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JOINT PUBLIC HEARING - DISPOSITION AND
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Adopt a resolution regarding the sale of 1112 and 1118 S. Orange to RSI
Development LLC for the ,development of two affordable, detached single-
family homes.
COMMUNITY REDEVELOPMENT AGENCY ACTION
Adopt a resolution approving a Disposition and Development Agreement
between the Community Redevelopment Agency and RSI Development LLC for
the development of two affordable, detached single-family homes at 1112
and 1118 S. Orange.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION
At its Regular Meeting of December 2, 2008, by a vote of 6:0, the
Community Redevelopment and Housing Commission recommended to continue
this item to the December 16, 2008, meeting to allow them time to review
the new project in context with the existing neighborhood.
At its Regular Meeting of December 16, 2008, by a vote of 4:1 (Vasquez,
No), the Community Redevelopment and Housing Commission recommended that
City Council adopt a resolution regarding the sale of 1112 and 1118 S.
Orange to RSI Development LLC for the development of two affordable,
detached single-family homes and recommended that the Community
Redevelopment Agency adopt a resolution approving a Disposition and
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Joint Public Hearing -
DDA with RSI Development LLC
January 5, 2009
Page 2
Development Agreement between the Community Redevelopment Agency and RSI
Development LLC for the development of two affordable, detached single-
family homes at 1112 and 1118 S. Orange, and which should include
collaboration between the developer and the Eastside Neighborhood
Association to develop home designs compatible with the historical
integrity of the neighborhood.
DISCUSSION
A key objective of the Redevelopment Agency (Agency) is to expand and
preserve affordable housing. To that end, the Agency staff has been
working to develop Agency-owned property at 1112 and 1118 S. Orange
Avenue (Exhibit 1) which was acquired as part of the McFadden
Realignment project.
Ronald M. Simon (RSI Development, LLC) has proposed a model project for
this site consisting of two single-family homes (Exhibit 2). Mr. Simon
has been recognized for his success in transforming the manufacturing
process of bathroom and kitchen cabinetry by streamlining the supply
chain and business process. The proposed model project will duplicate a
similar precision manufacturing model. The construction process is
controlled to enhance productivity and reduce waste of building
materials. The houses are designed to match building product
dimensions, thereby minimizing waste and utilizing wall panels and
precut structural components to reduce building time. These homes will
also meet Energy Star rating.
Although the home designs have been created taking into consideration
neighborhood compatibility, RSI will continue to work with Eastside
Neighborhood Association representatives to ensure that the new homes
support the historical integrity of the neighborhood.
The terms of the Disposition and Development Agreement (DDA) with RSI
provide for: 1) transfer of 1112 and 1118 S. Orange to RSI, at no cost;
and, 2) Agency funded construction financing, including soft costs, in
the amount of $225,000. The homes will have three and four bedrooms,
with 1,621 and 1,968 square feet, respectively. They will be sold to
low-income households earning no more than 80o Area Median Income (AMI),
for a sale price of $160,700 and $171,700, respectively.
The homebuyers will be responsible for securing the financing for the
First Trust Deed and will execute a zero-interest promissory note and
trust deed (silent second) with the Community Redevelopment Agency. The
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Joint Public Hearing -
DDA with RSI Development LLC
January 5, 2009
Page 3
amount of the note will be equal to the difference between the fair
market value of the homes and the affordable sales price at the time of
completion. In accordance with previous direction from the Community
Redevelopment and Housing Commission, preference will first be given to
homebuyers that are military veterans and who live or work in Santa Ana.
The second preference is for homebuyers who live or work in Santa Ana.
The homes will be sold through a lottery process. The sale of these
properties will be income-restricted for a period of forty-five years in
accordance with California Redevelopment Law. All subsequent homeowners
must also meet income eligibility requirements. It is anticipated that
construction will commence by February 2009 and be completed in April
2009.
Construction of these homes will assist the City and Agency in meeting
the Regional Housing Needs Assessment (RHNA) goals identified in the
Housing Element and the Agency's replacement and inclusionary housing
obligations.
On December 22 and December 29, 2008, notification was published in the
Orange County Reporter that a public hearing will be held with regard to
the proposed sale of the property at 1112 and 1118 S. Orange to RSI
Development LLC.
ENVIRONMENTAL COMPLIANCE
In accordance with the California Environmental Quality Act, the
proposed project is exempt from further review.
FISCAL IMPACT
Funds are available in the Tax Increment Housing Set-Aside account (no.
507-936-6631).
APPROVED AS TO FUNDS AND ACCOUNTS:
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Exhibit 1
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EXHIBIT 2
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RESOLUTION NO. 2009-
A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF
SANTA ANA APPROVING A DISPOSITION AND
DEVELOPMENT AGREEMENT BETWEEN THE
AGENCY AND RSI DEVELOPMENT, LLC
BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF SANTA ANA, AS FOLLOWS:
Section 1: The Board of the Community Redevelopment Agency of the City of
Santa Ana hereby finds, determines and declares as follows:
A. The Community Redevelopment Agency of the City of Santa Ana
(hereinafter referred to as the "Agency") is engaged in activities necessary
to execute and implement the Redevelopment Plan for the Merged
Redevelopment Project Areas (the "Redevelopment Plan"), including
strengthening of public-private partnerships to provide more affordable
housing, and particularly to provide decent, safe, sanitary, and affordable
housing to the lower income citizens of the City of Santa Ana.
B. In order to implement the Redevelopment Plan, the Agency has
agreed, subject to the approval of the City Council, to sell certain real
property located at 1112 and 1118 S. Orange Street (the "Property")
pursuant to the terms and provisions of a Disposition and Development
Agreement (hereinafter referred to as the "Agreement") between the
Agency and RSI Development, LLC, which is on file in the office of the
Executive Director of the Agency, in which said real property, is described.
C. RSI Development, LLC, proposes to construct and sell these two
homes to qualified Low Income Households. The term of affordability on
each of the homes will be for forty-five years.
D. The Agreement contains all of the provisions, terms, conditions and
obligations required by the state and local laws.
E. RSI Development, LLC, possesses the qualifications and financial
resources necessary to acquire and insure development of the Properties,
in accordance with the purpose and objectives of the Redevelopment Plan.
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3-7
F. Pursuant to the provisions of the California Redevelopment Law, the
Agency and the City Council have held a duly noticed joint public hearing on
the proposed sale of the Property.
Section 2. The Disposition and Development Agreement is hereby approved,
and the Executive Director of the Agency is hereby authorized to execute the Agreement,
with such non-substantive changes as may be approved by Agency's General Counsel.
Section 3. The Executive Director of the Agency is hereby authorized to take all
steps, and to sign all documents and instruments necessary to implement and carry out
the Agreement on behalf of the Agency.
2
ADOPTED this day of , 2009.
Miguel A. Pulido
Chair
APPROVED AS TO FORM:
Joseph W. Fletcher, General Counsel
By:
Lisa E. Storck
Assistant Counsel
AYES: Boardmembers:
NOES: Boardmembers:
ABSTAIN: Boardmembers:
NOT PRESENT: Boardmembers:
CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, PATRICIA E. HEALY, Secretary of the Agency, do hereby attest to and certify the
attached Resolution No. to be the original resolution adopted by the
Community Redevelopment Agency of the City of Santa Ana on , 2009.
Date:
Secretary
Community Redevelopment Agency
of the City of Santa Ana
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THIS PAGE LEFT BLANK INTENTIONALLY
3-10
12/10/08
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") is entered into on
this _day of , 2008 by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA, a public body corporate and politic ("Agency"), and
RSI DEVELOPMENT LLC, a Delaware limited liability company ("Developer").
RECITALS
The following recitals are a substantive part of this Agreement:
A. In furtherance of the objectives of the California Community Redevelopment
Law, the Agency desires to redevelop two (2) developable Sites located at McFadden and
Orange (APN Ol 1-062-32, Ol t-062-33, and Ol t-062-34) within the City of Santa Ana, as more
particularly described on Exhibit A and incorporated herein (the "Sites"). The Sites are all
undeveloped vacant properties. APN 011-062 & 011-062-33 ("Site 1") is 7,431 square feet and
APN 011-062-34 ("Site 2") is 7,747 square feet. The Site Map is attached hereto as Exhibit B.
B. The Sites are all currently owned by the Agency.
C. The Agency and Developer desire by this Agreement for the Agency to convey
the Sites to the Developer and for the Developer to agree to construct a total of two (2) detached
single-family homes with landscaped front and back yards on the Sites. Each of the single-
family homes will be sold at an affordable price to income-qualified households.
D. The Agency's disposition of the Sites to the Developer, and the Developer's
acquisition of the Sites and construction of the Improvements pursuant to the terms of this
Agreement, are in the vital and best interest of the City and the health, safety, morals and welfare
of its residents, and in accord with the public purposes and provisions of applicable state and
local laws and requirements under which the redevelopment of the Project has been undertaken.
NOW THEREFORE, the Agency and Developer hereby agree as follows:
100. DEFINITIONS
"Actual Knowledge" is defined in Section 208.1 hereof.
"Affordability Restrictions on Transfer of Property" means the document containing
the covenants and restrictions pertaining to affordability of the Units for a term of 45 years
running with the land, to be executed by the Agency and the Low Income Household(s) and
recorded against each of the Properties. Said Agreement is attached hereto and incorporated
herein, along with the legally required Notice, as Exhibit C.
600457905v2 3 -11
"Affordable Housing Cost" means a price which is established at a level which ensures
that the monthly housing costs of (a) any Low Income Household purchaser which earns not
greater than eighty percent (80%) of the Area Median Income adjusted for household size, does
not exceed the product of thirty percent (30%) multiplied by seventy percent (70%) of the Area
Median Income adjusted for Household Size Appropriate to the Unit, and (b) any Low Income
Household purchaser which earns not less than seventy percent (70%) or more than eighty
percent (80%) of Area Median Income adjusted for household size, the payment of which does
not exceed thirty percent (30%) of the gross income of such purchaser. Such housing costs
(including mortgage payments, a reasonable utility allowance and similar costs) shall not exceed
the maximum amount applicable to Low Income Households pursuant to California Health and
Safety Code Section 50052.5(b)(3).
"Affordable Units" means each of the single family homes to be constructed and sold at
an Affordable Housing Cost pursuant to this Agreement.
"Agency" means the Community Redevelopment Agency of the City of Santa Ana, a
public body, corporate and politic, exercising governmental functions and powers and organized
and existing under Chapter 2 of the Community Redevelopment Law of the State of California,
and any assignee of or successor to its rights, powers and responsibilities.
"Agency's Conditions Precedent" means the conditions precedent to each Closing to
the benefit of the Agency, as set forth in Section 205.1 hereof.
"Agency's Election to Remediate" is defined in Section 208.3 hereof.
"Agreement" means this Disposition and Development Agreement between the Agency
and the Developer.
"Area Median Income" means the median income figures for Orange County adopted
by the State of California pursuant to Health and Safety Code Section 50093, as amended from
time to time.
"City" means the City of Santa Ana, a charter city and municipal corporation.
"Closing" means the close of escrow for the conveyance of the Sites from the Agency to
the Developer, as set forth in Section 202 hereof.
"Closing Date" means the date of the Closing, as set forth in Section 202.4 hereof.
"Condition of Title" is defined in Section 203 hereof.
"Conveyance" means the conveyance of the Sites to Developer by recordation of the
Grant Deeds from the Agency.
"Date of Agreement" is set forth in the first paragraph hereof.
600457905v2 ®2
"Default" means the failure of a party to perform any action or covenant required by this
Agreement within the time periods set forth herein following notice and opportunity to cure, as
set forth in Section 501 hereof.
"Design Development Drawings" means those plans and drawings to be submitted to
the City for its approval, pursuant to Section 302 hereof.
"Developer" means RSI Development LLC, a Delaware limited liability company.
"Developer Parties" is defined in Section 208.7.
"Developer's Conditions Precedent" means the conditions precedent to each Closing to
the benefit of the Developer, as set forth in Section 205.2.
"Developer's Remedial Work Estimate" is defined in Section 208.3 hereof.
"Developer's Remediation Proposal" is defined in Section 208.3 hereof.
"Environmental Consultant" means the environmental consultant to be employed by
the Developer pursuant to Section 208.2 hereof.
