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HomeMy WebLinkAboutCHARLES H. MANH FAMILY TRUSTINSURANCE NOT REQUIRED WORK MAY PROCEED A-2022-113 CLERK OF THE COUNCILGREEMENT FOR EXCHANGE OF REAL PROPERTY DATE' This Agreement for Exchange of Real Property ("Agreement') is entered as of the 21St day of June , 2022, by and between the CITY OF SANTA ANA, a charter city and municipal corporation duly organized under the Constitution and laws of the State of California ("City"), and CHARLES H. MANH FAMILY TRUST ("Manh"). The City and Manh hereinafter are sometimes referred to collectively as the "Parties." OI POA(yl &IG)b� 1 RECITALS A. City owns certain real properties commonly known as Parcels C2, C3, C8, and P1, located on Bristol Street between 7 b and 171 Street, in the City of Santa Ana, County of Orange, State of California, N as more particularly described and depicted in the Legal Description attached hereto as Exhibits "A- 1" through "A-4" and incorporated herein by reference ("City Property"). c, Parcel C2, APN numbers 405-272-21 & 24, Parcel C3, APN numbers 004-123-56 & 57, Parcel C8, APN numbers 008-091-01, 02, 13, 14 and Parcel PI, APN numbers 405-074-38. B. A copy of the Grant Deeds for the City Property, filed with the County of Orange are attached hereto as Exhibits "B-l" Through `B-4" and incorporated herein by reference. C. On April 21, 2020, the Santa Ana City Council adopted Resolution No. 2020-032 declaring the City Property as surplus land and directing the City Manager to comply with the requirements of California Government Code Section 54220 et seq. (" Surplus Land Act") for the disposition of the Property. D. On April 27, 2020, the City released a Notice of Availability ("NOA') of surplus property for the City Property for a period of sixty days. This NOA was sent out to all " local public entities," as defined in Health and Safety Code section 50079, within whose jurisdiction the surplus land is located, and to " Housing Sponsors" that have notified the California Department of Housing and Community Development (" HCD") of their interest in surplus land. The NOA was also sent to local parks agencies and school districts. E. The City Property was among those for which either no responses were received by entities receiving the notices of availability or for which responses were received and good faith negotiations ended after a period of not less than 90 days without agreement to price and terms. F. Manh owns certain real property commonly known as Orange County Assessor Parcel No. 005-142- 34, 48, 49, located at 925 N Flower Street and 848 & 852 N Gamsey Street , in the City of Santa Ana, County of Orange, State of California, as more particularly described and depicted in the Legal Description attached hereto as Exhibit "C" and incorporated herein by reference ("Manh Property"). G. A copy of the Grant Deed for the Manh Property, filed with the County of Orange as Document No. 2021000036844, is attached hereto as Exhibit "D" and incorporated herein by reference. H. The Parties desire by this Agreement to provide the terms and conditions for the exchange of fee interests in the City Property and the Manh Property. Page 1 of 11 THEREFORE, for and in consideration of their mutual promises, covenants and agreements, and subject to the terms, conditions and provisions of this Agreement, the Parties agree as follows: Exchange of Real Property 1.1. Conveyance by City. City agrees to convey the City Property to Manh by Grant Deed, and Manh agrees to accept the same from the City. 1.2. Conveyance by Manh. Manh agrees to convey the Manh Property to City by Grant Deed, and City agrees to accept the same from Manh. 1.3. Title Conveyance. The Parties agree that, except as may hereinafter be otherwise expressly provided, the real properties subject to this Agreement shall be conveyed by the Parties, as aforesaid, free and clear of any and all conditions, restrictions, reservations, exceptions, easements, assessments, profits, limitations, encumbrances (whether monetary or non - monetary, general or specific, including any and all leasehold interests), liens, clouds or defects in title. The Parties hereby warrant that the title to said real properties to be conveyed by the Parties shall be free and clear as provided above. The Parties further agree that acceptance of any deed to said real property, with or without knowledge of any condition, restriction, reservation, exception, easement, assessment, profit, limitation, encumbrance (whether monetary or non -monetary, general or specific, and including any and all leasehold interests), lien, cloud or defect in title, shall not constitute a waiver by either Party of its right to the full and clear title hereinabove agreed to be conveyed by the Parties, nor of any right which might accrue because of the failure of the Parties to convey title as hereinabove provided. 