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HomeMy WebLinkAboutC36940 - Easemnt-Maint Agmt - The Retreat DW CONTRACT NO. C36940 STAFF REPORT CITY OF PALM DESERT Economic Development Department MEETING DATE: April 26, 2018 PREPARED BY: Martin Alvarez, Director of Economic Development REQUEST: Approval of an Easements and Maintenance Agreement between the City of Palm Desert and Portola PD, LLC, Associated with The Retreat at Desert Willow Project Recommendation By Minute Motion; 1. Authorize the Mayor to execute an easement and maintenance agreement with Portola PD, LLC, associated with The Retreat at Desert Willow project. 2. Appropriate $14,000 from Desert Willow Capital Project Account Number 4414195-4809200 payable to Portola PD, LLC for one-time maintenance costs associated with the easements. Strategic Plan Objective Not applicable. Executive Summary The approval of this item will authorize the City Manager to execute an easement and maintenance agreement with Portola PD, LLC (also known as The Retreat at Desert Willow) for the maintenance of various improvements required as part of The Retreat at Desert Willow's conditions of approval. The agreement requires that The Retreat at Desert Willow Homeowner Association (HOA) maintain the City's 4.2-acre retention basin and perimeter landscaping, a new golf cart path easement to the Desert Willow Golf Resort, and a portion of Desert Willow's landscaping located along the common property line on the Firecliff Golf Course holes five and six. In return, the agreement requires that the City contribute $14,000 toward a one-time cleanup of the golf course maintenance easement and any future maintenance. Background Analysis In 2015, City Council approved Development Agreement 15-15 with Portola PD, LLC for the development of 112 condominium units on 15 acres located on the east side of Portola Avenue, 600 feet south of Frank Sinatra Drive. This project is known as The Retreat at April 26, 2018 Easement/Maintenance Agreement—The Retreat at DW/ City Page 2 of 3 Desert Willow (The Retreat) and has a common property line with the Desert Willow's Firecliff Golf Course, golf holes five and six and the City's 4.2 acre retention basin. The Retreat project is currently under construction and approximately 20 units are nearing completion. As part of the project's development agreement, The Retreat was required to fulfill the following conditions: 1. Install a 6-foot high slump stone block wall along the Portola Avenue frontage of the City's retention basin. The wall must match the color, texture, width, and flagstone columns of the block wall to the existing Desert Willow perimeter block wall. 2. Install double metal gates to provide access from Portola Avenue to the City's retention basin. 3. Install and maintain desert landscaping in front of the City's retention basin along the Portola frontage. 4. Plant trees on the south side of the retention basin to screen the maintenance building. 5. Maintain the retention basin, slopes, drywells, walls, and perimeter trees and other underground drainage appurtenances within the retention basin. The Developer may transfer the responsibility to the HOA. 6. Provide a one-time maintenance "clean up" of existing landscaping on the common east/north property line adjacent to the Desert Willow Golf Resort, golf holes five and six. 7. All homeowners (two per household) upon closing on their units automatically become the equivalent of Academy Golf Members and Platinum Club Members at the City-owned Desert Willow Golf Resort for a monthly fee of $75.00 and includes the following benefits: • Golf Academy Membership and Applicable Discounts and Benefits • Unlimited Use of Academy Practice Facility • Platinum Club Membership and Applicable Discounts and Benefits • Private Golf Cart Access to the Desert Willow Clubhouse and driving ranges (no private golf carts allowed on golf courses) Discussion The attached easement and maintenance agreement will allow the City and Portola PD, LLC to memorialize the easements and maintenance areas required as part of The Retreat at Desert Willow's conditions of approval and DA 15-15. The agreement addresses all of the conditions listed above and identifies the location of the golf cart and maintenance easements. The agreement also allows The Retreat to utilize the City's retention basin for retention of storm water run-off. As part of the agreement, the City is required to contribute $14,000 towards a one-time cleanup of the maintenance easement along the common G\Econ Development\Martin Alvarez\2018\SR\DW-Retreat Easement Agr 4-26-18 cm edits CLEAN.doc April 26, 2018 Easement/Maintenance Agreement— The Retreat at DW / City Page 3 of 3 property line adjacent to Desert Willow Firecliff Golf Course holes five and six and maintenance of the easements in perpetuity. Once the project is completed, the requirements of the agreement will be assigned to The Retreat's HOA. The agreement requires that the developer/HOA secure the standard certificate of insurance, naming the City as additionally insured. Staff recommends approval of the easement and maintenance agreement as presented. Fiscal Analysis The proposed easement and maintenance agreement requires that the City contribute toward a one-time maintenance cost of $14,000 in exchange for the developer/HOA maintaining the City's 4-acre retention basin, the