HomeMy WebLinkAboutCal State University Disposition and Development Agreement 07-08-1999 PALM DESERT REDEVELOPMENT AGENCY
MEMORANDUM
DATE: JLTNE 24, 1999
TO: CITY MANAGER, HONORABLE MAYOR AND MEMBERS OF THE
CITY COUNCIL
HONORABLE CHAIRMAN AND MEMBERS OF REDEVELOPMENT
AGENCY BOARD
FROM: EXECUTIVE DIRECTOR, REDEVELOPMENT AGENCY
SUBJECT: DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN PALM
DESERT REDEVELOPMENT AGENCY AND CALIFORNIA STATE
UNIVERSITY
Recommendation:
That the City Council/Agency Board open the joint public hearing and following testimony take
the following actions:
1. That the Agency Board adopt Resolution No. 374 - "A RESOLUTION OF
THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE
CONVEYANCE TO THE TRUSTEES OF CALIFORNIA STATE UNIVERSITY OF
APPROXIMATELY 200 ACRES OF REAL PROPERTY LOCATED AT THE
NORTHEAST CORNER OF FRANK SINATRA DRIVE AND COOK STREET"
2. That the City Council adopt Resolution No. 99-56 - " A RESOLUTION OF THE
CITY OF PALM DESERT APPROVING THE CONVEYANCE TO THE
TRUSTEES OF CALIFORNIA STATE UNIVERSITY OF APPROXIMATELY 200
ACRES OF REAL PROPERTY LOCATED AT THE NORTHEAST CORNER OF
FRANK SINATRA DRIVE AND COOK STREET"
Background.
This report summarizes the terms and conditions of that certain Disposition and
Development Agreement (the "DDA")between the Palm Desert Redevelopment Agency(the
"Agency") and California State University ("the Developer") concerning the proposed sale of
certain real property by the Agency to California State University(CSU). The report is created
to comply with the requirements of California Health and Safety Code Section 33433.
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Summary of DDA.
The Agency is the owner of certain real property in the City of Palm Desert, on the
northeast corner of Frank Sinatra and Cook Street. The Agency proposes to cause to be
developed on such real property a California State University Campus.
Under the terms of the agreement, the Agency agrees to initially transfer 40 acres to CSU,
and CSU shall be obligated to construct facilities and relocate the Coachella Valley Center of Cal
State San Bernardino.
CSU shall also be obligated to begin construction of the Center within 3 years from the
date of the Agreement (the Agreement is dated June 24, 1999), and shall complete construction
of the three buildings (three phases)which constitute the Center and open them for operation
according to the following schedule: (a) The first building of the Center shall be open and
operating within 5 years after the date of the Agreement; (b) the second building of the Center
shall be commenced within 5 years from the date of the Agreement and shall be open and
operating within 7 years after the date of the Agreement; and(c) the third building of
the Center shall be commenced within 7 years from the date of the Agreement and shall be open
and operating within 9 years after the recording date of the Grant Deed, unless such time period
is extended by the mutual agreement of the Agency and CSU. If CSU does not comply with this,
the land reverts to the Agency.
In addition:
1. The Agency grants to CSU an Option to purchase the remainder of the site (160 acres).
The Option term will begin on the DDA execution date and will end 25 years after the
execution date of the DDA. During the Option term, Parcel B will be made available to
CSU, at a purchase price of$0, in the event that the State of California(the "State")
authorizes CSU to develop a fully independent campus of the CSU system(the
"University Campus") on the Site.
2. Pending the exercise of the Option, CSU, the City and the Agency will participate in a
planning process to determine mutually compatible, temporary land uses for the 160 acres
until construction begins on the University Campus.
3. The 160 acres will be conveyed to CSU in phases, subject to CSU providing reasonably
satisfactory evidence to a Planning Committee (made up of representatives of the
Agency, the City, and CSU) of its financing plan for development of the applicable
phase.
4. CSU may exercise the Option to purchase the 160 acres subject to the satisfaction or
waiver(by the Agency) on the condition(among others) that CSU shall have constructed
2
all improvements on Parcel A described in the Master Plan, and shall be operating the
Center therefrom.
5. If CSU exercises the Option to purchase Parcel B, then CSU shall begin constructing the
improvements constituting the University Campus within certain time frames and
complete such improvements within certain time frames, otherwise the land reverts to the
Agency.
6. CSU agrees that it shall, for a period of 55 years after completion of each building
(whether on Parcel A or Parcel B), it shall use such property and improvements only for
the operation of the Center or as part of the University Campus (if one should be built).
7. If any portion of the Site transferred by the Agency to CSU is reasonably determined by
the Parties to be unnecessary for CSU's campus, or is not being used primarily as part of a
public institution of higher education operated by CSU, the property shall revert to the
Agency. Note that the reversion provisions terminate with respect to any phase of any
Parcel 55 years after the completion of any building on the parcel.
Current Status
At the present time, we are informed that CSU objects to a number of provisions in the
Agreement. First,they object to the time frames for commencement and completion of
construction. Second, CSU objects to any provisions in the DDA that provide either the
Planning Committee, the Agency, or the City, to approve any aspect of the project, including any
amendments to the Master Plan, the phasing plan(including the division of the parcels,which
will be necessary in the event the parties wish to avoid disputes over the dimensions of the land
that would revert to the Agency if either undeveloped by CSU or with respect to which the use
changes before the expiration of the applicable 55 year period), and any plan for financing the
development of any phase. Indeed, at the present time, we have not received any indication that
CSU is at all willing to sign the DDA with any controls or provisions that restrict CSU's free and
unfettered use of the property, even if such provisions are, in the opinion of Agency staff, and
based upon the direction of the Agency's Board members from the Agency's meeting of May
7,1999, necessary to protect the Agency and insure that the property will, in fact,be used for Cal
State University purposes. However, per the direction of the Agency Board,we have advertised
this matter and placed it before the Agency Board for this meeting for your consideration.
The Agency Board has the option of(i) approving this Agreement, (ii) disapproving the
Agreement, (iii) approving this Agreement with amendments, (iv) taking no action, or(v)
continuing the matter.
Carlos L. Ortega
Executive Director
3
RESOLUTION NO. 374
(07/08/99}
CONSIDERATION OF APPROVAL OF THE DISPOSITION AND
DEVELOPMENT AGREEMENT BETWEEN PALM DESERT REDEVELOPMENT
AGENCY AND CALIFORNIA STATE UNIVERSITY (JOINT CONSIDERATION
WITH THE PALM DESERT CITY COUNCIL). (Continued from the meeting of
June 24, 1999).
By Minute Motion,this matterwas continued to a date uncertain.
4_1 (Ferguson NO)
RESOLUTION NO. 374
A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING
THE CONVEYANCE TO THE TRUSTEES OF CALIFORNIA STATE UNIVERSITY OF
APPROXIMATELY 200 ACRES OF REAL PROPERTY LOCATED AT THE
NORTHEAST CORNER OF FRANK SINATRA DRIVE AND COOK STREET
THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS,
DETERMINES, RESOLVES AND ORDERS AS FOLLOWS:
Section
1. On June 24, 1999, the City Council of the City of Palm Desert and the Palm Desert
Redevelopment Agency (the "Agency") held a duly noticed joint public hearing on the
approval of the Agency's proposed conveyance of certain real property (the "Property")
located in the Agency's Project Area No. 2, as described in that certain Disposition and
Development Agreement (the "DDA") between the Agency and the Trustees of the California
State University ("CSU"), at which time all persons desiring to comment on or ask questions
concerning the conveyance of the Property to CSU were given the opportunity to do so. Prior
to the public hearing, information concerning the Agency's proposed conveyance of the
Property to CSU was available for public inspection in the offices of the City of Palm Desert
at 73-510 Fred Waring Drive, Palm Desert, California 92260, between the hours of 8:00 a.m.
and 5:00 p.m., Monday through Friday. Notice of the public hearing was published in Desert
Sun on June 10, 1999 and June 17, 1999.
Section 2. The Agency has reviewed and considered all written and oral
comments, questions and concerns regarding the Agency's proposed conveyance of the
Property to CSU received prior to and at the public hearing on said conveyance.
Section 3. The environmental impacts of the Agency's proposed conveyance of
the Property to CSU for the development of improvements thereon was analyzed in the Final
Environmental Impact Report for the California State University San Bernardino, Coachella
Valley Master Plan (the "EIR"). The City certified the EIR by Resolution No. 99-34,
"Resolution of the City Council of the City of Palm Desert, California, Approving a Master
Plan, Conditional Use Permit and Certification of an Environmental Impact Report (EIR) SCH
�#97111071 to Allow Development of a California State University Campus on 204 Acres
Bounded by Cook Street, Frank Sinatra Drive and Gerald Ford Avenue, APN 653-420-016,
37-300 Cook Street. Case No. CUP 99-3." In addition, the Agency finds that there have not
been any (i) subsequent material changes in the project, (ii) significant new environmental
impacts not previously considered as a part of the project, or (iii) new information relating to
the project which would require supplemental environmental documentation for the
conveyance of the Property to CSU.
Section 4. The DDA provides that CSU shall have the right to construct certain
improvements on the Property as therein described.
rev.6/18/99 P6402-00001 slm 1630510 0
RDA Resolution No. 374
Section 5. The Agency has obtained an evaluation of the fair market value of
the Property from REASCO, who has determined that the fair reuse value of Parcel A when
encumbered by the restrictions set forth in the DDA is $0.00, and the fair reuse value of
Parcel B is $0.00.
Section 6. Project Area No. 2 is an area which has previously been identified
in the Redevelopment Plan as a blighted area. The area has previously been determined to
create a social and economic burden on the community which cannot reasonably be expected to
be reversed or alleviated by private enterprise or governmental action, or both, without
redevelopment. In addition, Project Area No. 2 contains vacant and under-utilized properties
and properties which suffer from economic dislocation, deterioration or disuse, including
depreciated or stagnant property values and impaired investments. Project Area No. 2 is
characterized by the existence of inadequate public improvements, public facilities and open
spaces which cannot be remedied by private or governmental action without redevelopment.
Section 7. The Agency hereby finds that the conveyance of the Property
pursuant to the DDA will assist in the elimination of blight by CSU's construction of the
improvements described in the DDA on previously vacant, under-utilized land, which will
remedy the lack of adequate public improvements, assist in the revitalization of Project Area
No. 2, encourage private sector investment and create job opportunities, all for the health,
safety and welfare of the residents and taxpayers of the City.
Section 8. The Agency hereby finds that the consideration to be paid by CSU is
not less than the fair reuse value of the Property at its highest and best use in accordance with
the Redevelopment Plan for Project Area No. 2 of the Agency.
Section 9. The Agency hereby finds that the conveyance of the Property
pursuant to the DDA is consistent with the Agency's Implementation Plan adopted pursuant to
Health and Safety Code Section 33490.
Section 10. The Agency hereby approves the DDA and the sale of the Property
to CSU in accordance with the terms and conditions of the DDA pursuant to the requirements
of Health and Safety Code Section 33433(b).
Section 11. If CSU has not signed the DDA by December 31, 1999, then the
Agency's approval of the DDA shall automatically be rescinded unless such approval has
otherwise been extended by the Agency.
rev.6/18/99 P6402-00001 slm 1630510 0 — 2 —
RDA Resolution No. 374
PASSED, APPROVED and ADOPTED by the City Council of the City of
Palm Desert, this 24th day of June, 1999, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ROBERT A. SPIEGEL, MAYOR
ATTEST:
SHEILA R. GILLIGAN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
rev.6/18/99 P6402-00001 slm 1630510 0 — 3 —
�
RESOLUTION NO. 99-56
NO ACTION
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RESOLUTION NO. 99-56
A RESOLUTION OF THE CITY OF PALM DESERT
APPROVING THE CONVEYANCE TO THE TRUSTEES OF
CALIFORNIA STATE UNIVERSITY OF APPROXIMATELY
200 ACRES OF REAL PROPERTY LOCATED AT THE
NORTHEAST CORNER OF FRANK SINATRA DRIVE AND
COOK STREET
THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES,
RESOLVES AND ORDERS AS FOLLOWS:
Section
1. On June 24, 1999, the City Council of the City of Palm Desert (the "City") and the Palm
Desert Redevelopment Agency (the "Agency") held a duly noticed joint public hearing on the
approval of the Agency's proposed conveyance of certain real property (the "Property")
located in the City's Project Area No. 2, as described in that certain Disposition and
Development Agreement (the "DDA") between the Agency and the Trustees of the California
State University ("CSU"), at which time all persons desiring to comment on or ask questions
concerning the conveyance of the Property to CSU were given the opportunity to do so. Prior
to the public hearing, information concerning the Agency's proposed conveyance of the
Property to CSU was available for public inspection in the offices of the City of Palm Desert
at 73-510 Fred Waring Drive, Palm Desert, California 92260, between the hours of 8:00 a.m.
and 5:00 p.m., Monday through Friday. Notice of the public hearing was published in Desert
Sun on June 10, 1999 and June 17, 1999.
Section 2. The City has reviewed and considered all written and oral
comments, questions and concerns regarding the Agency's proposed conveyance of the
Property to CSU received prior to and at the public hearing on said conveyance.
Section 3. The environmental impacts of the Agency's proposed conveyance of
the Property to CSU for the development of improvements thereon was analyzed in the Final
Environmental Impact Report for the California State University San Bernardino, Coachella
Valley Master Plan (the 'BIR"). The City certified the EIR by Resolution No. 99-34,
"Resolution of the City Council of the City of Palm Desert, California, Approving a Master
Plan, Conditional Use Permit and Certification of an Environmental Impact Report (EIR) SCH
#97111071 to Allow Development of a California State University Campus on 204 Acres
Bounded by Cook Street, Frank Sinatra Drive and Gerald Ford Avenue, APN 653-420-016,
37-300 Cook Street. Case No. CUP 99-3." In addition, the City finds that there have not
been any (i) subsequent material changes in the project, (ii) significant new environmental
impacts not previously considered as a part of the project, or (iii) new information relating to
the project which would require supplemental environmental documentation for the
conveyance of the Property to CSU.
rev.6/18/99 P6402-00001 slm 1630515 0
Resolution No. 99-56
Section 4. The DDA provides that CSU shall have the right to construct certain
improvements on the Property as therein described.
Section S. The City has obtained an evaluation of the fair market value of the
Property from REASCO, who has determined that the fair reuse value of Parcel A when
encumbered by the restrictions set forth in the DDA is $0.00, and the fair reuse value of
Parcel B is $0.00.
Section 6. Project Area No. 2 is an area which has previously been identified
in the Redevelopment Plan as a blighted area. The area has previously been determined to
create a social and economic burden on the community which cannot reasonably be expected to
be reversed or alleviated by private enterprise or governmental action, or both, without
redevelopment. In addition, Project Area No. 2 contains vacant and under-utilized properties
and properties which suffer from economic dislocation, deterioration or disuse, including
depreciated or stagnant property values and impaired investments. Project Area No. 2 is
characterized by the existence of inadequate public improvements, public facilities and open
spaces which cannot be remedied by private or governmental action without redevelopment.
Section 7. The City hereby finds that the conveyance of the Property pursuant
to the DDA will assist in the elimination of blight by CSU's construction of the improvements
described in the DDA on previously vacant, under-utilized land, which will remedy the lack of
adequate public improvements, assist in the revitalization of Project Area No. 2, encourage
private sector investment and create job opportunities, all for the health, safety and welfare of
the residents and taxpayers of the City.
Section 8. The City hereby finds that the consideration to be paid by CSU is
not less than the fair reuse value of the Property at its highest and best use in accordance with
the Redevelopment Plan for Project Area No. 2 of the City.
Section 9. The City hereby approves the DDA and the conveyance of the
Property to CSU in accordance with the terms and conditions of the DDA pursuant to the
requirements of Health and Safety Code Section 33433(b).