"Environmental Laws" means an federal, state or local law, statute, ordinance or
regulation pertaining to environmental regulation, contamination or cleanup of any Hazardous
Materials including, but not limited to: (i) sections 25115, 25117, 25122.7,or 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law),
(ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory), (iv) Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Article 9 or
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi) Section
311 of the Clean Water Act (33 U.S.C. section 1317), (vii) Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. section 6901, et seq. (42 U.S.C. section 6903, (viii)
Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. section 9601 et seq., or (ix) any state or federal lien or "superlien" law, any
environmental cleanup statute or regulation, or any permit, approval, authorization, license,
variance or permission required by any governmental authority having jurisdiction.
"Environmental Site Assessment" is defined in section 208.1 hereof.
"Escrow" is defined in Section 202 hereof.
"Escrow Agent" is defined in Section 202 hereof.
"Exceptions" is defined in Section 203 hereof.
600457905v2 3
"Executive Director" means the Executive Director of the Agency, or her/his designee.
"Force Majeure" shall mean delays of performance by either party hereunder due to
war; insurrection; strikes; lockouts; labor disputes; riots; floods; earthquakes; fires; casualties;
acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack
of transportation; governmental restrictions or priority; litigation including, but not limited to,
litigation challenging the validity of this transaction or any element thereof (except
condemnation); severe weather; inability to secure necessary labor, materials or tools; delays of
any contractor, subcontractor, or supplies; acts of the other party; acts or failure to act of the City
or any other public or governmental agency or entity (other than acts or failure to act on the part
of the Agency or the City shall not excuse performance by the Agency); or any other cause
beyond the control, or without the fault of the party claiming an extension of time to perform;
provided that notice by the party claiming such extension is sent to the other party within thirty
(30) days of the commencement of the cause or event resulting in such delays. Any such
extension shall be for the duration of the cause of the delay.
"Governmental Requirements" means all laws, ordinances, statutes, codes, rules,
regulations, orders and decrees of the United States ,the state, the county, the City or any other
political subdivision in which the Sites are located, and of any other political subdivision, agency
or instrumentality exercising jurisdiction over the Agency, the Developer or the Sites.
"Grant Deed" means the grand deed for each conveyance of a Site from the Agency to
the Developer, in the form of Exhibit D hereto which is incorporated herein.
"Hazardous Materials" means any substance, material, or waste which is or becomes,
regulated by any local governmental authority, the State of California, or the United States
government, including, but not limited to, any material or substance which is (i) defined as a
"hazardous waste," "extremely hazardous waste," or "restricted hazardous waste under Section
25115, 25117, or 25122.7, or listed pursuant to Section 25140 of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"hazardous substance" under Section 25316 of the California Health and Safety Code, Division
20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a
"hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of
the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls,
(viii) listed under Article 9 or Administrative Code, Division 4, Chapter 20, (ix) designated as
"hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section
1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.,(42 U.S.C. section 6903) or (xi)
defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. section 9601 et seq.
"Household Size Appropriate for the Unit," for the purpose of determining Affordable
Housing Cost only, means four persons for a three bedroom Affordable Unit and five persons for
600457905v2 -41
a four bedroom Affordable Unit. Household Size Appropriate for the Unit is not intended to
constitute a limitation on the number of persons who may live in the Unit.
"Improvements" means the improvements to be constructed by the Developer upon the
Sites, all more specifically defined herein and in the Scope of Development.
"Lender" is defined in Section 311.2 hereof.
"Low Income Households" shall mean persons and families whose income does not
exceed the qualifying limits for Low income families in Orange County as established by the
State of California pursuant to Health and Safety Code section 50079.5, as such qualifying limit
is amended from time to time.
"Monthly Housing Costs" shall mean (i) one-twelfth of the annual cost of principal and
interest payments on each loan secured by a mortgage on the Affordable Unit and loan insurance
fees, if any, associated with such mortgages; (ii) one-twelfth of the annual cost of property taxes
and assessments; (iii) one-twelfth of the annual cost of fire and casualty insurance covering
replacement value of property improvements; (iv) one-twelfth of the annual cost of property
maintenance and repairs; (v) one-twelfth of the annual cost of a reasonable allowance for utilities
to be determined by the Agency, including garbage collection, sewer, water, gas, electricity, and
other heating, cooking or refrigeration fuels, but not telephone service, and (vi) one-twelfth of
annual homeowners association dues and assessments.
"Mortgage" is defined in Section 311.2 hereof.
"No Further Action Letter" is defined in Section 208.3 hereof.
"Notice" shall mean notice in the form prescribed by Section 601 hereof.
"Outside Date" shall mean the last date the Closing shall occur, as set forth in Section
202.4 hereof.
"Phase I Report" is defined in Section 208.1 hereof.
"Project" means predevelopment activities related to the Sites, the acquisition of the
Sites by Developer, the construction of two (2) Affordable Units, the sale thereof to qualified
purchasers of the Affordable Units at an Affordable Housing Cost and any other activities
undertaken in connection therewith.
"Project Budget" means the budget for the project submitted and approved by the
Agency, attached hereto and incorporated herein as Exhibit E.
"Purchase Price" means the price to be paid by the Developer to the Agency in
consideration for the conveyance of fee title to each of the Sites.
600457905v2 -515
"RAP" means the remedial action plan for the remediation of the Sites, as defined in
Section 208.3 hereof.
"Release of Construction Covenants" means the document which evidences the
Developer's satisfactory completion of the Improvements, as set forth in Section 310 hereof, in
substantially the form of Exhibit F hereto which is incorporated herein.
"Remedial Work" is defined in Section 208.3 hereof.
"Remedial Work Expenditure Cap" is defined in Section 208.3 hereof.
"Remediation Cost" is defined in Section 208.3 hereof.
"Report" means the preliminary title report, as described in Section 203 hereof.
"Schedule of Performance" means the Schedule of Performance attached hereto as
Exhibit G and incorporated herein, setting out the dates and/or time periods by which certain
obligations set firth in this Agreement must be accomplished. The Schedule of Performance is
subject to revision from time to time as mutually agreed upon in writing between the Developer
and the Agency's Executive Director, and the Agency's Executive Director is authorized to make
such revisions as he or she deems reasonably necessary.
"Scope of Development" means the Scope of Development attached hereto as Exhibit H
and incorporated herein, which describes the scope, amount and quality of development of the
Improvements to be constructed by the Developer and the Agency Improvements to be
developed by the Agency pursuant to the terms and conditions of this Agreement.
"Site" means each of the locations upon which a housing unit shall be built.
"Site Legal Description" means the description of the Sites attached hereto as Exhibit A,
and incorporated herein.
"Site Map" means the map depicting the Sites which is attached hereto as Exhibit B.
"Studies" are defined in Section 207 hereof.
"Threshold Amount" is defined in Section 208.3 hereof.
"Title Company" is deEned in Section 204 hereof.
"Title Policy" is defined in Section 204 hereof.
"Trust Deed" is defined in Section 311.2 hereof.
600457905v2 3 -616
"Veteran" means a person who is serving or has served, in the armed forces of the
United States, regardless of nature of service (peacetime/wartime) who was not discharged
dishonorably.
200. CONVEYANCE OF THE SITES
201. Purchase and Sale of Sites. The Agency currently holds fee title to all of the
Sites. Subject to all of the terms and conditions of this Agreement, Agency shall sell the Sites to
Developer, and Developer shall purchase the Sites from Agency, for the all-inclusive cash
purchase price of One Dollar ($1.00) (the "Purchase Price"). Payment of the Purchase Price
represents the agreed upon reuse value of the Sites, at the use and with the covenants and
conditions and development costs authorized by this Agreement.
201.1 Developer Responsibilities/Obligations:
Developer shall be responsible for all necessary planning and zoning
changes; preparation of plans; landscaping, including on-site and off-site improvements;
construction of all Improvements; and maintaining construction defect insurance policy(ies) for a
period of ten (10) years after conveyance of each Site to each qualified affordable household;
and marketing, pre-qualification and sale of each Site to a qualified affordable household.
201.2 Timing. The Conveyance of the Sites shall comply with all of the
provisions of this Article including, without limitation, the Escrow provisions set forth in Section
202 hereof, the title provisions set forth in Sections 203 and 204 hereof, and the Conditions
Precedent set forth in Section 205 hereof.
202. Escrow.
(a) The Agency agrees to open escrow for the sale of the Sites to the Developer with
First American Title Insurance Company, or such other escrow company mutually agreed upon
by the parties (the "Escrow Agent") within thirty (30) days of the effective date of this
Agreement. This Agreement and Escrow Agent's Standard Form Escrow Instructions constitute
the joint escrow instructions of the Agency and the Developer and a duplicate original of this
Agreement shall be delivered to the Escrow Agent upon the opening of the escrow.
(b) The Agency's Executive Director and the Developer shall provide such additional
escrow instructions as shall be necessary and consistent with this Agreement. The Escrow Agent
hereby is empowered to act under this Agreement, and upon indicating its acceptance of this
Section in writing, delivered to the Agency and within five (5) days after delivery of this
Agreement, shall carry out its duties as Escrow Agent hereunder.
(c) After delivery to the Escrow Agent by the Agency of a deed for each of the Sites,
and upon close of escrow, the Escrow Agent shall record such deeds in accordance with these
escrow instructions, provided that the title to the Sites can be vested in the Developer in
accordance with the terms and provisions of this Agreement. The Escrow Agent shall buy, affix,
and cancel any transfer stamps required by law and pay any transfer tax required by law. Any
600457905v2 ~/ ®7~
insurance policies relating to such property shall not be transferred to Developer by Agency.
(d) The Agency and the Developer shall deliver to the Escrow Agent all documents
necessary for the conveyance of title to the Sites in conformity with, within the times, and in the
manner provided in this Agreement.
(e) If in the opinion of either party it is necessary or convenient in order to
accomplish the Closing of this transaction, such party may require that the parties sign
supplemental escrow instructions; provided that if there is any inconsistency between this
Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall
control. The parties agree to execute such other and further document as may be reasonably
necessary, helpful or appropriate to effectuate the provisions of this Agreement. The Closing
shall take place when both the Agency's Conditions Precedent and the Developer's Conditions
Precedent have been satisfied. Escrow Agent is instructed to release Agency's escrow closing
and Developer's escrow closing statements to the respective parties.
to Developer:
202.1 Costs of Conveyance. With regard to the conveyance of title to the Sites
(1) The Developer shall pay the following fees, charges and costs:
(a) Developer's share of the premium for any title insurance policies as set
forth in Section 205 of this Agreement;
(b) One-half (1/2) of escrow fees and recording fees;
(c) The Purchase Price;
(d) One-half (1/2) of notary fees.
(2) The Agency shall pay all other fees, charges and costs, including without
limitation:
(a) Costs necessary to place title in the condition required by the provisions of
this Agreement;
(b) Ad valorem taxes, if any, upon the property conveyed for any time prior to
conveyance of title;
(c) Any federal, state, county or city documentary stamps and transfer taxes;.
(d) The Agency's share of the Title Policy;
(e) One-half (1/2) of escrow fees and recording fees;
(f) One-half (1/2) of notary fees.
600457905v2 3 -g1
202.2 Reserved.
202.3 Authority of Escrow Agent. With respect to the Closing, Escrow Agent
is authorized to, and shall:
a. Pay and charge Agency for the premium of the Title Policy and any
amount necessary to place title in the condition necessary to satisfy Section 203 of this
Agreement.
b. Pay and charge Developer and Agency for their respective shares of any
escrow fees, charges, and costs payable under Section 202.1 of this Agreement.
c. Pay and charge Developer for any endorsements to the Title Policy which
are requested by the Developer.
d. Disburse funds, and deliver and record the Grant Deed when both the
Developer's Conditions Precedent and the Agency's Conditions Precedent have been fulfilled or
waived by Developer and Agency.
e. Do such other actions as necessary, including obtaining the Title Policy, to
fulfill its obligations under this Agreement.
£ Within the discretion of Escrow Agent, direct Agency and Developer to
execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably
necessary to comply with the provisions of FIRPTA and any similar state act and regulation
promulgated thereunder. Agency agrees to execute a Certificate of Non-Foreign Status by
individual transferor and/or a Certification of Compliance with Real Estate Reporting
Requirement of the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to
be supplied by Escrow Agent.
g. Prepare and file with all appropriate governmental or taxing authorities a
uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-5
form, and be responsible for withholding taxes, if any such forms are provided for or required by
law.