golf cart easement and the maintenance easement located along the common property line in perpetuity. Funds for the one-time maintenance costs are available in Desert Willow's Capital Account 441 . LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER Approved as to Form 04-_Eple tek_ Robert W. Hargreaves Martin Alvarez Janet Moore Lauri Aylaian City Attorney Economic Development `Director of Finance City Manager Director VENDOR: Portola PD, LLC do Family Development Group, Inc. 73081 Fred Waring Drive Palm Desert, CA 92270 ATTACHMENT: Easements and Maintenance Agreement G\Econ Development\Martm Alvarez\2018\SR\DW-Retreat Easement Agr 4-26-18 cm edhts CLEAN doc RECORDING REQUESTED BY AND AFTER RECORDATION RETURN TO: Portola PD, LLC c/o Family Development Group, Inc. 73081 Fred Waring Drive Palm Desert, California 92260 Attn: Rudy Herrera EASEMENTS AND MAINTENANCE AGREEMENT RETREAT AT DESERT WILLOW THIS EASEMENTS AND MAINTENANCE AGREEMENT (this "Agreement") is made and entered into as of the _ day of , 2018 (the "Effective Date"), by and between The City of Palm Desert, a California municipal corporation (hereinafter referred to as "Grantor"), and Portola PD, LLC, a California limited liability company (hereinafter referred to as "Grantee"). Grantor and Grantee each may be individually referred to herein as an "Owner" and collectively referred to herein as the "Owners". RECITALS WHEREAS, Grantee is the owner of fee simple title to that certain parcel of real property of approximately 15.520 acres adjacent to Portola Road in Palm Desert, California generally identified on Exhibit "A" (the "Depiction of Project Area") as the 'Development Parcel' (the "Development Parcel"), which Development Parcel is more particularly described on Exhibit "B" attached hereto. WHEREAS, Grantor is the owner of fee simple title to those certain parcels of real property adjacent to or in the vicinity of the Development Parcel, being currently utilized by Grantor as (i) a retention basin (the "Existing Basin") generally identified on the Depiction of Project Area as the 'Retention Basin Parcel' (the "Retention Basin Parcel"), which Retention Basin Parcel is more particularly described on Exhibit "C-1" attached hereto, (ii) a maintenance yard and a water treatment facility and pond generally identified on the Depiction of Project Area as the 'City Water Treatment Parcel' (the "City Water Treatment Parcel"), which City Water Treatment Parcel is more particularly described on Exhibit "C-2" attached hereto, and (iii) the Desert Willow Golf Course generally identified on the Depiction of Project Area as the 'Desert Willow Golf Course' (the "Golf Course Parcel"), which Golf Course Parcel is more particularly described on Exhibit "C-3" attached hereto. 1 WHEREAS, Owners are the parties to that certain Development Agreement (Retreat at Desert Willow) dated June 11, 2015 for reference purposes only and recorded in the official records of the County of Riverside as document number 2016-0175780 concerning the development and construction of a residential project on the Development Parcel (the "Development Agreement"). WHEREAS, Owners desire to enter into this Agreement in order to implement various provisions of the Development Agreement and related considerations, including (a) Grantor's granting to Grantee of various easements on, upon, over, through and across the Retention Basin Parcel, the City Water Treatment Parcel and the Golf Course Parcel as set forth herein, and (b) describing and memorializing certain Grantee obligations related to the maintenance of the Existing Basin and the Landscaping Maintenance Area (as hereafter defined). AGREEMENT AND TERMS NOW, THEREFORE, for $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owners grant, covenant and agree as follows: 1. Recitals/Definitions. The Recitals are incorporated into the body of this Agreement by this reference. Any initially capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Development Agreement. 2. Drainage and Water Retention Easement. Grantor hereby grants to Grantee, as of the Effective Date, a perpetual, appurtenant and non-exclusive easement for general drainage and flood control purposes, and for the collection, storage and retention of storm water and drainage discharge and runoff, on, upon, over, through and across the Retention Basin Parcel, including, without limitation, accommodating storm water flows from the Development Parcel and the right to use the Existing Basin for the collection, storage and retention of storm water and drainage discharge and runoff (the "Drainage and Water Retention Easement"). The Drainage and Water Retention Easement shall include the right of the Grantee Parties (as hereafter defined), and their contractors, consultants, engineers, agents and representatives, to construct, install and utilize, and to maintain, repair and replace, any and all drain channels, sub-surface pipes and related infrastructure and facilities reasonably required by Grantee to utilize the Existing Basin as contemplated. Except as otherwise expressly set forth herein, the Drainage and Water Retention Easement is for the use and benefit of Grantee, and any and all successors and transferees of Grantee's interest in or to all or a portion of the Development Parcel, including, without limitation, any homeowner's association established with respect to the residential development project being constructed on the Development Parcel ("HOA"), the owners of the 2 Units constructed on the Development Parcel ("Unit Owners") and any lender that acquires an interest in and to all or any portion of the Development Parcel (collectively, with Grantee, the "Grantee Parties"). 