the Lease Term. or any extended term thereof,
beginning in the first year during which the Business conducted upon the Improvements have
been open tor business for at least ninety (90) days preceding said date, Tenant shall. without
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P _-\gendas'.Agenda Anachments\.-\grrnts-Arnend ~005,05-01-IO El Paseo-Lease Agrrnt doc
notice or demand from Agency. deliver to Agency in the manner prescribed in this Lease for
giving notices. a statement prepared in accordance with generally accepted accounting principles
~onsi~tently applied and by a Certitled Public Accountant acceptable to the Agency showing the
gross income and deductions for the preceding Calendar Year. Delivery by mail or other means
~hall be deemed made in accordance with the detlnition of delivery set forth in Section 19.1.2 of
this Lease.
11.2 Audit.
Tenant shall keep true and correct records of the gross income and deductions. All
records relating to the management, operation. maintenance. repair. construction or alteration of.
ar addition to the Site and Improvements shall be kept at the principal business office of Tenant
for not less than three years after delivery of the required annual report. The Agency shall have
the right. at its cost and at any reasonable time and from time to time after giving prior written
notic; to Tenant. to do or cause to be done any of the following: to audit the records, to cause an
audit of the records to be made; to make abstracts from the records; to make copies of any or all
of the records: to examine any or all Subleases; and to make copies of any or all Subleases.
Tenant shall make all records specitled in the notice available at the time specified in the notice,
if reasonable. and at the place where the records are to be kept pursuant to this Section 11.2. All
information so obtained by the Agency shall be treated as contldential except in any litigation or
arbitration proceedings between the Agency and Tenant or the Agency and any Subtenant,
concessionaire or licensee and except. further. that the Agency may divulge the information to a
prospective buyer or encumbrancer of the Site or of the Agency's interest in the Lease or to a
governmental agency or employee thereof demanding the information. The primary purpose of
such audit right of the Agency shall be for the purpose of verifying the amount of Minimum
Sales Tax that are reported for purposes of determining the benefits received by the Agency for
the entering into of the Agreement and this Lease and to verify the manner and procedures for
use of the Infrastructure Funds and the Site Development Grant
11.3 Partial Year.
A "Calendar Year" shall be considered to begin on the first day of January of the year in
which the Improvements are open for business and each subsequent anniversary date of the
beginning of the tlrst Calendar Year. Partial years preceding the first Calendar Year and
following the last full Calendar Year of the term of this Lease shall be included in and with the
nearest whole Calendar Year.
11.4 Minimum Sales Tax.
Agency is entering into this Lease based on Tenant's assurances that the Improvements to
be operated by the Tenant will generate substantial revenue from the sales of automobile fueL
supplies and other items as are typically found in a convenience store. The Tenant covenants
that the Improvements shall generate minimum taxable sales transactions for the generation of
local sales tax revenues (the "Minimum Sales Tax") during the term of the Lease Term.
Specifically, pursuant to the Minimum Sales Tax Covenant (Exhibit "H" to the Agreement) the
Tenant covenants to generate Minimum Sales Tax in amount of Five Million Dollars
~~45-0847-02n I 19
i' .\~t'nJJ,,;,.'I,!!enda Ana..:hmt'nls,_.'I,grmts.....mend :0050:--01-10 E! Pa~C:ll-Lease A~rml dLlC
($5.000.000) for each and every year of operation of the Project during the Term of this Lease
including any extension of Lease Term as set forth herein.
11.5 Minimum Assessed Valuation.
Agency is entering into this Lease based on Tenant' s assurances. pursuant to the
Aureement and the Minimum Assessed Valuation Covenant (Exhibit "G"). that the
e
Improvements to be operated by the Tenant shall be assessed by the Assessor of the County of
San Bernardino. for general property tax purposes. at a minimum assessed value of Two Million
Five Hundred Thousand Dollars and No Cents ($2.500.000.00) (the "Minimum Assessed
Value").
11.6 Extension of the Lease Term.
Tenant shall have the right to extend the Lease Term upon written notice given to the
Agency thirty (30) days prior to the termination of the Lease Term so long as Tenant generates
Minimum Sales Tax from the Improvements for the preceding five (5) years of the Lease Term,
which in the aggregate total Thirty Four Million Seven Hundred One Thousand Five Hundred
Five Dollars and No Cents ($34.701.505.00) and so long as the Improvements to be operated by
Tenant shall be assessed by the Assessor of the County of San Bernardino. for general property
tax purposes. for the preceding five (5) years of the Lease Term, which in the aggregate total a
minimum assessed value of Twelve Million Five Hundred Thousand Dollars and No Cents
($12,500.000.00). Thereafter, Tenant may extend any Extension Term upon written notice given
to the Agency thirty (30) days prior to the termination of such Extension Term so long as Tenant
is not in default under any of the terms of this Lease.
ARTICLE XII
TAXES AND ASSESSMENTS
12.1 Taxes and Assessments.
12.1.1 Payment of T axes. Tenant agrees to pay and discharge as they become due,
promptly and before delinquency. all taxes. assessments. rates. charges. license fees. municipal
liens, levies. excises or imposts, whether general or special. or ordinary or extraordinary, of
every name. nature. and kind whatsoever. including all governmental charges of whatsoever
name, nature. or kind. which may be levied. assessed. charged, or imposed. or may become a lien
or charge on the real property leased hereunder. or any part thereot: the leasehold of Tenant
herein, the Site described herein, any building or buildings. or any other improvements now or
hereafter thereon, or on Tenant's estate hereby created which may be a subject of taxation, or on
Agency by reason of its ownership of the fee underlying this Lease. during the entire term
hereof. saving and excepting only those taxes hereinafter in this Section 12.1 specifically
excepted.
i 2.1.2 Pavment of Special Assessments. Specifically and without in any way limiting
the generality of the foregoing. Tenant shall pay any and all special assessments or levies or
.jg.j5-0847-0272I . 'JO
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charges made by any municipal or political subdivision for local improvements. and shall pay the
same in cash as they shall fall due and before they shall become delinquent and as required by
the act and proceedings under which any such assessments or levies or charges are made by any
municipal or political subdivision. If the right is given to pay either in one sum or in installments.
Tenant may elect either mode of payment and its election shall be binding on the Agency. If by
making an election to pay in installments. any of the installments shall be payable after the
termination of this Lease or any extended term thereof. the unpaid installments shall be prorated
as of the date of termination. and amounts payable after said date shall be paid by the Agency.
12.1.3 Proration of Taxes. All payments of taxes of special assessments shall be
prorated at commencement and expiration of the Lease term or any extended term thereof.
12.1.4 Contest of Taxes. If Tenant shall in good faith desire to contest the validity or
amount of any tax. assessments. levy. or other governmental charge herein agreed to be paid by
Tenant. Tenant shall be permitted to do so. and to defer the payment of said tax or charge. the
validity or amount of which Tenant is so contesting, until final determination of the contest~ by
giving to the Agency written notice thereof prior to the commencement of any contest. which
shall be at least 15 days prior to delinquency. and by protecting the Agency on demand by a
good and sufficient surety bond against any tax, levy. assessment. rate or governmental charge,
and from any costs. liability. or damage arising out of a contest.
12.1.5 Rebates. Any and all rebates on account of taxes. rates. levies, charges, or
assessments required to be paid and paid by Tenant under the provisions of this Lease shall
belong to Tenant. and the Agency will. on the request of Tenant. execute any receipts,
assignments. or other acquittances that may be necessary in order to secure the recovery of the
rebates. and will pay over to Tenant any rebates that may be received by the Agency.
12.1.6 Proof of Compliance. Once in each calendar year during the term of this Lease,
or any extended term thereof. Tenant shall obtain and deliver to the Agency receipts or duplicate
receipts or copies thereof for all taxes. assessments and other items required hereunder to be paid
by Tenant.
12.1. 7 Exemptions. Tenant's obligation to pay taxes shall not include income, gift.
franchise, estate. inheritance. succession. capital levy, or transfer tax levied or assessed against
the Agency. if any. by federal. state. or other governmental agency.
12.2 Personal Propertv Taxes.
Site Users. and each of them. agree to pay before delinquency all personal property taxes
assessed against personal property of each of them in or about the Site at any time during the
term of this Lease or any extended term thereof.
ARTICLE XIII
iNSURANCE
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13 .1 Insurance.
13.1.1 Site users. and each of them. agree. at all times during the term of this Lease and
am extended term thereof. and at such Site User's sole expense. to maintain Commercial
G~neral Liability Insurance (including Premises-Operations coverage. Contractual Liability
coverage for the- indemnity provisions of this Lease. Products-Completed Operations Hazards
coverage. Personal Injury and Death coverage. and public liability insurance coyerage). property
damage insurance. and Garage Keepers insurance. insuring the Site User and Site User's
empl;yees against all bodily injury. property damage. personal injury and other loss arising out
of the use and occupancy of the Site and the business operated by such Site User. or any other
occupant on the Site. including appurtenances to the Site and sidewalks fronting thereon.
including the sidewalk area used for pedestrians or vehicular travel entering or leaving the Site.
The insurance required hereunder shall have a minimum combined single limit of liability of not
less than ONE MILLION DOLLARS ($1,000.000). a general aggregate limit of TWO
MILLION DOLLARS ($2.000.000). and property damage limit of not less than FIVE
HUNDRED THOUSAND ($500.000). The Agency shall be named as an additional insured
under every such policy of insurance. and every policy shall contain cross-liability
endorsements.
13.1.2 Tenant. at all times during the term of this Lease and any extended term thereof
and at Tenant expense. shall maintain on the Improvements on the Site. insurance against loss or
damage by fire and by any peril included within fire and extended coverage insurance for ninety
percent (90%) of the full replacement value of the Improvements. If any boilers or other
pressure vessels or systems are hereafter installed on the Agency Property. boiler and machinery
insurance with a minimum limit of ONE MILLION DOLLARS ($1,000.000) per occurrence and
insuring Tenant against all liability assumed by it under this Lease. as well as liability imposed
by law, shall be carried and maintained by Tenant at Tenant's expense. Any policy or policies
described in this subsection shall name the Agency as an additional insured. and the policy shall
contain cross-liability endorsements.