202.4 Closing. This transaction shall close ("Closing") within thirty (30) days
of the parties' satisfaction of all Agency's and Developer's Conditions Precedent to Closing as
set forth in Section 205 hereof, but in no event later than March 1, 2009 (the "Outside Date").
The Closing shall occur at the offices of Escrow Agent at a time and place reasonably
agreed on by the parties. The "Closing" shall mean the time and day the Grant Deed is filed for
record with the County of Orange Recorder's Office. The "Closing Date" shall mean the day on
which the Closing of the Sites occurs.
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202.5 Termination. If (except for deposit of money by Developer, which shall
be made by Developer before the Closing) Escrow is not in condition to close by the Outside
Date, then either party which has fully performed under this Agreement may, in writing, demand
the return of money or property and terminate this Agreement. If either party makes a written
demand for return of documents or properties, this Agreement shall not terminate until five (5)
days after Escrow Agent shall have delivered copies of such demand to all other parties at the
respective addresses shown in authorized to hold all papers and document until instructed by a
court of competent jurisdiction or by mutual written instructions of the parties. Developer,
however, shall have the sole option to withdraw any money deposited by it for the acquisition of
the Sites less Developer's share of costs of Escrow. Termination of this Agreement shall be
without prejudice as to whatever legal rights either party may have against the other arising from
the Agreement. If no demands are made, the Escrow Agent shall proceed with the Closing as
soon as possible.
202.6 Closing Procedure. Escrow Agent shall close Escrow as follows:
a. Record the Grant Deed for each Site with instructions for the Orange
County Recorder's Office, California, to deliver the Grant Deed to the Developer;
b. Record the Deed(s) of Trust with instructions for the Recorder of Orange
County, California to deliver the Deed(s) of Trust to the Agency;
c.Instruct the Title Company to deliver the Title Policy for each Site to Developer;
d. File any informational reports required by Internal Revenue Code Section
6045(e), as amended, and any other applicable requirements; and
e. Deliver the FIRPTA Certificate, if any, to Developer;
f. Forward to both Developer and Agency a separate accounting of all funds
received and disbursed for each party and copies of all executed and recorded or
filed documents deposited into Escrow, with such recording and filing date and
information endorsed thereon.
203. Review of Title. The Agency shall cause First American Title Insurance
Company, or another title company mutually agreeable to both parties (the "Title Company"), to
deliver to Developer a standard preliminary title report (the "Report") with respect to the title to
each of the Sites, together with legible copies of the document underlying the exceptions
("Exceptions") set forth in the Report, within thirty (30) days from the date of this Agreement.
The Developer shall have the right to reasonably approve or disapprove the Exceptions;
provided, however, that the Developer herein approves the Redevelopment Plan as an Exception.
Developer shall have thirty (30) days from the date of its receipt of each Report to give
written notice to Agency and Escrow Holder of Developer's approval or disapproval of any such
Exceptions. Developer's failure to give written disapproval of the Report within such time limit
shall be deemed approval of the Report. If Developer notifies Agency of its disapproval of any
600457905v2 ~ 101'
Exceptions in the Report, Agency shall have the right, but not the obligation, to remove any
disapproved Exceptions within thirty (30) days after receiving written notice of Developer's
disapproval or provide assurances satisfactory to Developer that such Exception(s) will be
removed on or before the Closing. If Agency cannot or does not elect to remove any of the
disapproved Exception within that period, Developer shall have ten (10) business days after
expiration of such thirty (30) day period to either give the Agency written notice that Developer
elects to proceed with the purchase of the applicable Site subject to the disapproved Exceptions
or to give the Agency written notice that the Developer elects to terminate this Agreement as to
all of the Sites, or as to only the Site which is the subject of the disapproved Report. The
Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as
the "Condition of Title." Developer shall have the right to approved or disapprove any
Exception(s) reported by the Title Company after Developer has approved the Condition of Title
for the Sites (which are not created by Developer) within ten (10) business days after receipt of
any supplemental title report ("Supplemental Report") and a legible copy of the documents
underlying the new Exception. Developer's failure to give written disapproval of the
Supplemental Report within such time limits shall be deemed approval of the Supplemental
Report. If Developer notifies Agency of its disapprovals of any Exceptions in the Supplemental
Report, Agency shall have the right, but not the obligation, to remove any disapproved
Exception(s) within twenty (20) days after receiving written notice of Developer's disapproval or
provide assurance satisfactory to Developer that such Exception(s) would be removed on or
before the Closing. If Agency cannot or does not elect to remove any of the disapproved
Exceptions within that period, Developer shall have ten (10) business days after expiration of
such twenty (20) day period to either give the Agency written notice that Developer elects to
proceed with the purchase of the applicable Site subject to the disapproved Exception(s) or give
the Agency written notice that Developer elects to terminate this Agreement as to all of the Sites,
or only as to the Site which is the subject of the disapproved Supplemental Report. Agency shall
not voluntarily create any new exceptions to title following the date of this Agreement.
204. Title Insurance. Concurrently with recordation of the Grant Deed(s) conveying
title to each Site, there shall be issued to Developer an ALTA Owner's Policy of Title Insurance
with Western Regional Exceptions (the "Title Policy"), together with such endorsements as are
reasonably requested by the Developer, issued by First American Title Insurance Company (the
"Title Company") insuring that the title to the Sites is vested in Developer in the condition
required by Section 203 of this Agreement. The Title Company shall provide the Agency with a
copy of the Title Policy. The Title Policy shall be for the amount of the fair market value of the
Sites. The Agency agrees to remove on or before the Closing any deeds of trust or other
monetary liens against the Sites. The Agency shall pay that portion of the premium for the Title
Policy equal to the cost of the ALTA standard coverage title policy in the amount of the fair
market value of the Sites. Any additional costs, including the cost of an ALTA extended
coverage policy or any endorsements requested by the Developer, shall be borne by the
Developer.
205. Conditions of Closing. The Closing of each Phase of the Sites is conditioned
upon the satisfaction of the following terms and conditions within the times designated below:
600457905v2 3 1121
205.1 Agency's Conditions of Closing. Agency's obligation to proceed with
the Closing of the sale of the Sites is subject to the fulfillment or waiver by Agency of each and
all of the conditions precedent (a) through (j), inclusive, described below ("Agency's Conditions
Precedent"), which are solely for the benefit of Agency, and which shall be fulfilled or waived
by the time periods provided for herein:
a. No Default. Prior to the Close of Escrow, Developer is not in
default in any of its obligations under the terms of this Agreement and all representations and
warranties of Developer contained herein shall be true and correct in all material respects.
b. Execution of Documents. The Developer shall have executed the
Grant Deed for each of the applicable Sites and executed any other documents required
hereunder and delivered such documents into Escrow.
c. Payment of Closing Costs. Prior to the Close of Escrow,
Developer has paid all required costs of Closing into Escrow in accordance with Section 202
hereof.
d. The DIR shall have issued a written determination regarding the
Project.
e. Design Approvals. The Developer shall have obtained approval
by the Agency of the Design Development Drawings as set forth in Section 302 hereof.
f. Land Use Approvals. The Developer shall have received all land
use approvals and permits required pursuant to Section 303 hereof.
g. Insurance. The Developer shall have provided proof of insurance
as required by Section 302 hereof.
h. Financing. The Agency shall have approved financing of the
Improvements as provided in Section 311.1 hereof.
i. No Litigation. No litigation shall be pending or threatened by any
third parties which seeks to enjoin the transactions contemplated herein.
j. Representations and Warranties. All representations and
warranties of Developer contained in this Agreement shall be true and correct as if made on and
as of the Closing.
205.2 Developer's Conditions of Closing. Developer's obligation to proceed
with the purchase of each Phase of the Sites is subject to the fulfillment or waiver by Developer
of each and all of the conditions precedent (a) through (1), inclusive, described below
("Developer's Conditions Precedent"), which are solely for the benefit of Developer, and
which shall be fulfilled or waived by the time periods provided for herein:
600457905v2 ~ 1~l 7
a. No Default. Prior to the Close of Escrow, Agency is not in default
in any of its obligations under the terms of this Agreement and all representations and warranties
of Agency contained herein shall be true and correct in all material respects.
b. Execution of Documents. The Agency shall have executed the
Grant Deed for each of the applicable Sites and any other documents required hereunder, and
delivered such documents into Escrow.
c. Payment of Closing Costs. Prior to the Close of Escrow, Agency
shall have paid all required costs of Closing for the applicable Phase into Escrow in accordance
with Section 202 hereof.
d. The DIR shall have issued a written determination regarding the
Project.
e. Review and Approval of Title. Developer shall have reviewed
and approved the condition of title of the applicable Phase of the Sites, as provided in Section
203 hereof.
f. Title Policy. The Title Company shall, upon payment of Title
Company's regularly scheduled premium, have agreed to the Title Policy for the applicable
Phase of the Sites upon the Close of Escrow, in accordance with Section 204 hereof.
g. Condition of Sites. The Developer shall have approved the
environmental, physical and soils condition of the applicable Phase of the Sites and shall not
have elected to cancel Escrow and terminate this Agreement pursuant to Section 208 hereof, the
Remediation of the applicable Phase of the Sites (if required pursuant to that Section) shall have
been completed as provided therein, and Agency is prepared to deliver exclusive possession of
the Sites to Developer at the Closing.
h. Design Approvals. The Developer shall have obtained approval
by the Agency of the Design Development Drawings as set forth in Section 302 hereof.
i. Land Use Approvals. The Developer shall have received all land
use approvals and permits required pursuant to Section 303 hereof.
j. Financing. The Developer shall have obtained construction
financing of the Improvements on the applicable Phase as provided in Section 311.1 hereof.
k. No Litigation. No litigation shall be pending or threatened by any
third parties which seeks to enjoin the transactions contemplated herein.
1. Representations and Warranties. All representations and
warranties of Agency contained in this Agreement shall be true and correct as if made on and as
of the Closing.
600457905v2 3 1 3
206. Representations and Warranties.
as follows:
206.1 Agency Representations. Agency represents and warrants to Developer
a. Authority. Agency is a public body, corporate and politic, existing
pursuant to the California Community Redevelopment Law (California Health and Safety Code
Section 33000), which has been authorized to transact business pursuant to action of the City.
Agency has full right, power and lawful authority to grant, sell and convey the Sites as provided
herein and the execution, performance and delivery of this Agreement by Agency has been fully
authorized by all requisite actions on the part of Agency.
b. FIRPTA. Agency is not a "foreign person" within the parameters of
FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar
sate statue, or that Agency has complied and will comply with all the requirements under
FIRPTA or any similar state statute.
c. No Conflict. To the best of Agency's knowledge, Agency's execution,
delivery and performance of its obligations under this Agreement will not constitute a default or
a breach under any contract, agreement or order to which Agency is a party or by which it is
bound.
d. Litigation. There are no claims, causes of action or other litigation or
proceedings pending or, to the best knowledge of the Agency, threatened with respect to the
ownership, operation or environmental condition of the Sites or any part thereof (including
disputes with mortgagees, governmental authorities, utility companies, contractors, adjoining
landowners or suppliers of goods and services).
e. Violations. To the best knowledge of the Agency, there are no violations
of any health, safety, pollution, zoning or other laws, ordinances, rules or regulations with
respect to the Sites, which have not heretofore been entirely corrected. In the event Agency has
actual knowledge of any such violations, Agency shall (i) immediately provide Developer with
copies of all documents evidencing such violation, and (ii) cure such violation prior to Closing
except as expressly provided herein.
f. No Third Party Obligations. Agency has not made, and prior to the
Closing Date will not make, any commitments to any governmental authorities, utility company,
school board, church or other religious body, or any homeowner or homeowner's association, or
to any other organization, group or individual, relating to the Sites which would impose any
obligation on the Developer, or its successors or assigns, after the Closing Date to make any
contributions of money, dedications of land or grant of easements or rights of way, or to
construct, install or maintain any improvements of a public or private nature on or off the Sites,
without the approval of the Developer.
g. Use of Low and Moderate Income Housing Funds. The Agency has
used moneys from its Low and Moderate Income Housing Fund, established pursuant to Health
600457905v2 1-T
and Safety Code Section 33334.3, and no other funds, to acquire the Sites and to carry out all of
its obligations under this Agreement. Agency understands that Developer is relying on this
representation and warranty in making its determination as to whether the Improvements
constitute a "public work" pursuant to Labor Code Section 1720, and whether the project does
not constitute a project that is paid for in full or in part subject to the exception set forth in Labor
Code Section 1720(c)(4).