Section 10. If CSU has not signed the DDA by December 31, 1999, then the
the City agrees that the Agency's approval of the DDA shall automatically be rescinded unless
such approval has otherwise been extended by the Agency.
rev.6/18/99 P6402-00001 slm 1630515 0 — 2 '
Resolution No. 99-56
PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, this
24th day of June, 1999, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ROBERT A. SPIEGEL, MAYOR
ATTEST:
SHEILA R. GILLIGAN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
rev.6/18/99 P6402-00001 slm 1630515 0 — 3 —
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
PALM DESERT REDEVELOPMENT AGENCY
AND
THE TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY
DATED
June 24, 1999
�
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.1 A� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.2 A�encv Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.3 Aereement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.4 Center Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.5 Citv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.6 City Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.7 Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.8 Close of the Parcel A Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.9 Close of the Parcel B Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.10 CSU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.11 Escrow Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.12 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.13 Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.15 Onening of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.16 Ontion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.17 Planning Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.18 Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.19 Schedule of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.20 Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.21 Universit,�pus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.22 Universitv Campus Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 PURCHASE AND SALE OF PARCEL A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Transfer of Parcel A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Condition of Parcel A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.4 Opening and Closing of Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5 Condition of Title; Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.6 Parcel A Escrow Char�es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.7 Conditions to Close of the Parcel A Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.8 Deposits into Parcel A Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.9 Parcel A Escrow's Closing Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.10 Additional Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3 OPTION TO PURCHASE PARCEL B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.1 Grant of Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section3.2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3 Oution Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.4 Exercise of the Option in Phases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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990617 jar C:\WINDOWS\TEMPU6002756.WPD
Section 3.5 Use of Parcel B Pendin�Exercise of the Option. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.6 Condition of Parcel B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.7 Conditions to Exercise the Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.8 Opening and Closin� of Parcel B Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.9 Condition of Title: Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.10 Parcel B Escrow Char�es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.11 Conditions to Close of the Parcel B Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.12 De�osits into Parcel B Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.13 Parcel B Escrow's Closing Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.14 Additional Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4 USE MAINTENANCE, AND NON-DISCRIMINATION OBLIGATIONS. . . . . . . . . . 16
Section 4.1 Use of Propertv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section4.2 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.3 A�encv's Reversion Rights With Respect to Unimproved Portions of Parcel A. . . 17
Section 4.4 Agenc�s Reversion Ri�hts With Respect to Unimproved Portions of Parcel B. . . 18
Section 4.5 A�encv's Ri�hts With Respect to a Chan�e of Use . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.6 Restriction on CSU's Transfer of the Site and Rights and Obli�ations Under this
A�reement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.7 Obligation to Refrain from Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.8 Form of Nondiscrimination and Non-Se�re�ation Clauses . . . . . . . . . . . . . . . . . . . 19
Section 4.9 Restrictive Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.10 A�encv's Use Restrictions on Parcel A and Parcel B. . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 5 DEVELOPMENT OF THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.1 Feasibilit S�dv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.2 Development of the Center. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.3 Division into Phases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.4 Develo�ment of the Universit�mpus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.5 Universit,y Develo�ment Plannina Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.6 Subdivision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.7 Amendment of Master Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.8 Air Emissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.9 Com�liance bv Contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.10 Erosion Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section5.11 Safetv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.12 Communitv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.13 Cost of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.14 Local. State and Federal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.15 Anti-discrimination During�Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.16 Taxes Assessments. Encumbrances and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.17 No A�encv Created . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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ARTICLE 6 EVENTS OF DEFAULT. REMEDIES AND TERMINATION. . . . . . . . . . . . . . . . . . . . 23
Section 6.1 Defaults--Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.2 Remedies in the Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.3 No Personal Liabilitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.4 Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.5 Inaction Not a Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 7 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.1 Indemnitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.2 A�ency's Indemnitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 8 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.2 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.5 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.6 Warranty A ai�st Pavment of Consideration for Agreement . . . . . . . . . . . . . . . . . 27
Section 8.7 Entire A�reement, Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.8 Severabilitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.9 Headin�s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.10 No Third Partv Beneficiaries other than the Citv . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.11 Governin�Law• Jurisdiction: Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.12 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated as of June
24, 1999, is entered into by and between the PALM DESERT REDEVELOPMENT AGENCY, a public
body, corporate and politic (the "Agency"), and THE TRUSTEES OF THE CALIFORNIA STATE
UNIVERSITY("CSU"), and is executed with reference to the following circumstances as described herein.
RECITALS
A. The purpose of this Agreement is to effectuate the Redevelopment Plan for Project Area
_of the Agency (the "Redevelopment Plan"), in the City of Palm Desert, California,by facilitating
improvements to real property within the Project Area(as defined below).
B. The Redevelopment Plan has been approved and adopted by Ordinance No. of the
City of Palm Desert adopted
G The Agency is a public body, corporate and politic, exercising governmental functions
and powers, and organized and existing under the Community Redevelopment Law of the State of
California.
D. CSU, or California State University, is an entity of the State of California, and is
governed by its Board of Trustees. It receives its authority from the California Education Code.
E. Construction of the Project will assist in the elimination of blight in the Project Area,
provide additional jobs, and substantially improve the economic and physical conditions in the Project
Area in accordance with the purposes and goals of the Redevelopment Plan.
F. The land uses specified in this Agreement and the provisions relating to construction of
the Project are consistent with the provisions of the Redevelopment Plan and each of its applicable
elements.
G. The Agency and CSU desire to develop the university campus described below and the
related infrastructure in a coordinated, cooperative, and timely manner.
H. CSU's primary mission is to offer undergraduate and graduate instruction through the
master's degree in the liberal arts and sciences and professional education, including teacher education
(Education Code Section 66608). Regional access for students to this instruction is an integral part of
CSU's mission.
I. The Agency is the owner of certain real property (the "Site") generally located at the
northeast corner of Frank Sinatra Drive and Cook Street, within the City of Palm Desert, California,
within one mile of Interstate 10 and four miles from State Route 111. The Site is legally described in
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Exhibit A, attached hereto and incorparated by reference herein. For purposes of this Agreement, the
Site consists of two parcels, namely, Parcel A, composed of approximately 40 acres, and Parcel B,
composed of approximately 160 acres. CSU may request an increase of the size of Parcel A, beyond the
40 acres, and the Agency agrees to consider such request provided that CSU has submitted all
documents requested by the Agency for such consideration. Agency's consideration shall be sole and
absolute with no obligation by the Agency to grant such a request. Parcel A shall be divided into 3
parcels for a phased development, as described in Section 2.7.6, below, and Parcel B shall be subdivided
into such number of parcels as the Parties shall agree upon as provided herein. The Site is close to the
center of the Coachella Valley. Cook Street and the interchange on Interstate 10 will provide excellent
access to the Site for students residing in the region. The City of Palm Desert (the "City"), the Agency,
and CSU intend to encourage, support and provide for other means of transportation to the Site including
bus, car-pooling and bicycle.
J. Consistent with its mission, CSU currently operates from the College of the Desert the
Coachella Valley Center of California State University, San Bernardino (the "Center").
K. The Agency, the City, and CSU entered into a Memorandum of Understanding (the
"MOU") dated November 9, 1994, which initiated a process by which CSU would study the feasibility
of relocating the Center from its current location at leased quarters at the College of the Desert to Parcel
A, and, if the State of California(the "State") authorizes CSU to convert the Center to a University
Campus, as described below, CSU will develop the University Campus on Parcel A and Parcel B.
L. Following execution of the MOU, the City and Agency entered into a cooperative
planning process with CSU to determine mutually acceptable short and long term land uses to occur on
the Site. The process resulted in the adoption by the Coachella Valley Center Master Plan Advisory
Committee (the "Committee") of a Master Plan (the "Master Plan") for the California State University,
San Bernardino Permanent Coachella Valley Off-Campus Center, dated March 1997.
M. As a result of the development of the Master Plan, the Agency and CSU have negotiated
this Agreement, by which the Agency shall convey Parcel A to CSU, and CSU shall acquire Parcel A
and relocate the Center to Parcel A from its current location in leased quarters at the College of the
Desert, and shall construct and equip facilities for the Center on Parcel A with funds raised through a
capital campaign and a private/public partnership sponsored by California State University, San
Bernardino. CSU has provided to the Agency proof satisfactory to the Agency of its commitment to
relocate the Center to Parcel A. Such a facility will yield significant educational, cultural, and economic
benefits to the Coachella Valley region. Pursuant to this Agreement, CSU will begin construction of the
Center within 3 years from date of execution of this Agreement. In addition, pursuant to this
Agreement, the Agency shall grant to CSU an option to purchase Parcel B, as described in Article 3,
below.
N. The Agency and CSU desire to enter into this Agreement in order to establish
commitments for the development and provision of public services,public uses, and public
infrastructure related to the development of the Site by CSU. The Agency recognizes the benefit to the
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region and its citizens of having CSU acquire and develop the Site. CSU recognizes that it is in the best
interests of the state and its citizens to develop the Site for purposes of its higher education mission.
O. A material inducement to the Agency to enter into this Agreement is CSU's covenant to
construct the Improvements on the Site in accordance with the terms of this Agreement.
P. The City and the Agency served as co-lead agencies for the Environmental Impact Report
("the EIR") on the proposed uses of the Site as described in the Master Plan, as required by the MOU.
The City and Agency duly considered and certified the EIR as completed on , 1999.
Q. The Agency has completed the report required by California Health and Safety Code
Section 33433.
R. The Agency and the City held the public hearings required by California Health and
Safety Code Sections 33433 on June 24, 1999.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants
contained in this Agreement the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS.
Section l.l Definitions. The following terms as used in this Agreement shall have the
meanings given unless expressly provided to the contrary:
1.1.1 A�means the Palm Desert Redevelopment Agency, a public body, corporate
and politic, exercising governmental functions and powers, and organized and existing under the
Community Redevelopment Law of the State of California.
1.1.2 A�encv Board means the board of directors of the Palm Desert Redevelopment
Agency.
1.13 Aereement means this Disposition and Development Agreement.
1.1.4 Center Improvements means all buildings, landscaping, infrastructure, utilities, and
other improvements for the Center to be built on Parcel A or any part thereon, as described in the Master
Plan.
1.1.5 Citv means the City of Palm Desert, a municipal corporation.
1.1.6 Citv Council means the City Council of the City of Palm Desert, a municipal
corporation.
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1.1.7 Center means the Coachella Valley Center of California State University, San
Bernardino, a state sponsored and financed off-campus center of approximately 78,642 square feet of
building improvements, to be developed on Parcel A, consistent with the Master Plan.
1.1.8 Close of the Parcel A Escrow is defined in Section 2.4.
1.1.9 Close of the Parcel B Escrow is defined in Section 3.8.
1.1.10 CSU means the Trustees of the California State University, an arm of the State of
California, and receiving its authority from the California Education Code.
1.1.11 Escrow Holder means Title Company, a licensed
escrow holder mutually selected by the Agency and CSU.
1.1.12 Hazardous Materials means any chemical, material or substance now or hereafter
defined as or included in the definition of"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic substances," "pollutant or
contaminant," "imminently hazardous chemical substance or mixture," "hazardous air pollutant," "toxic
pollutant," or words of similar import under any local, state or federal law or under the regulations
adopted or publications promulgated pursuant thereto applicable to the Site, including, without
limitation: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §9601, et seq. ("CERCLA"); the Hazardous Materials Transportation Act, as amended, 49
U.S.C.§ 1801, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq.;
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq. The term
"Hazardous Materials" shall also include any of the following: any and all toxic or hazardous
substances, materials or wastes listed in the United States Department of Transportation Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and in
any and all amendments thereto in effect as of the date of the close of any escrow; oil,petroleum,
petroleum products (including, without limitation, crude oil or any fraction thereo fl, natural gas, natural
gas liquids, liquified natural gas or synthetic gas usable for fuel, not otherwise designated as a hazardous
substance under CERCLA; any substance which is toxic, explosive, corrosive, reactive, flammable,
infectious or radioactive (including any source, special nuclear or by-product material as defined at 42
U.S.C. § 201 l, et seq.), carcinogenic, mutagenic, or otherwise hazardous and is ar becomes regulated by
any governmental authority; asbestos in any form; urea formaldehyde foam insulation; transformers or
other equipment which contain dielectric fluid containing levels of polychlorinated byphenyls; radon
gas; or any other chemical, material or substance (i) which poses a hazard to the Site, to adjacent
properties, or to persons on or about the Site, (ii)which causes the Site to be in violation of any of the
aforementioned laws or regulations, ar(iii) the presence of which on or in the Site requires investigation,
reporting or remediation under any such laws or regulations.
1.1.13 Improvements means all buildings, landscaping, infrastructure, utilities, and other
improvements to be built on the Site, or any part thereon, and shall mean both the Center Improvements
and the University Campus Improvements.
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1.1.14 Master Plan has the meaning set forth in Recital .L.
1.1.15 O�enin� of Escrow means, with respect to Parcel A, the date upon which Escrow
Holder receives a fully executed copy of this Agreement, and with respect to Parcel B, the date upon
which the Agency and CSU actually open escrow pursuant to Section 3.8.
1.1.16 O,�tion means the option to purchase Parcel B granted by the Agency to CSU in
accordance with Article 3 hereof.
1.1.17 Plannin� Committee means the University Development Planning Committee, as
defined in Section 5.5.
1.1.18 Project means CSU's development of the Site with the Improvements and
operation thereof as described in this Agreement and the Master Plan.
1.1.19 Schedule of Performance means the schedule shown in Exhibit B, attached hereto
and incorporated by reference herein.
1.1.20 Site means that certain real property described in Exhibit A, attached hereto and
incorporated herein by reference, which shall be or is contemplated to be developed by CSU. The Site is
composed of two major parcels, identified as Parcel A and Parcel B in Exhibit A.
1.1.21 Universit,�pus shall mean the fully independent, full service,branch campus
of the California State University that may be developed on the Site (including both Parcel A and Parcel
B).
1.1.22 University Campus Improvements shall mean any and all buildings, landscaping,
infrastructure, utilities, and other improvements in connection with the University Campus to be built on
the Site (including Parcel A and Parcel B).
ARTICLE 2 PURCHASE AND SALE OF PARCEL A.
Section 2.1 Transfer of Parcel A. Subject to and in accordance with the terms and conditions
hereinafter set forth, the Agency agrees to transfer to CSU, and CSU agrees to accept from the Agency,
fee simple title to Parcel A, including all water, mineral, oil, gas, and geothermal rights to said parcel,
and including the right to extract the same from said parcel, to the extent such mineral rights are owned
by the Agency. The Agency shall perform this transfer by donating Parcel A when Parcel A is ready for
development thereof by CSU as part of the Center, as more fully set out below.
Section 2.2 Purchase Price. The purchase price for Parcel A to be paid by CSU (the "Purchase
Price") shall be the sum of$0.
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Section 2.3 Condition of Parcel A.
2.3.1 Prior to and during the Parcel A Escrow period, CSU is granted permission to
enter onto Parcel A for the purpose of inspecting the Site, including testing the soil. CSU shall
indemnify, hold harmless, and defend the Agency against and hold the Agency and Parcel A harmless
from, all losses, costs, damages, liabilities, liens, and expenses, including, without limitation, reasonable
attorneys' fees, arising out of such entry and activities by CSU and its agents, employees, or contractors,
prior to the Close of the Parcel A Escrow, except to the extent any such losses, costs, damages,
liabilities, and expenses arise out of the gross negligence or willful acts of the Agency andlor the City.
At any time during its inspection of Parcel A, but within 55 calendar days of the opening of escrow,
CSU shall approve or disapprove of the condition of Parcel A. If CSU disapproves the condition Parcel
A this Agreement (including the Option) and the Parcel A Escrow shall terminate. CSU shall provide to
the Agency its approval or disapproval in writing.
2.3.2 The Agency shall convey Parcel A to CSU in an "as is" "where is" condition,
without any warranty whatsoever to CSU as to the condition of any portion of Parcel A, including
whether Parcel A contains any Hazardous Materials. CSU shall rely upon its own inspection of Parcel A
and CSU's own determination as to whether the physical condition of Parcel A shall be suitable for
CSU's purposes. CSU acknowledges and agrees that:
2.3.2.1 The Agency has made no representation or warranty with respect to Parcel
A except for those representations and warranties contained in this Agreement, and that prior to
the Close of the Parcel A Escrow, the Agency will make no representations and warranties with
respect to Parcel A, other than those contained in this Agreement.
2.3.2.2 CSU is purchasing Parcel A with the ultimate objective constructing new
improvements thereon.
2.3.2.3 CSU's decision to purchase Parcel A shall be based on the results of
CSU's analysis and the reports it shall obtain prior to the Close of the Parcel A Escrow.
2.3.2.4 The Agency has made no representation or warranty as to the accuracy or
completeness of any reports and other materials prepared by any persons, and CSU is not relying
on the accuracy and completeness of any reports and other materials prepared by persons other
than CSU, its agents, or contractors.
2.3.2.5 Except as specifically provided in this Agreement, the Agency has made
no representation or warranty with respect to the use, fitness for a particular reason, zoning,
value, improvements, square footages or any other condition of Parcel A.
Except for the Agency's representations, warranties and covenants contained in this
Agreement, CSU is purchasing Parcel A in "AS-IS," "WHERE-IS" condition "WITH ALL FAULTS."
CSU agrees that the Agency has no obligation to remedy any faults, defects, or other adverse conditions
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described in any report or other material obtained by CSU or delivered by the Agency to CSU, including
the remediation of any Hazardous Material on Parcel A.
Section 2.4 Opening and Closing of Escrow. Within 10 days after CSU's approval of this
Agreement, the Agency and CSU shall cause an escrow (the "Parcel A Escrow") to be opened with
Escrow Holder for the transfer of Parcel A by the Agency to CSU. The Agency and CSU shall deposit
with Escrow Holder a fully executed duplicate original of this Agreement which shall serve as the
escrow instructions for the Parcel A Escrow. The Agency and CSU shall provide such additional escrow
instructions as shall be necessary and consistent with this Agreement. Escrow Holder is authorized to
act under this Agreement and to carry out its duties as Escrow Holder hereunder. Escrow shall close for
Parcel A within 60 days after the opening of the Parcel A Escrow, unless an extension of time is
mutually agreed to.