13 .1.3 The term "full replacement value" of the Improvements on the Site as used herein,
shall mean the actual replacement cost thereof from time to time less exclusions provided in the
normal fire insurance policy. In the event either party believes that the full replacement value
(that is to say. the then replacement cost less exclusions) has increased. it shall have the right, but
except as provided below. only at intervals of not less than three (3) years. to have the full
replacement value redetermined by the insurance company which is then carrying the largest
amount of standard fire and extended coverage insurance carried on the Site (hereinafter referred .
to as "major carrier"). The party desiring to have the full replacement value so redetermined by
the major carrier shall forthwith on submission of the determination of the major carrier give
written notice thereof to the other party hereto. The determination of the major carrier shall be
final and binding on the parties hereto. and Tenant shall forthviith increase the amount of the
insurance carried pursuant to this Lease as the case may be to the amount so determined by the
major carrier. Said determination shall be binding until superseded by agreement between the
parties hereto or by a subsequent redetermination by a major carrier. as defined herein. Each
party shall pay one-half of the. fee, if any, of the major carrier. If during anyone-year period
Tenant shall have made improvements to the premises, the Agency may have the "full
~~~'.0847.02"21 72
r -\c't'nda,;.l,\!enda .l,lta,:hlT1t'nl~,Agrmb--\mend :t1lJ5 0:'.1>1.10 EI Pase0-Lt'Jse ,-\~rmt do..: -
replacement value" redetermined at any time after the improvements are made. regardless of
when the "full replacement value" was last determined. The term "full replacement value" of
trade fixtures. equipment. and merchandise. as used herein. shall mean the actual replacement
cost thereof from time to time. In the event either party believes that the full replacement value
has increased or decreased. it shall have the right to have the replacement value redetermined as
provided above.
13.1.4 [Reserved]
13.1.5 Tenant further agrees at all times during the Lease Term and any extended term
thereof. and at Tenant's sole expense. to keep all of Tenant's personal property. including trade
fixtures and equipment and all merchandise of Tenant or any Subtenant that may be on the Site
from time to time. insured against loss or damage by fire and by any peril included within fire
and extended coverage insurance for an amount that will insure the ability of Tenant and its
subtenants. if any. to fully replace the trade fixtures. equipment and merchandise.
13.1.6 Site Users. and each of them. further agree to maintain in effect throughout the
Lease Term. or any extended term thereof. Workers' Compensation insurance in accordance with
California Law. and employers' liability insurance with a limit of not less than ONE MILLION
DOLLARS ($1.000.000) per employee and TWO MILLION DOLARS ($2.000.000) per
occurrence.
13.1.7 All of the policies of insurance referred to in this Lease shall be written by
companies authorized to do business in California and rated "B+NII" or better in "Best's
Insurance Guide". Site Users. and each of them. agree to pay all of the premiums therefor and
deliver said policies. or certified copies thereof. including all endorsements and amendments
thereof. to the Agency. In the event of the failure of a Site User either to procure said insurance
in the names herein called for \vithin ten (10) days after the commencement of this Lease and
thereafter at least fifteen (15) days prior to the expiration of any policy. or to pay the premiums
therefor when required. or to deliver said policies or certificates thereof. to Agency at least ten
( 10) days before the same become effective. the Agency shall be entitled. but shall have no
obligation. to procure said insurance and pay the premiums for same. Any premiums paid by
Agency shall be repaid by such Site User to Agency within fifteen (15) days of written notice
from Agency. and failure to repay the same shall carry with it the same consequence as failure to
pay any installment of rent. Each insurer referred to in this Section shall agree. by endorsement
on the policy or policies issued by it. or by independent instrument furnished to Agency. that it
will give the Agency thirty (30) days' written notice by registered mail before the policy or
policies in question shall be altered or cancelled.
13.1.8 In the event that Agency determines, in Agency's reasonable judgment. that the
limits of the public liability. property damage. or products liability insurance then carried by Site
User are materially less than the amount or type of insurance typically carried by owners or
tenants of properties located in San Bernardino, California, which are similar to and operated for
similar purposes as the Site. Agency may elect to require Tenant to increase the amount of
~peciric coverage. change the type of policy carried, or both. If Agency so elects, Tenant shall
De nonried in writing of the specific change in policy amount or type required and shall have
.J8.J5-08.Ji-0272.1 . . 23
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thirty (30) days after the date of Agency's notice to effect the change in amount or type of
policy. Any adjustment pursuant to this subsection may be made not more often than every two
(:2) years unless othemise agreed by Agency and Tenant.
13.1.9 Any policy required hereunder shall contain an endorsement waiving the insurer' s
rioht of subrogation against Agencv.
=- .......... ......
13.1.1 0 ~ot\\ithstanding an:1hing to the contrary contained within this Lease. the
Tenant" s obligation to carry the insurance provided for herein may be brought within the
~ -
coverage of a so-called blanket policy or policies of insurance carried and maintained by the
T enant~ provided. however. that the cO\uage afforded the Agency will not be reduced or
diminished or otherwise be different from that which would exist under a separate policy or
policies meeting all of the requirements of this Lease by reason of the use of a blanket policy of
insurance. and provided further that the requirements of this Article XIII are otherwise satisfied.
ARTICLE XIV
INDEMNIFICA TION
14.1 Indemnification.
Tenant agrees to indemnify. defend. protect. and hold Agency free and harmless from and
against any and all claims. liability. loss. damage. actions or causes of action, costs and expenses
(including attorneys' fees) arising from or in connection with any act. omission. or negligence of
Tenant. any and all Subtenants. or the employees. invitees. agents. licensees of any of them, or
any use of or activities on or about the Site. excluding any claims. liability. loss. damage, actions
or causes of action. costs and expenses (including attorneys' fees) arising from or in connection
\\ith Agency's willful misconduct. The indemnification or defense provided by Tenant is
independent of any insurance available to the Tenant. Agency shall be entitled to recover
reasonable attorney fees and court costs incurred in enforcing the indemnification and defense
clauses. The indemnification and defense clauses shall survive the expiration or earlier
termination of this Lease until all claims against Agency involving any of the indemnified
matters are fully. finally. and absolutely barred by applicable statutes of limitations. The duty of
Tenant to defend Agency is separate and independent of Tenant's duty to indemnify the Agency.
The duty to defend includes claims for which the Agency may be liable without fault or strictly
liable. The duty to defend applies regardless of whether the issues of negligence. liability. fault.
default. or other obligation on the part of Tenant or the Agency have been determined. but only
S(, long as any claim alleges a loss arising out of the Tenant's performance of its obligations
under this Lease or Tenant's actual use of the Site. It is the express intention of the parties that
either party may seek declaratory relief. summary adjudication or summary judgment in San
Bernardino Superior Court regarding Tenant's duty to defend the Agency at any stage of any
claim or suit.
ARTICLE XV
CONDEMNATION
~8~5-0847.0272.1 ')4
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15.1 Definitions.
The following definitions apply in construing proyisions of this Lease relating to a taking
of or damage to all or any part of the Agency Property or Improvements or any interest in them
by eminent domain or inverse condemnation:
"Taking" means any taking or damaging. including. without limitation. seyerance damage.
change of grade. taking possession. or damage to remaining property of the Agency and Tenant
by eminent domain or bv inverse condemnation or for any public or quasi-public use. A transfer
ot'title mav be either a t;ansfer resulting from the recording of a final order in condemnation or a
. ~
voluntary transfer or conveyance to the condemning agency or entity under threat of
condemnation. in avoidance of an exercise of eminent domain. or while condemnation
proceedings are pending. The taking shall be considered to take place as of the earlier of (i) the
date actual physical possession is taken by the condemner. or (ii) the date on which the right to
compensation and damages accrues under applicable law.
.. Total taking" means the taking of the fee title to all the Agency Property or the Improvements,
or a taking of the entire leasehold estate of Tenant. which shall be considered to exclude any off-
site improvements effected by Tenant to serve the Agency Property or the Improvements on the
Agency Property.
"Substantial taking" means the taking of so much of the Agency Property or Improvements so
that (a) in the reasonable judgment of the Agency a reasonable amount of reconstruction would
not make the Agency Property and Improvements either (i) a practical improvement and
reasonably suited for Tenant's continued occupancy for the uses and purposes for which the
Agency Property are leased hereunder. or (ii) reasonably efficient or economic for Tenant's use,
or (b) the income trom all Subleases payable to Tenant after the taking shall be less than one
hundred twenty percent (120%) of all rent additional rent, and other monetary obligations of
Tenant under this Lease.
"Partial taking" means any taking of the fee title to the Agency Property and Improvements
that is not either a total or a substantial taking.
"Notice of intended taking" means any notice that a reasonably prudent person would interpret
as expressing an existing intention of taking as distinguished from a mere preliminary inquiry or
proposal. It includes but is not limited to the service of a condemnation summons and complaint
on a party to this Lease. The notice is considered to have been received when a party to this
Lease receives from the condemning agency or entity a notice of intent to take. in writing,
containing a description or map of the proposed taking reasonably defining the extent of the
taking. In the case of inverse condemnation. notice is considered to have been received (i) by
Tenant when Tenant receives kno\\ledge of any fact or circumstance that would lead a
reasonable person to conclude that a taking by inverse condemnation has occurred or might
reasonably be expected to occur, and (ii) by the Agency when the Agency has received a written
communication (excluding communications of a generalized informational nature not relating
specifically to inverse condemnation of the Agency Property) that the Agency Property is being
taken by inverse condemnation.
.\8.\5-08.\ 7-02721 . 75
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"Award" means compensation paid for the taking whether pursuant to judgment or by
agreement or othem"ise.
15.2 Giving Notice.
The party receiving any notice of the kinds specified below shall promptly giw the other
party notice of the receipt. contents. and date of the notice received:
15.2.1 1'<otice of intended taking:
15.2.2 Service of any legal process relating to condemnation of the Agency Property or
Improvements:
15.2.3 Notice in connection with any proceedings or negotiations with respect to such a
condemnation: or
15.2.4 Notice of intent or willingness to make or negotiate a private purchase. sale. or
transfer in lieu of condemnation.