Until the Closing, Agency shall, upon learning of any fact or condition which would
cause any of the warranties and representations in this Section 206.1 not to be true as of Closing,
immediately give written notice of such fact or condition to Developer. Such exception(s) to a
representation shall not be deemed a breach by Agency hereunder, but shall constitute an
exception which Developer shall have a right to approve or disapprove is such exception would
have an effect on the value of the Sites and/or ability to develop the Sites. If Developer elects to
close Escrow following disclosure of such information, Agency's representations and warranties
contained herein shall be deemed to have been made as of the Closing, subject to such
exception(s). If, following the disclosure of such information, Developer elects to not close
Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party
shall have any further rights, obligations or liabilities hereunder. The representations and
warranties set forth in this Section 206.1 shall survive the Closing.
h. Leases and Other Interests. To the best of Agency's knowledge, there
are no tenants or other persons who have a lawful interest in the Sites. To the best of Agency's
knowledge, no person, firm, partnership or corporation has the right to possess the Sites or any
portion thereof.
206.2 Developer's Representations. Developer represents and warrants to
Agency as follows:
a. Authority. Developer is a duly organized limited liability
company formed within and in good standing under the laws of the State of Delaware.
Developer has full right, power and lawful authority to purchase and accept the conveyance of
the Sites and undertake all obligations as provided herein and the execution, performance and
delivery of this Agreement by Developer has been fully authorized by all requisite actions on the
part of the Developer.
b. No Conflict. To the best of Developer's knowledge, Developer's
execution, delivery and performance of its obligations under this Agreement will not constitute a
default or a breach under any contract, agreement or order to which the Developer is a party or
by which it is bound.
c. No Developer Bankruptcy. Developer is not the subject of a
bankruptcy proceeding.
Until the Closing, Developer shall, upon learning of any fact or condition which would
cause any of the warranties and representations in this Section 206.2 not to be true as of Closing,
immediately give written notice of such fact or condition to Agency. Such exception(s) to a
600457905v2 15 G
representation shall not be deemed a breach by Developer hereunder, but shall constitute an
exception which Agency shall have a right to approve or disapprove if such exception would
have an effect on the value and/or operation of the Sites. If Agency elects to close Escrow
following disclosure of such information, Developer's representations and warranties contained
herein shall be deemed to have been made as of the Closing, subject to such exception(s). If,
following the disclosure of such information, Agency elects to not close Escrow, then this
Agreement and the Escrow shall automatically terminate, and neither party shall have any further
rights, obligations or liabilities hereunder. The representations and warranties set forth in this
Section 206.2 shall survive the Closing.
207. Studies and Reports. Prior to the Closing, representatives of Developer shall
have the right of access to all portions of the Sites for the purpose of obtaining data and making
surveys and tests necessary to carry out this Agreement, including the investigation of the
environmental condition of the Sites pursuant to Section 208 hereof. Any preliminary work
undertaken on the Sites by Developer prior to the Closing shall be done at the sole expense of the
Developer, and the Developer's execution of a right of entry agreement to be provided by the
Agency. Any preliminary work shall be undertaken only after securing any necessary permits
from the appropriate governmental agencies.
208. Condition of the Sites
208.1 Disclosure. Prior to the execution of this Agreement, Agency has caused
a "Phase 1" investigation of the environmental condition of each Site to be undertaken by
Converse Consultants Inc., dated December 4, 2008 ("Agency Environmental Site Assessment"),
with the cost of such investigation at the expense of Agency. Agency represents and warrants
that Developer has been provided a copy of all reports and test results produced in connection
with the environmental investigation of each of the Sites by Agency. If Developer desires, prior
to the execution of this Agreement, Developer shall cause a "Phase 1" investigation of the
environmental condition of each Site to be undertaken ("Developer Environmental Site
Assessment"), with the cost of such investigation at the expense of Developer. Developer
represents and warrants that Agency has been provided with all reports and test results produced
in connection with the environmental investigation of each of the Sites by Developer. Agency
and the Developer hereby represent and warrant to the other, except as set forth in the Agency
Environmental Site Assessment and the Developer Site Assessment, that they have no Actual
Knowledge, and have not received any notice or communication from any governmental agency
having jurisdiction over the Sites, notifying such party of, the presence of surface or subsurface
zone Hazardous Materials in, on, or under the Sites, or any portion thereof. "Actual Knowledge,"
as used herein, shall not impose a duty of investigation, and shall be limited to the current actual
knowledge of the Executive Director of the Agency and the President of the Developer.
208.2 Investigation of Sites. Prior to Closing, the Developer shall have the
right, at its sole cost and expense, to engage its own environmental consultant (the
"Environmental Consultant") to make such investigations as Developer deems necessary,
including any "Phase 1" and/or "Phase 2" investigations of the Sites, and the Agency shall
promptly be provided a copy of all reports and test results provided by the Environmental
Consultant.
600457905v2 1 ~2 6
The Developer shall reasonably approve or disapprove of the environmental
condition of the Sites within the time set forth in the Schedule of Performance. The Developer's
approval of the environmental condition of the Sites shall be a Developer's Condition Precedent
to the Closing, as set forth in Section 205 hereof. If the Developer, based upon the above
environmental reports, reasonably disapproves the environmental condition of any of the Sites,
then the Developer may either eliminate the disapproved Site or Sites from this Agreement, or
may terminate this Agreement by written Notice to the Agency; provided, however, that if the
Agency, at its option, agrees to remediate the disapproved Sites in accordance with the terms of
Section 208.3such termination shall be ineffective.
208.3 Remediation of Sites. Upon receipt of Developer's notice to terminate
based upon the environmental condition of the Sites, Agency may, at Agency's option, agree to
remediate the Sites in accordance with the recommendations of Developer's Environmental
Consultant, Developer's Environmental Site Assessment and all Governmental Requirements
("Agency's Election to Remediate"), provided, Agency hereby agrees to make Agency's Election
to Remediate in the event that Agency reasonably estimates that the cost to conduct the Remedial
Worlc does not exceed Twenty Five Thousand Dollars ($ 25,000.00) ("Remedial Work
Expenditure Cap"). Agency shall give notice to Developer and Escrow Agent of such election
and Developer's notice to terminate shall be ineffective; provided, however, that Developer has
approved of the scope of the Remedial Work and the RAP prior to the commencement of such
work.
If Agency makes Agency's Election to Remediate, then within a reasonable
period after giving notice to Developer that it intends to proceed with remediation of the Sites,
Agency shall deliver to Developer for Developer's approval a proposed remedial action plan
("RAP") prepared by Agency's Environmental Consultant ("Agency's Environmental
Consultant"), which RAP shall be approved by the public agency asserting jurisdiction over the
remedial work to be performed pursuant to the RAP (the "Remedial Work"). The Remedial
Work shall assure the suitability of the Sites for the development, occupancy and operation of the
Project and shall be performed in accordance with applicable Governmental Requirements and
Environmental Laws, and shall be conducted in accordance with the requirements of Health and
Safety Code Section 33459, et seq., in a manner which is intended to qualify for the immunity
which is provided by Health and Safety Code Section 33459.3.
Upon making Agency's Election to Remediate and receiving Developer's
approval of the RAP, Agency shall proceed continuously and diligently with the Remedial Work.
Agency's compliance with the provisions of this Section, and the issuance of a letter, certificate
or other official writing by all governmental agencies which have asserted jurisdiction over the
remediation of the Sites, which provides that no further investigation, monitoring, remediation,
response or removal is currently necessary considering the development, occupancy and
operation of the Project ("No Further Action Letter"), shall each be a Developer's Condition
Precedent to the Closing and the Outside Date shall be extended until such conditions are
satisfied. Upon completion of the Remedial Work, Agency shall deliver to Developer a
certificate executed by the Agency's Environmental Consultant that the Remedial Work has been
completed in accordance with all applicable laws.
600457905v2 17
Notwithstanding the foregoing, if Developer, based upon Developer's
Environmental Site Assessment, Agency's Environmental Site Assessment and the RAP,
reasonably estimates that the Remedial Work cannot be completed within ten (10) weeks, then
Developer may terminate the Escrow and this Agreement by written notice to Agency.
As an alternative to Agency performing the Remedial Work pursuant to this
Section, Developer may propose ("Developer's Remediation Proposal") that Developer perform,
or have performed, the Remedial Worlc by written notice to Agency accompanied by an estimate
of the cost of performing the Remedial Work ("Developer's Remedial Work Estimate"). In the
event that Developer's Remedial Work Estimate is less than Remedial Work Expenditure Cap,
Agency shall elect to either (i) accept Developer's Remediation Proposal, in which event
Developer shall perform the Remedial Work in accordance with this Section and Agency shall
reimburse Developer in an amount not to exceed Developer's Remedial Work Estimate within
thirty (30) days following receipt by Agency of written request therefor by Developer, together
with copies of invoices and/or other such evidence as reasonably necessary to substantiate such
costs and expenses, or (ii) reject Developer's Remediation Proposal, in which event Agency shall
perform the Remedial Work in accordance with this Section. In the event that Developer's
Remedial Worlc Estimate is greater than the Remedial Work Expenditure Cap, Agency may elect
to terminate the Escrow and this Agreement, provided such termination shall be ineffective if
Developer then elects to perform the Remedial Work in accordance with this Section and bear
any costs and expenses in excess of the Remedial Work Expenditure Cap.
208.4 No Further Warranties As to Sites. Except as otherwise provided
herein, and upon remediation of the Sites pursuant to Section 208.3 (if applicable) the physical
condition, possession or title of the Sites shall be delivered from Agency to Developer in an "as-
is" condition, with no warranty expressed or implied by Agency, including without limitation,
the presence of Hazardous Materials or the condition of the soil, its geology, the presence of
known or unknown seismic faults, or the suitability of the Sites for the development purposes
intended hereunder.
208.5 Developer Precautions After Closing. Upon the Closing, the Developer
shall take all necessary precautions to prevent the release into the environment of any Hazardous
Materials which are located in, on or under the Sites. Such precautions shall include compliance
with all Governmental Requirements with respect to Hazardous materials. In addition, the
Developer shall install and utilize such equipment and implement and adhere to such procedures
as are consistent with commercially reasonable standards as respects the disclosure, storage, use,
removal and disposal of Hazardous Materials.
208.6 Required Disclosures After Closing. After the Closing, the Developer
shall notify the Agency, and provide to the Agency a copy or copies, of all environmental
permits, disclosures, applications, entitlements or inquiries relating to the Sites which have been
conveyed to the Developer, including notices of violation, notices to comply, citations, inquiries,
clean-up or abatement orders, cease and desist order, reports filed pursuant to self-reporting
requirements and reports filed or applications made pursuant to any Governmental Requirement
600457905v2 ~ 1 `+
relating to Hazardous Materials and underground tanks. The Developer shall report to the
Agency, as soon as possible after each incident, any unusual or potentially important incidents
with respects to the environmental condition of the Sites.
In the event of a release of any Hazardous Materials into the environment,
the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and
all reports relating thereto and copies of all correspondence with governmental agencies relating
to the release. Upon request, the Developer shall furnish to the Agency a copy or copies of any
and all other environmental entitlements or inquiries relating to or affecting the Sites including,
but not limited to, all permit applications, permits and reports including, without limitation, those
reports and other matters which maybe characterized as confidential.
208.7 Developer Environmental Indemnity. Upon the Closing, Developer
agrees to indemnify, defend and hold Agency harmless from and against any claim, action, suit,
proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense
(including, without limitation, attorney's fees), resulting from, arising out of, or based upon (i)
the release, use, generation, discharge, storage or disposal by Developer or by any individual or
entity that Developer shall bear the legal liability therefor including, but not limited to, officers,
agents, employees or contractors of Developer (collectively, the "Developer Parties") of any
Hazardous Materials in violation of Environmental Laws during the period of the Developer's
ownership of the applicable Site, on, under, in or about, or the transportation of any such
Hazardous Materials to or from, the .Sites by Developer or any of Developer Parties during the
period of the Developer's ownership of the applicable Site, or (ii) the violation, or alleged
violation, by Developer or any of Developer Parties of any Environmental Laws relating to the
use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on,
under, in or about, to or from, the Sites during the period of the Developer's ownership of the
applicable Site. This indemnity shall include, without limitation, any damage, liability, fine,
penalty, cost or expense arising from or out of any claim, action, suit, or proceeding for personal
injury (including sickness, disease or death), tangible or intangible property damage,
compensation for lost wages, business income, profits or other economic loss, damage to the
natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse
effect on the environment.