Section 2.5 Condition of Title: Title Insurance.
2.5.1 Promptly following the execution of this Agreement by both Parties, the Agency
shall order from Title Company ("Title Company"), or another title company
mutually acceptable to the Agency and CSU, for delivery to CSU and to the Agency, a preliminary
report for an ALTA Owner's Standard Coverage Policy of Title Insurance for Parcel A, setting forth all
liens, encumbrances, easements, restrictions, conditions, pending litigation,judgments, administrative
proceedings, and other matters affecting the Agency's title to Parcel A, together with copies of all
documents relating to title exceptions referred to in the Preliminary Report (collectively, the "Parcel A
Preliminary Report"). CSU shall approve or disapprove each exception shown on the Parcel A
Preliminary Report within 55 calendar days following the receipt of the Parcel A Preliminary Report.
Notwithstanding the foregoing, the Agency shall be under no obligation to remove any encumbrance to
title,but the Agency agrees to cooperate in good faith with CSU in CSU's efforts to eliminate any
encumbrance to title,provided the Agency is not obligated to pay any sums to the holder of such
encumbrance to obtain the release thereof.
2.5.2 The Agency shall provide an ALTA survey of Parcel A to CSU("Survey").
Subject to the terms of Section 2.5.1 above, CSU shall approve or disapprove each encroachment,
overlap, or boundary line dispute, or any other matter that materially and adversely affects title to Parcel
A or that violates any law, rule, or regulation reflected on the Survey (each an "Exception") within 30
days after receiving said ALTA Survey or after the Opening of the Parcel A Escrow, whichever is later.
Any such Exception that CSU disapproves is termed a "Disapproved Exception."
If CSU is unable to obtain a discharge, satisfaction, release, or termination of a
Disapproved Exception, or if the Agency does not elect to do so, then CSU shall have the right, within
60 days of the Opening of Escrow, to:
2.5.2.1 waive the Disapproved Exception and proceed with Closing the Parcel A
Escrow, accepting title to Parcel A subject to the Disapproved Exception, or
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2.5.2.2 terminate this Agreement, in which event both CSU and the Agency shall
be relieved of all further obligation and liability to each other under this Agreement (including
the Option) and all the funds and documents deposited with Escrow Holder shall be promptly
refunded or returned, as the case may be, by Escrow Holder to the depositing party, less
reasonable escrow cancellation fees; or
2.5.2.3 ask Agency for an extension of time to do further investigation prior to
making a decision, which request shall not be unreasonably withheld by Agency.
2.5.3 Upon satisfaction of the conditions to convey title to Parcel A, the Agency shall
convey title of Parcel A to CSU by Grant Deed. Title to Parcel A shall be conveyed subject to (i) all title
exceptions affecting Parcel A shown on the Preliminary Title Report for Parcel A approved by CSU, (ii)
the covenants, conditions and restrictions benefitting and burdening Parcel A as described in this
Agreement, and (iii) any other matters which arise out of the actions of CSU or its agents and
representatives ("Permitted Exceptions")but including all water, mineral, oil, gas, and geothermal rights
to said parcel, including the right to extract the same from said parcel held by the Agency, if any. The
Agency shall use reasonable efforts to cause any disapproved exceptions to be removed by the Close of
the Parcel A Escrow (so long as such exception may be removed without the Agency being obligated to
pay any sums to the holder thereo fl,but if the Agency is unable to remove any disapproved non-
monetary title exceptions, then the Agency shall not be in breach hereof but CSU shall have the right to
terminate this Agreement.
2.5.4 At the Close of the Parcel A Escrow, CSU may, at CSU's sole cost and expense,
purchase a CLTA or an ALTA Owner's Standard Coverage Policy of Title Insurance, issued by the Title
Company, in favor of CSU, insuring that title is vested in CSU free and clear of all liens, easements,
covenants, conditions, restrictions, and other encumbrances of record, other than the Permitted
Exceptions for Parcel A. CSU may obtain one or more extended coverage policies of title insurance or
special endorsements at its own cost.
Section 2.6 Parcel A Escrow Char�es. CSU shall be responsible for paying (i) all Parcel A
Escrow charges, and (ii) all recording fees, documentary and local transfer taxes that are legally
applicable to a transaction wherein CSU is the transferee.
Section 2.7 Conditions to Close of the Parcel A Escrow. The obligations of the Agency and
CSU under this Agreement to close the escrow for the conveyance of Parcel A, shall be subject to the
satisfaction or waiver of each of the following conditions:
2.7.1 CSU shall have committed, in writing, to relocate the Center to Parcel A and to
operate it therefrom.
2.7.2 [omitted]
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2.7.3 The representations and warranties of the Agency and CSU contained in this
Agreement shall be true and correct as of the Close of the Parcel A Escrow.
2.7.4 The Agency shall have delivered all documents required to be delivered by the
Agency pursuant to Section 2.8 hereof.
2.7.5 The Title Company shall have issued a commitment to issue a Policy of Title
Insurance, as required herein, on the Close of the Parcel A Escrow, subject only to the Permitted
Exceptions on Parcel A, with liability equal to such sum as requested by CSU, showing Parcel A vested
in CSU.
2.7.6 Parcel A shall have been subdivided by into 3 parcels, corresponding to 3 phases of
development, and the division of such parcels and the phases of development shall have been approved
by the Planning Committee, and such phasing plan shall have been incorporated into the Master Plan.
The sole purpose for such division being to clarify the rights of the parties with respect to any property
that may becomes subject to reversion pursuant to Sections 4.3, 4.4 and 4.5.
If the foregoing conditions are not satisfied, and the Parcel A Escrow has not closed,by June 30, 2000,
then either the Agency or CSU shall have the right to terminate this Agreement.
Section 2.8 Deposits into Parcel A Escrow. The Agency agrees to deliver to Escrow Holder
prior to the Close of the Parcel A Escrow, the following instruments and documents, the delivery of each
of which shall be a condition of the Close of the Parcel A Escrow:
2.8.1 A Grant Deed, duly executed and acknowledged by the Agency, conveying a fee
simple interest in Parcel A to CSU. Said Grant Deed shall be in the form attached hereto as Exhibit B;
2.8.2 The Agency's affidavit as contemplated by California Revenue and Taxation Code
§18662 ("Withholding Affidavit");
2.8.3 A Certification of Non-Foreign Status in accordance with I.R.C. Section 1445 (the
"FIRPTA Certificate"); and
2.8.4 Such proof of the Agency's authority and authorization to enter into this
transaction as the Title Company may reasonably require in order to issue CSU's policy of title
insurance.
Section 2.9 Parcel A Escrow's Closing Actions. On the Close of the Parcel A Escrow, Escrow
Holder shall close the Parcel A Escrow as follows:
2.9.1 Record the Grant Deed (marked for return to CSU) with the Riverside County
Recorder;
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2.9.2 Obtain conformed copies of all instruments so recorded,bearing the County
Recorder's file marks, and deliver a copy of same to the attorneys for the Agency and CSU;
2.9.3 Issue the Title Policy, or cause the Title Company to issue the Title Policy, to
CSU, with CSU as the insured;
2.9.4 If applicable, prorate any taxes, assessments, rents, and other charges, if any, as of
the Close of the Parcel A Escrow, if and to the extent CSU shall be liable for payment thereof after the
Close of the Parcel A Escrow.
2.9.5 Charge CSU for those costs and expenses to be paid by CSU under the terms of
the Parcel A Escrow and disburse any net funds remaining after the preceding disbursements to CSU;
2.9.6 Prepare and deliver to both CSU and the Agency one signed copy of Escrow
Holder's closing statement showing all receipts and disbursements of the Parcel A Escrow; and
2.9.7 Deliver to CSU the FIRPTA Certificate and the Withholding Affidavit.
Section 2.10 Additional Provisions. The Agency and CSU may execute additional appropriate
escrow instructions if necessary as prepared by the Escrow Holder, which are consistent herewith. If
there is any inconsistency between the terms hereof and the terms of the additional escrow instructions,
the terms hereof shall control unless an intent to amend the terms hereof is expressly stated in such
instructions. Any amendment of these escrow instructions shall be in writing and signed by both the
Agency and CSU. At the time of any amendment, Escrow Holder shall agree to carry out its duties as
escrow holder under such amendment. Escrow Holder is instructed to send copies of notices, demands
and communications between the Agency and CSU to or from the Agency or to or from CSU, to both
parties to the addresses and in the manner established in Section 8.1 of this Agreement.
ARTICLE 3 OPTION TO PURCHASE PARCEL B.
Section 3.1 Grant of Option. The Agency hereby grants to CSU an option(the "Option") to
purchase Parcel B.
Section 3.2 Term. The term of the Option shall commence on the date hereof, and shall expire
on June 30, 2024.
Section 3.3 Option Price. The Purchase Price of the Parcel B property pursuant to the Option is
$0.00.
Section 3.4 Exercise of the Option in Phases. The Parties agree that it is impractical for CSU to
commit to commence construction of the entire campus upon the Close of first Parcel B Escrow.
Therefore, if CSU provides reasonably satisfactory evidence to the Agency of its intention and ability to
do so in phases, including evidence of its ability to ultimately complete the entire University Campus
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within the time frame set forth in Section 3.7.2 hereof, then the parcels comprising Parcel B shall be
conveyed in a phased fashion, with each parcel being conveyed to CSU, in a manner and program
mutually acceptable to the Agency and CSU, from time to time as CSU is ready and able to commence
construction of the Improvements on the applicable portion, as provided below.
Section 3.5 Use of Parcel B Pendin�Exercise of the Option. Pending the exercise of the Option,
CSU, the City, and the Agency shall enter a planning process to determine mutually compatible
temporary land uses to occur on Parcel B until such time as construction begins on the University
Campus. The Agency and CSU envision this planning process as a cooperative one which could result
in joint use facilities as well as the possibility of temporary income producing activities (which income
shall be retained by the Agency). The Agency shall have the right to temporarily lease or license Parcel
B, or to enter into concession agreements thereof, and such lessees, licenses, and concessionaires shall
have the right to construct improvements thereon, provided that such uses are reasonably compatible
with adjacent uses, and provided further, that the leases and licenses with respect to the applicable
parcels comprising Parcel B shall expire or be terminable by the date upon which the Agency and CSU,
pursuant to such planning process, anticipate that CSU shall require title to such parcel for the
development thereof. Moreover, the Agency shall have the right to construct any improvements thereon
for public purposes, subject to the review and recommendations of the Planning Committee and CSU. If
the Agency develops any temporary improvements on Parcel B or any portion thereof, then CSU shall
not be entitled to exercise this Option with respect to such portions without the Agency's prior written
consent until the later of(i) January 1, 2010, or(ii)the expiration of the period of time the Agency
intended to use such improvements for other public purposes, so as to allow the Agency a reasonable
time to use and benefit from any improvements constructed by the Agency on Parcel B,but no later than
the expiration of any lease, license, or concession agreement on such portion of Parcel B. If the
Agency's or the City's use, lease, license, or concession delays or causes CSU to be unable to meet the
deadlines hereof, then CSU shall not be held in breach by reason of such delay.
Section 3.6 Condition of Parcel B.
3.6.1 Prior to exercise of the Option, CSU shall have the right to enter onto Parcel B for
the purpose of inspecting and testing the soil, provided such entry is performed without unreasonable
interference with the then existing users of Parcel B or damage to any improvements thereon. CSU shall
indemnify, hold harmless, and defend the Agency against and hold the Agency and Parcel B harmless
from, all losses, costs, damages, liabilities, liens, and expenses, including, without limitation, reasonable
attorneys' fees, arising out of such entry and activities by CSU and its agents, employees, or contractors,
except to the extent any such losses, costs, damages, liabilities, and expenses arise out of the gross
negligence or willful acts of the Agency and/or the City.
3.6.2 If CSU exercises the Option, then the Agency shall convey to CSU each parcel
comprising Parcel B in an "as is" "where is" condition, without any warranty whatsoever to CSU as to
the condition of any portion of Parcel B, including whether Parcel B contains any Hazardous Materials.
By exercising the Option, CSU shall be deemed to have inspected Parcel B and CSU shall be deemed to
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have determined that the physical condition of Parcel B is suitable for CSU's purposes. CSU
acknowledges and agrees:
3.6.2.1 The Agency has made no representation or warranty with respect to
Parcel B except for those representations and warranties contained in this Agreement, and that
prior to the Close of the applicable Parcel B Escrow, the Agency will make no representations
and warranties with respect to Parcel B other than those contained in this Agreement.
3.6.2.2 CSU is purchasing Parcel B with the ultimate objective of demolishing
any existing improvements, using any improvements already in place, and/or constructing new
improvements thereon.
3.6.2.3 CSU's decision to purchase Parcel B will be based on the results of its
analysis and the reports it obtains prior to the exercise of the Option.
3.6.2.4 The Agency has made no representation or warranty as to the accuracy or
completeness of any reports and other materials prepared by any persons, and CSU is not relying
on the accuracy and completeness of any such reports and other materials prepared by persons
other than CSU, its agents, or contractors.
3.6.2.5 Except as specifically provided in this Agreement, the Agency has made
no representation ar warranty with respect to the use, fitness for a particular reason, zoning,
value, improvements, square footages or any other condition of Parcel B.
Except for the Agency's representations, warranties and covenants contained in this
Agreement, CSU is purchasing Parcel B in "AS-IS," "WHERE-IS" condition "WITH ALL FAULTS."
CSU agrees that the Agency has no obligation to remedy any faults, defects, or other adverse conditions
described in any report or other material obtained by CSU or delivered by the Agency to CSU, including
the remediation of any Hazardous Material on Parcel B.
Section 3.7 Conditions to Exercise the Option. CSU's right to exercise the Option, and the
Agency's obligation under this Agreement to transfer Parcel B, or any phase thereof, to CSU pursuant to
the Option shall be subject to the satisfaction or waiver of each of the following conditions:
3.7.1 CSU shall have purchased Parcel A, shall have constructed the Improvements as
described in the Master Plan, and shall be operating the Center therefrom. Notwithstanding anything
provided herein to the contrary, CSU may not exercise the Option for Parcel B until all the
Improvements to be constructed on Parcel A as specified in the Master Plan have been completed and
CSU is operating the Center from Parcel A.
3.7.2 CSU shall have forwarded to the Planning Committee its financial plan for
development and operation of the phase of Parcel B to be transferred, the Planning Committee shall have
recommended to the Agency Board its findings and conclusions that the financial plan reasonably
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provides for the development and operation of the Phase to be transferred, and the Agency Board shall
have agreed with such findings, which agreement shall not unreasonably be withheld and shall be made
in good faith.
3.7.3 The Agency and CSU shall have mutually agreed upon the sequence of phasing of
the transfer of the parcels comprising Parcel B as the University Campus develops and is built out.
3.7.4 The parcels comprising Parcel B shall have been subdivided by CSU into phases
that have been approved by the Agency, and such phasing plan shall have been incorporated into the
Master Plan.
3.7.5 CSU shall not otherwise be in default in its prior development commitments with
of the phases of Parcel B previously conveyed by the Agency to CSU, and shall not otherwise be in
default of a material provision hereof where the time period for curing such default shall have lapsed.
Section 3.8 Opening and Closin� of Parcel B Escrow. Within 10 days after CSU's delivery of its
notice of exercise of the Option, if all conditions to the valid exercise of the Option set forth in Section
3.7 have been satisfied, then the Agency and CSU shall cause an escrow (each, a "Parcel B Escrow") to
be opened with Escrow Holder for the transfer of the applicable phase of Parcel B by the Agency to
CSU. The Agency and CSU shall deposit with Escrow Holder a fully executed duplicate original of this
Agreement which shall serve as the escrow instructions for the Escrow. The Agency and CSU shall
provide such additional escrow instructions as shall be necessary and consistent with this Agreement.
Escrow Holder is authorized to act under this Agreement and to carry out its duties as Escrow Holder
hereunder. The Escrow concerning the applicable phase of Parcel B shall close (the "Close of the Parcel
B Escrow"), as soon as reasonably possible after the satisfaction of the conditions precedent for the
Close of the Parcel B Escrow (or such phase thereo fl,but, in any event, within 180 days after the
opening of such Escrow (unless an extension of such time is mutually agreed to by CSU and the
Agency). Any portion of Parcel B which is not conveyed pursuant to the foregoing provisions due to the
fact that all the conditions precedent described in Section 3.7 shall be continue to be subject to the
Option, which may be exercised with respect to such additional parcels when the conditions precedent to
exercising same have been satisfied.
Section 3.9 Condition of Title: Title Insurance.