3. Covenants Regarding Retention Basin. Grantor covenants and agrees with Grantee, as of the Effective Date and in perpetuity, that Grantor (a) will continue to utilize the Retention Basin Parcel primarily for general drainage and flood control purposes, and for the collection, storage and retention of storm water and drainage discharge and runoff, (b) will not materially alter the Existing Basin to the material detriment of the Grantee Parties, and (c) will not take any actions or fail to take any actions that will result in any material decrease in the storage capacity of the Existing Basin to the material detriment of the Grantee Parties. 4. General Retention Basin Parcel Easement. Grantor hereby grants to Grantee, as of the Effective Date, a perpetual, appurtenant and non-exclusive easement for access, use, construction, installation, maintenance, repair and replacement purposes on, upon, over, through and across the Retention Basin Parcel (the "General Retention Basin Parcel Easement"), for the purposes of (i) planting and installing the Retention Basin Trees, (ii) constructing the Block Wall, (iii) installing the double metal gates (as described in the Development Agreement), (iv) installing, irrigating and maintaining the Block Wall Landscaping (the "Block Wall Landscaping Obligation"), and (v) maintaining and repairing the Retention Basin, including the Retention Basin Trees and the slopes, drywells, walls and other underground drainage appurtenances associated with the Existing Basin, including a quarterly clean-up obligation, in a commercially reasonable manner (the "Retention Basin Maintenance Obligations"). The General Retention Basin Parcel Easement is for the use and benefit of the Grantee Parties, and the Grantee Parties shall have the right to utilize their contractors, consultants, engineers, agents and representatives to perform any construction, installation, maintenance, repair, replacement and related work and obligations upon the Retention Basin Parcel. Grantee's Block Wall Landscaping Obligation, Grantee's Retention Basin Maintenance Obligations, any Golf Cart Path Maintenance Obligations (as hereafter defined), the Landscape Maintenance Area Work (as hereafter defined), any Grantee obligation to provide insurance or reimburse City for insurance (and any other insurance related obligations) pursuant to this Agreement and any indemnity and related obligation of Grantee set forth in this Agreement (collectively, the "Grantee Obligations") may be assigned to the HOA and/or included as an HOA obligation under the CC&Rs. To the extent any Grantee Obligations are assigned to the HOA and/or included as an HOA obligation under the CC&Rs, Grantee shall be released from such Grantee Obligations and shall have no further responsibility therefor. 5. Golf Cart Path Easement. Grantor hereby grants to Grantee, as of the Effective Date, a perpetual, appurtenant and non-exclusive easement (the "Golf Cart Path Easement") for access, use, construction, installation, maintenance, repair and replacement purposes on, upon, over, through and across those 3 certain portions of the Retention Basin Parcel and the City Water Treatment Parcel depicted and identified on Exhibit "D" attached hereto as the Cart Path Easement Area (the "Golf Cart Path Easement Area"), which Golf Cart Path Easement Area is more particularly described in Exhibit "D-1" attached hereto, for the purposes of (i) only golf cart access directly to, from and between the Development Parcel and the Desert Willow Golf Resort Clubhouse and Golf Academy and associated public streets, but not otherwise on the cart paths on the golf courses, and (ii) constructing, installing, maintaining, repairing and replacing the golf cart paths within the Golf Cart Path Easement Area and any other improvements related thereto or associated therewith (the "Golf Cart Path Maintenance"). Grantee shall maintain the Golf Cart Path Easement in a commercially reasonable manner. Pedestrians will not be permitted on the Golf Cart Path Easement. Grantee may, on a temporary and non-exclusive basis, and without interfering with Grantor's operations thereon, utilize other portions of the Retention Basin Parcel and the City Water Treatment Parcel to construct, install, maintain, repair and replace golf cart paths and any other improvements related thereto or associated therewith ("Golf Cart Easement Work"). The Grantee Parties shall have the right to utilize their contractors, consultants, engineers, agents and representatives to perform any Golf Cart Path Maintenance and any Golf Cart Easement Work. Subject to the foregoing, the Golf Cart Path Easement is for the use and benefit, on a Unit by Unit and time of determination basis, of one Unit Owner and no more than three other guests or co-owners of the subject Unit ("Authorized Users") so that the golf cart being used by the Unit Owner in the exercise of the rights granted by the Golf Cart Path Easement does not exceed the lesser of 4 occupants or the seating capacity of such golf cart. The golf cart access