208.8 Agency Environmental Indemnity. Upon the Closing, Agency agrees to
indemnify, defend and hold Developer and the Developer Parties harmless from and against any
claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive
damage, or expense (including, without limitation, attorneys' fees) resulting from, arising out of,
or based upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous
Materials in violation of Environmental Laws during the period prior to the Closing, on, under,
in or about, or the transportation of any such Hazardous Materials to or from the Sites, during the
period prior to the Closing; or (ii) the violation, or alleged violation, of any Environmental Laws
relating to the use, generation, release, discharge, storage, disposal or transportation of
Hazardous Materials on, under, in or about, to or from, the Sites during the period prior to the
Closing. This indemnity shall include, without limitation, any damage, liability, fine, penalty,
cost or expense arising from or out of any claim, action, suit or proceeding for personal injury
(including sickness, disease or death), tangible or intangible property damage, compensation for
600457905v2 1 ~ `~
lost wages, business income, profits or other economic loss, damage to the natural resource or
the environment, nuisance, contamination, leak, spill, release or other adverse affect on the
environment.
300. DEVELOPMENT OF THE SITES
301. Scope of Development. The Developer shall develop the Improvements in
accordance with the Scope of Development and the plans, drawings and documents submitted by
the Developer and approved by the City as set forth herein. The Improvements shall generally
consist of the construction of two (2) detached single-family homes with garages, associated
landscaping and other required onsite and offsite improvements. One home shall have three
bedrooms and two bathrooms (approximately 1621 square feet), and the other will have four
bedrooms and two bathrooms (approximately 1968 square feet).
302. Design Review.
302.1 Developer Submissions. Before commencement of construction of the
Improvements or other works of improvement upon the Sites, and as a Condition Precedent
pursuant to Section 205, and at or prior to the times set forth herein, the Developer shall submit
to the City any plans and drawings (collectively, the "Design Development Drawings") which
maybe required by the City with respect to any permits and entitlements which are required to
be obtained to develop the Improvements, and such plans for the Improvements as required by
the City in order for the Developer to obtain building and grading permits for the Improvements.
Within thirty (30) days after the City's disapproval or conditional approval of such plans, the
Developer shall revise the portions of such plans identified by the City as requiring revisions and
resubmit the revised plans to the City.
302.1.1 Special Development Requirements. The Design
Development Drawings shall, to the extent compatible with Section 403 [Affordable Housing]
and applicable design requirements of the City of Santa Ana, incorporate design elements and
building practices that will reduce the maintenance and utility costs of home ownership, and also
reduce the adverse environmental impacts otherwise associated with residential construction.
Such design elements and practices may include, but are not limited to passive solar design,
environmentally sensitive landscaping, installation of energy efficient furnaces and water heaters
(Energy Star Appliances), and installation of high efficiency toilets.
302.2 City Review and Approval. The City and the Agency shall have all
rights to review and approve or disapprove all Design Development Drawings and other required
submittals in accordance with the Santa Ana Municipal Code, and nothing set forth in this
Agreement shall be construed as the City/Agency's approval of any or all of the Design
Development Drawings.
302.3 Reserved.
302.4 Revisions. Any and all change orders or revisions required by the City
and its inspectors which are required under the Municipal Code and all other applicable Uniform
600457905v2 ~ ?~
Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and
regulations shall be included by the Developer in its Design Development Drawings and other
required submittals and shall be completed during the construction of the Improvements.
302.5 Defects in Plans. The Agency and the City shall not be responsible either
to the Developer or to third parties in any way for any defects in the Design Development
Drawings, nor for any structural or other defects in any work done according to the approved
Design Development Drawings, nor for any delays reasonably caused by the review and
approval processes established by this Section 302.
303. Land Use Approvals. Before commencement of construction of the
Improvements or other works of improvement upon the Sites, the Developer shall, at its own
expense, secure or cause to be secured any and all land use and other entitlements, permits and
approvals which may be required for the Improvements by the City or any other governmental
agency affected by such construction or work. The Developer shall, without limitation, apply for
and secure the following (as required), and pay all costs, charges and fees associated therewith:
a. reserved;
b. Zoning Amendment;
c. reserved;
d. Lot Line Adjustment;
e. All permits and fees required by the City, Orange County and other
governmental agencies with jurisdiction over the Improvements.
However, the execution of this Agreement does not constitute the granting of or a
commitment to obtain any required land use permits, entitlements or approvals required by the
Agency or the City.
304. Schedule of Performance. The Developer shall submit all Design Development
Drawings, commence and complete all construction of the Improvements, and satisfy all other
obligations and conditions of this Agreement within the times established therefore in the
Schedule of Performance attached hereto and incorporated herein as Exhibit G. The Agency
shall perform all of its obligations hereunder within the times established therefore in the
Schedule of Performance.
305. Cost of Construction. Except to the extent otherwise expressly set forth in this
Agreement, all of the cost of acquisition of the Sites and the planning, designing, developing and
constructing all of the Improvements, preparation of the Sites and grading shall be borne solely
by the Developer.
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306. Insurance Requirements. The Developer shall take out and maintain or shall
cause its contractor to take out and maintain until the completion of construction pursuant to the
terms of this Agreement, a commercial general liability policy in the amount of Two Million
Dollars ($2,000,000) combined single limit policy, and a comprehensive automobile liability
policy in the amount of One Million Dollars ($1,000,000), combined single limit, or such other
policy limits as the Agency may approve at its discretion, including contractual liability, as shall
protect the Developer, City and Agency from claims for such damages. Such policy or policies
be written on an occurrence form. The Developer shall also furnish or cause to be furnished to
the Agency evidence satisfactory to the Agency that Developer and any contractor with whom it
has contracted for the performance of work on the Sites or otherwise pursuant to this Agreement
carries workers' compensation insurance as required by law. The Developer shall furnish a
certificate of insurance countersigned by an authorized agent of the insurance carrier on a form
approved by the Agency setting forth the general provisions of the insurance coverage. This
countersigned certificate shall name the City and the Agency and their respective officers,
agents, and employees as additionally insured parties under the policy, and the certificates shall
be accompanied by a duly executed enforcement evidencing such additional insured status (the
Agency's preferred Additional Insured Endorsement is attached hereto as Exhibit I). The
certificate and endorsement by the insurance carrier shall contain a statement of obligation on the
part of the carrier to notify City and the Agency of any material change, cancellation or
termination of the coverage at least thirty (30) days in advance of the effective date of any such
material change, cancellation or termination. Coverage provided hereunder by the Developer
shall be primary insurance and not be contributing with any insurance maintained by the Agency
or City, and the policy shall contain such an endorsement. The insurance policy or the
endorsement shall contain a waiver of subrogation for the benefit of the City and the Agency.
The required certificate shall be furnished by the Developer at the time set forth in the Schedule
of Performance.
306.1 Construction Defect Insurance. The Developer shall maintain
construction defect insurance coverage on each of the Affordable Units that are built for a period
of at least ten (10) years.
306.2 Builders Risk Insurance. The Developer shall take out and maintain
Builders Risk Insurance coverage to cover the buildings during the course of construction. Such
insurance shall provide coverage on an all risk basis, including theft and vandalism, for
accidental losses, damage or destruction of the property during construction. The limit of
insurance shall be in the amount of the full value of the project.
307. Reserved.
308. Rights of Access. For purposes of assuring compliance with this Agreement,
representatives of the Agency shall have the right of access to the Sites, without charges or fees,
at normal construction hours during the period of construction for the purposes of this
Agreement, including but not limited to, the inspection of the work being performed in
constructing the Improvements so long as Agency representatives comply with all safety rules.
The Agency (or its representatives) shall, except in emergency situations, notify the Developer
prior to exercising its right pursuant to this Section 308.
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309. Compliance With Laws. The Developer shall carry out the design and
construction of the Improvements in conformity with all applicable laws, including all applicable
state labor standards, the City zoning and development standards, building, plumbing,
mechanical and electrical codes, and all other provisions of the City of Santa Ana Municipal
Code, and all applicable disabled and handicapped access requirements, including without
limitation the Americans With Disabilities Act. 42 U.S.C. Section 12101, et seq., Government
Code Section 4450, et seq
309.1 Taxes and Assessments. Following the Closing, the Developer shall pay
prior to delinquency all ad valorem real estate taxes and assessments on the Sites, subject to the
Developer's right to contest in good faith any such taxes. The Developer shall remove or have
removed any levy or attachment made on any of the Sites or any part thereof, or assure the
satisfaction thereof within a reasonable time. The Developer shall not apply for or receive any
exemption from the payment of property taxes or assessments on any interest in or to the Sites or
the Improvements.
309.2 Liens and Stop Notices. The Developer shall not allow to be placed on
the Sites or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or
recorded affecting the Improvements the Developer shall within thirty (30) days of such
recording or service or within five (5) days of the Agency's demand whichever last occurs:
a. pay and discharge the same; or
b. affect the release thereof by recording and delivering to the Agency a
surety bond in sufficient form and amount, or otherwise; or
c. provide the Agency with other assurance which the Agency deems, in its
sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the
full and continuous protection of Agency from the effect of such lien or bonded stop notice.
309.3 Prevailing Wage Requirements. Pursuant to Labor Code section 1720
(c)(4), the construction or rehabilitation of affordable housing units for Low- or
moderate-income persons pursuant to paragraph (5) or (7) of subdivision (e) of Section
33334.2 of the Health and Safety Code that are paid for solely with moneys from a Low
and Moderate Income Housing Fund established pursuant to Section 33334.3 of the
Health and Safety Code do not constitute a project that is paid for in whole or in part out
of public funds for which prevailing wage must be paid. The Agency hereby warrants
and represents that (i) the Sites were acquired by Agency solely with moneys from a Low
and Moderate Income Housing Fund established pursuant to Section 33334.3 of the
Health and Safety Code, and (ii) Agency shall pay for all costs and expenses arising out
of this Agreement and under the Agency Loan solely with moneys from a Low and
Moderate Income Housing Fund established pursuant Section 33334.3 of the Health and
Safety Code. Further, Labor Code section 1720 (b)(6)(E) provides another exemption
from prevailing wage law. Should a determination be made that this project is not
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exempt from prevailing wage law, the Agency agrees to assume said risk and bear all
costs and expenses associated therewith.
310. Release of Construction Covenants. Promptly after completion of the
Improvements or any portion thereof in conformity with this Agreement, the Agency shall
furnish the Developer with a "Release of Construction Covenants," substantially in the form of
Exhibit F hereto which is incorporated herein by reference. The Agency shall not unreasonably
withhold such Release of Construction Covenants. The Release of Construction Covenants shall
be a conclusive determination of satisfactory completion of the applicable portion of the
Improvements and the Release of Construction Covenants shall so state. Any party then owning
or thereafter purchasing, leasing, or otherwise acquiring any interest in the Sites shall not
(because of such ownership, purchase, lease or acquisition) incur any obligation or liability under
this Agreement except for those continuing covenants as set forth in Section 406 of this
Agreement.
If the Agency refuses or fails to furnish the Release of Construction Covenants,
after written request from the Developer, the Agency shall, within thirty (30) days of written
request therefore, provide the Developer with a written statement of the reasons the Agency
refused or failed to furnish the Release of Construction Covenants. The statement shall also
contain the Agency's opinion of the actions the Developer must take to obtain the Release of
Construction Covenants. The Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of the Developer to any holder of any
mortgage, or any insurer of a mortgage securing money loaned to fmance the Improvements, or
any part thereof. The Release of Construction Covenants is not a notice of completion as
referred to in Section 3093 of the California Civil Code.
