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HomeMy WebLinkAboutCARIBOU INDUSTRIES (9)Recording Requested by Fidelity National Title RECORDED AT THE REQUEST OF AND WHEN RECORDED MAIL TO: THE CITY OF SANTA ANA 20 CIVIC CENTER PLAZA, M-30 SANTA ANA, CA 92701 ATTENTION: CITY CLERK Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder NO FEE *$ R 0 0 1 4 1 D 4 1 8 3$ 2022000403444 2:56 pm 12109/22 340 NC-5 C38 10 0.00 0.00 0.00 0.00 27.00 0.00 0.000.000.00 0.00 (Space Above This Line for Recorder's Office Use Only) 0 ' C UA (M. Qrl ty 15. VA.L vez) W,L) I EXEMPT FROM FILING FEE PER Return FULLLY EXECUTED GOVERNMENT CODE SECTION27383 Copy to COTC, M-30 A-2020-265-03 N OPERATIONS COVENANT N \N THIS OPERATIONS COVENANT AND DECLARATION OF COVENANTS AND CD RESTRICTIONS ("Covenant") is made and entered into this 23nd day of November, 2022, by and icy between the CITY OF SANTA ANA, a charter city and municipal corporation organized under � the Constitution and the laws of the State of California ("City"), and Caribou Industries, Inc. a Nevada Corporation (the "Developer"). RECITALS: A. The City of Santa Ana owns the property located at 201 W. 3rd Street in the City of Santa Ana, more particularly described in Exhibit "A" attached hereto and incorporated heroin by reference (the "Site") and utilized the property as a public parking lot. B. Developer desires to remove an existing three (3) story parking structure to construct a Mixed Use Project including apartments, commercial (including retail and food/beverage establishments), a seventy-five (75) room Hotel Project and a Parking Structure which will contain 444 total parking spaces including 211 public parking spaces, as described in the definitions of "Project," "Mixed Use," "Hotel Project," "Public Parking Parcel" and "Parking Structure" as set forth in ARTICLE 3 of the Disposition and Development Agreement ("DDA") entered into by and between the City and Developer dated October 5, 2020 for reference purposes only, and recorded on January 28, 2021, as Instrument No. 2021000061922 of the Official Records of Orange County, California. C. City and Developer have entered into a DDA for the conveyance of the Site to allow for the Construction of the Project including the Mixed Use, Hotel and Parking Structure. D. City and Developer now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as a hotel available for short-term rental for the term of this Covenant, to run with the land of the Property and bind successive owners of the Property as set forth in this Covenant. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Developer hereby agree as follows: Page 1 of 7 55394.00049\33266069.5 Form of Operations Covenant 1. The recitals are true and correct and are incorporated into this Covenant in their entirety by this reference. 2. Definitions. All initially capitalized terms used in the Covenant shall have the same meaning as the Terms in the DDA 3. Use of Land — The Developer covenants and agrees with the City that the Site must only be built on and used in strict accordance with this Covenant. 4. Covenant to Build Hotel — The Developer agrees to timely construct the Hotel in strict compliance with this Covenant and in accordance with all development entitlements issued for this Project by City. Developer agrees that Developer will design and build the hotel to Automobile Association of America (AAA) minimum acceptable conditions to be considered a AAA hotel with the amenities set forth in Section 6.3 below. 5. Restriction on Use of Land — The use of the Land must include a hotel, having a minimum of 75 Guest Rooms and providing facilities set forth in Section 6.5 (the "Hotel"). Without limiting the foregoing, the Land and the Development thereon may be used for additional residential or office use, in addition to the required Hotel use, as part of a mixed -use development. 6. Covenant to Operate Hotel 6.1 Developer will use commercially reasonable efforts to execute an operating agreement with a nationwide hotel chain. 6.2 Should Developer be unsuccessful in securing an operating agreement with a nationwide hotel chain, then Developer will self -operate a Hotel. 6.3 Hotel shall contain the following minimum amenities: (a) Fitness Room (b) Community Meeting Space (c) Baggage Storage (d) Elevators (e) 24 hour Pantry Market (1) Multi -Lingual Staff (g) Safety Deposit Box (h) ATM. 6.4 After construction of the Hotel, the Developer shall operate the Hotel or cause the Hotel to be operated such that its Guest Rooms are used only for Public Lodging Use and for no other purpose, and the Developer shall take or cause to be taken all reasonable commercial steps Page 2 of 7 5 5394.00049\3 3266069.5 Form of Operations Covenant to keep the Hotel open for business, except in the case of substantial damage or destruction by natural hazard, by fire, or by other insurable hazard. 