15.3 Independent Taking.
The Agency and Tenant shall each have the right to represent its respective interest in
each proceeding or negotiation with respect to a taking or intended taking and to make full proof
of its claims. No agreement. settlement. sale, or transfer to or with the condemning authority
shall be made without the consent of the Agency and Tenant. The Agency and Tenant each agree
to execute and deliver to the other any instruments that may be required to effectuate or facilitate
the provisions of this Lease relating to condemnation.
15.4 Substantial Taking.
If the taking is substantial as defined in Section 15.1. above. Tenant may. by notice to the
Agency given within ninety (90) days after Tenant receives notice of intended taking. elect to
treat the taking as a substantial taking. If Tenant does not so notify the Agency. the taking shall
be deemed a partial taking. A substantial taking shall be treated as a total taking if (a) Tenant
delivers possession to the Agency within ninety (90) days after determination that the taking was
a substantial taking, and (b) Tenant is not in default under the Lease and has complied with all
provisions concerning apportionment of the award. If these conditions are not met. the taking
shall be treated as a partial taking.
15.5 Total Taking.
On a total taking. all sums. including, without limitation. damages and interest, awarded
for the fee or the leasehold or both shall be deposited promptly with the Agency and shall be
distributed and disbursed in the following order and priority:
~8~5-08~7-0272.1 ")6
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15.5.1 All real and personal property taxes constituting a lien on the Agency Property
and Improvements.
15.5.2 To the Leasehold Mortgagees. the amount due under the Leasehold Mortgages.
15.5.3 To the Agency a sum equal to the fair market value of the Agency Property taken
\'alued at its highest and best use as unimproved land exclusive of Improvements and
unburdened by this Lease and all Subleases.
15.5.4 To the Agency any expenses or disbursements (including anomeys' fees)
reasonably paid or incurred bv or on behalf of the Agency for or in connection with the
condemnation proceedings.
15.5.5 To Tenant the expenses or disbursements (including attorneys' fees) reasonably
paid or incurred by or on behalf of Tenant for or in connection with the condemnation
proceedings.
15.5.6 The balance. if any. to Agency.
15.6 Partial Taking.
15.6.1 Effect on Minimum Rent: Term. On a partial taking. this Lease shall remain in full
force and effect. covering the remaining Agency Property, except that if the rent payable under
this Lease during the Lease Term shall not be reduced however the rent payable during any
Extension Term shall be reduced in the same ratio as the fair market value of the portion of the
Agency Property taken (excluding Improvements then in existence but deducting expenses of
collection, including any attorneys' fees of the Agency and Tenant and restoration costs).
15.6.2 Award. On a partial taking. all sums. including damages and interest. awarded for
the fee title or the leasehold or both. shall be deposited with the Agency and shall be distributed
and disbursed in the following order of priority:
(a) To Tenant. the cost of restoring the Improvements. provided that such
amounts shall be held by the Agency and applied in the same maImer as proceeds
of insurance under Section 6.8.7. and to the Subtenants. the amount assessed or
awarded for their removal or relocation. plus any amount awarded for detriment
to their business.
(b) To the Leasehold Mortgagee a sum equal to the amount necessary to
reduce the then principal balance so that the ratio of the principal balance to fair
market value of the property encumbered by the Leasehold Mortgage remains the
same after the taking as it was before the taking.
(c) To the Agency a sum equal to the fair market value of the Agency
Property taken valued at it highest and best use as unimproved land exclusive of
Improvements and unburdened by this Lease and all Subleases.
4845.08H-0272.1 . ')7
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(d) To the Agency any expenses or disbursements (including attorneys' fees)
reasonably and necessarily incurred or paid by or on behalf of the Agency for or
in connection with the condemnation proceedings.
(e) To Tenant any expenses or disbursements (including attorneys' fees)
reasonably and necessarily incurred or paid by or on behalf of Tenant for or in
connection with the condemnation proceedings.
(f) The balance. if any. to Agency.
15.7 Temporarv Taking.
15.7.1 Effect on Rent Term. On a temporary taking, the term of this Lease shall not be
reduced or affected in any way and Tenant shall continue to pay the rent in full without
diminution. deduction. offset. reduction. or abatement. and (to the extent that Tenant is prevemed
from doing so by any lawful order of the condemning authority), Tenant shall continue to
perform and observe all of the other covenants. conditions. and agreements of this Lease to be
performed or observed by Tenant as though such temporary taking had not occurred.
15.7.2 Award. On a temporary taking. any and all awards and payments made for the
temporary use of the whole or any part of the Agency Property, including, without limitation,
damages and interest. shall be paid to the Agency and the Agency shall pay over to Tenant,
subject to the provisions of the following sentence, such awards and payments less (i) that
portion of said awards or payments that, in the Agency's sole and arbitrary judgment. will be
required to be expended on the termination of this period of temporary use in order to restore the
Agency Property as nearly as may be practicable to the condition in which the same were prior to
such temporary taking, (ii) any amounts required to be paid in order to cure any event of default,
or event or occurrence. which, with notice of the passage of time. would constitute an event of
default. irrespective of whether the period of curing the same. if any. has expired, and (iii) the
Agency's reasonable costs and expenses. including. without limitation. reasonable experts' and
attorneys' fees and disbursements. incurred in the Agency's determination of the amounts
described in clause (i). above. If a temporary taking is for a period extending beyond the then
current term of this Lease. the sums payable for such temporary taking shall be apportioned
between the Agency and Tenant in the same ratios. respectively, that that part of the entire period
of such temporary use falling after the expiration date of the then current term hereof, and that
part falling before said expiration date bear to the entire period of temporary use. Tenant's share.
hereof shall be reduced in the manner set forth in the first sentence of this Section 15.7.2 if the
conditions therein are applicable.
ARTICLE XVI
DEFAULT AND REMEDIES
16.1 Event of Default.
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Each of the following events shall be a default by Tenant C'Event of Default") and a
breach of this Lease.
16.1.1 Abandonment. Abandonment or surrender of the Agency Property or of the
leasehold estate. The Agency Property shall be deemed vacated if the Improvements are not
operated for a period of seven consecutive days for any reason other than a closure for major
repairs or renovation. Acts of God. casualty. war or insurrection. strikes or labor disputes, or
other matters beyond the reasonable control of Tenant.
16.1.2 Failure to Pay Rent. Tenant shall at any time be in default hereunder as to any
monetary obligation hereunder. which for all purposes and proceedings shall be deemed rent
(" Rent"): prO\ided. however. that such default shall have continued for a period of ten (10)
days.
16.1.3 Failure to Perform. Tenant shall be in default if any of its other promises,
covenants. or agreements contained in this Lease including, but not limited to, the Minimum
Sales Tax Covenant set forth in section 11.4 herein, the Minimum Assessed Valuation Covenant
set forth in section 11.5 herein, and such default shall continue for thirty (30) days after written
notice thereof from the Agency to Tenant.
16.1.4 Judicial Process. The subjection of any right or interest of Tenant or any member
of Tenant in, to or under this Lease to attachment, execution, or other levy, or to seizure under
legal process when the claim against Tenant is materiaL ifnot released within ninety (90) days.
16.1.5 Receiver. If not released within sixty (60) days, the appointment of a receiver to
take possession of the Site or Improvements. or of Tenant's or any member of Tenant's interest
in. to. and under this Lease. the leasehold estate or of Tenant's operations on the Site for any
reason. including. without limitation. assignment for benefit of creditors or voluntary or
involuntary bankruptcy proceedings. but not including receivership pursuant to administration of
the estate of any deceased or incompetent Tenant or of any deceased or incompetent individual
member of Tenant.
16.1.6 Bankruptcv. An assignment by Tenant for the benefit of creditors; or the voluntary
filing by Tenant or the involuntary filing against Tenant of a petition. other court action or suit
under any law for the purpose of (i) adjudicating Tenant a bankrupt. (ii) extending time for
payment, (iii) satisfaction of Tenant's liabilities, or (iv) reorganization. dissolution, or
arrangement on account of, or to prevent. bankruptcy or insolvency; provided. however, that in
the case of an involuntary proceeding, if all consequent orders. adjudications, custodies, and
supervisions are dismissed, vacated, or otherwise permanently stayed or terminated within 90
days after the filing or other initial event. then Tenant shall not be in default under this Section
16.1.6.
16.2. Remedies on Default.
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16.2.1 Ri\!ht to Terminate. In the event of any default by Tenant. the Agency. in
addition to any other remedies available to the Agency at law or in equity. shall have the option
to terminate this Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate. No notice of any kind. including a notice of default. given by the Agency
to Tenant shall constitute a termination of this Lease unless expressly so stated in the notice. In
the event the Agency elects to terminate this Lease. then the Agency may recover from Tenant:
(a) At the time of a\\ard. any outstanding and unpaid rent at the time of such
termination: plus
(b) At the time of award of the amount by which the unpaid rent after termination
until the time of a\vard exceeds the amount of such rental loss Tenant proves
could have been reasonably avoided: plus
(c) At the time of award of the amount by which the unpaid rent for the balance of
the term after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided: plus
(d) Any other amount. including court costs. necessary to compensate the Agency for
all the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease: and
(e) At the Agency's election. such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable California and
federal law.
16.3 Reentrv on Agency Property.
In the event of any default by Tenant. the Agency shall also have the right. with or
without terminating this Lease. to reenter the Agency Property and to remO\.e all persons and
property from the Agency Property. Property removed may be stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant.
16.4 Continuation of Lease.
The Agency may elect in the event of a default by Tenant to continue this Lease in full
force and effect and to collect rent as it becomes due under this Lease. In such eyent. the Agency
may enter on and relet the Agency Property or any part thereof to a third party or third parties for
such term or terms and at such rental or rentals and on such other terms and conditions as the
Agency in its sole discretion may deem advisable and shall have the right to make alterations and
repairs to the Agency Property. Tenant shall be liable for all the Agency's costs in reletting.
including but not limited to remodeling costs required for the reletting. In the eyent the Agency
relets the Agency Property. Tenant shall pay all rent due under and at the times specified in this
Lease, less any amount or amounts actually received by the Agency from the reletting.