311. Financing of the Improvements.
311.1 Approval of Financing. As required herein and as an Agency Condition
Precedent to the Closing, Developer shall submit to Agency evidence that Developer has
obtained sufficient equity capital (for example, a Letter of Credit) or has obtained firm and
binding commitments for construction and permanent financing necessary to undertake the
development of the Sites and the construction of the Improvements in accordance with this
Agreement. Agency shall approve or disapprove such evidence of financing commitments
within thirty (30) days of receipt of a complete submission. Approval shall not be unreasonably
withheld or conditioned. If Agency shall disapprove any such evidence of financing, Agency
shall do so by Notice to Developer stating the reasons for such disapproval and Developer shall
promptly obtain and submit to Agency new evidence of financing. Agency shall approve or
disapprove such new evidence of financing in the same manner and within the same times
established in this Section 311.1 for the approval or disapproval of the evidence of financing as
initially submitted to Agency. Developer shall close the approved financing concurrently with
the Closing.
Such evidence of financing shall include the following: (a) a copy of a legally
binding, firm and enforceable loan commitment(s)/ Letter of Credit obtained by Developer from
600457905v2 ~ ?d
unrelated financial institutions for the mortgage loan or loans for financing to fund the
construction, complete, operation and maintenance of the Improvements, subject to such lenders'
reasonable, customary and normal conditions and terms, and/or (b) a certification from the chief
financial officer of Developer that Developer has sufficient funds for such construction, and that
such funds have been committed to such construction, and/or other documentation satisfactory to
the Agency as evidence of other sources of capital sufficient to demonstrate that Developer has
adequate funds to cover the difference between the total cost of the acquisition of the Sites, and
construction and completion of the Improvements, less financing authorized by those loans set
forth in subparagraph (a) above.
Agency's loan amount to Developer shall not exceed $222,478.00. Sales proceeds from the sale
of the affordable homes shall be retained by the Developer. Construction financing to
Developer will be provided on the terms more fully described in the First Trust Deed Promissory
Note, attached hereto and incorporated herein as Exhibit J and secured through a First Deed of
Trust attached hereto and incorporated herein as Exhibit K. Developer acknowledges that these
documents will be fully executed and recorded as part of the conveyance of each of the Sites.
Agency and Developer agree to utilize a construction disbursement account through
AmeriNational Community Services for the purpose of authorizing and releasing construction
progress payments. The Agency has provided the following forms pertaining to disbursements:
Request for Progress Payment, Release of Retention and Fu11 Release which are attached hereto
and incorporated herein as Exhibit L. Said forms shall be submitted to the Agency along with
proper documentation evidencing costs incurred by Developer.
311.2 No Encumbrances Except Agency recorded documents (Deeds of
Trust/Affordability Restrictions on Transfer of Property) The Developer shall not enter into
any conveyance for financing prior to the Release of Construction Covenants without the prior
written approval of the Agency, which approval Agency agrees to give if any such conveyance
for financing is given to a responsible financial lending institution or person or entity ("Lender").
The Developer may enter into a conveyance for financing after the completion of the
Improvements as evidenced by the recording of the Release of Construction Covenants without
the approval of the Agency.
400. COVENANTS AND RESTRICTIONS
401. Use in Accordance with Redevelopment Plan. The Developer covenants and
agrees for itself, its successors, assigns, and every successor in interest to the Sites, that upon the
Closing and during construction and thereafter, until Developer's sale of the Improvements on
the Sites, the Developer shall devote the Sites to the uses specified in the Redevelopment Plan
and this Agreement for the periods of time specified therein. All uses conducted on the Sites,
including, without limitation, all activities undertaken by the Developer pursuant to this
Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the Santa
Ana Municipal Code. The foregoing covenants shall run with the land.
402. Reserved.
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403. Affordable Housing
403.1 Number of Units. Developer agrees to make available, restrict occupancy
to, and sell each of the two (2) single family housing units to be developed upon the Sites to
"Low Income Households" (as that term is herein defined) at an Affordable Housing Cost (the
"Affordable Units"). In addition, the Developer agrees to cooperate with the Agency in any
subsidized loan program the Agency may in its sole discretion make available to Low Income
Household purchasers of some or all of the Affordable Units.
403.2 Selection of Buyers. The Developer shall provide the Agency with a
copy of its Marketing Plan which shall set forth how the Developer plans to provide interested
households with information about the Sites. The Developer shall be solely responsible for the
selection of qualified purchasers of the Affordable Units. Developer shall ensure that there will
be adequate homebuyer education with HUD approved pre- and post- purchase counseling.
403.2.1 Marketing and Outreach Plan. The goal of the Marketing and
Outreach Plan is to insure that the marketing of affordable for-sale housing be as broad and
inclusive as possible in order to inform and attract as many prospective buyers as possible. The
Outreach and Marketing Plan and the associated applicant selection procedures will be targeted
to purchasers regardless of race, color, religion, sex, disability status, familial status or national
origin. The Marketing Plan is attached hereto as Exhibit M.
Information shall also be provided on the Developers website, City of Santa Ana website, City
cable channel, Workforce Investment Board, Santa Ana Chamber of Commerce, Santa Ana
Unified School District, Rancho Santiago Community College District, Community
Development Resource Network Newsletter and through neighborhood associations.
A. LOTTERY
Developer shall be responsible to organize, schedule and coordinate a lottery drawing, which
shall be open to the public. The lottery shall take place not less than 90 days prior to completion
of the available unit.
Preference shall be given as follows: (1) Veterans who live or work in the City of Santa Ana, (2)
households who live or work in Santa Ana, and (3) others. Those claiming the preferences will
be maintained separately. For the purpose of the lottery drawing, the lottery will be divided by
those who have claimed a preference and those who do not. All lottery forms will be drawn and
numbered to create a complete list of alternate applications.
Developer shall provide written notification to lottery participants informing them of the results
and their priority number. This priority number represents the order with which prospective
buyers' will be reviewed for final determination of eligibility. If a household who was selected
claimed a preference but could not verify such will be deemed ineligible and the next selected
participant will be notified.
Pre-purchase counseling must be completed PRIOR to close of escrow.
600457905v2 3 263 6
403.3 Income of Buyers. Prior to the sale of any Affordable Unit to a
purchaser, the Developer shall submit to the Agency a completed income computation and
certification form from each purchaser of an Affordable Unit in the form which is provided by
the Agency. Each purchaser shall certify, to the best of the purchaser's knowledge, that it is a
Low Income Household and meets the eligibility requirements established for the Affordable
Unit. The Developer shall obtain an income certification (copy of Income Certification form
attached hereto as Exhibit N) from the prospective purchaser of an affordable unit and shall
certify that, to Developer's Actual Knowledge, the income of the prospective purchaser is
truthfully set forth in the income certification form. For purposes of such certification, the
Developer shall verify the income certification of the prospective purchaser in one or more of the
following methods reasonably acceptable to the Agency:
(a) obtain two (2) paycheck stubs from the prospective purchaser's
two (2) most recent pay period.
(b) obtain a true copy of an income tax return from the prospective
purchaser for the most recent tax year in which a return was filed.
(c) obtain an income verification certification from the employer of
the prospective purchaser.
(d) obtain an income verification certification from the Social Security
Administration and/or the California Department of Social Services if the prospective purchaser
receives assistance from such agencies.
(e) obtain an alternate form of income verification reasonably
acceptable to the Agency, if none of the above forms of verification is available to the
Developer.
403.4 Documentation. At the closing of escrow for the purchase of each
Affordable Unit, the Agency will require each Low Income Household purchaser of such unit to
execute, Affordability Restrictions on Transfer of Property, Notice of Affordability on Transfer
of Property, the Promissory Note (attached hereto as Exhibit O) ,Deed of Trust (attached hereto
as Exhibit P) and such further documents reasonably required by the Agency in a form provided
by the Agency. The Promissory Note, Affordability Restrictions, and Notice of Affordability on
Transfer of Property shall be for a term of forty-five (45) years. The principal amount of the
Promissory Note shall be in an amount equal to the difference between the sales price of the
Affordable Unit and the fair market value of such unit as if no restriction were placed thereon, as
determined by the sales price of equivalent unrestricted units on the Sites at the time of such sale.
If there are no equivalent unrestricted units on the Sites at the time of sale, the fair market value
of the unit shall be determined by appraisal which is reasonably acceptable to the Agency. The
Affordability Restrictions on Transfer of Property and Promissory Note shall permit sales of the
Affordable Units prior to expiration of the forty-five year period only to a qualified Low Income
household at an Affordable Housing Cost. The Affordability Restrictions and covenants must be
fully explained to the Purchaser and the entire explanation and execution of said document must
be videotaped by the Developer. A copy of said videotape shall be placed on a CD which shall
be kept by the Developer and the Agency.
600457905v2 ?'3 7
403.5 Affordable Housing Property Tax. Developer shall be responsible for
applying to the County of Orange to request that the property tax be based on the restricted value
with the affordability covenants that are recorded against each Affordable Unit.
403.6 Maintenance. The Affordability Restrictions on Transfer of Property
shall require each of the households to maintain their property in conformance with local and
state requirements.
403.7 Reasonable Efforts to Sell Affordable Units. The Developer agrees tv
exercise reasonable efforts consistent with prudent business practices to sell all of the Affordable
Units developed on the Sites to owner-occupants as soon as practical following the completion of
the construction. The Developer agrees that the units developed on the Sites shall not be sold to
the Developer or any party/employee related to the Developer.
403.8 Guarantee/Homeowner Protection Plan. Developer agrees to
guarantee its work from defects for a period of at least one (1) year after construction is
complete, with a five (5) year guarantee for the roof of each Unit. Developer shall
provide each Homebuyer with all of the manufacturer's warranties and product
information. Developer shall also provide the Homebuyers of each of the Affordable
Units with a Homeowner Protection Plan.
403.9 Subsequent Sales. The Grant Deed from Developer to any
proposed qualified household shall restrict the use of the Property to owner-occupied, and
shall restrict subsequent resales of the Property to Lower Income Households, at an
Affordable Housing Cost, who agree to occupy the Unit(s) as their primary place of
residence.
404. Maintenance Covenants. During the time of Developer's ownership of the
Sites, the Developer shall maintain the Sites and all improvements thereon, including all
landscaping, in compliance with the terms of all applicable provisions of the City of Santa Ana
Municipal Code. Each homeowner shall be responsible for maintenance of their own property
after transfer of title.
405. Nondiscrimination Covenants. Developer herein covenants by and for itself, its
successors and assigns, that there shall be no discrimination against or segregation of, any person
or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of
the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m)
and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government
Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises
herein conveyed, nor shall the grantee or any person claiming under or through him or her,
establish or permit any practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees in the premises herein conveyed. The foregoing covenants shall run with the land.
Notwithstanding the immediately preceding paragraph, with respect to familial
status, the immediately preceding paragraph shall not be construed to apply to housing for older
600457905v2 ~ ®2 v
persons, as defined in Section 12955.9 of the Government Code. With respect to familial status,
nothing in the immediately preceding paragraph shall be construed to affect Sections 51.2, 51.3,
51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and
(p) of Section 12955 of the Government Code shall apply to the immediately preceding
paragraph.
All deeds, leases or contracts entered into by Developer relating to the Sites shall
contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
a. In deeds: "The grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any person or group of
persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall the grantee or any person claiming under or through him or her, establish or
permit any practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land.
"Notwithstanding the immediately preceding paragraph, with respect to
familial status, the immediately preceding paragraph shall not be construed to apply to housing
for older persons, as defined in Section 12955.9 of the Government Code. With respect to
familial status, nothing in the immediately preceding paragraph shall be construed to affect
Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the
immediately preceding paragraph."
b. In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
"That there shall be no discrimination against or segregation of any person
or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of
the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m)
and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government
Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the
premises herein leased nor shall the lessee himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy, of tenants,
lessees, sublessees, subtenants, or vendees in the premises herein leased.
600457905v2 3 293 9
"Notwithstanding the immediately preceding paragraph, with respect to
familial status, the immediately preceding paragraph shall not be construed to apply to housing
for older persons, as defined in Section 12955.9 of the Government Code. With respect to
familial status; nothing in the immediately preceding paragraph shall. be construed to affect
Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the
immediately preceding paragraph."
c. In contracts: "There shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises which are the subject of this Agreement, nor shall the grantee or any
person claiming under or through him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land."
"Notwithstanding the immediately preceding paragraph, with respect to
familial status, the immediately preceding paragraph shall not be construed to apply to housing
for older persons, as defined in Section 12955.9 of the Government Code. With respect to
familial status, nothing in the immediately preceding paragraph shall be construed to affect
Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the
immediately preceding paragraph."
d. The foregoing covenants shall, without regard to technical
classification and designation, be binding for the benefit and in favor of Agency, its successors
and assigns, any occupants of the Sites, and any successor in interest to the Sites. The covenants
against discrimination shall remain in effect in perpetuity. In no event shall anything in this
Section 405 be construed as authority to lease Affordable Units unless otherwise permitted
herein.