7. Conversion to Residential. 7.1 Developer shall not submit an application to City to convert the hotel to apartments unless the following threshold has are satisfied: (a) The Developer shall only be entitled to submit an application to City to convert the hotel to apartments if the following thresholds are established. (b) On the Third Hotel Anniversary Date (defined as three calendar years following the date that the Hotel had the first guest completed the first overnight stay for compensation in the Hotel), if for the period between the Second Hotel Anniversary Date through the day before the Third Hotel Anniversary the RevPAR falls below $1255.00. (Revenue per available room (RevPAR) is a hotel industry performance metric, and is calculated by dividing the total room revenue for the hotel by the total number of available rooms in the period being measured) (c) On the Fourth Hotel Anniversary Date, if for the period between the Third Hotel Anniversary Date through the day before the Fourth Hotel Anniversary the RevPAR falls below $125.00. (d) On the Fifth Hotel Anniversary Date if for the period between the Fourth Hotel Anniversary Date through the day before the Fifth Hotel Anniversary the RevPAR falls below $125.00. (e) On the Sixth Hotel Anniversary Date if for the period between The Fifth Hotel Anniversary Date through the day before the Sixth Hotel Anniversary the RevPAR falls below $125.00. 7.2 Any application for conversion shall be subject to approval of all applicable City entitlements. Developer understand and acknowledges that, in the context of processing the application to convert the hotel to apartments, the City cannot guarantee the ultimate outcome of any public hearings before the Planning Commission or the City Council or other public bodies of the City, nor prevent any opposition thereto by members of the public or other agencies affected by or interested in the Project. By entering into this Agreement, the City does not pre - commit or imply that the application to convert the hotel to apartments to be considered for approval will be approved. The City retains the discretion to approve, conditionally approve, or disapprove the application to convert the hotel to apartments. 8. Indemnification. 8.1 Developer Indemnity Obligations. Developer shall defend, with Counsel approved by the City, and Indemnify City Parties against any and all Claims to the extent such Claims arise from any wrongful intentional act or negligence of Developer Parties. 8.2 Independent of Insurance Obligations. Developer's indemnification obligations under this Covenant shall not be construed or interpreted as in any way being restricted, limited or modified by any insurance coverage carried by Developer. Page 3 of 7 5 5 3 94.00049\33 266069.5 Form of Operations Covenant 8.3 Survival of Indemnification and Defense Obligations. The indemnity and defense obligations of Developer under this Covenant shall survive the expiration or earlier termination of this Covenant, until any and all actual or prospective Claims regarding any matter subject to an indemnity obligation under this Covenant are fully, finally, absolutely and completely barred by applicable statutes of limitations. 9. Governing Law. The substantive and procedural laws of the State shall govern the interpretation and enforcement of this Covenant, without application of conflicts or choice of laws, statutes or principles. 10. Notices. 10.1 Notices. Any and all Notices submitted by either Party to the other Party pursuant to or as required by this Agreement shall be proper, if in writing and transmitted to the principal office of the City or the Developer, as applicable, set forth in Section 10.1, by one or more of the following methods: (i) messenger for immediate Personal delivery, (ii) a nationally recognized overnight (one-night) delivery service (i.e., Federal Express, United Parcel Service, etc.) or (iii) registered or certified United States Mail, postage prepaid, return receipt requested. Such Notices may be sent in the same manner to such other addresses as either Party may designate from time to time, by Notice. Any Notice shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service (or when delivery has been attempted twice, as evidenced by the written report of the courier service) or four (4) calendar days after it is deposited with the United States Postal Service for delivery, as provided in this Section 10 Rejection, other refusal to accept or the inability to deliver a Notice because of a changed address of which no Notice was given or other action by a Person to whom Notice is sent, shall be deemed receipt of the Notice. 