16.5 Application of Rent from Reletting.
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In the event that the Agency elects to relet all or a portion of the Agency Property
following a default by Tenant, then rent received by the Agency from the reletting shall be
applied: first. to the payment of any indebtedness other than rent due hereunder from Tenant to
the Agency: second, to the payment of any cost of the reletting: third, to the payment of the cost
of any alterations and repairs to the Agency Property: fourth, to the payment of rent due and
unpaid under this Lease. The residue. if any. shall be held by the Agency and applied in payment
of future rent as the same may become due and payable hereunder. Should that portion of rent
received from the reletting during any month. which is applied to the payment of rent hereunder.
be less than the rent payable during that month by Tenant hereunder. then Tenant shall pay such
deficiency to the Aeencv immediately on demand therefor bv the Aeencv. Such deficiency shall
., .......... "...... "' ..
be calculated and paid monthly. Tenant shall also pay to the Agency. as soon as ascertained. any
costs and expenses incurred by the Agency in such reletting or in making such alterations and
repairs not covered by the rent received from the reletting.
16.6 Other Riehts of the Aeencv.
No act of the Agency. including but not limited to the Agency's entry on the Agency
Property. efforts to relet the Agency Property. or maintenance of the Agency Property, shall be
construed as an election to terminate this Lease unless a written notice of such intention is given
to Tenant or unless the termination thereof is decreed by a court of competent jurisdiction.
Notwithstanding the Agency election to continue the lease in full force and effect after a default
by tenant and to relet the Agency Property. the Agency may at any time after such reletting elect
to terminate this Lease for any such default.
16.7 Aeency's Rieht to Cure.
After expiration of the applicable time for curing a particular default, or before the
expiration of that time in the event of emergency or other condition which if not remedied by the
curing of the default could materially and adversely affect the Agency's right or security under
this Lease, the Agency may at the Agency's election. but is not obligated to. make any payment
required of Tenant under this Lease. or perform or comply with any covenant imposed on Tenant
under this Lease. and the amount so paid plus the reasonable cost of any such performance or
compliance. including. without limitation. attorneys' fees and disbursements. plus interest on this
sum at the then maximum interest rate permitted by law from the date of payment, performance,
or compliance (herein called act). shall be deemed to be additional rent payable by Tenant with
the next succeeding installment of rent. No such act shall constitute a waiver of default or of any
remedy for default or render the Agency liable for any loss or damage resulting from any such'
act.
16.8 Right of Subtenants.
The possession of any Subtenant of Tenant shall not be disturbed following a termination
of this Lease or a foreclosure of any mortgage (or assignment in lieu thereof) provided the
Subtenant is not then in default under its Sublease with Tenant and provided the Subtenant
agrees in writing to attorn to the Agency. the Leasehold Mortgagee. or the assignee of either.
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16.9 Rig:hts of Leasehold MortQat:ee
16.9.1 Rit:ht to Cure. The Agency. on providing Tenant any notice of: (i) default under
this Lease, or (ii) the termination of this Lease, or (iii) a matter on which the Agency may
predicate or claim a default. shall at the same time provide a copy of such notice to every
Leasehold Mortgagee who shall have given the Agency written notice specifying its name and
address. No such notice by the Agency to Tenant shall be deemed to have been duly given unless
and until a copy thereof has been so provided to Leasehold Mortgagee. From and after the date
such notice has been given to Leasehold Mortgagee. Leasehold Mortgagee shall have the same
period. after the giving of such notice on it. for remedying any default or acts or omissions that
are the subject matter of the notice or causing the same to be remedied. as is given Tenant after
the giving of the notice to Tenant to remedy. commence remedying. or cause to be remedied the
defaults or acts or omissions that are the subject matter of the notice. The Agency shall accept
such performance by or at the instigation of such Leasehold Mortgagee as if the same had been
done by Tenant. Tenant authorizes Leasehold Mortgagee to take any such action at Leasehold
Mortgagee's option and does hereby authorize entry on the Agency Property and the
Improvements by the Leasehold Mortgagee for such purpose.
16.9.2 Notice to Leasehold Mort!lagee. Anything contained in this Lease to the contrary
notwithstanding, if any default shall occur that entitles the Agency to terminate this Lease, the
Agency shall have no right to terminate this Lease unless, following the expiration of the period
of time, if any. given Tenant to cure the default or the act or omission that gave rise to the
default, the Agency shall notify Leasehold Mortgagee of the Agency" s intent to so terminate at
least thirty (30) days in advance of the proposed effective date of the termination if the default is
capable of being cured by the payment of money, and at least forty-five (45) days in advance of
the proposed effective date of the termination if the default is not capable of being cured by the
payment of money ("Termination Notice"). The provisions of Section 16.9.3 below shall apply
if. during this 30-day or 45-day Termination Notice Period. Leasehold Mortgagee shall:
(a)
notice. and
Notify the Agency of the Leasehold Mortgagee' s desire to nullify the
(b) Payor cause to be paid all rent. additional rent. and other payments then
due and in arrears as specified in the Termination Notice to the Leasehold Mortgagee and
which has become due or may become due during the 30-day period. and
(c) Comply in good faith, with reasonable diligence and continuity, with all
non-monetary requirements of this Lease then in default and reasonably susceptible of
being complied with by the Leasehold Mortgagee, provided however. that the Leasehold
Mortgagee shall not be required during the 45-day period to cure or commence to cure
any default consisting of Tenant's failure to satisfy and discharge any lien, charge, or
encumbrance against the Tenant's interest in this Lease or the Agency Property or
Improvements junior in priority to the lien of the Mortgage held by Leasehold
Mortgagee.
16.9.3 Procedure on Default.
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(a) If the Agency shall elect to terminate this Lease by reason of any default
of Tenant. and Leasehold 1\ Iortgagee shall haw proceeded in the manner provided for by
subsection (a) of this Section 16.9, the specified date for the termination of this Lease as
fixed by the Agency in its Termination Notice shall be extended for a period of six (6)
months. provided that such Leasehold Mortgagee shall. during this six-month period:
( I ) Payor cause to be paid. the rent. additional rent. and other
monetary obligations of Tenant under this Lease that have become due
and as the same become due. and continue its good faith efforts to perform
all of Tenant's other obligations under this Lease. excepting (A)
obligations of Tenant to satisfy or otherwise discharge any lien. charge. or
encumbrance against Tenant's interest in this Lease or the Agency
Property or the Improvements junior in priority to the lien of the mortgage
held by Leasehold Mortgagee and (B) past non-monetary obligations then
in default and not reasonably susceptible of being cured by Leasehold
Mortgagee: and
(2) Take steps to acquire or sell Tenant's interest in this Lease by
foreclosure of the Leasehold Mortgage or other appropriate means and
prosecute the same to completion with due diligence.
(b) If at the end of the six-month period the Leasehold Mortgagee is
complying with subsection 16.9.3(a). above. this Lease shall not then terminate. and the
time for completion by Leasehold Mortgagee of its proceedings shall continue so long as
Leasehold Mortgagee is enjoined or stayed and thereafter for so long as such Leasehold
Mortgagee proceeds to complete steps to acquire or sell Tenant's interest in this Lease by
foreclosure of the Leasehold Mortgage and by other appropriate means with reasonable
diligence and continuity. Nothing in this subsection (b) of this Section 16.9.3. however.
shall be construed to require Leasehold Mortgagee to continue such foreclosure
proceedings after the default has been cured. If the default shall be cured and Leasehold
Mortgagee shall discontinue such foreclosure proceedings. this Lease shall continue in
full force and effect as if Tenant had not defaulted under this Lease.
(c) If Leasehold Mortgagee is complying with subsection (a) of this Section
16.9.3. on the acquisition of Tenant's estate herein by Leasehold Mortgagee or its
designee or any other purchaser at a foreclosure under the Leasehold Mortgage (hereafter
the .. Purchaser") and the discharge of all liens. charges. and encumbrances against the
Tenant's interest in this Lease or Agency Property and the Improvements that the Tenant
is obligated to satisfy and discharge by reason of the terms of this Lease. this Lease shall
continue in full force and effect as if Tenant had not defaulted under this Lease.
(d) Any Purchaser (who may, but need not be. the Leasehold Mortgagee) who
acquires Tenant's interest in this Lease at a foreclosure sale. or who otherwise acquires
;- mant' s interest from the Leasehold Mortgagee or by virtue of a Leasehold Mortgagee's
exercise of its remedies, shall be deemed to have agreed to perform all of the terms,
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covenants. and conditions on the part of the Tenant to be performed hereunder from and
after the date of the purchase and assignment. but only for so long as the Purchaser or
Leasehold t\10rH!aflee is the O\\'l1er of the leasehold estate. If the Leasehold Mortgagee or
~ - - -
Purchaser shall become holder of the leasehold estate and if the Improvements on the
Agency Property shall have been or become materially damaged on. before. or after the
date of the purchase and assignment. the Leasehold Mortgagee or Purchaser shall be
obligated to cause restoration only to the extent of the net insurance proceeds received by
the Leasehold Mortgagee or Purchaser by reason of such damage. However. should the
net insurance proceeds be insufficient for the restoration to the extent required by this
Lease and should the Leasehold Mortgagee or its designee choose not to fully reconstruct
the Improvements to the extent required by this Lease. such failure shall constitute an
event of default under this Lease that shall give the Agency the right to terminate this
Lease after 30 days prior written notice to Leasehold Mortgagee or Purchaser.
(e) Leasehold Mortgagee or other acquirer of the leasehold estate of Tenant
pursuant to Foreclosure. assignment in lieu of foreclosure or other proceedings may: on
acquiring Tenant's leasehold estate. without further consent of the Agency, sell and
assign the leasehold estate on such terms and to such persons and organizations as are
acceptable to Leasehold Mortgagee or acquirer and thereafter be relieved of all
obligations under this Lease: provided that such assignee has delivered to the Agency and
its \\Titten agreement to be bound by all of the provisions of this Lease.