3.9.1 Promptly following the execution of this Agreement by both Parties, and again
promptly following the opening of the Parcel B Escrow, the Agency shall order from
Title Company("Title Company"), or another title company mutually acceptable to the Agency and
CSU, for delivery to CSU and to the Agency, a preliminary report for a CLTA Owner's Standard
Coverage Policy of Title Insurance for Parcel B, setting forth all liens, encumbrances, easements,
restrictions, conditions, pending litigation,judgments, administrative proceedings, and other matters
affecting the Agency's title to Parcel B, together with copies of all documents relating to title exceptions
referred to in the preliminary report (collectively, the "Parcel B Preliminary Report"). CSU shall
approve or disapprove each exception shown on the Parcel B Preliminary Report within 55 calendar
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days following the receipt of the Parcel B Preliminary Report. Notwithstanding the foregoing, the
Agency shall be under no obligation to remove any encumbrance to title, but the Agency agrees to
cooperate in good faith with CSU in CSU's efforts to eliminate any encumbrance to title, provided the
Agency shall not be obligated to pay any sums to the holders of such encumbrances to obtain the release
thereof.
3.9.2 The Agency shall provide to CSU an ALTA survey of Parcel B ("Survey") and
the accompanying preliminary title report, as soon as available to the Agency, but no later than 20 days
after execution of this Agreement. Subject to the terms of Section 3.9.1 above, CSU shall approve or
disapprove each encroachment, overlap, or boundary line dispute, or any other matter that materially and
adversely affects title to Parcel B or that violates any law, rule, or regulation reflected on the Survey
(each an "Exception") within 55 calendar days after the Opening of the Parcel B Escrow. Any such
Exception that CSU disapproves is termed a "Disapproved Exception."
If CSU is unable to obtain a discharge, satisfaction, release, or termination of a
Disapproved Exception, or if the Agency does not elect to do so, then CSU shall have the right within 60
days of the Opening of the Parcel B Escrow to:
3.9.2.1 waive the Disapproved Exception and proceed with Closing the Parcel B
Escrow, accepting title to Parcel B subject to the Disapproved Exception, or
3.9.2.2 rescind its exercise of the Option and terminate the Parcel B Escrow, in
which event both CSU and the Agency shall be relieved of all further obligation and liability to
each other under the Option, and all the funds and documents deposited with Escrow Holder
shall be promptly refunded or returned, as the case may be, by Escrow Holder to the depositing
party, less any reasonable escrow cancellation fees; or
3.9.2.3 ask Agency for an extension of time to do further investigation prior to
making a decision, which extension shall not be unreasonably denied by the Agency.
3.9.3 At the Close of the Parcel B Escrow, or the applicable phase thereof, the Agency
shall convey title in fee simple to Parcel B (or the applicable phase thereo fl to CSU by grant deed. Title
to Parcel B (or the applicable phase thereofl shall be conveyed subject to (i) all title exceptions affecting
Parcel B (or the applicable phase thereo� shown on the Preliminary Title Report for Parcel B approved
by CSU, (ii) the covenants, conditions and restrictions benefitting and burdening Parcel B (or the
applicable phase thereo fl as described in this Agreement, and(iii) any other matters which arise out of
the actions of CSU or its agents and representatives ("Parcel B Permitted Exceptions"), but including all
water, mineral, oil, gas, and geothermal rights to said parcel, including the right to extract the same held
by the Agency, if any. CSU agrees to approve or disapprove any title exceptions within 55 calendar
days after receipt of the preliminary title report and all documents noted as exceptions thereof
subsequent to the opening of the Parcel B Escrow. The Agency shall use reasonable efforts to cause any
disapproved exceptions to be removed by the Close of the Parcel B Escrow (so long as such exception
may be removed without the Agency being obligated to pay any sums to the holder thereo�, provided
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same may be removed without any payment by the Agency to the holder of the encumbrance so
disapproved, but if the Agency is unable to remove any disapproved title exceptions, then the Agency
shall not be in breach hereof but CSU shall have the right to terminate this Agreement.
3.9.4 At the Close of the Parcel B Escrow, or the applicable phase thereof, CSU may, at
CSU's sole cost and expense, purchase a ALTA Owner's Standard Policy of Title Insurance, issued by
the Title Company, in favor of CSU, insuring that title is vested in CSU free and clear of all liens,
easements, covenants, conditions, restrictions, and other encumbrances of record, other than the Parcel B
Permitted Exceptions. CSU may obtain one or more extended coverage policies of title insurance or
special endorsements at its own cost.
Section 3.10 Parcel B Escrow Char�es. CSU shall pay (i) all recording fees, documentary and
local transfer taxes, if any are legally required to be paid by CSU, and (ii) all Parcel B Escrow charges.
Section 3.11 Conditions to Close of the Parcel B Escrow. The obligations of the Agency and
CSU under this Agreement to close the Parcel B Escrow, with respect to any phase thereof, shall be
subject to the satisfaction or waiver of each of the following conditions:
3.11.1 The representations and warranties of the Agency and CSU contained in this
Agreement shall be true and correct as of the Close of the Parcel B Escrow (or the applicable phase
thereo fl.
3.11.2 The Agency shall have delivered all documents required to be delivered by the
Agency pursuant to Section 3.12 hereof.
3.11.3 The Title Company shall have issued a commitment to issue a policy of title
insurance as required on the Close of the Parcel B Escrow in Section 3.9.
Section 3.12 Deposits into Parcel B Escrow. The Agency agrees to deliver to Escrow Holder
prior to the Close of the Parcel B Escrow, or the applicable phase thereof, the following instruments and
documents, the delivery of each of which shall be a condition of the Close of the Parcel B Escrow, or
such phase thereo£
3.12.1 A Grant Deed, duly executed and acknowledged by the Agency, conveying a fee
simple interest in the applicable phase of Parcel B to CSU. Said Grant Deed shall be in the form
attached hereto as Exhibit B;
3.12.2 The Agency's affidavit as contemplated by California Revenue and Taxation Code
§18662 ("Withholding Affidavit")(or any successor thereto);
3.12.3 A Certification of Non-Foreign Status in accordance with I.R.C. Section 1445 (the
"FIRPTA Certificate") (or any successor thereto); and
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3.12.4 Such proof of the Agency's authority and authorization to enter into this
transaction as the Title Company may reasonably require in order to issue CSU's policy of title
insurance.
Section 3.13 Parcel B Escrow's Closin�Actions. On the Close of the Parcel B Escrow, or the
applicable phase thereof, Escrow Holder shall close the Parcel B Escrow as follows:
3.13.1 Record the Grant Deed(marked for return to CSU)with the Riverside County
Recorder;
3.13.2 Issue the Title Policy or cause the Title Company to issue the Title Policy;
3.13.3 If applicable, prorate taxes, assessments, rents, and other charges, if any, as of the
Close of the Parcel B Escrow, if and to the extent CSU shall be liable for payment thereof after the Close
of the Parcel B Escrow.
3.13.4 Charge CSU for those costs and expenses to be paid by CSU under the terms of
the Parcel B Escrow and disburse any net funds remaining after the preceding disbursements to CSU.
3.13.5 Prepare and deliver to both CSU and the Agency one signed copy of Escrow
Holder's closing statement showing all receipts and disbursements of the Parcel B Escrow; and
3.13.6 Deliver to CSU the FIRPTA Certificate and the Withholding Affidavit.
Section 3.14 Additional Instructions. The Agency and CSU shall execute additional appropriate
escrow instructions, prepared by the Escrow Holder, which are consistent herewith. If there is any
inconsistency between the terms hereof and the terms of the additional escrow instructions, the terms
hereof shall control unless an intent to amend the terms hereof is expressly stated in such instructions.
Any amendment of these escrow instructions shall be in writing and signed by both the Agency and
CSU. At the time of any amendment, Escrow Holder shall agree to carry out its duties as escrow holder
under such amendment. Escrow Holder is instructed to send copies of notices, demands and
communications between the Agency and CSU to or from the Agency or to or from CSU, to both parties
to the addresses and in the manner established in Section 8.1 of this Agreement.
ARTICLE 4 USE, MAINTENANCE,AND NON-DISCRIMINATION OBLIGATIONS.
Section 4.1 Use of Property. CSU agrees that it shall use Parcel A only for operation of the
Center or as part of the University Campus (if it should be built), and, if it exercises the Option, it shall,
until expiration of the Agency's reversionary rights set forth in Section 4.5, use both Parcel A and Parcel
B only for operation of the University Campus, and for no other purpose whatsoever, except as provided
herein, and in all cases consistent with the Master Plan. Notwithstanding the foregoing, without the
Agency's consent, CSU may lease or license (for terms of not to exceed 20 years, including options) the
operation of retail, commercial, restaurant and service uses that are incidental to and directly supportive
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of the operation of the Center or the University Campus, as applicable, and to the extent that are
customarily associated with similar university campuses; and provided that the total area of all
"Permitted Commercial Uses" (as defined in the Master Plan) shall not be inconsistent with the area for
Permitted Commercial Uses set forth in the Master Plan.
Section 4.2 Name. CSU agrees (i) that the words "Palm Desert" shall be included, in perpetuity,
in the name of the Center, and (ii) if the University Campus shall be built, that the name of the
University Campus shall be "California State University, Palm Desert," unless the City and CSU
negotiate a mutually agreeable alternative.
Section 4.3 A encv's Reversion Ri�hts With Respect to Unimproved Portions of Parcel A.
4.31 Between the date hereof and June 30, 2000, the Agency and CSU shall revise the
Master Plan to divide Parcel A into 3 discrete parcels of land for a phased development(although all of
Parcel A shall be conveyed as one parcel). CSU shall begin construction of the Center within 3 years
after the date hereof, and shall complete construction of the Center and open it for operation in
accordance with the following schedule: (i)the first building in the Center as described in the Master
Plan shall be commenced within 3 years after the date hereof open and operating within 5 years after the
date hereof, (ii) the second building in the Center as described in the Master Plan shall be commenced
within 5 years after the date hereof and shall be open and operating within 7 years after the date hereof,
and(iii) the third building in the Center as described in the Master Plan shall be commenced within 7
years after the date hereof and shall be open and operating within 9 years after the date hereof, unless
such time periods are extended by the mutual agreement of the Agency and CSU. Such dates may be
extended with the mutual approval of the Agency and CSU, which approval shall not unreasonably be
withheld.
4.3.2 If CSU does not commence or complete construction by such dates, then, at the
option of the Agency, the phase of Parcel A for which construction has not then commenced or been
completed shall, at the option of the Agency, shall be subject to reversion to the Agency following 180
days' notice to CSU and if CSU does not cure such default prior to the end of such 180 day period, then
this Agreement (including the Option) shall terminate and be of no further force or effect, the designated
unimproved phase of Parcel A shall revert to the Agency, free and clear of any and all liens and
encumbrances that may have been create by or with the approval of CSU, other than utility easements
and reasonable access easements, and this Agreement(including the Option, to the extent applicable to
phases of Parcel B for which the Option has not theretofore been exercised) shall terminate and be of no
further force or effect, and the Agency will be free to use or dispose of such unimproved parcel. In such
event, CSU shall execute a grant deed to the Agency conveying fee title to such land, free and clear of
all liens and encumbrances created or permitted by CSU other than utility easements and reasonable
access easements. The Agency agrees that any reversionary rights hereunder shall be subordinate and
inferior to any other than utility easements and reasonable access easements.
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Section 4.4 A encv's Reversion Ri�hts With Respect to Unimproved Portions of Parcel B. If
CSU exercises the Option, then CSU shall begin construction of the improvements constituting the
improvements on each phase conveyed to CSU within 18 months after recording of the Grant Deed
regarding the applicable phase of Parcel B, and complete construction within 36 months after the
conveyance of the applicable parcel (unless such time period is extended by the mutual agreement of the
Agency and CSU). If CSU does not commence construction within such 18-month period, or complete
construction within such 36 month period, then, at the option of the Agency, the parcel so conveyed
shall be subject to reversion to the Agency following 180 days' notice to CSU, and if CSU does not cure
such default prior to the end of such 180 day period, then such phase of Parcel B shall revert to the
Agency, free and clear of any and all liens and encumbrances that may have been create by or with the
approval of CSU(other than utility easements and reasonable access easements), and this Agreement
(including the Option, to the extent applicable to phases of Parcel B for which the Option has not
theretofore been exercised) shall terminate and be of no further force or effect, and the Agency will be
free to use or dispose of the portion of the Site still owned by the Agency, and the unimproved parcels of
Parcel A and Parcel B owned by CSU. In such event, CSU shall execute a grant deed to the Agency
conveying fee title to such land, free and clear of all liens and encumbrances created or permitted by
CSU. The Agency agrees that any reversionary rights hereunder shall be subordinate and inferior to any
utility easements and reasonable access easements.
Section 4.5 A�enc, 'y s Rights With Respect to a Chan�e of Use. If after the conveyance of any
portion of the Site transferred by the Agency to CSU(i) is determined by the parties, reasonably and in
good faith, to be unnecessary for CSU's campus, or(ii) is not primarily used by CSU as a part of a
public institution of higher education operated by CSU, whether or not such portion of the Site is
improved by CSU, then, the Agency shall send to CSU written notice of such determination and CSU
shall have 12 months after receipt of such notice to commence to use such portion of the Site as a part of
a public institution of higher education operated by CSU. If prior to the expiration of such 12 month
period CSU has not commenced to use such portion of the Site as a part of a public institution of higher
education operated by CSU, then fee title to such portion of the Site shall revert to the Agency. In such
event, CSU shall execute a grant deed to the Agency conveying fee title to such land, free and clear of
all liens and encumbrances created or permitted by CSU, other than utility easements and emergency
access easements. Such reversion rights may be waived by the Agency at any time in the Agency's sole
and absolute discretion. Notwithstanding the foregoing, however, the reversionary provisions of this
Section 4.5 shall terminate as to any phase of Parcel A and/or Parcel B on the date that is 55 years after
the date the buildings thereon were finished and substantially complete. Each party agree to
memorialized such expiration date at the written request of the other party.
Section 4.6 Restriction on CSU's Transfer of the Site and Rights and Obli�ations Under this
A�reement. CSU shall not, at any time, convey, sell, encumber, hypothecate, lease or otherwise transfer
(collectively, "Transfer")the Site or any portion thereof, or this Agreement, or any interest therein,
without the prior written consent of the Agency, which consent may or may not be given in the sole and
absolute discretion of the Agency, except as provided in Section 4.1. Notwithstanding the foregoing,
this provision shall expire as to any developed portion of the Site upon the expiration of any
reversionary rights set forth in Section 4.5.
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Section 4.7 Obligation to Refrain from Discrimination. CSU covenants and agrees for itself and
its successors and assigns, and for every successor in interest to the Site, or any part thereof, and to its
rights under this Agreement, that there shall be no discrimination against or segregation of any person,
or group of persons, on account of sex, marital status, age, handicap, race, color, religion, creed, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site,
and CSU (itself or any person claiming under or through CSU) shall not 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, subtenants, subleases, or vendors of the Site or any portion thereof.
Section 4.8 Form of Nondiscrimination and Non-Se�re�ation Clauses. CSU shall refrain from
restricting the rental, sale or lease of the Site or any portion thereof, on the basis of sex, age, handicap,
marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or
contracts shall contain or be subject to substantially the following nondiscrimination or non-segregation
clauses:
1. In deeds: "The grantee herein covenants by and for himself, his 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 sex, marital
status, race, age, handicaps color,religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land herein conveyed,nor shall the grantee himself
or any person claiming under or through him, 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, subtenants, subleases or vendors in the land herein conveyed. The foregoing covenants
shall run with the land."
2. In leases: "The lessee herein covenants by and for himself,his heirs, executors,
administrators and assigns, and all persons claiming under or through him, 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 sex, marital status, race, age, handicap, color, religion, creed, national origin or ancestry, in
the leasing, subleasing, transferring, use, or enjoyment of the land herein leased, nor shall the lessee
himself, or any person claiming under or through him, 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 land herein leased."
3. In contracts relating to the sale or transfer of the Site, or any interest therein: "There shall
be no discrimination against or segregation of any person or group of persons on account of sex, marital
status, race, age, handicap, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person
claiming under or through him, 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,
subtenants, sublessees or vendees of the land."
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Section 4.9 Restrictive Covenants. CSU agrees that the covenants and agreements set forth in
the above Sections 4.1 through 4.8 shall burden all portions of the Site and shall run with the land for the
benefit of the Agency and its successors and assigns, and that the same shall remain in effect in
perpetuity unless stated otherwise within the specific terms set out above. The Agency and its
successors-in-interest may obtain by appropriate legal action specific performance of these covenants
and restrictions and injunctive relief prohibiting the breach of such covenants and restrictions. The
Grant Deed regarding Parcel A shall set forth the restrictive covenant on Parcel A as required by Section
2.8, above, restricting and burdening Parcel A, as set forth in this Article. If CSU exercises the Option
to purchase Parcel B, then a similar restrictive covenant restricting and burdening Parcel B shall be
recorded in the Grant Deed for Parcel B. Both such restrictive covenants shall be in a form and in
substance that shall be subject to the approval of CSU and the Agency's Executive Director; shall
provide that the restrictive covenants shall remain in effect in perpetuity(unless stated otherwise within
the specific terms set out above); and shall provide that the restrictive covenant shall be enfarceable by
the Agency and its successors-in-interest by appropriate legal action for specific performance of their
covenants and restrictions and for injunctive relief prohibiting the breach of their covenants and
restrictions.