2. Consideration 2.1 Consideration by City. City shall provide to Manh signed grant deeds for the City Property in the forms attached as Exhibits `B-l" through `B-4" 2.2 Consideration by Manh. Manh shall provide to City (a) a signed grant deed for the Manh Property in the form attached as Exhibit D and (b) the sum of $4,800,000. 3. Escrow 3.1 Escrow Agent. Within five (5) days from and after the execution of this Agreement by all Parties, City agrees to open an escrow with Fidelity National Financial Title, 4400 Mac Arthur Blvd., Suite 200, Newport Beach, CA 92660 ("Escrow Agency"). This Agreement constitutes the joint escrow instructions of the Parties and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow ("Effective Date"). 3.2 Escrow Agent Authorization. The Escrow Agent hereby is empowered to act under this Agreement and the General Escrow Provisions, attached hereto as Exhibit E and incorporated herein by reference, and upon indicating its acceptance of this Agreement and the General Escrow Provisions, in writing, delivered to the Parties within five (5) days after delivery of Page 2 of 11 this Agreement, shall carry out its duties as Escrow Agent hereunder. 3.3 Escrow Agent Liability. The liability to the Escrow Agent under this Agreement is limited to performance of the obligations imposed upon it under this Agreement. 3.4 Closing Costs. City agrees to bear, and Escrow Agent is hereby authorized to charge to the City the cost of any transfer taxes, recording fees, cost of title insurance, re -conveyance fees, document preparation fees, escrow fees and any other closing costs incidental to the conveying of said real property to City. Manh agrees to bear, and Escrow Agent is hereby authorized to charge to Manh the cost of any transfer taxes, recording fees, cost of title insurance, re -conveyance fees, document preparation fees, escrow fees and any other closing costs incidental to the conveying said real property to Manh. Penalties for prepayment of bona fide obligations secured by any existing deed of trust or mortgage shall be waived pursuant to California Code of Civil Procedure Section 1265.240, 3.5 Title Insurance. The Parties agree to deliver, concurrently with the conveyance of said real properties, within the time and at the place hereinabove specified for said conveyance of said real property, a policy of title insurance to be issued by the above mentioned title company, with the receiving Party therein named as the insured, in an amount equal to the appraised value of the subject property, insuring the title to said real property is free and clear of any and all conditions, restrictions, reservations, exceptions, easements, assessments, profits, limitations, encumbrances (whether monetary or non -monetary, general or specific, and including any and all leasehold interests), liens, clouds or defects in title, excepting such specific ones as the receiving Party may hereinafter expressly agree to take subject to. Acceptance by the receiving Party of any such policy of insurance, whether such insurance complies with the requirements of this paragraph or not, shall not constitute a waiver by the receiving Party of its right to such insurance as is herein required of the granting Party, nor a waiver by the receiving Party of any rights of action for damages or any other rights which may accrue to the receiving Party by reason of the failure of the giving Party to convey title or to provide title insurance as required in this Agreement. 3.6 Property Taxes. (a) Such real property taxes, if any, on the subject real properties for the fiscal year within which said real property is conveyed to the receiving Party as are unpaid at the time of said conveyance shall be cleared and paid in accordance with the provisions of Section 4986 of the Revenue and Taxation Code of the State of California. (b) The granting Party shall be eligible for a refund under Section 5096.7 of the Revenue and Taxation Code of the State of California for that portion of property taxes on said real property for said fiscal year which have been paid prior to the date the deed conveying said real property to the receiving Party is recorded which is allocable to that portion of the fiscal year which begins on the date the deed conveying said real property to the receiving Party is recorded and made uncollectible if unpaid by reason of Section 5086 of the Revenue and Taxation Code of the State of California. To the extent that the granting Party has prepaid any taxes or assessments attributable to the subject real property, the granting Party shall be solely responsible for obtaining any refund due thereon from the taxing authority. Upon written request, the receiving Party shall assist the granting Party, at the granting Party's sole cost, in obtaining said Page 3 of 11 refund, if any; however, in no case shall the receiving Party credit or otherwise pay the granting Party for that refund, if any, through or outside of Escrow. (c) All unpaid taxes on either property for any and all years prior to the fiscal year within which said conveyance is made shall be paid by the granting Party before conveyance of said real property to the receiving Party. 