provided pursuant to the Golf Cart Path Easement shall be fenced or walled in a reasonable manner to prevent unauthorized access to adjoining properties. Grantee shall install a locking card-only electric-swing gate on its property at the terminus of the Golf Cart Path Easement. Such gate shall restrict entrance onto the Golf Cart Path Easement solely to persons entitled hereby to use it. 6. Golf Course Easement and Landscape Maintenance Area Easement. Grantor hereby grants to Grantee, as of the Effective Date, a perpetual, appurtenant and non-exclusive easement for use, access, ingress and egress on, upon, over, through and across (a) those certain existing golf cart paths on and over the Golf Course Parcel depicted on Exhibit "E" for travel to and from the Golf Resort Clubhouse and Golf Academy only (the "Golf Course Easement"), and (b) that certain sloped portion of the Golf Course Parcel depicted on Exhibit "F" and identified as the 'Scope of Work Area' thereon (the "Landscape Maintenance Area") for purposes of performing the Landscape Maintenance Area Work (as hereafter defined) (the "Landscape Maintenance Area Easement"). Except for the rights arising from the Golf Course Easement, Unit Owner golf carts will not be allowed on other golf cart paths of the Desert Willow Golf Resort and associated golf courses. The Golf Course Easement is for the use and benefit of 4 Authorized Users. The use and exercise of the rights conferred by the Golf Course Easement by Authorized Users shall be subject to any reasonable rules and regulations generally applicable to all golf carts using the underlying golf paths. Further, Authorized Users' use will be subject to the same reasonable rules and restrictions as apply to the general public with respect to hours of use, and such use may be curtailed or eliminated during special events. The "Landscape Maintenance Area Work" means Grantee's obligation to keep and maintain the Landscape Maintenance Area in a commercially reasonable manner consistent with the requirements of this Agreement. Upon full execution of this Agreement, Grantor shall make a one-time payment to Grantee of fourteen thousand dollars ($14,000) to help defray the cost of Landscape maintenance. The Landscape Maintenance Area Easement is for the use and benefit of the Grantee Parties, and the Grantee Parties shall have the right to utilize their contractors, consultants, engineers, agents and representatives to perform any construction, installation, maintenance, repair, replacement and related work and obligations upon the Landscape Maintenance Area. 7. Grantee Work Obligations. All improvements constructed and work performed by or for the Grantee Parties on or about the Golf Course Parcel, the Retention Basin Parcel and the City Water Treatment Parcel, including, without limitation, the Block Wall Landscaping Obligation, the Landscape Maintenance Area Work, Retention Basin Maintenance Obligations, Golf Cart Path Maintenance, Golf Cart Easement Work and any improvements Grantee and the Grantee Parties have the right or obligation to construct or install thereon (collectively, "Easement Work and Improvements") shall be performed in a good and workmanlike and lien-free manner, consistent with applicable City standards to ensure their continued functioning as intended and, as and when applicable, in accordance with plans approved by the City, the Development Approvals, the Existing Land Use Regulations and, subject to the terms of the Development Agreement, any other applicable laws, rules and regulations. 8. Insurance. Without limiting Grantee's indemnification of Grantor as set forth herein, and prior to use of any of the easements granted by this Agreement (collectively, the "Easements"), Grantee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form that is reasonably satisfactory to Grantor. 8.1 General Liability Insurance. Grantee shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $5,000,000 per occurrence, $6,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO "insured contract" language will not be accepted. 5 8.2 Automobile Liability Insurance. Contractors (as defined in Section 8.17) shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Grantee arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident. If Grantee maintains automobile liability insurance, then Grantee shall provide the same endorsements required of other coverages in this section. 8.3 Umbrella or Excess Liability Insurance. Grantee may opt to utilize umbrella or excess liability insurance in meeting insurance requirements. In such circumstances, Grantee shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer's liability. Such policy or policies shall include the following terms and conditions: (a) A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; (b) Pay on behalf of wording as opposed to reimbursement; (c) Concurrency of effective dates with primary policies; and (d) Policies shall "follow form" to the underlying primary policies. Insureds under primary policies shall also be insureds under the umbrella or excess policies. 8.4 Workers' Compensation Insurance. Grantee shall maintain Workers' Compensation Insurance (Statutory Limits) and Employer's Liability Insurance (with limits of at least $1,000,000). Grantee shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of the City of Palm Desert, its officers, agents, employees and volunteers. 