(f) Notwithstanding any other provisions of this Lease. any sale of this Lease
and the leasehold estate hereby created in any proceedings for the foreclosure of the
Leasehold Mortgage, or the assignment or transfer of this Lease and of the leasehold
estate hereby created in lieu of the foreclosure of the Leasehold Mortgage shall be
deemed to be a permitted sale, transfer. or assignment of this Lease and of the leasehold
estate hereby created.
16.9.4 New Lease. In the event of the termination of this Lease as a result of Tenant"s
default. the Agency shall. in addition to providing the notices of default and termination as
required by Section 16.9.3. provide Leasehold Mortgagee with prompt written notice that the
Lease has been terminated. together with a statement of all sums that would at that time be due
under this Lease but for such termination. and of all other defaults, if any. then known to the
Agency. The Agency agrees to enter into a new lease C'New Lease") of the Agency Property
with Leasehold Mortgagee or Purchaser for the remainder of the term of this Lease, effective as
of the date of termination, at the rent and on the terms. covenants, and conditions (but excluding
requirements that are no longer applicable or that have already been fulfilled) of this Lease,
provided:
(a) Leasehold Mortgagee shall make written request on the Agency for the
New Lease within sixty (60) days after the date Leasehold Mortgagee receives the
Agency's Termination Notice of this Lease given pursuant to this Section 16.9.4.
(b) Leasehold Mortgagee or Purchaser shall payor cause to be paid to the
Agency at the time of the execution and delivery of the New Lease. any and all sums that
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would at the time of execution and delivery thereof be due pursuant to this lease but for
such termination and. in addition thereto. all reasonable expenses. including reasonable
attorneys' fees. that the Agency shall have incurred by reason of such termination and the
execution and deliverv of the New Lease and that have not otherwise been received bv
. .
the Agencv from Tenant. On the execution of the New lease. the Agency shall allow to
the T~n~t named therein as an offset against the sums otherwise due under this
subsection or under the New Lease. an amount equal to the net income derived by the
Agencv from the Agency Property during the period from the date of termination of this
l;ase to the date of the beginning of the Lease term of the New Lease. In the event of a
controvers\ as to the amount to be paid to landlord pursuant to this subsection. the
payment ~bligation shall be satisfied if the Agency shall be paid the amount not in
controYersv. and leasehold Mortgagee or its designee shall agree to pay any additional
sum ultim~tely determined to be due plus interest at the then maximum legal rate and this
obligation shall be adequately secured.
(c) Leasehold Mortgagee or Purchaser shall agree to remedy any of Tenant's
defaults of which leasehold Mortgagee was notified by the Agency's Notice of
Termination and which are reasonably susceptible of being so cured by Leasehold
Mortgagee or its designee.
(d) The Leasehold Mortgagee or Purchaser. as Tenant under any such New
lease. shall be liable to perform the obligations imposed on the Tenant by the New Lease
only during the period such person has ownership of such leasehold estate.
16.9.5 leasehold Mortgagee Need Not Cure Specified Defaults. Nothing herein
contained shall require leasehold Mortgagee or Purchaser as a condition to its exercise of right
hereunder to cure any default of Tenant not reasonably susceptible of being cured by leasehold
\lortgagee or Purchaser. including. without limitation. the default referred to in Section 16.1.6 of
this Lease relating to bankruptcy and insolvency and any other Sections of the lease that may
impose conditions of default not susceptible to being cured by leasehold Mortgagee or
Purchaser. in order to comply with the provisions of Sections 16.5.2 or 16.5.3. or as a condition
of entering into the New lease provided for Section 16.5.4.
16.9.6 No Merger. So long as any leasehold Mortgage is in existence. unless all
leasehold Mortgagees shall otherwise expressly consent in writing. the fee title to the Agency
Property and to the Improvements and the leasehold estate of Tenant therein created by this
Lease shall not merge but shall remain separate and distinct, notwithstanding the acquisition of
said fee title and said leasehold estate by the Agency or by Tenant or by a third party, by
purchase or otherwise. unless such merger results from a default by Tenant, when the leasehold
Mortgagee or leasehold Mortagees have been given an opportunity to cure and has failed to do
so.
16.9.7 Method of Giving Notices. All notices given by the Agency to leasehold
\lortgagees shall be given by registered or certified maiL return receipt requested, address~d to
the Leasehold Mortgagees at the address last specified in \Hiting to the Agency by the Leasehold
\lortgagee. and any such notice shall be deemed to have been given when so mailed.
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16.9.8 Amendments to Lease. On the request of any Leasehold Mortgagee. the Agency
agrees to execute any amendment to this Lease that does not. in the opinion of the Agency's
c~unsel. adversely affect the Agency's rights hereunder.
16.6 Agencv's Default.
The Agency shall not be considered to be in default under this Lease unless (a) Tenant
has given notice specifying the default and (b) the Agency shall have failed to promptly and
dilig~ntlv cure the default \vithin ninety (90) days after the notice is given. plus any additional
period that is reasonably required for the curing of the default if the default is not reasonably
susceptible to being cured during this period. so long as the Agency continuously and diligently
proceeds to cure the default. Tenant waives the protections of Civil Code Sections 1932 and
1933. Any judgment against the Agency shall be limited to. and satisfied only out of. the
Agency's interest in the Agency Property. Improvements. and this Lease. No money judgment
shall be satisfied from any other assets of the Agency.
16.7 Unavoidable Delav.
Any prevention. delay. nonperformance. or stoppage due to strikes. lockouts. labor
disputes. riots. insurrection. war. and other causes beyond the reasonable control of either party
shall excuse nonperformance for a period of time equal to the period any such preventions,
delay. nonperformance. or stoppage. prO\ided. however. that the foregoing shall not excuse the
failure of Tenant to timely and completely perform the obligations imposed by this Lease for the
payment of rent.
16.8 Waiver.
No waiver of any default shall constitute a waiver of any other breach of default. whether
of the same or any other covenant or condition. No waiver. benefit. privilege. or service
voluntarily given or performed by either party shall give the other any contractual right by
custom. estoppel, or otherwise. The subsequent acceptance of rent pursuant to this Lease shall
not constitute a waiver of any preceding default by Tenant other than default in the payment of
the particular rental payment so accepted. regardless of the Agency' s kno\vledge of the preceding
breach at the time of accepting the rent. nor shall acceptance of rent or any other payment after
termination constitute a reinstatement. extension. or renewal of the Lease or revocation of any
notice or other act by the Agency.
16.9 Attornev's Fees.
If either party brings any action or proceeding to enforce. protect. or establish any right or
remedy under this Lease. the prevailing party shall be entitled to recover reasonable attorneys'
fees, expenses and costs.
ARTICLE XVII
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SURRENDER OF AGENCY PROPERTY AND IMPROVEMENTS
17.1 Surrender.
At the expiration or earlier termination of the Lease Term or any extended term thereof.
Tenant shall surrender to the Agency the possession of the Agency Property and Improvements
and deliver to the Agency a good and sufficient grant deed. in form acceptable for recordation
conveying all of its right. title. and interest therein to the Agency. Tenant shall leave the
surrendered Agency Property and Improvements and any other property of Tenant located
thereon or contained therein in good and broom-clean condition except as provided to the
contrary in provisions of this Lease on maintenance. repair. and removal of Improvements. All
property that Tenant is required to surrender shall become the Agency' s property on the
expiration of or earlier termination of the Lease. All property that Tenant is not required to
surrender or remove but which remains on the Agency Property after the expiration or earlier
termination of the Lease shall be deemed abandoned and shall. at the Agency's election. become
the Agency' s property.
17.2 Failure to Surrender.
If Tenant fails to surrender the Agency Property and Improvements at the expiration or
sooner termination of. and in the manner required under this Lease. Tenant shall defend and
indemnify the Agency from all liability and expense resulting from the delay or failure to
surrender. including. without limitation, claims made by any succeeding tenant founded on or
resulting from Tenant's failure to surrender.
ARTICLE XVIII
OPTION TO PURCHASE AGENCY PROPERTY
18.1 Tenant's Option to Purchase the Agencv Propertv.
Tenant shall have the option to purchase the Agency Property (the "Option"). or any
portion thereof owned by the Agency at the time the Option is exercised by Tenant upon written
notice to the Agency of the intent to exercise the Option and subject to the conditions set forth in
this Article XVIII.
18.2. Exercise of Option to Purchase the Agencv Propertv.
Tenant shall have the right to exercise the Option at any time on or after the twentieth
(20th) anniversary of this Lease so long as the following conditions have been met:
18.2.1 Tenant or its assignees and successors is not in default of any of the terms of this
Lease; and
18.2.2 Tenant is not in default under any Mortgage: and
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18.:U Tenant is not in default under any Sublease for any portion of the Site: and
18.2.4 The Tenant has generated Maximum Sales Tax for the immediately prior five l5)
years in excess of Thirty-Five Million Dollars ($35.000.000) in accordance with
Section 11.4. herein.
18.3 Purchase Price.
The purchase price shall be equal to the greater of (i) the amount of the Bond proceeds
that were used and applied by the Agency. including the Infrastructure Funds and the Site
Development Grant and any other amounts used for the acquisition of the Property and the
relocation of tenants and demolition of structures. together with interest thereon at a rate equal to
that of the rate of interest on the Bonds, in furtherance of the acquisition of the Agency Property
and the site preparation in anticipation of the construction of the Improvements thereon or (ii) the
appraised fair market value determined by a qualified MAl appraiser mutually agreed upon by
the Agency and the Tenant as of the date that the sale of the Site is expected to occur.
18.4 Escrow.
If Tenant exercises the Option. escrow for the purchase and sale shall be opened jointly
by the parties with ("'Escrow Holder"). or such other escrow company
mutually acceptable to the parties. within five days of Tenant's notice to the Agency electing to
purchase the Agency Property. Each party shall execute escrow instructions in a form
appropriate to complete the purchase and sale of the Agency Property and shall deposit the same
with Escrow Holder. The escrow instructions shall provide the following:
18.4.1 Escrow shall close v.;ithin ninety (90) days after the date of Tenant"s notice to the
Agency electing to purchase the Agency Property.