Section 4.10 A�encv's Use Restrictions on Parcel A and Parcel B. The Agency agrees that from
the date hereof until the date CSU closes the Parcel B Escrow(or any phase thereof, as applicable), the
Agency shall use and maintain Parcel B (or the phase thereof still owned by the Agency) in a manner
consistent with the uses specified therefor in the Master Plan. To that end, the Agency shall not institute
any use on Parcel B that would interfere with CSU's prospective use of Parcel A as the Center or Parcels
A and B for the University Campus. The Agency's obligation in this respect may include the Agency's
good faith cooperation with the City and CSU in the potential development of a city park adjacent to the
Center on the northwest corner of the Site, as contemplated and further set forth in the Master Plan.
Notwithstanding the foregoing, however, the foregoing obligation shall terminate upon CSU's decision
not to build the University Campus on the Site or CSU's release of the Option.
ARTICLE 5 DEVELOPMENT OF THE PROJECT.
Section 5.1 Feasibilitv Studv. Within 180 days of the beginning of construction of the third
phase of Parcel A as set forth in the Master Plan, CSU shall initiate a feasibility study that shall include a
timetable for the growth and development of the Site, including the transition from the off-campus
Center to a full-service independent California State University Campus with an estimated ultimate size
of 25,000 full time equivalent students (FTE). If CSU determines as a result of the feasibility study that
it shall not develop a full-service independent California State University Campus, it shall notify the
Agency of such determination, and then the Agency shall have the option to terminate the Option.
Section 5.2 Development of the Center. CSU shall develop, or cause to be developed, the Center
on Parcel A, in accordance with the Master Plan, the Schedule of Performance, and any and all federal,
state and local laws, rules and regulations (to the extent applicable to CSU) in connection with such
construction, and all terms, conditions and requirements of this Agreement.
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Section 5.3 Division into Phases. Parcel A and Parcel B shall be divided into discrete parcels
for development in phases. CSU shall subdivide Parcel A and Parcel B into such design corresponding
to CSU's ultimate development plan therefor, which development plan and subdivision plan shall be
subject to the Planning Committee's approval. The division of Parcel A shall be completed by June 30,
2000.
Section 5.4 Development of the Universitv Campus. If CSU exercises the Option, then CSU
shall develop, or cause to be developed, the University Campus on the entire Site (including Parcel A
and Parcel B), in accordance with the Master Plan, the Schedule of Performance, and any and all federal,
state and local laws, rules and regulations (to the extent applicable to CSU) in connection with such
construction, and all terms, conditions and requirements of this Agreement.
Section 5.5 Universitv Development Plannin� Committee. CSU shall establish the University
Development Planning Committee (the "Planning Committee") whose charge will be to review all
interim and permanent development proposed for Parcel A and/or Parcel B, advising and recommending
action to the President of California State University, San Bernardino, regarding land owned by the State
and/or regarding land owned by the Agency. It will be the Planning Committee's responsibility to
shepherd proposed construction and site development plans through appropriate City and University
review processes for comment and consultation. The Planning Committee will review proposed
developments prior to its submission to higher authority for final action. The Committee shall also
review and comment upon proposed revisions to the Master Plan(Exhibit B). In no case shall it forward
plans with a positive recommendation without a 2/3 (six [6] members voting affirmatively) vote in favor
of the subject.
The Planning Committee will be composed of nine (9)members. Four(4)will be identified by
the Mayor of Palm Desert. Four(4)will be identified by the President of California State University,
San Bernardino. The Mayor and the President will jointly identify the ninth member, who will be the
Chair. The President shall formally appoint the Committee.
Section 5.6 Subdivision. CSU shall undertake to develop the plans and engineering work
necessary to subdivide Parcel B into such phases as is reasonable and practical, necessary to develop the
Center and the University Campus, respectively, on Parcel A and Parcel B. This shall not mean that
CSU is required to comply with the Subdivision Map Act. The development of the phases shall be
subject to the review, comment and recommendation, of the Planning Committee.
Section 5.7 Amendment of Master Plan. CSU shall not adopt any modifications or amendments
to the Master Plan without first obtaining the City's prior written approval to such modifications or
amendments.
Section 5.8 Air Emissions. CSU understands it is subject to the applicable jurisdiction of the
South Coast Air Quality Management District (SCAQMD) and will work with same to minimize its
impact upon the air quality of the Coachella Valley region. CSU intends to maintain its leadership
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position in reducing air emissions of noxious gases and other air pollutants. CSU is committed to
mitigation measures related to regional and project impacts upon air quality.
Section 5.9 Compliance bv Contractors. CSU shall require contractors to take appropriate
measures necessary to reduce construction related impacts upon local traffic, air quality and noise.
Section 5.10 Erosion Control. CSU shall implement erosion control measures to protect against
the impacts of construction and project generated urban runoff.
Section 5.11 Safetv. CSU shall coordinate campus development with local law enforcement and
fire protection agencies, and establish a campus office of public safety as the University Campus
develops. Once established, the office would enter into mutual aid agreements with appropriate local
agencies, as required by law.
Section 5.12 Communitv. CSU shall work with the City and the Agency, and other local
agencies, to develop programs for reducing impacts of campus development with respect to housing, air
quality, traffic,public services and noise. CSU shall coordinate initial Center and University Campus
development with local school districts, community colleges, and other public independent colleges and
universities in the region. CSU shall coordinate toxic materials disposal plans and procedures with any
necessary agencies. CSU shall coordinate campus efforts with the community concerning alternative
powered vehicle use and ride sharing programs.
Section 5.13 Cost of Construction. The cost of constructing the Project, including the costs for
developing and constructing the Improvements thereon, and the cost of all infrastructure, shall be the
sole responsibility of CSU.
Section 5.14 Local. State and Federal Laws. CSU shall carry out the construction of the
Improvements on the Site in conformity with all laws applicable to CSU, including all applicable federal
and state occupation, safety and health standards, including prevailing wage laws and public bidding
requirements.
Section 5.15 Anti-discrimination During Construction. CSU, for itself and its successors and
assigns, agrees that it shall not discriminate against any employee or applicant for employment because
of age, sex, marital status, race,handicap, color, religion, creed, ancestry, or national origin in the
construction of the Improvements, as required by law.
Section 5.16 Taxes, Assessments, Encumbrances and Liens. CSU shall pay when due, when
legally obligated to do so, all real property taxes and assessments, if any, assessed or levied on portions
of the Site from time to time owned by CSU.
Section 5.17 No A�encv Created. In performing this Agreement, CSU not the agent of the
Agency or the City. The Agency and the City are not agents of CSU. Neither the Agency nor the City
shall have any responsibility whatsoever for payment to any contractor or supplier of CSU. CSU shall
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not have any responsibility whatsoever for payment to any contractor or supplier of the Agency or the
City.
ARTICLE 6 EVENTS OF DEFAULT, REMEDIES AND TERMINATION.
Section 6.1 Defaults--Definition.
Occurrence of any or all of the following breaches shall constitute a default ("Event of
Default") under this Agreement:
6.1.1 A breach of any material term of this Agreement by any Party not involving the
payment of money, and failure of such Party to cure such breach within the time period stated, or
if no cure period is stated, then within thirty(30) days after the non-defaulting Party has given
notice to the defaulting Party; provided,however, if such breach is not reasonably curable within
such thirty (30) day period, then such Party shall be deemed in Default only if such Party does
not commence to cure such breach within such thirty (30) day period and thereafter fails to
diligently pursue a cure of such breach to completion;
6.1.2 CSU's abandonment or suspension of construction of the Improvements on any
Parcel (or any phase thereo� for a period of ninety (90) days after written notice of such
abandonment or suspension from the Agency, and CSU's failure to cure such default within such
90 day period, unless such suspension is due to Force Majeure (as provided in Section 8.3,
below);
6.1.3 The Agency's failure or refusal to provide any requested approvals without
good faith, legitimate reason which causes CSU to be deemed in breach of this Agreement or
default or threat thereof;
6.1.4 The Agency's use of Parcel B in a manner that adversely affects CSU's use or
development of Parcel A or Parcel B in a material manner;
6.1.5 Any breach of this Agreement by any Party involving the payment of money, and
the continuance of such breach for a period of thirty (30) days after the non-defaulting Party has
given written notice to the defaulting Party, as specified in Section 8.1.
6.1.6 CSU's Transfer(as defined in Section 4.6), or the occurrence of any involuntary
Transfer, of the Site or any part thereof or interest therein, or any rights or obligations of CSU
under this Agreement, in violation of this Agreement (including, without limitation, Section 4.6);
It is specifically acknowledged that any breach by the City, the Agency or CSU, of any other agreement
between CSU and the Agency or the City, shall be a breach hereof and of each other agreement between
CSU and the Agency or the City, and any breach hereof shall be a breach by CSU, the Agency or the
City, as applicable, of each other agreement between CSU and the Agency or the City.
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Section 6.2 Remedies in the Event of Default. In the event of a Default by any Party, the non-
defaulting Party shall have the right to terminate this Agreement (including the Option)by delivering
written notice thereof to the defaulting Party and to Escrow Holder, subject to the rights of the defaulting
Party to cure such Default as provided in Section 6.1. Such Party may also seek against the defaulting
Party any available remedies at law or equity, including but not limited to, the right to receive damages
or to pursue an action for specific performance.
Section 6.3 No Personal Liabilitv. No representative, agent, attorney, consultant, or employee of
the Agency shall personally be liable to CSU or any successor in interest of CSU, in the event of any
Default or breach by the Agency, or for any amount which may become due to CSU or any successor in
interest, on any obligation under the terms of this Agreement. No representative, agent, attorney,
consultant, or employee of CSU shall personally be liable to the Agency or any successor in interest of
the Agency, in the event of any Default or breach by CSU, or for any amount which may become due to
the Agency or any successor in interest, on any obligation under the terms of this Agreement.
Section 6.4 Ri�hts and Remedies are Cumulative. The rights and remedies of the parties are
cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude
the exercise by it, at the same time or different times, of any other rights or remedies for the same default
or any other default by the non-defaulting Party.
Section 6.5 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 rights to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. The
acceptance by a Party of less than the full performance from the other Party shall not constitute a waiver
of such Party's right to demand and receive the full amount due, unless such Party executes a specific
accord and satisfaction.
ARTICLE 7 INDEMNITY.
Section 7.1 Indemnitv. From and after the date of recordation of a grant deed to CSU with
respect any portion of the Site, CSU shall indemnify, defend, protect, and hold harmless the Agency and
the City, and their agents, employees, attorneys, and representatives, from and against all losses,
liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs
and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to,
or arising out of or in connection with:
(i) the development of the Improvements on such portion of the Site ar the use,
ownership, management, occupancy, or possession of such portion of the Site,
(ii) any of CSU's activities on such portion of the Site (or the activities of CSU
agents, employees, lessees, representatives, licensees, guests, invitees, contractors,
subcontractors, or independent contractors on such portion of the Site),
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except to the extent such losses or liabilities are caused by the negligence or conduct of the Agency or
the City or its agents or contractors. CSU shall defend, at CSU's expense, including attorneys' fees and
costs, the Agency and the City, and the Agency's and the City's council members, board members,
officers, employees, agents, attorneys, and consultants, in any legal action or threatened legal action
(including arbitrations and mediations)based upon such alleged acts or omissions. The Agency and the
City may in their discretion participate in the defense of any such legal action.
Section 72 A e�ncv's Indemnity. The Agency shall indemnify, defend,protect, and hold
harmless CSU, and its agents, employees, attorneys, and representatives, from and against all losses,
liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs
and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to,
or arising out of or in connection with any portion of the Site with respect to matters occurring on such
portion of the Site prior to the recordation of the grant deed by the Agency, except to the extent such
losses or liabilities are caused by the negligence or conduct of CSU or its agents or contractors. The
Agency shall defend at the Agency's expense, including atforneys' fees and costs, CSU and CSU's board
members, officers, employees, agents, attorneys, and consultants, in any legal action or threatened legal
action(including arbitrations and mediations)based upon such alleged negligence. CSU may in its
discretion participate in the defense of any such legal action.
ARTICLE 8 GENERAL PROVISIONS.
Section 8.1 Notices. All notices and demands shall be given in writing by certified mail,
postage prepaid, and return receipt requested, or by personal delivery. Notices shall be considered given
upon the earlier of(a) personal delivery or(b) 2 business days following after deposit or delivery shown
on the return receipt in the United States mail,postage prepaid, certified or registered,return receipt
requested. A copy of all notices shall be sent to Escrow Holder. Notices shall be addressed as provided
below for the respective Party; provided that if any Party gives notice in writing of a change of name or
address, notices to such Party shall thereafter be given as demanded in that notice:
The Agency: Mr. Carlos L. Ortega
Executive Director
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
(Telephone: 760-346-0611)
(Facsimile: 760-341-6372)
with a copy to: Richards, Watson& Gershon
A Professional Corporation
333 South Hope Street, 38th Floor
Los Angeles, California 90071
Attention: Jeffrey A. Rabin and William L. Strausz
(Telephone: 213-626-8484)
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(Facsimile: 213-626-0078)
CSU: Mr. David DeMauro
Vice President for Administration and Finance
California State University, San Bernardino
5500 University Parkway
San Bernardino, California 92407
(Telephone: 909-880-5130)
(Facsimile: 909-880-7032)
With a copy to: Ms. Elisabeth Sheh Walter
University Counsel
Office of General Counsel
The California State University
401 Golden Shore, 4`''Floor
Long Beach, California 90802-4275
(Telephone: 562-985-2873)
(Facsimile: 562-985-2925)
Section 8.2 Construction. The Parties agree that each Party and its counsel have reviewed and
revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or
exhibits thereto. This Agreement shall be construed as a whole according to its fair language and
common meaning to achieve the objectives and purposes of the Parties.
Section 83 Force Majeure. Notwithstanding anything to the contrary in this Agreement, CSU's
unexcused material failure to complete the Improvements required to be completed according to this
Agreement, the Schedule of Performance and/or the Master Plan shall be a breach hereof,provided,
however, nonperformance shall be excused when performance is prevented or delayed by reason of any
of the following forces reasonably beyond the control of such party: (i)war, insurrection, riot, flood,
severe weather, earthquake, fire, casualty, acts of public enemy, governmental restriction, litigation, acts
or failures to act of any governmental agency or entity, including the Agency, or(ii) inability to secure
necessary labor, materials or tools, strikes, lockouts, delays of any contractor, subcontractor or supplier.
In the event of an occurrence described in clauses (ii) and (ii) above, such nonperformance shall be
excused and the time of performance shall be extended by the number of days the matters described in
clauses (i) and (ii) above prevent or delay performance.
Section 8.4 Inter�retation. In this Agreement the neuter gender includes the feminine and
masculine, and singular number includes the plural, and the words "person" and "party" include
corporation,partnership, firm, trust, or association wherever the context so requires.
Section 8.5 Time of the Essence. Time is of the essence of this Agreement.
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Section 8.6 Warranty Against Payment of Consideration for A�reement. CSU, the Agency and
the City, warrant that they have not paid or given, and will not pay or give, to any third person, any
money or other consideration for obtaining this Agreement, other than normal costs of conducting
business and costs of professional services such as architects, engineers and attorneys.
Section 8.7 Entire Agreement, Waivers and Amendments. The Agreement may be executed in
duplicate originals. Escrow Holder may accept escrow instructions in counterparts. This Agreement,
together with all attachments and exhibits hereto, and all agreements executed pursuant hereto,
constitutes the entire understanding and agreement of the Parties. This Agreement integrates all of the
terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous
agreements between the Parties with respect to the subject matter hereof. No subsequent agreement,
representation or promise made by either Party hereto, or by or to any employee, officer, agent or
representative of either Party, shall be of any effect unless it is in writing and executed by the Party to be
bound thereby. No person is authorized to make, and by execution hereof CSU and the Agency
acknowledge that no person has made, any representation,warranty, guaranty or promise except as set
forth herein; and no agreement, statement,representation or promise made by any such person which is
not contained herein shall be valid or binding on CSU or the Agency.
Section 8.8 Severabilitv. Each and every provision of this Agreement is, and shall be construed
to be, a separate and independent covenant and agreement. If any term or provision of this Agreement
or the application thereof shall to any extent be held to be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to circumstances other than those to which it is
invalid or unenforceable, shall not be affected hereby, and each term and provision of this Agreement
shall be valid and shall be enforced to the extent permitted by law.
Section 8.9 Headin�s. All section headings and subheadings are inserted for convenience only
and shall have no effect on the construction or interpretation of this Agreement. The references in this
agreement to "Section" shall refer to the sections of this Agreement unless it is clear from the context
that another meaning is intended.
Section 8.10 No Third Partv Beneficiaries other than the Citv. The City shall be a named third
party beneficiary of this Agreement. This Agreement is made and entered into for the sole protection
and benefit of the Agency and CSU, the City and their successors and assigns. No other person shall
have any right of action based upon any provision of this Agreement.