8.5 Proof of Insurance. Grantee shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation. Insurance certificates and endorsements must be approved by City's Risk Manager prior to commencement of performance of any work within the Easements, which approval shall not be unreasonably withheld, conditioned or delayed. Current certification of applicable insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. 6 8.6 Duration of Coverage. Grantee shall procure and maintain or cause to be procured and maintained for the duration of this Agreement or the duration of any Easement Work and Improvements, the insurance policies required by this Section 8. 8.7 Primary/Non-Contributing. Coverage provided by Grantee shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City's own insurance or self-insurance shall be called upon to protect it as a named insured. 8.8 City's Rights of Enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications, or is canceled and not replaced, City has the right, but not the duty, to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Grantee. City may cancel this Agreement with thirty (30) days prior notice to Grantee if any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced. 8.9 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 8.10 Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against the City of Palm Desert, its elected or appointed officers, agents, officials, employees and volunteers, or shall specifically allow Grantee or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Grantee hereby waives its own right of recovery against the City of Palm Desert, and shall require similar written express waivers and insurance clauses as set forth in this Section 8.10 from each of its contractors and subcontractors. 8.11 Enforcement of Contract Provisions (non estoppel). Grantee acknowledges and agrees that any actual or alleged failure on the part of the City to inform Grantee of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights of City hereunder. 7 8.12 Requirements Not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Grantee maintains higher limits than the minimums shown above, Grantor requires and shall be entitled to coverage for the higher limits maintained by the Grantee. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. 8.13 Notice of Cancellation. Grantee agrees to oblige its insurance agent or broker and insurers to provide to City with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. 8.14 Additional Insured Status. General liability and automobile liability policies shall provide or be endorsed to provide that the City of Palm Desert and its officers, officials, employees, agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies. 8.15 Prohibition of Undisclosed Coverage Limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. 8.16 Separation of Insureds. A severability of interests provision must apply for all additional insureds ensuring that Grantee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer's limits of liability. The policy(ies) shall not contain any cross-liability exclusions. 8.17 Pass Through Clause. Grantee agrees to ensure that, except for the requirement to provide umbrella or excess liability coverage pursuant to Section 8.3, its contractors, consultants, subconsultants, subcontractors and any other party performing any work within the Easements for Grantee (collectively "Contractors") provide the same insurance coverage and endorsements required of Grantee, except that the minimum CGL coverage shall be $1,000,000 per occurrence and $2,000,000 general aggregate. Grantee agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Grantee agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the project will be submitted to City for review. 8 8.18 City's Right to Revise Specifications. The City reserves the right at any time during the term of this Agreement to change the amounts and types of insurance (provided such changes are commercially reasonably and available in the marketplace) required by giving the Grantee ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the Grantee, the City and Grantee may negotiate Grantee's compensation. 8.19 Self-Insured Retentions. Any self-insured retentions must be declared to and approved by Grantor. City reserves the right to require that self- insured retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be considered to comply with these specifications unless approved by City. 8.20 Timely Notice of Claims. Grantee shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Grantee's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. 8.21 Additional Insurance. Grantee shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution its obligations hereunder. 8.22 Insurance Limits Adjustment. The insurance limits required herein shall be adjusted, at five-year intervals, in accordance with changes in the Consumer Price Index. 8.23 Safety. Grantee shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its obligations hereunder, the Grantee shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all reasonable and necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions, where applicable, shall include, but shall not be limited to: (a) adequate life protection and lifesaving equipment and procedures; (b) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (c) adequate facilities for the proper inspection and maintenance of all safety measures. 