18.4.2 Each party shall deposit such funds and instructions as are necessary to complete
the purchase and sale as of said date.
18.4.3 Each party shall pay one half of the escrow fee.
18.4.4 The Agency shall pay for any documentary transfer tax on the Agency Quitclaim
Deed.
18.4.5 Each party shall pay such other charges and fees commonly paid by buyer and
seller in a purchase and sale of real estate in San Bernardino Counry'.
18.4.6 The Agency shall provide. at its cost a CL T A Owner's policy of title insurance
with liability in the amount of the purchase price showing title to the Agency Property vested in
4845-0847-0272.1 38
P_-\gendas\Agenda Attachments A.grmls-,'\mend :005 O~.Ol-IO EI Paseo-Lease Agrm! doc
Tenant. subject only to nondelinquent real property taxes and assessments plus those exceptions
to title in existence as of the date hereof or which may result from T enanf s actions. consent. or
use of the Agency Property during the term hereof. Tenant may request an ALTA Owner's
extended policy. but the difference in cost between the AL T A policy and the CL T A policy shall
be paid by Tenant.
18.5 Effect of Purchase on Lease.
. Except for any conditions. restrictions. covenants. and/or easements specifically set forth
in this Lease or the Agency Quitclaim Deed. this Lease and Tenant's obligations under this
Lease shall terminate as of the close of escro\\ for the Agency Property. which shall be the date
on which the Agency Quitclaim Deed is filed for record by the Escrow Holder.
18.6 Condition of the Agencv Propertv .
Tenant acknowledges and agrees that it shall have had the right to inspect and investigate
the Agency Property during the Lease Term. Tenant shall accept the delivery of possession to
the Agency Property on the close of escrow in an "AS IS". "WHERE IS" and "SUBJECT TO
ALL FAULTS" condition. Tenant further agrees and represents to the Agency that Tenant shall
have conducted and completed (or waived the completion) of all of its independent investigation
of the condition of the Property prior to exercising the Option. Tenant hereby acknowledges that
it shall rely solely upon its own investigation of the Agency Property and its own review of such
information and documentation as it deems appropriate for the purpose of accepting the
condition and possession of the Agency Property. Tenant is not relying on any statement or
representation by the Agency relating to the condition of the Agency Property unless such
statement or representation is specifically contained in this Lease. Without limiting the
foregoing, the Agency makes no representations or warranties as to whether the Agency Property
presently complies with environmental laws or whether the Agency Property contains any
hazardous substance. Furthermore. to the extent that the Agency has provided Tenant with
information relating to the condition of the Agency Property. including information and reports
prepared by or on behalf of the City. the Agency makes no representation or warranty with
respect to the accuracy, completeness or methodology or content of such reports or information.
Without limiting the above. except to the extent covered by an express representation or
warranty of the Agency set forth in this Lease. Tenant. on behalf of itself and its successors and
assigns. waives and releases the Agency and its successors and assigns from any and all costs or
expenses whatsoever (including. without limitation. attorneys' fees and costs), whether direct or
indirect. known or unknown. foreseen or unforeseen. arising from or relating to the physical
condition of the Agency Property. the condition of the soils. the suitability of the soils for the
improvement of the Project as proposed. or any law or regulation applicable thereto. including
the presence or alleged presence of harmful or hazardous substances in. under or about the
Agency Property including. without limitation. any claims under or on account of (i) CERCLA
and similar statutes and any regulations promulgated thereunder or (ii) any other environmental
laws.
~8~5-08~7-02n]. 39
p A~cnda~'AgendJ. Anachmcflls.....grll1lS-.-\mend :1)05 0"-0 i -1 0 El Pasl:l'-Lease....~rlT1l doc
Tenant expressly waiyes any rights or benefits ayailable to it with respect to the foregoing
release under any provision of applicable law which generally provides that a general release
does not extend to claims which the creditor does not know or suspect to exist in his or her fayor
at the time the release is agreed to. which. if known to such creditor. would materially affect a
settlement. By exercising the Option. Tenant acknowledges that it fully understands the
foregoing. and with this understanding. nonetheless elects to and does assume all risk for claims
knO\\TI or unknown. described in this Section 18.6 without limiting the generality of the
foregoing:
The undersigned acknowledges that it has been adyised by legal counsel and is
familiar with the proyisions of California Ciyil Code Section 1542. which
provides as follows:
"A GENERA.L RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS
FA VOR AT THE TIME OF EXECUTING THE
RELEASE. WHICH IF KNOWN BY HIM. MUST
HAVE MA TERIALL Y AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
The undersigned. being aware of this code section, hereby expressly waives any rights it
may have thereunder. as well as under any other statutes or common law principles of similar
effect.
Initials of Tenant:
The proyisions of this Section 18.6 shall surviye the close of escrow.
ARTICLE XIX
GENERAL PROVISIONS
19.1 Notice Requirements.
As used in this Lease. notice includes, but is not limited to. the communication of any
notice, request, demand, approval, statement. report, acceptance. consent. waiver, or.
appointment. No notice of the exercise of any option or election is required unless the provision
giving the election or option expressly requires notice. Unless the provisions of this Lease on
rent direct otherwise, rent shall be sent in the manner provided for giying notice or as directed by
notice from the Agency.
19.1.1 Writing. All notices must be in writing; provided that no writing other than the
check or other instrument representing the rent payment itself need accompany the payment of
rent.
~X~,-08~ 7-0~7~.1 40
\l -\~"'nJJS .....~"'ndJ\!ladlITIeI1IS Agrmls-:\mend :005 05.01.j(J EI Pas,,"o-Lehe Agrmt due
19.1.2 Deliyery. Notice is considered given either (a) when deliyered in person to th~
person intended named below. or (b) deposited in the United States mail in a sealed enyelope or
container. either registered or certified mail. return receipt requested. postage and postal charges
prepaid. addressed by name and address to the party or person intended as follows:
TE:\ANT:
EI Paseo Petroleum. LLC
27403 Ynez Road. Suite 218
Temecula. CA 92591
Attention: Managing Member
AGENCY:
Redevelopment Agency of the City of San Bernardino
200 North "E'" Street. Suite 301
San Bernardino. California 92401
Attention: Executive Director
19.1.3 Change of Recipient or Address. Either party may. by notice given at any time or
from time to time. require subsequent notices to be given to another party or an officer or
representative. or to a different address. or both. Notices given before actual receipt of notice of
change shall not be in\'3lidated by the change.
19.1.4 Notice by Subtenants. Each Sublease of the Improyements or the Site shall
contain a provision that unless a copy of the notice is delivered to the Agency pursuant to this
Section no notice regarding an alleged default of Tenant shall be \'alid, Tenant shall deliver to
the Agency a copy of any notice from a governmental entity received by Tenant regarding any
alleged violations of Laws or from any person allegedly entitled to give notice under any
conditions. covenants. or restrictions binding or affecting the Site.
19.2 Estoppel Certificates.
At any time and from time to time. \vithin twenty-one (21) days after notice of request by
either party. the other party shall execute. acknowledge. and deliver to the requesting party, or to
such other recipient as the notice shall direct. a statement certifying that this Lease is unmodified
and in full force and etTect. or. if there have been modifications. that it is in full force and effect
as modified in the manner specified in the statement. The statement shall also state the dates to
which the rent has been paid in advance. The statement shall be sllch that it can be relied on by
any other auditor. creditor. commercial banker, and investment banker of either party and by any
prospective purchaser or encumbrancer of the Site or of all or any part or parts of Tenant's or the
Agency's interests under this Lease. Tenant's failure to execute. acknowledge. and deliver, on
-18-15.08-17.0272.\. 41
P _.....gendasAgenda AnachmenrsAgrmts-Amend :005,0:--01-10 EI Pasea.Lease :\~rml doc
request. the statement described above within the specified time shall constitute acknowledgment
bv Tenant to all persons entitled to rely on the statement that this Lease is unmodified and in full
f~rce and effect and that the rent has been duly and fully paid to and including the respective due
dates immediately preceding the date of the notice of request and shall constitute a waiver. with
respect to all persons entitled to rely on the statement. of any defaults that may exist before the
date of the notice and shall be an Event of Default.
19.3 Delegation.
. Tenant may at Tenant's election delegate performance of any or all covenants to anyone
or more Subtenant. or subtenants of Subtenants. and the performance so delegated shall be
deemed Tenant' s performance. This provision shall not be considered to permit or to broaden the
right of assignment or subletting beyond the provisions of this Lease relating to assignment and
subletting.
19.4 No Merger.
If both the Agency's and Tenant's estates in the Site or the Improvements or both become
vested in the same owner. this Lease shall nevertheless not be destroyed by application of the
doctrine of merger except at the express election of the owner and with the written consent of all
Leasehold Mortgagees.
19.5 Gender.
The neuter gender includes the feminine and masculine. the masculine includes the
feminine and neuter. and the feminine includes the neuter. and each includes corporation,
partnership. or other legal entity when the context so requires.
19.6 Plural.
The singular number includes the plural and vice versa whenever the context so requires.
19.7 Exhibits.
All exhibits to which reference is made in this Lease are incorporated in the Lease by the
respective references to them. \vhether or not they are actually attached.
19.8 Entire Agreement.
This Lease contains the entire agreement between the parties. ;--Jo promise. representation.
warranty, or covenant not included or referred to in this Lease has been or is relied on by either
party. Each party has relied on its 0\\'11 examination of this Lease. the counsel of its own
advisors. and the warranties. representations. and covenants in the Lease itself and those referred
to in this Lease.
1 q q !nvalidin'.
.8.5.0847-0272.1 47
[J .-\~en.jas .-\g.enJa Atla.::hments Agrmls--\mend :(,05 05.01-10 EI Pasell.LeJ.~o.::-\~fmt Ju~ -
The imalidity or illegality of any provision shall not affect the remainder of the Lease.
