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XHIBIT 2 <br />OPERATING AGREEMENT <br />This AGREEMENT made and entered into this 17`x' day of September, 2013, by and <br />between the City of Santa Ana, a charter city and municipal corporation duly organized and existing <br />under the Constitution and laws of the State of California, hereinafter referred to as "City," and <br />Santa Ana Business Council Inc., a California non-profit corporation, hereinafter referred to as <br />"SABC." <br />RECITALS <br />A. Whereas the City Council of the CITY previously established a community management <br />district (hereinafter the "CMD") designated as the "Downtown Community Management <br />District" (hereinafter the "DISTRICT"); and <br />B. Whereas assessments were supposed to be levied annually against the assessable parcels in <br />the DISTRICT commencing with Fiscal Year 2009-2010 and continuing through Fiscal <br />Year 2013-2014; and <br />C. Whereas the CITY was to use the assessments to contract for the administration of a <br />program of improvements and activities in connection with the DISTRICT for Fiscal Years <br />2009-2010 through 2013-2014; and <br />D. Whereas due to various reasons the City Council on February 4, 2012 repealed the entirety <br />of the CMD and did not levy the DISTRICT assessment to fund the CMD services for <br />calendar year 2013; and <br />E. Whereas with the repeal of the CMD, several downtown merchants and property owners <br />have expressed an interest in reactivating the Downtown Santa Ana Business Improvement <br />Area (BID) so that they could continue to receive funding to promote the safety, <br />maintenance, and overall economic stability of the downtown area; and <br />F. Whereas the City Council agreed that if there was sufficient support by those businesses <br />that would be impacted by assessments, that it would reactivate the prior Downtown <br />Business Improvement Area which was established on February 6, 1984 pursuant to <br />Ordinance NS-1715 (attached hereto and incorporated herein as Exhibit A) ; and <br />G. Whereas the City Council further agreed in a Settlement and Release Agreement with <br />Downtown Inc. ("DTP'), that, should the BID be reactivated, DTI would receive 50% of the <br />BID revenues in any given calendar year and remaining 50% would be distributed to a new <br />merchants' nonprofit group serving independently of DTI, subject to an operating <br />agreement for each group; and <br />1 <br />25D-15