9. Indemnification. Grantee Parties and Authorized Users (collectively "Easement Users") agree that Easement Users enter the Easements at Easement User's sole cost and risk. Grantee agrees to indemnify, defend, with counsel chosen by the City, and hold harmless the City, and/or the City's Affiliates 9 from all losses, costs, claims or expenses (including, without limitation, all expenses of investigation and defense of any such claim or action, including reasonable attorneys' fees and costs) arising out of Easement Users' use of the Easements. Grantee Parties hereby release the City, and/or the City's Affiliates from any claims losses, costs (including reasonable attorneys' fees), damages, actions or expenses arising out of Grantee Parties' use of the Easements. 10. Performance Bond. To ensure faithful performance of all terms of the Agreement with respect to construction of the initial Easement Work and Improvements, Grantee agrees to provide performance and labor and material bonds, each in sum reasonably approved by the City and duly executed with a surety company in the form and containing contents acceptable to City, the premium to be paid by Grantee. 11. Prevailing Wages. By its execution of this Agreement, Grantee certifies that it is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., as well as California Code of Regulations, Title 8, Section 16000 et seq. ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. If and to the extent that any of the Easement Work and Improvements are an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Grantee agrees to (a) fully comply with such Prevailing Wage Laws, and (b) make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Easement Work and Improvements available to interested parties upon request, and shall post copies at the Grantee's principal place of business and the project site. It shall be mandatory upon the Grantee to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Section 1776), hours of labor (Labor Code Sections 1813 and 1815), public works contractor registration (Labor Code Sections 1725.5 and 1771.1) and debarment of contractors and subcontractors (Labor Code Sections 1777.1) with respect to the Easement Work and Improvements. Grantee shall be solely responsible for determining the applicability of the Prevailing Wage Laws and the City makes no representations as to the applicability or non-applicability of the Prevailing Wage Laws to the Easement Work and Improvements. Grantee shall defend, indemnify and hold the City, its elected officials, officers, members, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure of Grantee or its contractors, consultants, engineers, agents or representatives to comply with the Prevailing Wage Laws. Notwithstanding the foregoing, the parties acknowledge and agree that the Project is a private residential project being built on private property and not being built pursuant to an agreement with a state agency, a redevelopment agency or a local public housing authority. 10 12. Hazardous Materials. 12.1 For purposes of the Easements, the term "Hazardous Substance" means: (i) any substance, product, waste or other material of any nature whatsoever which is or becomes listed, regulated, or addressed pursuant to any federal, state, or local statute, law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous or toxic substances now or at any time hereafter in effect ("Environmental Laws"); (ii) any substance, product, waste or other material of any nature whatsoever which may give rise to liability under any Environmental Laws or under any statutory or common law theory based on negligence, trespass, intentional tort, nuisance or strict liability or under any reported decisions of a state or federal court; (iii) petroleum or crude oil other than petroleum and petroleum products which are contained within regularly operated motor vehicles; and (iv) asbestos. 12.2 Grantee Parties shall not use, store or otherwise possess, in or about the Easements and in violation of any Environmental Laws, any Hazardous Substances. Grantee agrees to indemnify, defend, with counsel chosen by the Grantor, protect and hold harmless the Grantor, and/or the Grantor's Affiliates from and against all claims, actual damages (including, without limitation, special and consequential damages), punitive damages, injuries, costs, response costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses (including, without limitation, attorneys' and expert witness' fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity) of any kind whatsoever paid, incurred or suffered by, or asserted against, any indemnified party directly or indirectly (collectively, "Claims") arising from or attributable to the presence of, or any repair, cleanup or detoxification, or preparation and implementation of any removal, remedial, response, closure or other plan concerning any Hazardous Substance placed on, under or about the Easements by Easement Users, regardless of whether undertaken due to governmental action. To the fullest extent permitted by law, the foregoing indemnification shall apply regardless of the fault, active or passive negligence, breach of warranty or contract of the Grantor; provided, however, that in no event or circumstance shall such indemnification obligation cover or apply in any manner whatsoever to any Claims arising from or in connection with any Hazardous Substances that (a) existed or were present on, under or about on the Easements, the Retention Basin Parcel, the City Water Treatment Parcel or the Golf Course Parcel prior to the Effective Date, or (b) were not placed on, under or about the Easements by any of the Easement Users, Grantee Parties, or their contractors or agents. The foregoing indemnity is intended to operate as an agreement pursuant to section 107, subdivision (e) of CERCLA, 42 United States Code section 9607, subdivision (e) and to California Health and Safety Code section 25364, to insure, protect, hold harmless and indemnify the Grantor from any liability pursuant to such sections. 