Section 8.11 Governing Law; Jurisdiction: Service of Process. This Agreement and the rights of
the Parties shall be governed by California law. The Parties consent to the exclusive jurisdiction of the
California Superior Court for the County of Riverside. If any legal action is commenced by CSU
against the Agency, or by Agency against CSU, service of process on the Agency shall be made by
personal service upon the executive director or secretary of the Agency, or in such other manner as may
be provided by law. If any legal action is commenced by Agency against CSU, service of process on
CSU shall be made by personal service on the President of the Board of Trustees of CSU, or in such
other manner as may be provided by law. CSU agrees, for the benefit of the Agency, that it shall
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designate an agent for service of process in the State of California in the manner prescribed by law, and
if it fails to do so, the State Attorney General of the State of California is designated as agent for CSU,
with full authority to receive such service of process on its behalf, which designation and authorization
shall survive the Close of Escrow and be irrevocable.
Section 8.12 Survival. The provisions hereof shall not terminate but rather shall survive any
conveyance hereunder and the delivery of all consideration.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the
day and year first above written.
"CSU": "The Agency":
THE TRUSTEES OF THE CALIFORNIA PALM DESERT REDEVELOPMENT
STATE UNIVERSITY AGENCY, a public body, corparate and politic
By:
Chairperson
By:
ATTEST:
By: Secretary
LIST OF EXHIBITS
Exhibit A -- Legal Description
Exhibit B -- Grant Deed
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EXHIBIT A
LEGAL DESCRIPTION
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EXHIBIT B
SCHEDULE OF PERFORMANCE
1 Agency approval of the Agreement June 24, 1999
2 Completion of phasing of Parcel A June 30, 2000
3 Commencement of construction of first building on June 24, 2002
Parcel A
4 Completion of construction of first building on Parcel A June 24, 2004
5 Commencement of construction of second building on June 24, 2004
Parcel A
6 Completion of construction of second building on June 24, 2006
Parcel A
7 Commencement of construction of second building on June 24, 2004
Parcel A
8 Completion of construction of third building on Parcel A June 24, 2008
9 Expiration of Option to purchase Parcel B June 30, 2024
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EXHIBIT C
Master Plan
Parcel A: The Center
An off-campus permanent facility with a FTES of 735, of approximately 78,000 square feet in
accordance with the plans set forth in the Master Plan, the terms and provisions of which are
incorporated herein by this reference.
Parcel B: The University Campus
A fully independent CSU campus, . . . . [to be completed]
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EXHIBIT D
FORM OF GRANT DEED
[THIS SHALL BE MODIFIED TO CONFORM TO FINAL DRAFT OF THE DDA]
Recording Requested by:
Palm Desert Redevelopment Agency
And when recorded return to
and mail tax statements to:
Assessor's Parcel Map No.:
Exempt from Recording Fees Pursuant to G.C. 6103
GRANT DEED
The undersigned grantor(s) declare(s):
Documentary transfer tax is $
FOR A VALUABLE CONSIDERATION,receipt of which is hereby acknowledged,
PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic
hereby GRANTS to
THE TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY
the following described real property, including all water, oil, mineral, gas, and geothermal rights, and
including the right to extract the same from said real property, if and to the extent any such rights are
held by the Grantor(collectively, the "Property") located in the City of Palm Desert, County of
Riverside, State of California:
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See Exhibit A attached hereto and incorporated herein by reference.
SUBJECT TO, all easements, covenants, conditions, restrictions, and rights of way of record.
RESERVING AND EXCEPTING THEREFROM,
1. This Grant of the Property is subject to the Redevelopment Plan for Project Area_of the Palm
Desert Redevelopment Agency and pursuant to a Disposition and Development Agreement (the
"Agreement") entered into by and between Grantor and Grantee dated June 24, 1999, the terms
of which are incorporated herein by reference. A copy of the Agreement is available for public
inspection at the offices of the Grantor, 73-510 Fred Waring Drive, Palm Desert, California
92260. The Property is conveyed further subject to all easements, rights of way, covenants,
conditions, restrictions, reservations and all other matters of record.
2. The Property is conveyed upon the conditions hereinafter specified, upon the violation or failure
of any of which title to said parcel shall revert to and vest in Grantor, or its successor in interest;
provided, however, that no reversion of the Property shall occur until and unless: a failure or
violation of one of the conditions hereafter specified actually occurs; and Grantor gives Grantee
notice in writing thereof specifying the particular failure or violation and that the notice is given
pursuant to this Grant Deed and, at the expiration of the time stated in the Disposition and
Development Agreement as dependant upon the type of failure and from the receipt by Grantor
of such notice, the failure has not been remedied or the violation has not ceased. The conditions
are:
a. That CSU shall begin construction of the Center(as defined in the Agreement) on the
Property within three (3) years of the recording of title to said property in the name of
CSU.
b. That the Property shall be used for the construction, operation, and maintenance thereon
of improvements for use operation of higher educational facilities as part of the California
State University, including university or college related service and administrative
facilities.
3. By acceptance hereof, Grantee agrees, far itself, its successors and assigns, to refrain from
restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion,
ancestry, sex, marital status, national origin or age of any person in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself or any
persons claiming under or through it 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, subtenants, sublessees, or vendees in the Property. The foregoing covenants
shall run with the land.
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All deeds, leases or contracts entered into with respect to the Property 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 race, color, creed, religion, national origin, sex, marital status, age or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed,
nor shall the grantee 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, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants shall run with the land."
(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
be no discrimination against or segregation of any person or group of persons, on account of age,
race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing,
subleasing, transferring, use or occupancy, tenure or enjoyment of the land 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 land herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of, any
person, or group of persons on account of race, color, creed, religion, age, national origin, sex,
marital status or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land, nor shall the transferee 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, subtenants, sublessees or vendees of the land."
4. All covenants contained in this Grant Deed shall run with the land and shall be binding for the
benefit of Grantor and its successors and assigns and such covenants shall run in favor of the
Grantor and for the entire period during which the covenants shall be in force and effect, without
regard to whether the Grantor is or remains an owner of any land or interest therein to which
such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have
the right to exercise all of the rights and remedies provided herein or otherwise available, and to
maintain any actions at law or suits in equity or other property proceedings to enforce the curing
of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall
be enforceable only by the Grantor and its successors and assigns.
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990617 jar C:\WINDOWS\TEMP\16002756.WPD
5. All notices and demands shall be given in writing by certified mail, postage prepaid, and return
receipt requested, or by personal delivery. Notices shall be considered given upon the earlier of
(a)personal delivery or(b) 2 business days following after deposit or delivery shown on the
return receipt in the United States mail, postage prepaid, certified or registered, return receipt
requested. A copy of all notices shall be sent to Escrow Holder. Notices shall be addressed as
provided below for the respective Party; provided that if any Party gives notice in writing of a
change of name or address, notices to such Party shall thereafter be given as demanded in that
notice:
The Agency: Mr. Carlos L. Ortega
Executive Director
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
(Telephone: 760-346-0611)
(Facsimile: 760-341-6372)
with a copy to: Richards, Watson& Gershon
A Professional Corporation
333 South Hope Street, 38th Floor
Los Angeles, California 90071
Attention: Jeffrey A. Rabin and William L. Strausz
(Telephone: 213-626-8484
(Facsimile: 213-626-0078)
CSU: Mr. David DeMauro
Vice President for Administration and Finance
California State University, San Bernardino
5500 University Parkway
San Bernardino, California 92407
(Telephone: 909-8 80-5130)
(Facsimile: 909-880-7032)
With a copy to: Ms. Elisabeth Sheh Walter
University Counsel
Office of General Counsel
The California State University
401 Golden Shore, 4t''Floor
Long Beach, California 90802-4275
(Telephone: 5 62-985-2873)
(Facsimile: 562-985-2925)
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IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of the date set forth below.
Dated:
PALM DESERT REDEVELOPMENT AGENCY,
a public body, corporate and politic
By:
Chairman
Attest:
Secretary
State of California }
}
County of }
On , 19 , before me, , a Notary
Public, personally appeared
, personally known to me (or 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.
WITNESS my hand and official seal.
Signature
(seal)
-5-
990617 jar C:\WINDOWS\TEMP\16002756.WPD
' � � ��AL ESTATE ANALYSIS� �ERVICES CO.
POST OFFICE BOX 2809, PALM DESERT, CALIFORNIA 92261
TELEPHONE: (760) 340-1429; FAX: (760) 340-2041
June 18, 1999
Mr. Carlos L. Ortega
Executive Director
PALM D�SERT REDEVELOPMENT AGENCY
CITY OF PALM DESERT
73-510 Fred Waring Drive
Palm Desert, California 92260
REFERENCE: Proposed Sale Of Land To CSU
SUBJECT: Report Pursuant To Section 33433 Of The California Health And Safety Code
NOTE: This report is based on the terms and conditions of the Disposition and Development
Agreement dated June 24, 1999.
Dear Mr. Ortega,
Section 33433 of the California Health and Safety Code stipulates that before any property of the Agency, acquired
directly or indirectly with tax increment funds, is sold or leased for development purposes pursuant to the
redevelopment plan, the sale or lease shall first be approved by the legislative body by resotution after public
hearing. The land the Agency proposes to sell to CSU falls into the category covered by Section 33433.
I have prepared a comprehensive report (included as an attachment to this �etter) which is required in order to
comply with Section 33433. Pursuant to the report, I have concluded that the following findings can be included
in the resolution approving the sale:
FINDING #1: The Property is currently completely unimproved, and the development of the Project will
assist in the elimination of blight in the area.
FINDING #2: Sale of the Property is consistent with the implementation plan adopted pursuant to Section
33490 of the California Health and Safety Code.
FINDING #3: The consideration is not less that the fair reuse value.
The rationale for these findings can be found in the attached report.
Yours truly,
, � � �
_ �� , �- 1��.
� �
Leonard R. Wolk, resident
Real Estate Analysis Services Company (REASCO)
"LTR C33"(23 18-Jun-99 06:10 PM
" REPORT PURSUANT TO SE�TION 33433 OF THE CAUFORNIA yEALTH AND SAFETY CODE
— page 1 —
This report was prepared to comply with the requirements of California Health and Safety Code Section 33433.
The report contains the following sections: Section 1, A summary of the terms and conditions of the proposed
Disposition and Development Agreement (the "DDA") between the Palm Desert Redevelopment Agency (the
"Agency") and the Trustees of the California State University ("CSU") concerning the proposed acquisition by CSU of
certain real property owned by the Agency; Section 2, The cost of the DDA to the Agency; Section 3, The
estimate�d value of the interest to be conveyed, determined at the highest and best uses permitted under the
Redevelopment Plan; Section 4, The estimated value of the interest to be conveyed, determined at the use and with
the conditions, covenents and development costs required by the DDA (the "reuse value"); and Section 5,
Recommended Findings to be included in the resolution approving the sale.
SECTION 1: Summary of the DDA:
�► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
A.The Subiect Property:
The Agency is the owner of certain real property (the "Site") in the City of Palm Desert (the "City") located at the
northeast corner of Frank Sinatra Drive and the Cook Street Extension, northeast of the Desert Willow Golf
Resort at Palm Desert, within a mile of Interstate 10 and four miles from State Route 111. The Site is legally
described in Exhibit A of the DDA. For purposes of the DDA, the Site is comprised of approximately 200
acres divided into two separate parcels, namely Parcel A, composed of approximately 40 acres and located
immediately at the intersection of Frank Sinatra Drive and the Cook Street Extension and Parcel B, composed
of approximately 160 acres, east of and contiguous to Parcel A.
B. Disposition of Parcel A:
1.The primary mission of CSU is to offer undergraduate and graduate instruction through the master's
degree in the liberal arts and sciences, and professional education, including teacher education.
Regional access to students is an integral part of CSU's mission.
2.The Agency intends to transfer Parcel A to CSU; the purchase price to be paid by CSU shall be $0.
3. Consistent with its mission, after satisfaction of all the conditions of the DDA, CSU has made a firm
commitment to accept Parcel A and relocate the Coachella Valley Center of California State University,
San Bernardino (the "Center") from its current location in purchased quarters at the College of the Desert
in Palm Desert, California to permanent facilities to be developed on Parcel A. CSU intends to construct
and equip facilities for the Center on Parcel A with funds to be raised through a capital campaign and a
public/private partnership sponsored by California State University, San Bernardino; such facilities will
yield significant educational, cultural and economic benefits to the Coachella Valley region. Maintenance
and operational costs for the Center will be paid by CSU.
4.The Agency agrees to transfer Parcel A to CSU when Parcel A is ready for development by CSU as part
of the Center.
"LTR C33"/12 18-Jun-99 06:02 PM
REPORT PURSUANT TO SECT��N 33433 OF THE CALIFORNIA HEA' TH AND SAFETY CODE
— page 2 —
SECTION 1: Summary of the DDA_(continued):
�► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the ODA, the DDA shall control.
B. Disposition of Parcel A (continued):
5.At the close of escrow for Parcel A,the Agency shall transfer fee simple title of all of Parcel A to CSU.Parcel A
escrow shall close after satisfaction of the following conditions: (1). CSU shall have committed to the
� Agency, in writing, to relocate the Center to Parcel A and to operate it therefrom; (2). Parcel A shall have
been subdivided into 3 parcels for a phased development, and the subdivision and the development
phasing shall have been approved by the Planning Committee. The Planning Committee will consist of
nine members;four members to be identified by the Mayor of Palm Desert; four members to be identified
by the President of CSU, San Bernardino; the Mayor and the President will jointly identify the ninth
member, who will be the chair.
6.CSU shall begin construction of the Center within 3 years after the date of the DDA (June 24, 1999) and
shall complete construction of the Center and open it for operation in accordance with the following
schedule: (a). Construction of the first building of the Center shall be commenced within 3 years after the
date of the DDA, and it shall be open and operating within 5 years after the date of the DDA. (b).
Consrtruction of the second building of the Center shall be commenced within 5 years after the date of
the DDA, and it shall be open and operating within 7 years after the date of the DDA. and (c).
Construction of the third building of the Center shall be commmenced within 7 years after the date of the
DDA, and it shall be open and operating within 9 years after the date of the DDA. Such dates may be
extended by the mutual agreement of the Agency and CSU.
If CSU does not comply with this schedule, then, at the option of the Agency, the phase of Parcel A for
which construction has not commenced or been completed, shall be subject to reversion to the Agency
after due notice. If CSU does not cure this default within a specified time, then the DDA shall terminate,
the Parcel B Option shall be terminated, and the designated, unimproved phase of Parcel A shall revert to
the Agency, and the Agency will be free to use or dispose of the unimproved phase of Parcel A and all of
Parcel B in any lawful manner.
C. Disposition of Parcel B:
1.The Agency has granted to CSU an Option to purchase Parcel B of the Site. The Option term will begin
on the date of_the DDA and will end 25 years after the date of the DDA. During the Option term, Parcel B
will be made available to CSU, at a purchase price of $0, in the event that the State of California (the
"State") authorizes CSU to develop a fully independent campus of the CSU system (the "University
Campus") on the Site (Parcels A and B).
2. Pending the exercise of the Option, CSU, the City and the Agency will participate in a planning process to
determine mutually compatible, temporary land uses for Parcel B until construction begins on the
University Campus.
3.Within 180 days after construction of the third building of Parcel A has begun, CSU will initiate a feasibility
study to include a timetable for the growth and development of the Site, including the transition from the
Center, to the University Campus on Parcels A and B, with an ultimate estimated size of 25,000 full time
equivalent ("FTE'� students. If CSU determines, as a result of the feasibility study, that it shall not develop
a University Campus, it shall notify the Agency of such determinination, and the Agency shall have the
option to terminate the Oprtion.
"LTR C33"/17 18-Jun-99 06:23 PM
REPORT PURSUANT TO SE�'TION 33433 OF THE CALIFORNIA "EALTH AND SAFETY CODE
— page 3 —
SECTION 1: Summary of the DDA �continued)_
�► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
C. Disposition of Parcel B_(continued)_
�4. If it has been decided that CSU will develop the University Campus, the Parties agree that the parcels
comprising Parcel B will be conveyed to CSU in phases, subject to CSU providing reasonably
satisfactory evidence to the Agency of its ability and intention to construct the University Campus in
phases, including evidence of its ability to ultimately complete the entire University Campus within the
time frame set forth in the DDA. Each parcel of Parcel B will be conveyed to CSU, in a manner and
program mutually acceptable to CSU and the Agency, from time to time as CSU is ready and able to
commence construction of the improvements on the applicabfe parcel.
5.CSU may exercise the Option to purchase Parcel B subject to the satisfaction or waiver (by the Agencyj
of the following condition:
a. CSU shall have first purchased all of Parcel A and shall have constructed all improvements thereon as
described in the Master Plan, and shall be operating the Center therefrom. CSU may not exercise
the Option to purchase Parcel B until all improvements to be constructed on Parcel A have been
completed, and CSU is operating the Center on Parcel A.
6. Before a parcel of Parcel B is transferred to CSU, CSU shall have presented to the Planning Committee,
its financial plan for development and operation of the applicable parcel. The Planning Committee shall
have recommended to the Agency Board its findings that the financial plan reasonably provides for the
development and operation of the applicable parcel, and the Agency Board shall have reasonably
agreed with the findings.