3.7 Deposit of Funds and Documents. (a) Prior to Close of Escrow, the Parties shall deposit into Escrow (i) all escrow and Closing Costs as described above and (ii) such other documentation and funds as are necessary to close Escrow; (b) Prior to the Close of Escrow, each Party shall deposit into Escrow (i) the properly executed grant deed for conveyance of each Property and (ii) such other documents and sums as are necessary to close Escrow in conformance herewith. 3.8 Conditions Precedent to Close of Escrow. The obligation of the Parties to exchange the Properties as contemplated by this Agreement and the Close of Escrow is subject to satisfaction of each of the following conditions: (a) All representations and warranties of each Party set forth in this Agreement shall be true and correct as of the date of the Close of Escrow; (b) Each Party shall timely perform all obligations required by the terms of this Agreement to be performed by it; (c) The irrevocable and unconditional written agreement of Title Company to record the grant deeds at the Close of Escrow and to issue the Title Policy to the receiving Party, effective as of the date and time the deed is recorded; and, (d) No material adverse physical change to either Property, including those caused by condemnation and/or casualty, shall have occurred subsequent to the Effective Date and on or prior to the Close of Escrow. 3.9 Close of Escrow. The Escrow Agent is hereby authorized to close escrow upon and after ("Close of Escrow"): (a) Conveyance of the City Property by the City and the Manh Property by Manh as hereinabove provided; (b) Acceptance by Manh of a Grant Deed conveying the City Property, and acceptance by the City of a Grant Deed conveying the Manh Property; (c) Delivery to each Party of the policies of title insurance as hereinabove provided; (d) Recordation of the Grant Deed conveying the City Property and the Grant Deed conveying the Manh Property. Page 4 of 11 If escrow is not in a condition to close by the Close of Escrow, and failure to close is due to unforeseen conditions of title or interest of third parties in either Property that cannot be resolved in Escrow, then either Party may, at its option, request cancellation of Escrow and this Agreement and return of any funds it has deposited into escrow. Thereupon, all obligations and liabilities of the Parties under this Agreement shall cease and terminate. If no such request is made, Escrow shall be closed as soon as possible thereafter. 4. Representations and Warranties 4.1 Representations and Warranties of Citv. City makes the following representations and warranties with respect to the City Property, each of which shall survive Close of Escrow: (a) The execution and delivery of this Agreement, performance hereunder, and the consummation of the transaction contemplated hereby will not constitute a violation of any order or decree or result in the breach of any contract or agreement to which the City is at present a party or by which the City is bound. (b) To City's actual knowledge, no litigation and no governmental, administrative or regulatory act or proceeding regarding the environmental, health and safety aspects of the City Property is pending, proposed or threatened. (c) City will not enter into any agreements or undertake any new obligations prior to Close of Escrow that will in any way burden, encumber or otherwise affect the City Property without the prior written consent of Manh. (d) City is aware of its obligation under California Health and Safety Code Section 25359.7 to disclose any knowledge which they may have regarding any release of Hazardous Substances (as defined by applicable federal, state and local statutes, rules and regulations) upon or under the City Property. City warrants and represents to Manh that City is not aware that any such Hazardous Substances have been generated, stored or disposed of upon or under the City Property. (e) To the best of City's knowledge the City Property complies with all applicable laws and governmental regulations including, without limitation, all applicable federal, state, and local laws pertaining to air and water quality, hazardous