11 12.3 Grantee Parties shall, within reasonable time following the discovery by any of the Grantee Parties of the presence or believed presence or release or imminent release of any Hazardous Substance on, under or about the Easements that are or will be in violation of Environmental Laws and that were placed on, under or about the Easements by any of the Easement Users, Grantee Parties, or their contractors or agents give written notice of such discovered condition to Grantor. The failure to make any such disclosure in a timely manner as and when required hereunder may subject Grantee Parties to a default on this Agreement in addition to actual damages and other remedies provided by law. 13. The Owners hereby acknowledge and agree that this Agreement shall be irrevocable and shall be recorded in the official real estate records of Riverside County, California. 14. The Owners further acknowledge and agree that the easements and responsibilities set forth herein are appurtenant to and benefit, encumber and burden the Development Parcel, encumber and burden the Retention Basin Parcel, the City Water Treatment Parcel and the Golf Course Parcel, run with the land, and shall inure to the benefit of and be binding upon the Owners and their respective heirs, successors, and/or assigns. Upon transfer to HOA of Grantee's interest in the common area within the HOA, HOA shall assume all of Grantee's obligations and responsibilities under this Agreement, including the insurance obligations (Section 8) and the indemnity obligations (Section 9), and Grantee shall be released from such obligations and responsibilities. 15. This Agreement shall not be amended, modified, canceled, supplemented, superseded, revoked or terminated except by a written instrument signed by or on behalf of the Owners and recorded in the official real estate records of Riverside County, California. Notwithstanding the foregoing, the HOA shall have the right to execute any amendment of this Agreement on behalf of any Unit Owner, other than the initial Grantee, that is a member of the HOA. 16. No waiver of any breach of this Agreement shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. 17. This Agreement may be executed in one or more counterparts. All such separate counterparts together shall constitute one and the same instrument. Each Owner agrees to execute and deliver all further documents and instruments and to take all further actions that are reasonably necessary or appropriate to effectuate the purposes of this Agreement. 18. If an Owner institutes legal proceedings to determine or enforce its legal rights arising hereunder or in connection herewith, the prevailing party shall be entitled to reasonable attorneys' fees and costs, expert fees and costs, court costs, cost of investigation and other related expenses in connection therewith. 12 19. This Agreement shall be construed, interpreted and applied in accordance with the laws of the State of California. If any term or provision of this Agreement is ever determined to be invalid or unenforceable for any reason, that term or provision shall be severed from this Agreement without affecting the validity or enforceability of the remainder of this Agreement. 20. This Agreement, including the Recitals set forth herein above and the Exhibits attached hereto, each of which are intended to be a part of and incorporated into the substance of this Agreement, contains all of the terms agreed upon by the Owners with respect to the subject matter hereof and supersedes all prior understandings and agreements with respect thereto. This Agreement shall be deemed to be jointly drafted and construed in accordance with its plain meaning, without regard to any presumption or other rule of construction favoring either Owner. 21. Each Owner represents to the other Owner that it has the legal right, power and authority to enter into this Agreement, and that this Agreement will be a binding obligation of such Owner (with the intent that it bind the successors, assigns and transferees thereof). IN WITNESS WHEREOF, the Owners have executed this Easements and Maintenance Agreement as of the Effective Date. GRANTOR: City of Palm Desert Sabby Jonathan, Mayor Attest: Rachelle Klassen, City Clerk GRANTEE: Portola PD, LLC a California limited liability company by: Rudy C. Herrera, Manager 13 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On , before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: (seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF RIVERSIDE On before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: (seal) 14