7. If CSU exercises the Option to purchase Parcel B, then CSU shall begin constructing the improvements
constituting the University Campus within certain time frames, and shall complete the construction of the
improvements within certain time frames. These time frames are specified in the DDA.
D. Use of the Site:
1. CSU agrees that it shall use Parcel A only for the operation of the Center or as part of the University
Campus (if one should be built), and if CSU exercises the option for Parcel B, it shall use both Parcels A
and B only for the operation of the University Campus.
2. If any portion of the Site transferred by the Agency to CSU is reasonably determined by the Parties to be
unnecessary for CSU's campus, or is not being used primarily as part of a public institution of higher
education operated by CSU, then, after due notice and without a timely cure by CSU, at the option of the
Agency, such portion of the Site, whether improved or not, shall revert to the Agency. The Agency's
reversionary right for an improved parcel under this provision shall terminate 55 years after the date the
buildings on this parcel were completed.
"LTR C33"/13 18-Jun-99 06:23 PM
REPORT PURSUANT TO SFr'TION 33433 OF THE CALIFORNIA '-�EALTH AND SAFETY CODE
— page 4 —
SECTION 2: Cost of the agreement_(the"DDA" to the Agency_
The cost of the DDA to the Agency is comprised of 3 components: (1). The land acquisition cost; (2). The cost of any
improvements to be provided by the Agency; and (3). The estimated interest on the source of funds to finance the
agreement (the"land carry cosY').
A. Land acquisition cost:
The Agency acquired the subject land in September, 1993 as a result of an Exchange Agreement for a price of
$51,736�er acre. Therefore, the_land_acguisition cost_per Parc_el_can be expressed, as follows:
_PARCEL A_LAN_D____ __PARCEL B LAND _ TOTAL SITE
ACRES S�. FT. ACRES SQ. FT. ACRES SQ. FT.
1. Amount of land 40 1,742,400 160 6,969,600 200 8,712,000
2. Cost/acre;/sq. ft. $51L735�_---_--$1.19_--_— $51�735_ _$1.19 $51,735 $1.19
3. Total cost $2,069,400 $2,069,400 $8,277,600 T$8,277,6001 $10,347,000 $10,347,000
B. Cost of any improvements to be prov_ided_ by the A�ency_
The Agency will neither provide nor pay for any of the improvements. CSU will be solely responsible for
providing and paying the construction costs of all the improvements, including the infrastructure.
C. Calculation of the expected land carry cost_
The land acquisition cost was financed by a combimation of a bond issue and a loan from the City.
The apportioninq of the land carry cost is as described_the following_table_
PARCEL A FUNDS SOURCE PARCEL B FUNDS SOURCE
BONDS CITY LOAN BONDS CITY LOAN
1.Amount of funds $1,069,400 $1,000,000 $4,277,600 $4,000,000
—-------------_..-------- ---------
2.The Agency's estimated cost of funds rate 6.125% 5.40% 6.125% 5.400%
--- _._.___ ___. ___ _._..._-- __ _ . ----- _ .._
3. Expected payment term (years) 30 30 30 30
—. _------------ ------- --._.—.
4. Estimated interest cost (NPV) per acre $33,266 $39,862 $33,266 $39,862
5.Times number of acres ' 20.67 19.33 83 77
---- _ -- _ __--- -- ---— ___ _ -_ _ ---------
6. Land carry cost $687,632 $770,504 $2,750,529 $3,082,017
D. Total cost of the DDA to the Agenc_y:
IMPROVE- LAND CARRY
LAND COST -MENT COST COST TOTAL COST
1. Parcel A land:
a.Total amount $2,069,400 $0 $1,458,137 $3,527,537
b.Per acre $51,735 $0 $36,453 $88,188
c. Per square foot $1.19 $0 $0.84 $2.02
2. Parcel B land:
a.Total amount $8,277,600 $0 $5,832,547 $14,110,147
b.Per acre $51,735 $0 $36,453 $88,188
c. Per square foot $1,19 $0 $0.84 $2.02
3.Total site:
a.Total amount $10,347,000 $0 $7,290,683 $17,637,683
---- _— - -- __ - - . __ ----
b. Per acre $51 735 $0 $36,453 $88,188
c. Per square foot ------ -- $1.19 $0 ' -----$0.84� $2.02
"LTFi C33"/14 18-Jun-99 06:23 PM
� HEPORT PURSUANT TO SE('TION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
— page 5 —
SECTION 3: The estimated value of the interest to be conveyed, determined at the highest and best uses
permitted under the Redevelopment Plan:
Knowledgeable real estate professionals have concluded that because of its zoning and location, the subject Site
has a valuation of$72,000 per acre. Therefore, the fair marketyalue of the Site can be expressed, as follows:
PARCEL A LAND PARCEL B LAND TOTAL SITE
ACRES SQ. FT. ACRES SQ. FT. ACRES SQ. FT.
1. Amou�t of land 40 1,742,400 160 6,969,600 200 8,712,000
2. Value/acre; /sq. ft. $72,000 $1.65 $72,000 $1.65 $72,000 $1.65
------- -----.._ __ _ _------
3. Total value $2,880,000 $2,880,000 $11,520,000 $11,520,000 $14,400,000 $14,400,000
SECTION 4: The estimated value of the interest to be conveyed, determined at the use and with the
conditions�covenants and dev_elopment costs_�equired_by the DDA (the "Fair Reuse Value'):
In accordance with the terms and conditions of the DDA, CSU is required to develop Parcel A solely as the
permanent Coachella Valley Center of California State University, San Bernardino, and if the State authorizes CSU to
develop an independent campus of the CSU system on the Site, CSU will be required to build only the necessary
university facilities on the remainder of the Site. Pursuant to the audited budget of the CSU system for the latest fiscal
yea�, total expenses are approximately equal to total revenues, so the CSU system is essentially operated as a
non—profit entity. Capital funding for acquisition and construction for the CSU system is accomplished by the State
issuing General Obligation Bonds. According to the Dean of the Center, because of the current backlog of approved
projects, it would take at least 15 years before the State could issue bonds to pay for the land and improvements for
the subject project, and no other State funds are available for this purpose.
Therefore, because of the land usage and the timing of facilities development imposed on CSU by the
terms and conditions of the DDA, the fair reuse value of the "interest to be conveyed' is essentially $0.
SECTION 5: Findings to be included in the resolution approving the sale_
The resolution shall contain the following findings: (1). The sale or lease of the property will assist in the elimination
of blight; (2). The sale or lease of the property is consistent with the implementation plan adopted pursuant to
Section 33490 of the California Health and Safety Code; ancl one of the following two additional findings: (3). The
consideration is not less than the fair market value at its highest and best use in accordance with the redevelopment
plan or (4). The consideration is not less than the fair reuse value at the use and with the covenants and conditions
and development costs authorized by the sale.
The following findings can be included in the resolution_approv.in�the sale:
FINDING #1: The Site is currently completely unimproved, and the development of the CSU project will
assist in the elimination of blight in the area.
FINDING #2: Sale of the Site is consistent with the implementation plan adopted pursuant to Section
33490 of the California Health and Safety Code.
FINDING #3: The consideration ($0) is not less that the fair reuse value ($0).
"LTR C33"/15 18-Jun-99 06:02 PM
PALM DESERT REDEVELOPMENT AGENCY
MEMORANDUM
DATE: JUNE 24, 1999
TO: CITY MANAGER, HONORABLE MAYOR AND MEMBERS OF THE CITY
COLJNCIL
HONORABLE CHAIRMAN AND MEMBERS OF REDEVELOPMENT
AGENCY BOARD
FROM: EXECUTIVE DIRECTOR,REDEVELOPMENT AGENCY
SUBJECT: DISPOSITION AND DEVELOPMEI�TT AGREEMENT BETWEEN PALM
DESERT REDEVELOPMENT AGENCY AND CALIFORNIA STATE
UNIVERSITY
Recommendation:
That the City CounciUAgency Board open the joint public hearing and following testimony take
the following actions:
1. That the City Council adopt Resolution No. 99-56 - a resolution of the City of Palm
Desert approving the sale by the Palm Desert Redevelopment Agency of 40 acres of real
property on the northeast corner of Frank Sinatra and Cook Street;
2. That the Agency Board adopt Resolution No. 374 - a resolution of the Palm Desert
Redevelopment Agency approving the sale to California State University of
approximately 40 acres of real property on the northeast corner of Frank Sinatra and
Cook Street;
3. That the Agency approve a Disposition and Development Agreement between the Palm
Desert Redevelopment Agency and California State University setting forth certain
conditions for development of the site to include a provision for California State
University to purchase an additional 160 acres.
Back�round:
This report summarizes the terms and conditions of that certain Disposition and Development
Agreement (the"DDA")between the Palm Desert Redevelopment Agency (the "Agency") and
California State University("the Developer") concerning the proposed sale of certain real
Coachella Valley
� � Economic Partnership
73-710 Fred Waring Drive,Suite 205•Palm Desert,CA 92260•760/340-1575 or 1-800-596-1007•Fax 760/340-9212
May 13, 1999
� �; `
c� ��-,,
-� -�
-< �.._
c> =-
Mayor Robert Spiegel � �; �
City of Palm Desert �
73-510 Fred Waring Drive "' �
Palm Desert, CA 92260 0 ,--
�' f
Dear Mayor Spiegel: �� �
RE: Letter of Support for CSUSB-CVC Campus �
This is to provide you with a letter of support for the development of the
California State University San Bernardino-Coachella Valley Campus
(CSUSB-CVC) to be constructed on Cook Street in Palm Desert. It is
written on behalf of the over one hundred private and public investors of
the Coachella Valley Economic Partnership (CVEP).
As you are aware, the Partnership is charged with the responsibility of
recruiting economically diverse companies to the region that will create
living-wage jobs. One of the greatest challenges our region faces is
access to higher education and training to prepare our workforce to meet
the challenges of the next millennium.
The unique teamwork between the City of Palm desert and the CSUSB-
CVC will provide the impetus necessary to bridge the education and
training gap needed over the long term by our region for economic
success. It is for that reason that CVEP endorses and encourages the
development of the new campus.
We strongly urge the approval of the necessary agreements between the
City of Palm Desert and CSUSB-CVC so that the project can go forward
expeditiously.
Resp ctfully,
� �?�,�.�.,// %��.-.�--
Bill Powers, President Michael Bracken
First Community Bank Executive Director
�
PALM DESERT REDEVELOPMENT AGENCY
MEMORANDUM
DATE: APRIL 22, 1999
TO: CITY COUNCIL MEMBERS
FROM: EXECUTIVE DIRECTOR, REDEVELOPMENT AGENCY
SUBJECT: CALSTATE AGREEMENT
The attached document is a summary of the current deal points included in the draft
agreements between CalState and the Redevelopment Agency related to the transfer
of the property from Agency to CalState.
The report is one that needs to accompany the Disposition and Development
Agreement and is a very accurate summary of the current deal points. It also includes
other information with regard to the value of the property and the justification for the
fair re-use value.
This document has been provided to Mayor Spiegel and Councilmembers Crites and
Ferguson, and I believe is a good start for the Council's discussion of the major deal
points with CalState and to provide direction for continuing discussions with CalState.
��1��°�.���
Carlos L. Ortega
Executive Director
mh
Attachment (as noted)
cc: City T�anager
Director of Cca�rnmity Affairs/City Clerk
�' � • I��AL ESTATE ANALYSI�► SERVICES CO.
POST OFFICE BOX 2809, PALM DESERT, CALIFORNIA 92261
TELEPHONE: (760) 340-1429; FAX: (760) 340-2041
Apri121, 1999
Mr. Carlos L. Ortega
Executive Director
PALM DESERT REDEVELOPMENT AGENCY
CITY OF PALM DESERT
73-510 Fred Waring Drive
Palm Desert, California 92260
REFERENCE: Proposed Sale Of Land To CSU
SUBJECT: Report Pursuant To Section 33433 Of The California Health And Safety Code
NOTE: This report is based on the terms and conditions of the DDIA as of April 21, 1999.
Dear Mr. Ortega,
Section 33433 of the California Health and Satety Code stipulates that before any property of the Agency, acquired
directly or indirectly with tax increment funds, is sold or leased for development purposes pursuant to the
redevelopment plan, the sale or lease shall first be approved by the legislative body by resolution after public
hearing.The land the Agency proposes to sell to CSU falls into the category covered by Section 33433.
I have prepared a comprehensive report (included as an attachment to this letter) which is required in order to
comply with Section 33433. Pursuant to the report, I have concluded that the following findings can be included
in the resolution approvinq the sale:
FINDING #1: The Property is currently completely unimproved, and the development of the Project will
assist in the elimination of blight in the area.
FINDING #2: Sale of the Property is consistent with the implementation plan adopted pursuant to Section
33490 of the California Health and Safety Code.
FINDING #3: The consideration is not less that the fair reuse value.
The rationale for these findings can be found in the attached report.
Yours truly, _
Leonard R. Wolk, resi ent �
Real Estate Analysis Services Company (REASCO)
"LTR C33"/23 21-Apr-99 09:54 AM
REPORT.PURSUANT TO S�^•TION 33433 OF THE CALIFORNIO �-IEALTH AND SAFETY CODE
— page 1 —
This report was prepared to comply with the requirements of California Health and Safety Code Section 33433.
The report contains the following sections: Section 1, A summary of the terms and conditions of the proposed
Disposition and Development Agreement (the "DDA") between the Palm Desert Redevelopment Agency (the
"Agency"j and the Trustees of the California State University ("CSU") concerning the proposed acquisition by CSU of
certain real property owned by the Agency; Section 2, The cost of the DDA to the Agency; Section 3, The
estimated value of the interest to be conveyed, determined at the highest and best uses permitted under the
Redevelopment Plan; Section 4, The estimated value of the interest to be conveyed, determined at the use and with
the conditions, covenents and development costs required by the DDA (the "reuse value"); and Section 5,
Recommended Findings to be included in the resolution approving the sale.
SECTION 1: Summary of the DDA:
�► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
A.The Subiect Property:
The Agency is the owner of certain real property (the "Site") in the City of Palm Desert (the "City") located at the
northeast corner of Frank Sinatra Drive and the Cook Street Extension, northeast of the Desert Willow Golf
Resort at Palm Desert, within a mile of Interstate 10 and four miles from State Route 111. The Site is legally
described in Exhibit A, attached herein. For purposes of the DDA, the Site is comprised of approximately 200
acres divided into two separate parcels, namely Parcel A, composed of approximately 40 acres and located
immediately at the intersection of Frank Sinatra Drive and the Cook Street Extension and Parcel B, composed
of approximately 160 acres, east of and contiguous to Parcel A.
B. Disposition of Parcel A:
1.The primary mission of CSU is to offer undergraduate and graduate instruction through the master's
degree in the liberal arts and sciences, and professional education, including teacher education.
Regional acess to students is an integral part of CSU's mission.
2.The Agency intends to donate Parcel A to CSU; the purchase price will be $0.
3. Consistent with its mission, after satisfaction of all the conditions of the DDA, CSU has made a firm
commitment to accept Parcel A and relocate the Coachella Valley Center of California State University,
San Bernardino (the "Center") from its current location in purchased quarters at the College of the Desert
in Palm Desert, California to permanent facilities to be developed on Parcel A. CSU intends to construct
and equip facilities for the Center on Parcel A with funds to be raised through a capital campaign and a
public/private partnership sponsored by California State University, San Bernardino; such facilities will
yield significant educational, cultural and economic benefits to the Coachella Valley region. Maintenance
and operational costs for the Center will be paid by CSU.
4.The Agency agrees to transfer Parcel A to CSU when Parcel A is ready for development by CSU as part
of the Center.
"LTR C33'y12 21-Apr-99 09:54 AM
REPORT.PURSUANT TO S�"TION 33433 OF THE CALIFORNIP '�EALTH AND SAFETY CODE
q — page 2 —
SECTION 1: Summary of the DDA (continued):
s► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
B. Disposition of Parcel A (continuedL
5.At the close of escrow for Parcel A, the Agency shall transfer fee simple title of Parcel A to CSU. Parcel A
escrow shall close after satisfation of the following conditions: (1). CSU shall have committed to the
Agency, in writing, to relocate the Center to Parcel A and to operate it therefrom; (2). CSU shall have
presented to the Planning Committee, and the Planning Committee shall have approved, satisfactory
proof that it has obtained adequate financing commitments for the development and operation of the
Center on Parcel A. The Planning Committee will consist of nine members; four members to be selected
by the Mayor of Palm Desert; four members to be selected by the President of CSU, San Bernardino; the
Mayor and the President will jointly select the ninth member.