waste, waste disposal, and other environmental matters, including, but not limited to, the Clean Water, Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation Recovery and Comprehensive Environmental Response Compensation and Liability Acts, and the California Environment Quality Act, and the rules, regulations, and ordinances of the City, the California Department of Health Services, the Regional Water Quality Control Board, the State Water Resources Control Board, the Environmental Protection Agency, and all applicable federal, state, and local agencies and bureaus. (f) City, as a government agency, has not been subject to real property tax assessment on the City Property. Transfer of title to the City Property to Manh at the Close of Escrow will subject the City Property to an assessment from the Orange County Office of the Assessor and shall be the obligation of Manh henceforth. Page 5 of 11 (g) Affordable Housing Covenant in the Event of Residential Development. In accordance with California Government Code Section 54233, if 10 or more residential units are developed on the City Property, not less than 15 percent of the total number of residential units developed on the City Property shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, to lower income households, as defined in Section 50079.5 of the Health and Safety Code. Rental units shall remain affordable to, and occupied by, lower income households for a period of at least 55 years for rental housing and 45 years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915 of the Government Code. Manh expressly agrees and consents that the requirements of this section shall be contained in a covenant or restriction recorded against the City Property prior to land use entitlement of the project, and the covenant or restriction shall ran with the land and shall be enforceable, against any owner who violates a covenant or restriction and each successor in interest who continues the violation, by any of the entities described in subdivisions ( a) to (t), inclusive, of Section 54222.5 of the Government Code. 4.2 Representations and Warranties of Manh. Manh makes the following representations and warranties with respect to the Mann Property, each of which shall survive Close of Escrow: (a) The execution and delivery of this Agreement, performance hereunder, and the consummation of the transaction contemplated hereby will not constitute a violation of any order or decree or result in the breach of any contract or agreement to which Manh is at present a party or by which Manh is bound. (b) To Manh's actual knowledge, no litigation and no governmental, administrative or regulatory act or proceeding regarding the environmental, health and safety aspects of the Manh Property is pending, proposed or threatened. (c) Manh will not enter into any agreements or undertake any new obligations prior to Close of Escrow that will in any way burden, encumber or otherwise affect the Manhs Property without the prior written consent of the City. (d) Manh is aware of its obligation under California Health and Safety Code Section 25359.7 to disclose any knowledge which they may have regarding any release of Hazardous Substances (as defined by applicable federal, state and local statutes, rules and regulations) upon or under the Manh Property. Manh warrants and represents to the City that Manh is not aware that any such Hazardous Substances have been generated, stored or disposed of upon or under the Manh Property. (e) To the best of Manh's knowledge the Manh Property complies with all applicable laws and governmental regulations including, without limitation, all applicable federal, state, and local laws pertaining to air and water quality, hazardous waste, waste disposal, and other environmental matters, including, but not limited to, the Clean Water, Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation Recovery and Comprehensive Environmental Response Page 6 of 11 Compensation and Liability Acts, and the California Environment Quality Act, and the rules, regulations, and ordinances of the City, the California Department of Health Services, the Regional Water Quality Control Board, the State Water Resources Control Board, the Environmental Protection Agency, and all applicable federal, state, and local agencies and bureaus. (f) Manh makes the following representations and warranties with respect to the Property, each of which shall survive Close of Escrow. Manh hereby represents and guarantees that it will complete construction and development of one of the following four City properties, Parcels C2, C3, C8, and P 1, for the permitted uses per the City's Bristol Street Specific Plan within 48 months following the Close of Escrow. Manh further