10.2 Addresses. The following are the authorized addresses for the submission of Notices to the Parties: To the Developer: Caribou Industries, Inc. 1103 North Broadway Santa Ana, CA 92701 To the City: City of Santa An 20 Civic Center Plaza (M-30) P.O. Box 1988 Attention: Cites With courtesy copy to: City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Attention: City Attorney Page 4 of 7 5 5394.00049\33266069. 5 Form of Operations Covenant I L Jurisdiction and Venue. The Parties each acknowledge and agree that this Covenant is entered into and is to be fully performed in the City of Santa Ana, Orange County, State of California, and that all legal actions arising from this Covenant shall be filed in the Superior Court of the State of California in and for Orange County, California, or the United States District Court with jurisdiction in Orange County, California. 12. Principles of Interpretation. No inference in favor of or against any Party shall be drawn from the fact that such Party has drafted any part of this Covenant. The Parties have both participated substantially in the negotiation, drafting, and revision of this Covenant, with advice from legal counsel and other advisers of their own selection. A term defined in the singular in this Covenant may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which also govern all other language in this Covenant. The words "include" and "including" shall be construed to be followed by the words: "without limitation." Each collective noun shall be interpreted as if followed by the words "(or any part of it)," except where the context clearly requires otherwise. Every reference to any document, including this Covenant, refers to such document as modified from time to time (excepting any modification that violates this Covenant), and includes all exhibits, schedules, addenda and riders to such document. The word "or" includes the word "and." Every reference in this Covenant to a law, statute, regulation, order, form or similar governmental requirement refers to each such requirement as amended, modified, renumbered, superseded or succeeded, from time to time. 13. Counterpart Originals; Integration. This Covenant may be signed in multiple counterpart originals, each of which is deemed to be an original, but all of which taken together shall constitute one and the same instrument. This Covenant, the exhibits attached to this Covenant and the documents (including maps) referenced in this Covenant represent the entire understanding of the Parties and supersede all previous negotiations, letters of intent, memoranda of understanding or agreements between the Parties with respect to all or any part of the subject matter of this Covenant. 14. Severability. If any term or provision of this Covenant or its application to any Person or circumstance shall to any extent be invalid or unenforceable, then the remainder of this Covenant or the application of such term or provision to Persons or circumstances, except those as to which it is invalid or unenforceable, shall not be affected by such invalidity. Alt remaining provisions of this Covenant shall be valid and be enforced to the fullest extent Law allows. 15. No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants, conditions, restrictions or agreements contained in this Covenant shall not be deemed a waiver of such term, covenant, condition, restriction or agreement, nor shall any waiver or relinquishment of any rights or powers under this Covenant at any one time or more times be deemed a waiver or relinquishment of such right or power at any other time or times. 16. Time is of the Essence. Time is of the essence in the performance of the Parties' obligations under this Covenant. Page 5 of 7 55394.00049\33266069.5 Form of Operations Covenant 17. No Third Party Beneficiaries. The performance of the Parties' respective obligations under this Covenant are not intended to benefit any Person other than City and Developer, except as may be expressly provided otherwise in this Covenant. No Person not a signatory to this Covenant shall have any rights or causes of action against any Party to this Covenant as a result of that Party's performance or non-performance under this Covenant, except as otherwise expressly provided in this Covenant. 