406. Effect of Violation of the Terms and Provisions of this Agreement After
Completion of Construction. The Agency is deemed the beneficiary of the terms and
provisions of this Agreement and of the covenants running with the land, for and in its own right
and for the purposes of protecting the interest of the community and other parties, public or
private, in whose favor and for whose benefit this Agreement and the covenants running with the
land have been provided, without regard to whether the Agency has been, remains or is an owner
of any land or interest therein in the Sites or in the Project. The Agency shall have the right, if
the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain
any actions or suits at law or in equity or other proper proceedings to enforce the curing of such
breaches to which it or any other beneficiaries of this Agreement and covenants maybe entitled.
600457905v2 V 30~®
The covenants contained in this Agreement shall remain in effect as follows: environmental
covenants set forth in Sections 208.5, 208.6 and 208.7 shall remain in effect in perpetuity.
a. The covenants pertaining to use of the Sites which are set forth in Section 401
shall remain in effect for the term of the Redevelopment Plan.
b. The covenants pertaining to the use of the Sites as affordable housing set forth in
Section 403 shall remain in effect for a period of not less than forty-five (45) years from the date
that the property is conveyed to a Low Income Household.
c. The covenants pertaining to maintenance of the .Sites and all improvements
thereon, as set forth in Section 404, shall remain in effect for the term of forty-five (45) years.
d. The covenants against discrimination, as set forth in Section 405 shall remain in
effect in perpetuity.
500. DEFAULTS AND REMEDIES
501. Default Remedies. Subject to the extensions of time set forth in Section 602 of
this Agreement, failure by either party to perform any action or covenant required by this
Agreement within the time periods provided herein following notice and failure to cure as
described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default
shall give written notice of Default to the other party specifying the Default complained of.
Except as otherwise expressly provided in this Agreement, the claimant shall not institute any
proceeding against any other party, and the other party shall not be in Default if such party
within thirty (30) days from receipt of such notice immediately, with due diligence, commences
to cure, correct or remedy such failure or delay and shall complete such cure, correction or
remedy with diligence.
502. Institution of Legal Actions. In addition to any other rights or remedies and
subject to the restriction otherwise set forth in this Agreement, either party may institute and
action at law or equity to seek specific performance of the terms of this Agreement, or to cure,
correct or remedy any Default, to recover damages for any Default, or to obtain any other
remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in
the Courts of the County of Orange, State of California, or in the District of the United States
District Court in which such county is located.
503. Termination by the Developer. In the event that the Developer is not in default
under this Agreement and the Agency does not tender title to the Sites pursuant to the Grant
Deed in the manner and condition and by the date provided in this Agreement; or one or more of
the Developer's Conditions Precedent to the Closing is not fulfilled on or before the time set
forth in the Schedule of Performance and such failure is not caused by the Developer; or in the
event of any default of the Agency prior to the Closing which is not cured within the time set
forth in Section 501 hereof, and any such failure is not cured within the applicable time period
after written demand by the Developer, then this Agreement may, at the option of the Developer,
be terminated by written notice thereof to the Agency. From the date of the written notice of
600457905v2 3 3 1
termination of this Agreement by the Developer to the Agency and thereafter this Agreement
shall be deemed terminated and there shall be no further rights or obligations between the parties,
except that the parties may pursue any other remedies they may have hereunder, including,
without limitation, the right of Developer to commence an action. for monetary damages against
Agency for all costs and expenses incurred by Developer in the investigation and acquisition of
the Sites.
504. Termination by the Agency. In the event that the Agency is not in Default under
this Agreement the Developer (or any successor in interest) assigns or attempts to assign the
Agreement or any rights therein or in the Sites in violation of this Agreement; or one or more of
the Agency's Conditions Precedent to the Closing is not fulfilled on or before the time set forth
in the Schedule of Performance and such failure is not caused by the Agency or City; or the
Developer is otherwise in default of this Agreement and fails to cure such default within the time
set forth in Section 501 hereof; then this Agreement and any right of the Developer or any
assignee or transferee with respect to or arising out of the Agreement or the Sites, shall, at the
option of the Agency, be terminated by the Agency by Agreement by the Agency to the
Developer and thereafter this Agreement shall be deemed terminated and there shall be no
further rights or obligations between the parties, except that the parties may pursue any other
remedies they may have hereunder.
505. Re-entry and Revesting of Title in the Agency After the Closing and Prior to
Completion of Construction. The Agency has the right, at its election, to reenter and take
possession of the Sites, with all improvements thereon, and terminate and revest in the Agency
the estate conveyed to the Developer if after the Closing and prior to completion of construction
the Developer (or its successors in interest) (and subject to the terms of Section 603) shall:
a. fail to start the construction of the Improvements as required by this
Agreement for a period of thirty (30) days after written notice thereof from the Agency; or
b. abandon or substantially suspend construction of the Improvements
required by this Agreement for a period of thirty(30) days after written notice thereof from the
Agency; or
c. contrary to the provisions of Section 603 transfer or suffer any involuntary
transfer of the Sites or any part thereof in violation of this Agreement, and Developer fails to
reverse such transfer within the time set forth in Section 501 hereof; or
d. Otherwise materially breach this Agreement and such breach is not cured
within thirty (30) days after written notice thereof from Agency.
Such right to re-enter, terminate and revest shall be subject to and be limited by and shall not
defeat, render invalid or limit:
1. Any mortgage or deed of trust permitted by this Agreement; or
2. Any rights or interests provided in this Agreement for the protection of the
holders of such mortgages or deeds of trust.
324
600457905v2
The Grant Deed shall contain appropriate reference and provisions to give effect
to the Agency's right as set forth in this Section 505, under specified circumstances, to re-enter
and take possession of the Sites, with all improvements thereon, and to terminate and revest in
the Agency the estate conveyed to the Developer. In no event, however, shall the Agency have
the right to re-enter and take possession of any portion of the Site on which a completed home is
located. Upon the revesting in the Agency of title to the Sites as provided in this Section 505,
the Agency shall, pursuant to its responsibilities under state law, use its reasonable efforts to
resell the Sites as soon and in such manner as the Agency shall find feasible and consistent with
the objectives of such law and of the Redevelopment Plan, as it exists or maybe amended, to a
qualified and responsible party or parties (as determined by the Agency) who will assume the
obligation of making or completing the Improvements, or such Improvements in their stead as
shall be satisfactory to the Agency and in accordance with the uses specified for such Sites or
part thereof in the Redevelopment Plan. Upon such resale of the Sites, the net proceeds thereof
after repayment of any mortgage or deed of trust encumbering the Sites which is permitted by
this Agreement, shall be applied;
i. First, to reimburse the Agency, on its own behalf or on behalf of the City,
all costs and expenses incurred by the Agency, excluding City and Agency staff costs, but
specifically, including, but not limited to, any expenditures by the Agency or the City in
connection with the recapture, management and resale of the Sites or part thereof (but less any
income derived by the Agency from the Sites or part thereof in connection with such
management); all taxes, assessments and water or sewer charges with respect to the Sites or part
thereof which the Developer has not paid (or, in the event that Sites is exempt from taxation or
assessment of such charges during the period of ownership thereof by the Agency, an amount, if
paid, equal to such taxes, assessments, or charges as would have been payable if the Sites were
not so exempt); any payments made or necessary to be made to discharge any encumbrance or
liens existing on the Sites or part thereof at the time or revesting of title thereto in the Agency, or
to discharge or prevent from attaching or being made any subsequent encumbrances or liens due
to obligation, default or acts of the City, its successors or transferees; any expenditure made or
obligation incurred with respect to the making or completion of the improvements or any part
thereof on the Sites, or part thereof; and any amounts otherwise owing the Agency, and in the
event additional proceeds are thereafter available, then
ii. Second, to reimburse the Developer, its successor or transferee, up to the
amount equal to the sum of (a) the costs incurred for the acquisition and development of the Sites
and for the improvements existing on the Sites at the time of reentry and possession, less (b) any
gains or income withdrawn or made by the Developer from the Sites or the improvements
thereon.
Any balance remaining after such reimbursements shall be retained by the Agency as its
property. The rights established in this section 505 are not intended to be exclusive of any other
right, power or remedy, but each and every such right, power, and remedy shall be cumulative
and concurrent and shall be in addition to any other right, power and remedy authorized herein or
now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact
that the Agency will have conveyed the Sites to the Developer for redevelopment purposes,
600457905v2 ~ 33/~
particularly for development of for sale affordable housing, and not for speculation in
undeveloped land.
506. Acceptance of Service of Progress. In the event that any legal action is
commenced by the Developer against the Agency, service of process on the Agency shall be
made by personal service upon the Executive Director of the Agency or in such other manner as
may be provided bylaw. In the event that any legal action is commenced by the Agency against
the Developer, service of process on the Developer shall be made by personal service upon the
President of the Developer or in such other manner as may be provided by law.
507. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in
this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either
party of one or more of such right or remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the
other party.
508. Inaction Not a Waiver of Default. Any failures or delays by either party in
asserting any of its rights and remedies as to any Default shall not operate as a waiver of any
Default or of any such rights or remedies, or deprive either such party of its right to institute and
maintain any actions or proceedings which it may deem necessary to protect, assert or enforce
any such rights or remedies.
509. Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
600. GENERAL PROVISIONS
6004579osv2 34A
601. Notices, Demands and Communications Between the Parties. Any approval,
disapproval, demand, document or other notice ("Notice") which either party may desire to give
to the other party under this Agreement must be in writing and maybe given by any
commercially acceptable means to the party to whom the Notice is directed at the address of the
party as set forth below, or at any other address as that party may later designate by Notice.
To Agency: Redevelopment Agency of the City of Santa Ana
20 Civic Center Plaza, M-25
Santa Ana, California 92780
Attention: Executive Director
To Developer: RSI Development LLC
620 Newport Center Drive, Suite 1200
Newport Beach, CA 92660
Attention: Ron Simon
Any written notice, demand or communication shall be deemed received immediate if
delivered by hand and shall be deemed received on the third day from the date it is postmarked if
delivered by registered or certified mail.
602. Developer Indemnity.
Developer shall indemnify, defend and hold harmless Agency, its officers, agents, employees
and volunteers from and against any and all loss or damage, expenses, injuries, death to any
person, damage to real or personal property, claim, demand, suit, action, judgment, settlement,
reasonable attorney's fees, costs, or proceeding of any kind arising out of this Agreement,
implementation of this Agreement, the sale of the property by Agency to Developer, securing of
financing, design development drawings, engineering, construction, reconstruction, structural
integrity of the homes to be built on the Sites, maintenance of Sites, operation, and subsequent
sale of Sites, including but not limited to:
(a) the presence, release, use, generation, discharge, storage or disposal of any Hazardous
Materials, on, under, in or about, or the transportation of any such hazardous materials to
or from, the Sites after the Closing Date;
(b) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation,
permit, judgment or license relating to the use, generation, release, discharge, storage,
disposal or transportation of Hazardous Materials on, under, in or about, to or from, the
Sites which occurs after the Closing Date;
(c) latent material defects in construction;
(d) any construction defect;
(e) personal injury, including death, of the employees, agents, officers, and/or volunteers of
Developer, Developer Parties, and/or any subcontractors, independent contractors,
partners, and/or subsidiaries;
(f) property damage claims of the employees, agents, officers, and/or volunteers of
Developer, Developer Parties, and/or any subcontractors, independent contractors,
partners, and/or subsidiaries;
600457905v2 ~ 35~ G
(g) delay in construction;
(h) personal injury, including death, of any third party;
(i) property damage claims of any third party; and
(j) the failure to make required real estate disclosures to subsequent buyers of homes on the
Sites.
Developer's obligation to indemnify as set forth in this Agreement shall extend to loss or
damage, expenses, injuries, death to any person, damage to real or personal property, claim,
demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceedings of
any kind that, are discovered or accrue, either before or after the termination of this Agreement.
Notwithstanding the foregoing, Developer shall not be required to indemnify and hold harmless
Agency or the City for liability attributable to the active negligence or intentional misconduct of
Agency or the City or any of their boards, officers, employees, representatives or agents.