represents and guarantees that the next two parcels will be completed within 84 months and the final parcel will be completed within 120 months. These timeframes shall be tolled by any delays directly attributable to the actions or inactions of the City, by any natural causes outside the control of either party ("Force Majeure"), or by mutual agreement of the parties. If Manh does not comply with these guarantees within the timeframes provided, the City shall have the right to repurchase the City Property, including any and all improvements to the properties completed by Manh, in exchange for payment by the City to Manh of eighty percent (80%) of the Purchase Price, $2,549,800 for Parcel C2, $1,268,300 for Parcel C3, $1,211,500 for Parcel C8 and $870,400 for Parcel Pl. Following the development deadline in this section, City shall provide a 180 day written Notice to Perform prior to formally initiating the repurchase of the City Property. 5. Right of Possession 5.1 Right of Possession. The Parties agree to deliver to each other quiet and peaceful physical and legal possession of the respective Properties, free of all personal property, effective as of the Close of Escrow. 6. As -Is Condition 6.1 As -Is Condition. Parties shall rely solely and exclusively upon the results of their own Due Diligence Investigations of the subject Properties with regard to any physical condition or state of the Properties. By completing the exchange of the Properties, Parties evidence their unconditional acceptance of the condition of each respective Property. Parties acknowledge and agree that each is acquiring its respective Property on an "AS -IS," "WHERE -IS" basis. Parties are not offering to acquire the respective Property based on any representation by the other Party, or a third party, except those expressly set forth in this Agreement. Parties hereby acknowledge that the exchange of the Properties is without warranties of any kind from the other Party, expressed or implied, except as expressly set forth in this Agreement, as to the condition of the subject Property or its improvements, if any, including, without implied limitation, soils, access to the subject Property or to utilities, appliances, structure utility systems, roof, foundation, landscaping or any other component of the subject Property. Parties do not warrant that either Property conforms with any ordinances, including, without implied limitation, zoning or building ordinances. Page 7 of 11 Acknowledgement of Full Benefits 7.1 Full Benefits. By execution of this Agreement, the Parties hereby acknowledge that this Agreement provides full payment for the acquisition of the subject Properties, and each Party hereby expressly and unconditionally waives any claim for damages, interest, loss of goodwill, severance damages, or any other compensation or benefits other than as already expressly provided for in this Agreement, it being understood that this is a complete and full settlement of all acquisition claims, liabilities, or benefits of any type or nature whatsoever relating to or in connection with the acquisition of the subject Properties. 8. Remedies 8.1 Remedies. If either Party defaults under this Agreement, and such default is not cured within thirty (30) days following the date of written notice of default, then the other Party may either: (i) terminate this Agreement by written notice, whereupon this Agreement and the obligations of the Parties hereunder shall terminate (other than those obligations that expressly survive a termination of this Agreement); or (ii) bring an action for specific performance of this Agreement. 9. Miscellaneous 9.1 Notice. All notices or other communication provided for under this Agreement shall be in writing, and shall be delivered personally, sent by reputable overnight mail equivalent carrier, or sent by registered or certified mail, return receipt requested, postage prepaid, addressed to the person to receive such notice or communication at the following address and shall be effective upon the earlier of actual receipt (including by facsimile) or refusal to accept delivery: If to the City: The City of Santa Ana Cleric of the Council 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 With a copy to: City Attorney 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, CA 92702 If to Manh: Danny Manh Esq 8990 Westminster Blvd, Second Floor Westminster, CA 92683 Notice of change of address shall be given by written notice in the manner set forth in this subsection. 9.2 Time is of the Essence. Time is of the essence with respect to each and every provision hereof. Page 8 of 11 9.3 Waivers. The waiver by either Party of any breach of any covenant or agreement herein contained on the part of the other Party shall not be deemed or held to be a waiver of any subsequent or other breach of said covenant or agreement nor a waiver of any breach of any other covenants or agreements contained herein. 