18. Relationship of Parties. The Parties agree and intend that City and Developer are independent contracting entities and do not intend by this Covenant to create any partnership, joint venture, or similar business arrangement, relationship or association between them. 19. Survival of Covenant. All of the provisions of this Covenant shall be applicable to any dispute between the Parties arising from this Covenant, whether prior to or following expiration or termination of this Covenant, until any such dispute is finally and completely resolved between the Parties, either by written settlement, entry of a non -appealable judgment or expiration of all applicable limitations periods and all terms and conditions of this Covenant relating to dispute resolution and limitations on damages or remedies shall survive any expiration or termination of this Covenant. 20. No Waiver. Failure to insist on any one occasion upon strict compliance with any term, covenant, condition, restriction or agreement contained in this Agreement shall not be deemed a waiver of such term, covenant, or condition, restriction or agreement, nor shall any waiver or relinquishment of any rights or powers under this Agreement at any one time or more times, be deemed a waiver or relinquishment of such right or power at any other time or times. [Signatures on the following page] Page 6 of 7 55394.00049\33266069.5 Form of Operations Covenant MAIINIMA-MIN SIGNATURE PAGE TO OPERATIONS COVENANT (CARIBOU INDUSTRIES, INC.) IN WITNESS WHEREOF, the City and the Developer have executed this 201 Operations Covenant (Caribou Industries, Inc.) by and through the signatures of their duly authorized representative(s) set forth below: CITY OF SANTA ANA DEVELOPER: By: Name: Kristine Ridge Its: City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: - T4va City 41orney Page 7 of 7 55394.00049\332660695 Form of Operations Covenant ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Orange ) On November 23, 2022.before me, L.J. Ortiz Notary Public (insert name and title of the officer) personally appeared AIGpge/ P:t-6'er(Cll— 14avrra A who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. L. J. ORTR Notary Public - California ` Orange County Signature (Seal) ° Commission ✓f 2406078 �' <u.MO My Comm. Expires May 27, 2026 EXHIBIT "A" TO OPERATIONS COVENANT PROPERTY LEGAL DESCRIPTION All of that certain real property situated in the State of California, County of Orange, City of Santa Ana, described as follows: Parcel l: All of Lots 2,3,6 and the northerly 20.00 feet of Lot 5 in Block 11 and all of Lots 1, 2, 3, 4, 5 and 6 in Block 12 of the town of Santa Ana, as shown on a map recorded in Book 2, Page 51 of miscellaneous records of Los Angeles County, California. Together with that portion of Sycamore Street, 60.00 feet wide, as shown on said map, as vacated and described in that certain resolution No. 82-17 of the city council of the City of Santa Ana, a certified copy of which was recorded February 11, 1982, as Document No. 82-051577 of official records of Orange County, California, bounded southerly by the north line of Third Street, 60.00 feet wide, and bounded northerly by a line parallel with and distant northerly 140.00 feet, measured at right angles, from said north line of Third Street. Excepting therefrom the easterly 15.00 feet of said Lot 3 in said Block 11. Parcel 2: A perpetual easement for ingress and egress over the south 2.50 feet of the east 15.00 feet of Lot 3 in Block 1 I of the town of Santa Ana, as shown on a map recorded in Book 2, Page 51 of miscellaneous records of Los Angeles County, California, as reserved in the deed to J. E. Lieberg et at, dated June 5, 1923 and recorded in Book 475, Page 362 of deeds, records of Orange County, California. Parcel 3: The right to use that portion of a brick wall of the building on Lot 1 in Block 11 of the town of Santa Ana, as per map recorded in Book 2, Page 51 of miscellaneous records of Los Angeles County, California, which adjoins the east boundary line of the south 25.00 feet of Lot 2 in said Block 11, as a party wall, as granted by that certain agreement, dated July 1, 1919 by and between H. R. Andre, also known as Roy Andre, et at, as parties of the first part, and L. J. Carden et at, as parties of the second part recorded August 19, 1919 in Book 341, Page 362 of deeds, records of Orange County, California.