19.10 Bindimr on Heirs.
Subject to the provisions of this Lease on assignment and subletting. each and all of the
covenants and conditions of this Lease shall be binding on and shall inure to the benefit of the
heirs. successors, executors. administrators. assigns. and personal representatives of the
respective parties.
19.11 Holding: Over.
This Lease shall terminate without further notice at expiration of the Lease Term. or any
extended term thereof. Any holding over by Tenant after expiration shall not constitute a renewal
or extension or give Tenant any rights in or to the Agency Property except as othenvise expressly
provided in this Lease.
19 .12 Counterparts.
This Lease. may be executed in two or more counterparts. each of which shall be an
original. but all of which shall constitute one and the same instrument.
19.13 Captions.
The captions of the various Sections of this Lease are for the convenience and ease of
reference only and do not define. limit. augment. or describe the scope. content. or intent of this
Lease or of any part or parts of this Lease.
19.14 Time of Essence.
Time is of the essence of this Lease.
[SIGNATURES ON SUBSEQUENT PAGEl
.18.15-08.17-0272 I . . . . 43
jJ-\~l:nda'.-\j,!end.) Aua.:nments .\grnus-Amend :OO~i)~-O \ -I (I EI Paseo-leJ.se-\~rml deK
This L:as<: is <::\<:cukd h: th<: parties hereto as of the date first abo\'e \\Titt<:n.
AGE:\CY:
Redeyelopment Agency of the City of San Bernardino
B\:
Gan \'an Osdel
Executiye Director
APPROYED AS TO FOIDI:
By:
J2 / I~/'
~ 1'/" /
" 0'/ LVJJII~
Agency ounseJ
DE\'ELOPER:
El Paseo Petroleum, LLC
By:
Managing \lember
~''';~.(i':'~- -IJ:-:: ;
-+-+
This LeJse is e'.ecuted by the pJrlleS hereto :.IS of the dJtc first Jbo\c \\nlle:1.
AGE:\CY:
Redcyelopment ,-\gcney of the City of San Bernardino
By:
Gan \'J!l Osdcl
E'.ecllli\ c Director
APPROYED AS TO FOR.'I:
By:
:\gene)' Counsel
DE\ ELOPER:
El Paseo Petroleum. LLC
B\':
\Ianaging \Iember
~:";";:'-I;'''':'- .(.-2-: 1
-t-t
This L<.:ase is e\<,:cukJ by the panie5 11<.:r.:1O as of the date first abO\e \\nttCl1"
AGE:\CY:
Rede\"elopment Agency of the City of San Bemardino
B\":
Gary \"an Osdel
E\ecutin: Director
APPRO\TD AS TO FOR\I:
By:
Agency Counsel
DEYELOPER:
El Paseo Petroleum. LLC
By:
\lanaging Member
~~~~-IJ~~--C;:-: i
-+-+
EXHIBIT "D"
SITE PLA\:
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.
EXHIBIT "E"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Redevelopment Agency of the City of San Bernardino
201 North E Street, Suite 301
5mBernardino, CA 92401
Attn: Executive Director
(Space Above Line For Use By Recorder)
Recording Fee Exempt Pursuant to Government Code Section 6103
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
NOTICE OF DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
EL P ASEO PETROLEUM, LLC
(Mt. Vernon Corridor Redevelopment Project Area)
TO ALL INTERESTED PERSONS:
PLEASE TAKE NOTICE that EI Paseo Petroleum, LLC, a California limited liability
company (the "Developer") and the Redevelopment Agency of the City of San Bernardino (the
"Agency"), have entered into an agreement entitled "Disposition and Development Agreement"
dated as of January 10,2005 (the "Agreement"). A copy of the Agreement is attached hereto, in
its entirety, for the purposes of recordation. It is also on file with the Secretary of the Agency as
a public record of the Agency and is available for inspection and copying by all interested
persons in accordance with applicable law.
[SIGNATURES ON NEXT PAGE}
[NOTARY REQUIRED}
1
P 'Agendas.Agenda Anachments\OS-OI-1O EI Paseo-5th and Mt. Vernon Notiu of Agmt doc
.
IN WITNESS WHEREOF, the Agency and the Developer have caused this Notice of
Disposition and Development Agreement to be executed by their authorized officers whose
signatures appear below:
DEVELOPER: EL P ASEO PETROLEUM, LLC,
a California limited liability company
Date:
,2005
Richard D. Anderson, Managing Member
AGENCY: Redevelopment Agency of the
City of San Bernardino
Date: January _,2005
Judith Valles, Chairperson
Community Development Commission,
City of San Bernardino, Its governing board
Date: January ,2005
Gary Van asdel, Executive Director
2
?Agcndas\Agcnda Ana.chments\05.01-IO EI Paseo-51h and Mt Vernon NOllcC of Agrm. doc
.
EXHIBIT "F"
SCHEDULE OF PERFORMANCE
June 1,2005 Pull all applicable building pennits and commence any demolition and
start offsite construction.
June 15,2005 Start actual onsite construction.
July 18,2005 Underground tanks and fuel island plumbing installed.
August 4, 2005 Concrete work complete on convenience store and carwash foundations
and slabs. Offsite improvements complete and asphalt paving complete
on parking lot.
August 31, 2005 Rough carpentry, plumbing, electrical and HV AC completed in the
convenience store and carwash tunnel. Fuel island canopy installed.
September 16,2005 Convenience store and carwash tunnel are finished with drywall, painting
stucco color cost, roofing, plumbing, electrical and HV AC.
October 18, 2005 Fuel dispensers installed, carwash equipment installed, store fixtures
installed and refrigeration equipment installed.
October 27, 2005
Fuel delivered to fill tanks and complete all pressure testing. Store
inventory delivered and stocking begins.
November 1, 2005 Final inspection and issuance of Certificate of Occupancy. Employee
training begins.
November 11,2005 Store Grand Opening.
4837-8933-4784.1 1
.
EXHIBIT ..G"
FOR\! OF \lI:\I\!L\! .-\SSESSEO \..-\LL\ no:\ (O\T:\.-\:\T
G-I
, \;x::.:.I- \>.:e:~':;.:""::J";;ll~~el1:j .'\:::l11b.\I;le::~: ,., "'.'; .:' E: i';bC:, DD-\ JL<
"
EXHIBIT "G"
Recording requested by, and
when recorded, return to:
Redevelopment Agency of the City of San Bernardino
201 North E Street, Suite 301
San Bernardino, CA 92401
Attn: Executive Director
Free recording requested pursuant to Government Code Section 6103
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MINIMUM ASSESSED V ALUA nON COVENANT
WHEREAS, the REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic, existing pursuant to California
Health and Safety Code Sections 33100, et seq. (the "Agency"), and EL P ASEO
PETROLEUM, LLC, a California limited liability company (the "Developer"), have
entered into that certain Disposition and Development Agreement dated as ofJanuary 10,
2005 (the "DDA"), concerning certain real property situated in San Bernardino County,
California, described in Exhibit "A", attached hereto and incorporated herein by this
reference (the "Site"); and
WHEREAS, as provided in Section 6.4 of the DDA, the Agency is authorized by
the Developer to record this Minimum Assessed Valuation Covenant in the Official
Records of San Bernardino; and
WHEREAS, the Developer has completed the construction of the improvements.
NOW THEREFORE, THE DEVELOPER COVENANTS AS FOLLOWS:
The Developer covenants to and for the benefit of the Agency that, upon
completion of the construction of the Improvements, the Site and the
Improvements shall, collectively, be assessed by the Assessor of the County of
San Bernardino, for general property tax purposes, at a minimum assessed value
of Two Million Five Hundred Thousand Dollars and No Cents ($2,500,000.00)
(the "Minimum Assessed Value"). If, upon completion of the construction of the
Improvements, the Site and the Improvements are, collectively, assessed by the .
Assessor of the County of San Bernardino, for general property tax purposes, at a
value less than the Minimum Assessed Value, the Developer shall pay to the
4837-2039-8848. J
.
Agency the dollar amount of the difference between the property tax revenues
received by the Agency from the property taxes assessed against the Site and the
Improvements and the amount of property tax revenues that would have been
received from the property taxes assessed against the Site and the Improvements,
if the Site and the Improvements were assessed at the Minimum Assessed Value.
IN WITNESS THEREOF, the Developer has executed this Covenant as of
,2005.
DEVELOPER:
El Paseo Petroleum, LLC
Richard D. Anderson
Managing Member
[NOTARY REQUIRED]
4837-2039-8848.1
.
EXHIBIT ""W
FORM OF MI~I\IC\1 S.-\LES TAX CO\"E~";ST
H - I
i1 '\.:;en::h, A~e~dJ Attachments ..1.grmb--\mend :Lln~Ci:'_ll:_1" EI P,\~el' 00.\ j,\~
A
"t
EXHIBIT "H"
Recording requested by, and
when recorded, return to:
Redevelopment Agency
of the City of San Bernardino
201 North E Street, Suite 301
San Bernardino, CA 92401
Attn: Executive Director
(Space Above Line Reserved For Use By Recorder)
Recording Fee Exempt Pursuant to Government Code Section 6103
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MINIMUM SALES TAX COVENANT
WHEREAS, the REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic, existing pursuant to California Health and
Safety Code Sections 33100, et seq. (the "Agency"), and EL P ASEO PETROLEUM, LLC, a
California limited liability company (the "Developer"), have entered into that certain Disposition
and Development Agreement dated as of January 10, 2005 (the "DDA"), concerning certain real
property situated in San Bernardino County, California, described in Exhibit "A", attached
hereto and incorporated herein by this reference (the "Site"); and
WHEREAS, as provided in Section 6.5 of the DDA, the Agency is authorized by the
Developer to record this Minimum Sales Tax Covenant in the Official Records of San
Bernardino; and
WHEREAS, the Developer has completed the construction of the improvements.