9.4 Assignment. Neither this Agreement, nor any interest herein, shall be assignable by any Party without prior written consent of the other, non -assigning Party hereto. 9.5 Inurement. Subject to the restrictions against assignment as herein contained, this Agreement, and all the terms, covenants, and conditions hereof, shall inure to the benefit of and shall be binding upon, the assigns, successors in interest, personal representatives, estates, heirs and legatees of the respective parties hereto. 9.6 Governing Law. All questions with respect to this Agreement, and rights and liabilities of the Parties hereto, shall be governed by the laws of the State of California. Venue shall be in the County of Orange. 9.7 Attorney Fees. In the event of any controversy, claim or dispute between the Parties hereto, arising out of or relating to this Agreement or the breach thereof, the prevailing party shall be entitled to recover from the other party reasonable expenses, attorney fees and costs. 9.8 Entire Agreement. The Agreement contains the entire agreement of the Parties hereto, and supersedes any prior written or oral agreements between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, between the Parties hereto, relating to the subject matter contained in this Agreement which are not fully expressed herein. 9.9 Additional Documents. All Parties hereto agree to execute any and all additional documents and instruments necessary to carry out the terms of this Agreement. 9.10 No Merger. All warranties, representations, acknowledgements, releases, covenants and obligations contained in this Agreement shall survive delivery and recordation of the grant deeds. 9.11 Contingency. It is understood and agreed between the Parties hereto that the completion of this transaction, and the escrow created hereby, is contingent upon the specific acceptance and approval of the City herein. The execution of these documents and the delivery of same to Escrow Agent constitute said acceptance and approval. 9.12 Modification and Amendment. This Agreement may not be modified or amended except in writing signed by the Parties. 9.13 Partial Invalidity. Any provision of this Agreement that is unenforceable or invalid or the conclusion of which would adversely affect the validity, legality, or enforcement of this Agreement shall have no effect, but all the remaining provisions of this Agreement shall remain in full force. Page 9 of 11 9.14 Captions. Captions and headings in this Agreement, including the title of this Agreement, are for convenience only and are not to be considered in construing this Agreement. 9.15 No Reliance by One Party on the Other. Each Party has received independent legal advice from its attorneys with respect to the advisability of executing this Agreement and the meaning of the provisions hereof. The provisions of this Agreement shall be construed as to their fair meaning, and not for or against any Party based upon any attribution to such Party as the source of the language in question. 9.16 No Third Party Beneficiary. This Agreement is intended to benefit only the Parties hereto and no other person or entity has or shall acquire any rights hereunder. 9.17 Duty to Cooperate Further. Each Party hereby agrees that it shall, upon request of the other, execute and deliver such further documents (in form and substance reasonably acceptable to the Party to be charged) and do such other acts and things as are reasonably necessary and appropriate to effectuate the terms and conditions of this Agreement, without cost. 9.18 Incorporation of Exhibits. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. 9.19 Authority to Execute Agreement. The persons executing this Agreement and the instruments referenced herein on behalf of City and Manh hereby represent and warrant that such persons have the right, power and authority to bind City and Manh, respectively. Manh shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 9.20 Counterparts. This Agreement may be signed in counterpart or duplicate copies, and any signed counterpart or duplicate copy shall be equivalent to a signed original for all purposes. Page 10 of 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. ATTEST Daisy Gomez City Clerk APPROVED AS TO FORM Sonia R. Carvalho City Attorney By: -F John M.Funk Sr. Assistant City Attorney RECOMMENDED FOR APPROVAL 0 �'>pTabil Saba Executive Director Public Works Agency CITY OF SANTA ANA �.— Nj�-- Lv__ Kristine Ridge City Manager CHARLES H. MANH, AS TRUSTEE FOR. THE CHARLES H. MANH FAMILY TRUST Page I 1 of 11 0