603. Enforced Delay; Extension of Times of Performance. In addition to specific
provisions of this Agreement, performance by either party hereunder shall not be deemed to be in
Default, and all performance and other dates specified in this Agreement shall be extended,
where delays or Defaults are due to causes beyond the control or without the fault of the party
claiming an extension of time to perform, which may include: war; insurrection; strikes;
lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts
of terrorism; epidemics; quarantine restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority; litigation; unusually severe weather; inability to secure
necessary labor, materials or tools, delays of any contractor, subcontractor or supplier; acts or
omissions of the other party; acts or failures to act of the City or any other public or
governmental agency or entity (other than the acts or failures to act of the Agency which shall
not excuse performance by the Agency). Notwithstanding anything to the contrary in this
Agreement, an extension of time for any such cause shall be for the period of the enforced delay
and shall commence to run from the time of the commencement of the cause, if notice by the
party claiming such extension is sent to the other party within thirty (30) days of the
commencement of the cause. Times of performance under this Agreement may also be extended
in writing by the mutual agreement of Agency and Developer. Notwithstanding any provision of
this Agreement to the contrary, the lack of funding to complete the Improvements shall not
constitute grounds of enforced delay pursuant to this Section 602.
604.Transfers of Interest in Sites or Agreement.
604.1 Prohibition. The qualifications and identity of the Developer are of
particular concern to the Agency. It is because of those qualifications and identity that the
Agency has entered into this Agreement with the Developer. For the period commencing upon
the date of this Agreement and until the expiration of the use and operations covenants which are
set forth in Section 401 hereof, no voluntary or involuntary successor in interest of the Developer
shall acquire any rights or power under this Agreement, nor shall the Developer make any total
or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole
or any part of the Sites or the Improvements thereon without prior written approval of the
Agency, except as expressly set forth herein. Any proposed total or partial sale, transfer,
600457905v2 ~ ®3Ey1 G
conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Sites or
the Improvements will entitle the Agency to its right of re-entry and reverting as set forth in
Section 505 hereof.
604.2 Permitted Transfers. Notwithstanding any other provision of this
Agreement to the contrary, Agency approval of an assignment of this Agreement or conveyance
of the Sites or Improvements, or any part thereof, shall not be required in connection with any of
the following:
(a) Any transfers to an entity or entities in which the Developer retains
ownership or beneficial interest and retains management and control of the transferee entity or
entities.
(b) The conveyance or dedication of any portion of the Sites to the City or
other appropriate governmental agency, or the granting of easements or permits to facilitate
construction of the Improvements (as defined herein).
(c) Any requested assignment for financing purposes (subject to such
financing being considered and approved by the Agency pursuant to Section 311 herein),
including the grant of a deed of trust to secure the funds necessary for land acquisition,
construction and permanent financing of the Improvements.
(d) Any sale of the single family homes to owner-occupants, pursuant to
Section 403 hereof.
In the event of an assignment by Developer under subparagraphs (a) or (c) above
not requiring the Agency's prior approval, Developer nevertheless agrees that at least thirty (30)
days prior to such assignment it shall give written notice to Agency of such assignment and
satisfactory evidence that the assignee has assumed jointly with Developer the obligations of this
Agreement.
604.3 Agency Consideration of Requested Transfer. The Agency agrees that
it will not unreasonably withhold approval of a request made pursuant to this Section 603,
provided the Developer delivers written notice to the Agency requesting such approval. Such
notice shall be accompanied by sufficient evidence regarding the proposed assignee's or
purchaser's development and/or operational qualifications and experience, and its financial
commitments and resources, in sufficient detail to enable the Agency to evaluate the proposed
assignee or purchaser pursuant to the criteria set forth in this Section 603 and as reasonably
determined by the Agency. The Agency shall evaluate each proposed transferee or assignee on
the basis of its development and/or qualifications and experience in the construction of facilities
similar to the Improvements, and its financial commitments and resources, and may reasonably
disapprove any proposed transferee or assignee, during the period for which this Section 603
applies, which the Agency determines does not posses equal or better qualifications that the
transferring Developer. An assignment and assumption agreement inform satisfactory to the
Agency's legal counsel shall also be required for all proposed assignments. Within thirty (30)
days after the receipt of the Developer's written notice requesting Agency approval of an
assignment or transfer pursuant to this Section 603, the Agency shall either approve or
600457905v2 3747
disapprove such proposed assignment or shall respond in writing by stating what further
information, if any, the Agency reasonably requires in order to determine the request complete
and determine whether or not to grant the requested approval. Upon receipt of such a response,
the Developer shall promptly furnish to the Agency such further information as may be
reasonably requested.
604.4 Successors and Assigns. All of the terms, covenants and conditions of
this Agreement shall be binding upon the Developer and its permitted successors and assigns.
Whenever the term "Developer" is used in this Agreement, such term shall include any other
permitted successors and assigns as herein provided.
604.5 Assignment by Agency. The Agency may assign or transfer any of its
rights or obligations under this Agreement with the approval of the Developer, which approval
shall not be unreasonably withheld; provided, however, that the Agency may assign or transfer
any of its interests hereunder to the City at any time without the consent of the Developer.
605. Non-Liability of Officials and Employees of the Agency and the Developer.
No member, official or employee of the Agency or the City shall be personally liable to the
Developer, or any successor in interest, in the event of any Default or breach by the Agency (or
the City) or for any amount which may become due to the Developer or its successors, or on any
obligations under the terms of this Agreement.
606. Relationship Between Agency and Developer. It is hereby acknowledged that
the relationship between the Agency and the Developer is not that of a partnership or joint
venture and that the Agency and the Developer shall not be deemed or construed for any purpose
to be the agent of the other. Accordingly, except as expressly provided herein or in the
Attachments hereto, the Agency shall have no rights, powers, duties or obligations with respect
to the development, operation, maintenance or management of the Improvements.
607. Agency Approvals and Actions. The Agency shall maintain authority of this
Agreement and the authority to implement this Agreement through the Agency Executive
Director (or his duly authorized representative). The Agency Executive Director shall have the
authority to make approvals, sign sales and escrow documents, issue interpretations, waive
provisions, and/or enter into amendments of this Agreement on behalf of the Agency so long as
such actions do not materially or substantially change the uses or development permitted on the
Sites, or materially or substantially add to the costs incurred or to be incurred by the Agency as
specified herein, and such approvals, interpretation, waivers and/or amendments may include
extensions of time to perform as specified in the Schedule of Performance. All other material
and/or substantial interpretations, waivers, or amendments shall require the consideration, action
and written consent of the Agency Board.
608. Counterparts. This Agreement may be signed in multiple counterparts which,
when signed by all parties, shall constitute a binding agreement and shall be deemed to be an
original.
609. Integration. This Agreement contains the entire understanding between the
parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous
600457905v2 ~ 38~v
agreements, understandings, representations and statements, oral or written, are merged in this
Agreement and shall be of no further force or effect. Each party is entering this Agreement
based solely upon the representations set forth herein and upon each party's own independent
investigation of any and all facts such party deems material. This Agreement includes pages 1
through _ and Exhibits A through P, which constitute the entire understanding and agreement of
the parties, notwithstanding any previous negotiations or agreements between the parties or their
predecessors in interest with respect to all or any part of the subject matter hereof.
610. Real Estate Brokerage Commission. The Agency and the Developer each
represent and warrant to the other that no broker or finder is entitled to any commission or
finder's fee in connection with the Developer's acquisition of the Sites from the Agency. The
parties agree to defend and hold harmless the other party from any claim to any such commission
or fee from any broker, agent or finder with respect to this Agreement which is payable by such
party.
611. Attorney's Fees. In any action between the parties to interpret, enforce, reform,
modify, rescind, or otherwise in connection with any of the terms or provisions of this
Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive
relief, or any other relief to which it might be entitled, reasonable costs and expenses including,
without limitation, litigation costs and reasonable attorneys' fees.
612. Titles and Captions. Titles and captions are for convenience of reference only
and do not define, describe or limit the scope or the intent of this Agreement or of any of its
terms. Reference to section numbers are to sections in this Agreement, unless expressly stated
otherwise.
613. Interpretation. As used in this Agreement, masculine, feminine or neuter gender
and the singular or plural number shall each be deemed to include the others where and when the
context so dictates. The word "including" shall be construed as if followed by the words
"without limitation." This Agreement shall be interpreted as though prepared jointly by both
parties.
614. No Waiver. A waiver by either party of a breach of any of the covenants,
conditions or agreements under this Agreement to be performed by the other party shall not be
construed as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Agreement.
615. Modifications. Any alteration, change or modification of or to this Agreement,
in order to become effective, shall be made in writing and in each instance signed on behalf of
each party.
616. Severability. If any term, provision, condition or covenant of this Agreement or
its application to any party or circumstances shall be held, to any extent, invalid or
unenforceable, the remainder of this Agreement, or the application of the term, provision,
condition or covenant to persons or circumstances other than those as to whom or which it is
held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the
fullest extent permitted by law.
600457905v2 ~ 39/~
617. Computation of Time. The time in which any act is to be done under this
Agreement is computed by excluding the first day (such as the day escrow opens), and including
the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also
excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of
the California Government Code. If any act is to be done by a particular time during a day, that
time shall be Pacific Time Zone time.
618. Legal Advice. Each party represents and warrants to the other the following: they
have carefully read this Agreement, and in signing this Agreement, they do so with full
knowledge of any right which they may have; they have received independent legal advice from
their respective legal counsel as to the matters set forth in this Agreement, or have knowingly
chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have
freely signed this Agreement without any reliance upon any agreement, promise, statement or
representation by or on behalf of the other party, or their respective agents, employees, or
attorneys, except as specifically set forth in this Agreement, and without duress or coercion,
whether economic or otherwise.
619. Time of Essence. Time is expressly made of the essence with respect to the
performance by the Agency and the Developer of each and every obligation and condition of this
Agreement.
620. Cooperation. Each party agrees to cooperate with the other in this transaction
and, in that regard, to sign any and all documents which maybe reasonably necessary, helpful, or
appropriate to carry out the purposes and intent of this Agreement including, but not limited to,
releases or additional agreements.
621. Conflicts of Interest. No member, official or employee of the Agency shall have
any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to the Agreement which affects his/her personal
interests or the interests of any corporation, partnership or association in which he/she is directly
or indirectly interested.
622. Date of Agreement. The date of this Agreement shall be the date set forth in the
first paragraph hereof.
600457905v2 4
IN WITNESS WHEREOF, the Agency and the Developer have executed this Agreement on
the date set forth hereinabove
AGENCY:
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF SANTA ANA, a public body,
corporate and politic
By:
Cynthia J. Nelson, Executive Director
ATTEST:
Patricia E. Healy, Secretary
APPROVED AS TO FORM:
JOSEPH W.FLETCHER
Agency General Counsel
By: Lisa E. Storck
Assistant Counsel
DEVELOPER:
RSI DEVELOPMENT LLC, a Delaware
limited liability company
By:
Title:
By:
Title:
600457905v2 ~ ®4
12/10/08
EXHIBIT A
LEGAL DESCRIPTION
600457905v2 3 - 2
EXHIBIT B
SITE MAP
600457905v2
EXHIBIT C
AFFORDABILITY COVENANTS ON TRANSFER OF PROPERTY
600457905v2 ~ ~1d
EXHIBIT D
DEVELOPER GRANT DEED
600457905v2
EXHIBIT E
BUDGET
600457905v2 3 - 5
EXHIBIT F
RELEASE OF CONSTRUCTION COVENANTS
600457905v2
EXHIBIT G
SCHEDULE OF PERFORMANCE
600457905v2 3 - 5
LIST OF EXHIBITS
Exhibit A -Legal Description(s)
Exhibit B -Site Map
Exhibit C -Affordability Restrictions on Transfer of Property
Exhibit D -Developer Grant Deed
Exhibit E -Project Budget
Exhibit F -Release of Construction Covenants
Exhibit G -Schedule of Performance
Exhibit H -Scope of Development
Exhibit I -Additional Insured Endorsement
Exhibit J -Promissory Note (Developer)
Exhibit K -First Deed of Trust (Developer)
Exhibit L -Reimbursement Forms
Exhibit M -Marketing Plan
Exhibit N -Income Verification Form
Exhibit O -Promissory Note (Homebuyer)
Exhibit P -Deed of Trust (Homebuyer)
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