NOW THEREFORE, THE DEVELOPER COVENANTS AS FOLLOWS:
The Developer covenants to and for the benefit of the Agency that, upon
completion of the construction of the Improvements, the Site and the Improvements shall,
collectively, generate retail sales tax, as maintained by the State Board of Equalization, at
an amount of Five Million Dollars ($5,000,000) for each and every year of operation of
the Project pursuant to the Lease Agreement until the expiration of the Lease Agreement,
including any extension of the Term of the Lease Agreement (the "Minimum Sales
Tax"). If, upon completion of the construction of the Improvements, the Site and the
Improvements are, collectively, as determined by the State Board of Equalization, at a
. value less than the Minimum Sales Tax, the Developer shall pay to the City the dollar
4838-3738-<l864.!
P I.Agcnda.s\Agenda Attachmcnts\05-0 1-10 EI Paseo-5th and Mt ......ernon Mimmum Sales Tax Covenant-doc
1&
".
.
2005.
amount of the difference between the sales tax revenues actually received by the City and
generated by the Improvements and the Site and the Improvements and the amount of
sales tax revenues that would have been received from the sales taxes generated by the
Improvements, if the Site and the Improvements were assessed at the Minimum Sales
Tax.
IN WITNESS THEREOF, the Developer has executed this Covenant as of January _'
DEVELOPER:
EI Paseo Petroleum, LLC
Richard D. Anderson
Managing Member
[NOTARY REQUIRED]
4838-3738~864.1
P. I.AgenOas\A&cnda Anactunetlu\OS-O 1-1 0 El Pa.sco-Sth and Mt. Vemon Minimum Saks Tax Covenant,doc;
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
M,"'ng Dot' (On', A'J;'dl' ~ Item #
Vote: Ayes Nays
Change to motion to amend original documents D
Ad~)
Resolution #
C!Jf!a ~t1~- - d-
Absent _~3
Abstain
Companion Resolutions
NulIIVoid After:
days/
Resolution # On Attachments: D
Note on Resolution of attachment stored separately: D
PUBLISH D
POST D
RECORD W/COUNTY D
By:
Date Sent to Mayor:
Date of Mayor's Signa
Date of ClerklCDC Signature:
Reso. Log Updated:
Seal Impressed:
D
D
Date Memo/Letter Sent for Signature:
I st Reminder Letter Sent:
Date Returned:
2nd Reminder Letter Sent:
Not Returned: D
Request for Council Action & Staff Report Attached: Yes No By_
Updated Prior Resolutions (Other Than Below): Yes No By__
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634): Yes No By_
Updated CDC Personnel Folders (5557): Yes No By_
Updated Traffic Folders (3985, 8234, 655, 92-389): Yes No By_
Copies Distributed to:
Animal Control D
City Administrator D
City Attorney D
Code Compliance D
Development Services D
Others:
EDA D Information Services D
Facilities D Parks & Recreation D
Finance D Police Department D
Fire Department D Public Services D
Human Resources D Water Department D
Notes:
/
Ready to File: li'."
~ i /
Dat3t /0 (
I
Revised 12/18/03
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Moo"". D," (D," AdoV"d.)o ~ 10 10<; nom # p.,") ') (6) Re"lo"oo #
Vote: Ayes (0 Nays Abstain
Change to motion to amend original documents 0 Companion Resolutions
NulI/Void After:
days /
Resolution # On Attachments: 0
Note on Resolution of attachment stored separately: 0
PUBLISH 0
POST 0
RECORD W/COUNTY 0
By:
Reso. Log Updated:
Seal Impressed:
o
o
Date Sent to Mayor:
Date of Mayor's Signature:
Date ofClerk/CDC Signature:
Date Memo/Letter Sent for Signature:
1st Reminder Letter Sent:
Date Returned:
2nd Reminder Letter Sent:
Not Returned: 0
Request for Council Action & Staff Report Attached: Yes No By_
Updated Prior Resolutions (Other Than Below): Yes No By_
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634): Yes No By_
Updated CDC Personnel Folders (5557): Yes No By_
Updated Traffic Folders (3985, 8234, 655, 92-389): Yes No By_
Copies Distributed to:
Animal Control 0 EDA 0 Information Services 0
City Administrator 0 Facilities 0 Parks & Recreation 0
City Attorney 0 Finance 0 Police Department 0
Code Compliance 0 Fire Department 0 Public Services 0
Development Services 0 Human Resources 0 Water Department 0
Others:
Notes:
Ready to File: _
Date:
Revised 12/18/03
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Mooting D,,, (D,'e Adn,'ed), .1, 0 loS "em # jJ, 'J,1;"(e) R"nlutirm # ;)Ooz; - ~ ~
Vote: Ayes]) ~ Abstain Absent::5
Change to motion to amend original documents D Companion Resolutions
NulIIVoid After:
days I
Resolution # On Attachments: D
Note on Resolution of attachment stored separately: D
PUBLISH D
POST D
RECORD W/COUNTY D
By:
Date Sent to Mayor:
Date of Mayor's Signature:
Date of Clerk/CDC Signature:
Reso. Log Updated:
Seal Impressed:
D
D
Date MemolLetter Sent for Signature:
1 st Reminder Letter Sent:
Date Returned:
2nd Reminder Letter Sent:
Not Returned: D
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Yes No By_
Yes No By_
Yes No By_
Yes No By_
Yes No By_
Copies Distributed to:
Animal Control D EDA D
City Administrator D Facilities D
City Attorney D Finance D
Code Compliance D Fire Department D
Development Services D Human Resources D
Others:
Notes:
Information Services D
Parks & Recreation D
Police Department D
Public Services D
Water Department D
Ready to File: _
Date:
Revised 12/18/03
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Dn'e (Date Ad~'d)' I \ I 90( nem # fJ, r; {f.} R"olution #
Vote: Ayes --U Nays Abstain
Change to motion to amend original documents D Companion Resolutions
doos--/3
Absent ,ft :.;
.-/
NulI/Void After: days /
Resolution # On Attachments: D Note on Resolution of attachment stored separately: D
PUBLISH D By:
Reso. Log Updated: D
Seal Impressed: D
Date Memo/Letter Sent for Signature:
I st Reminder Letter Sent:
Date Returned:
2nd Reminder Letter Sent:
Not Returned: D
"' Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Yes No By_
Yes No By_
Yes No By_
Yes No By_
Yes No By_
Copies Distributed to:
Animal Control D EDA D Information Services D
City Administrator D Facilities D Parks & Recreation D
City Attorney D Finance D Police Department D
Code Compliance D Fire Department D Public Services D
Development Services D Human Resources D Water Department D
Others:
Notes:
D"ed/0~
!
Ready to File:V'
Revised 12/18/03
CITY OF SAN BERNARDINO
Interoffice Memorandum
CITY CLERK'S OFFICE
Records and Information Management (RIM) Program
DATE:
January 18,2005
TO:
Wasana Chantha, Acting Secretary
FROM:
Eileen Gomez, Senior Secretary
RE:
Transmitting Documents for Signature - Resolution CDC/2005-2
At the Mayor and Common Council meeting 0 , he City of San Bernardino
adopted Resolution CDC/2005/2 - Resolution approving that certain Disposition and
Development Agreement ("DDA") and Lease Agreement ("Lease '') by and between the
Redevelopment Agency ("Agency'') and El Paseo Petroleum, LLC ("Developer'') - 5th & Mt.
Vernon in the Mt. Vernon Corridor Redevelopment Project Area.
Attached is one (1) original agreement with two (2) duplicate original agreements. Please obtain
signatures in the appropriate location and return the ORIGINAL agreement to the City Clerk's
Office as soon as possible, to my attention. Please keep the fully executed copies for your
records and for the other party.
If you have any questions, please do not hesitate to contact me at ext. 3206. Thank you.
Eileen Gomez
Senior Se,cretary
I
(,
,
, '
ledge receipt of the above mentioned documents.
Signed:
Date: 1/ I~lo 5
Please sign and return
City of San Bernardino
ECONOMIC DEVELOPMENT AGENCY
Redevelopment. Commul11ty Development. Housmg . Business: RecrUitment. Retention. Revitalization. Main Street. Inc.
SM
February 8, 200)
El Paseo Petroleum, LLC
Attn.: Richard Anderson
27403 Ynez Road, Suite 218
Temecula, CA 92591
RE: Disposition and Development Agreement (DDA)
(Mt. Vernon Corridor Redevelopment Project Area)
Dear Mr. Anderson:
Enclosed for your records is the fully executed Agreement as referenced above. Please note that the
Lease Agreement (Exhibit '"C") has not been finalized because the Agency does not own or control
all of the effected property. Once this occurs, we will notify you per the DDA.
., ny questions, I can be reached at (909) 663-1044.
MP:wac
Attachment:
Executed Disposition and Development Agreement (DDA)
(Mt. Vernon Corridor Redevelopment Project Area)
vtSleen Gomez (Original Executed Agreement)
Barbara Lindseth (Original Executed Agreement)
Mike Trout (with Copy of Executed Agreement)
Wasanll A. Chantha
/
cc:
!
I
201 North E Street, Suite 301 . San Bernardino, California 92401-1507. (909) 663-1044. Fax (909) 888-9413
www.sanbernardino-eda.org.
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO i?ECr
INTER-OFFICE MEMORANDUM
(1 i-',;'.:{
'05
J1~1 18
~ 0,0)")
I ",' ,,)t:
SUBJECT:
Eileen Gomez, Senior Secretary, City Cle~....s. Office
\\
Wasana A. Chantha, "Acting" Secretary ,
Executed Document
TO:
FROM:
DATE:
January 14,2005
Enclosed is the fully executed Agreement pertaining to the following resolution:
CDC/2005-13
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF
THE CITY OF SAN BERNARDINO APPROVING A CERTAIN
REDEVELOPMENT COOPERATION AND FINANCING
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO AND THE CITY OF SAN
BERNARDINO, CALIFORNIA (El Paseo Petroleum, LLC - 5th &
Mt. Vernon in the Mt. Vernon Corridor Redevelopment Project Area)
Should you have any questions, I can be reached at (909) 663-1044.
Thank you.
Enclosure
cc: Barbara Lindseth (with Original Executed Agreement)
Fred Wilson (with Original Executed Agreement)
Maggie Pacheco (with Original Executed Agreement)
Mike Trout (with Copy of Agreement)