6. CSU shall begin construction of the Center within 5 years from the recording date of the Grant Deed by
which the Agency conveyed Parcel A to CSU, and shall complete construction of the three buildings
(three Phases) which constitute the Center and open it for operation according to the following schedule:
(a). The first building of the Center shall be open and operating within 8 years after the recording date of
the Grant Deed. (b). The second building of the Center shall be open and operating within 10 years after
the recording date of the Grant Deed, and (c). �he third building of the Center shall be open and
operating within 12 years after the recording date of the Grant Deed, unless such time period is extended
by the mutual agreement of the Agency and CSU. If CSU does not comply with this schedule, then, after
due notice and without a timely cure by CSU, at the option of the Agency, the DDA shall terminate, the
Parcel B option shall be cancelled, the unimproved or incomplete portions of Parcel A shall revert to the
Agency and the Agency will be free to use or dispose of the unimproved or incomplete portions of Parcel
A and all of Parcel B in any lawful manner.
C. Disposition of Parcel B:
1.The Agency has granted to CSU an option to purchase Parcel B of the Site. The option term will begin on
the DDA execution date and will end 30 years after the execution date of the DDA. During the option
term, Parcel B will be made available to CSU, at a purchase price of $0, in the event that the State of
California (the "State") authorizes CSU to develop a fully independent campus of the CSU system (the
"University Campus") on the Site (Parcels A and B).
2. Pending the exercise of the option, CSU, the City and the Agency will participate in a planning process to
determine mutually compatible, temporary land uses for Parcel B until construction begins on the
University Campus.
3.Within 180 days after construction of the third building of Parcel A has begun, CSU will initiate a feasibility
study to include a timetable for the growth and development of the Site, including the transition from the
Center, to the University Campus on Parcels A and B, with an ultimate estimated size of 25,000 full time
equivalent ("FTE") students.
"LTR C33"/17 21-Apr-99 09:54 AM
REPORT PURSUANT TO �`CTION 39433 OF THE CALIFORNtA°��EALTH AND SAFETY CODE
# •
-- page 3 —
SECTION 1: Summa of the D .
s. Reierence is made to the DDA fo�fu(I particulars df a�r provision described herein, and in the event
df any incohsistency b�tween the provisions herein and the bbA. the DDA shall control.
C.Dispositiqn vf Parcei B (continuedL
4,If it has been decided that CSU will develop tha University Campus, th� Parties agree that the parcels
comprising Parcel B will be conveyed to CSU in phasos, subject to CSU prcviding reasonable evidence
to the Agency of its abiliry and intention to construct the University Campus in phases, including
�videtsce of its ability to ultimately complete tho eniire University Campus within a muivally agreed—to
time frame. Each pazcel of Parce( B will be conveyed tv CSU, in a manner and program mutually
acceptabl� to CSU and the Agency, wheh CSU is ready and able to commenca cvnstruction ot the
improvements on the applicable parcel.
5.CSU may exercise the option to putchase Parcel B subject to the satisfactipn or waiver (by the Agency)
of the follawing condition�
a. CSU shall have tirst purchased all of Parcel A �nd shal! have constructed all improvements thereon
described in the Master Plan, and shall ba eperating the Center therefrom. CSU may not exercise
the Option to purchase Patcel B until all irnprovements to be constructed on Parcel A have been
complated, and CSU is tully operating the Center on Parc�l A.
6.Before a parcel of Parcel B is conveyed to CSU, CSU shall have ptesented to the Planning Committee,
and the Planning Committee shall have gpprvved, satisfactory prnof that CSU has o6tained adequate
linancing committments tor tha construction and operatian of the applicable parcef.
7.If CSU exercises the option to purchase Parcel B� than CSU shall begin constructing the imprevements
constitutir►g th� Uhiversity Campus en each phase conveyed to CSU within 18 months, and shall
complete construction within 36 months, aftar recording the Grant Deed resulting irom the close oi
escrow for the applicable p�rcel of Parce! B, unless such time periad is extended by the mutual
agraement of the Agency and CSU. if CSU does nat cornply with this schedule, then, aite� due notice
and wlthout a timely cu►'� by CSU, at the option of the Agency, the DDA shall terminate, the Parcel S
option shall be canccU�d, the unimproved ar incomplete portions of Parcel $ shall r�vert to the Agency
and the Agency will be free to use or dispose of the unimproved vr incomplete portians of Parcel e In
any lawful manner.
C. Use of the Site:
CSU agrees that it shall, for a period�ot 99 years after the recording date of thQ Grant Deed of Parcel A, use
Parcel A only for the operatian ot the Center or as patt of the University Campus (if one shauld be buiiy, and if
CSU exercises the option for P�rcel B, it shall use both Parcels A and B onty for the operatian of the University
Campus.
> If the qgency reason�bly determines tttat any portion of the Site transferred by the Agency to CSU is not being
used prim�rily as part of a public institu�on of higher education, then after due noti�e and without a timely cure
by CSU, CSU shall pay to the Agency the fair market vatue tor the applic�ble portion at its highest and best use.
This payrnent is necessary to ensure compiiance with Spction 33433 of the California Health and Safety Code.
"LTR C33"/t3 21-A r-99 04�30 PM
REPORTPURSUANT TO SF"TION 33433 OF THE CALIFORNIP yEALTH AND SAFETY CODE
- page 4 -
SECTION 2: Cost of the agreement (the 'DDA') to the Agenc�
The cost of the DDA to the Agency is comprised of 3 components: (1). The land acquisition cost; (2). The cost of any
improvements to be provided by the Agency; and (3). The expected interest on the source of funds to finance the
agreement (the"land carry cosY').
A. Land acquisition cost:
The Agency acquired the subject land in September, 1993 as a result of an Exchange Agreement for a price of
$51,735 per acre. Therefore, the land acquisition cost per Parcel can be expressed as follows:
PARCEL A LAND PARCEL B LAND TOTAL SITE
ACRES SQ. FT. ACRES SQ. FT. ACRES S�. FT.
1. Amount of land 40 1,742,400 160 6,969,600 200 8,712,000
2. Cos acre� s . ft. $51 735 $1.19 $51 735 $1.19 $51 735 $1.19
3. Total cost $2,069,400 $2,069,400 $8,277,600 $8,277,600 $10,347,000 $10,347,000
B. Cost of any improvements to be provided by the Agency:
The Agency will neither provide nor pay for any of the improvements. CSU will be solely responsible for
providing and paying the construction costs of all the improvements, including the infrastructure.
C. Calculation of the expected land carry cost:
PARCEL A FUNDS SOURCE PARCEL B FUNDS SOURCE
BONDS CITY LOAN BONDS CITY LOAN
1.Amount of funds $1,069,400 $1,000,000 $4,277,600 $4,000,000
2.The Agency's estimated cost of funds rate 6.125% 5.744% 6.125% 5.744%
3. Expected payment term (years) 30 30 30 30
4. Estimated interest cost (NPV) per acre $33,266 $31,926 $33,266 $31,926
5.Times number of acres 20.67 19.33 83 77
6. Land carry cost $687,632 $617,106 $2,750,529 $2,468,426
D. Total cost of the DDA to the Agency_
IMPROVE- LAND CARRY
LAND COST -MENT COST COST TOTAL COST
1. Parcel A land:
a.Total amount $2,069,400 $0 $1,304,739 $3,374,139
b. Per acre $51,735 $0 $32,618 $84,353
c. Per square foot $1.19 $0 $0.75 $1.94
2. Parcel B land:
a.Total amount $8,277,600 $0 $5,218,955 $13,496,555
b. Per acre $51,735 $0 $32,618 $84,353
c. Per square foot $1.19 $0 $0.75 $1.94
3. Total site:
a.Total amount $10,347,000 $0 $6,523,694 $16,870,694
b. Per acre $51,735 $0 $32,618 $84,353
c. Per square foot $1.19 $0 $0.75 $1.94
"LTR C33"/14 21-Apr-99 09:54 AM
' REPORT PURSUANT TO SFr:TION 33433 OF THE CALIFORNIP �-IEALTH AND SAFETY CODE
— page 5 —
SECTION 3: The estimated value of the interest to be conveyed, determined at the highest and best uses
permitted under the Redevelopment Plan:
Knowledgeable real estate professionals have concluded that because of its zoning and location, the subject Site
has a valuation of$72,000 per acre. Therefore the fair market value of the Site can be expressed as follows•
PARCEL A LAND PARCEL B LAND TOTAL SITE
ACRES S0. FT. ACRES SQ. FT. ACRES SQ. FT.
1. Amount of land 40 1,742,400 160 6,969,600 200 8,712,000
2. Value/acre; /sq.ft. $72,000 $1.65 $72,000 $1.65 $72,000 $1.65
3. Total value $2,880,000 $2,880,000 $11,520,000 $11,520,000 $14,400,000 $14,400,000
SECTION 4: The estimated value of the interest to be conveyed, determined at the use and with the
conditions, covenants and development costs required by the DDA (the 'Fair Reuse ValueJ•
In accordance with the terms and conditions of the DDA, CSU is required to develop Parcel A solely as the
permanent Coachella Valley Center of California State University, San Bernardino, and if the State authorizes CSU to
develop an independent campus of the CSU system on the Site, CSU will be required to build only the necessary
university facilities on the remainder of the Site. Pursuant to the audited budget of the CSU system for the latest fiscal
year, total expenses are approximately equal to total revenues, so the CSU system is essentially operated as a
non—profit entity. Capital funding for land and improvements for the CSU system is accomplished by the State
issuing General Obligation Bonds. According to the Dean of the Center, because of the current backlog of approved
projects, it would take at least 15 years before the State could issue bonds to pay for the land and improvements for
the subject project, and no other State funds are available for this purpose.
Therefore, because of the land usage and the timing of facilities development imposed on CSU by the
terms and conditions of the DDA, the fair reuse value of the 'interest to be conveyed' is essentially $0.
SECTION 5: Findinqs to be included in the resolution approving the sale•
The resolution shall contain the following findings: (1). The sale or lease of the property will assist in the elimination
of blight; (2). The sale or lease of the property is consistent with the implementation plan adopted pursuant to
Section 33490 of the California Health and Safety Code; and one of the following two additional findings: (3). The
consideration is not less than the fair market value at its highest and best use in accordance with the redevelopment
plan or (4). The consideration is not less than the fair reuse value at the use and with the covenants and conditions
and development costs authorized by the sale.
The followinq findings can be inctuded in the resolution approving the sale-
FINDING #1: The Site is currently completely unimproved, and the development of the CSU project will
assist in the elimination of blight in the area.
FINDING #2: Sale of the Site is consistent with the implementation plan adopted pursuant to Section
33490 of the California Health and Safety Code.
FINDING #3: The consideration ($0) is not less that the fair reuse value ($0).
"LTR C33"/15 21-Apr-99 09:54 AM
PROOF OF PUBLICATION This is space for County C1erk's Filing Stamp
(2015.5.C.C.P)
4'
C�
n Cp
--�1 r
--< C:�
C'� ' _
r r•_ ,
rn �
�
��
STATE OF CALIFORNIA �� -
Couoty of Riverside � '
- , � -
I am a citizen of the United States and a resident of Proof of Publication of
the County aforesaid;I am over the age of eighteen —
years,and not a party to or interested in the _____ _ -- --
above-en�atled matter.I am the rinci al clerk of a No.1771
P P CITY OF PALM DESERT
printer of the,DESERT SUN PUBLISHING NOTICE OF JOINT PUBLIC HEARING
COMPANY a newspaper of general circulation, NOTICE IS HEREBY GIVEN that the City Council of
the City of Palm Desert and the Palm Desert Rede-
printed and published in the city of Palm Springs, velopment Agency will hold a public hearing on the
Coun of Riverside,and which news a er has been d�sposition of certain real pro�perty by the PALM
ty P P DESERT REDEVELOPMENT AGENCY to CALIFOR-
adjudged a newspaper of general circulation by the NIA STATE UNIVERSITY.Said public hearing is be-
Superior Court of the County of Riverside,State of ing held pursuant to sect�on 33433 of tne Health
and Safety Code. Such real property consists of
California under t6e date of March 24,1988.Case approximately 202 acres of land and is located at
Number 191236;thSt the IIot'1Ce,Of whiCh the the northeast corner of Frank Sinatra Drive and
Cook Street in the City of Palm Desert.
anoexed is a printed copy(set in type not smaller A cop of the proposed Disposition and Develop-
than non ariel,has been ublished in each re ular ment �greement regarding such disposition and a
F P g summary of the cost thereof to the Agency,the es-
and entire issue of said newspaper and not in any timated value of the interest to be conveyed deter-
Su lement thereof on the followin dStes,t0 wlt: mined at the highest and best uses permitted un-
pp g der the RedeveTopment Plan for Pro�ect Area No.
2, the estimated value of the interest to be con-
.lUt1C l�th veyed or leased, determined at the use and with
the conditions, covenants, and development costs
_�_���r_�� required by the proposed Disposition and Develop-
~� ment Agreement, the purchase price thereof, and
an explanation of why the sale of the propertv will
- -------- assist in the elimination of blight are availabfe for
� public inspection and copying at a cost not to ex-
ceed the cost of duplication at the Office of the
All in the year 1999 City Clerk of the City of Palm Desert, 73-510 Fred
Waring Drive, Palm Desert, California 92260.
The date,time,and place of said hearing will be as
1 certify(o"r declare)under penaity of perjury that the fouows
fore oin is true and correct. �ate: Tnursday, June 2a, 1999
g g Time: 7:00 p.m.
17[b Place: City Council Chamber
Dated at Palm S rin s,California this da Palm Desert Civic Center
p g y 73-5�0 Fred Waring Drive
June Palm Desert, California 92260
of--- -------------- 1999 Any person wishing to be heard regarding this
+ mpatter may appear at the above date, time and
_____J�Sa�.---i�'—��o-�----__---- lace.
Date: June 8, 1999
��� /s/Sheila R. Gilligan, City Clerk
City of Palm Desert
Signature PUB: June 17. 1999 i
Fttvt;`'� .._�.
PROOF OF PUBLICATION ���� ���n���65pa��for County C erk's Filing Stamp
(2015.5.C.C.P) G►7Y CLERK'S 0 c+��C k
�
STATE OF CALIFORNIA
County of Riverside
I am a citizen of the United States and a resident of Proof of Publication of
the County aforesaid;I am over the age of eighteen ---
years,and not a party to or interested in the No.1723
above-entitled matter.I am the rinci al clerk of st NOTiCe OF JOINT PUBLIC HEARII�1(�
P P NOTICE IS HEREBY GIVEN that the City CounCil
printer of the,DESERT SUN PUBLISHING ot tne City of Palm �esert a�d �he Patm iD�sert
COMPANY a newspaper of general circulation, Redevelopment.Agency will hold a publ'ic hearltnhe
on the disposttion of cektain real prc�pe�y py
printed and publis6ed in the city of Palm Springs, PALM DESERT REDEVELOPMEN� AQENGY to
COUII of Riversid and which news a CI'h8S bCEII CALIFORNIA STA7E LNIVER5ITY. Said p�bflc
�' � P P hearing is being held pursuant to Section 33439 of
adjudged a newspaper of generxl circularion by the the Health and Safety coda. s��n rea► erope+tv
Superior Court of the Coun of Riversid $tBtC Of consists of approximately 202 acres of land Anc1 is
�' � �ocated at the northeast corner of Frattic Slnatra
California under the date of Marc6 24,1988.Case Drive and Cook Street �r, �ne Ci�r of Palm Desert.
A cop of the proposed DispQsifion anc9 Develop-
Number 191236;that the notice,of which the ment �greement regarding such disposition and a
annexed is a printed eopy(set in type not smaller summary of th�e cost thereof to the Agency,tn�es-
timated value of the interest to be conve�ed deter-
t6an non pariel,has been published in each regular mined at the highest and best uses permitted un-
and entire issue of said newspaper and not in any der the Redevelopment Plan for Pro�ect Area No•
2, the estimated value of the interest to be con-
supplement thereof on t6e following dates,t0 W�t: veyed or leased, determined at the use and witn
the conditions, covenants, and development costs
required by the,proposed Disposition and Develap-
June lOth ment Agreement, the purchase price thereof, and
an explanation of why the sale of the prooertv will
— '� �' w assist in the eliminat�on'of blight are availab(e for
public inspection and copying at a cost not to ex-
ceed the cost of duplication at the Office of the
� i City_Clerk,of the City of Palm Desert, 73-510 Fred
Wanng Dnve, Palm Desert, Califomia 92260•
AI� iu the year 1999 Tfie date,time,and place of said hearing will be as
fol lows:
Date: Thursday, June 24; �999
I certify(or declare)under penalty of perjury that the rme: �:oo P.m.
foregoing is true and correct. Place: City Council Chamber
Palm Desert Crvic Center
14th 73-510 Fred Waring Drive
Palm Desert; California 92260
Dated at Palm Springs,Catifomia t6is d8y Any person wishing to be heard regarding this
JUne matter may appear at the above date, time and
1999 p�ace.,
Of --------� e /s1She�la R: Gilligan, City Clerk
� City of P�Im Desert
��/`ii��----`'R}�� Date: June 8, 1999 ,
i �— PUB: June 10. 1999
Signature
r
NOTICE OF JOINT PUBLIC HEARING ,
NOTICE IS HEREBY GIVEN that the City Council of the City of Palm Desert and the
Palm Desert Redevelopment Agency will hold a public hearing on the disposition of certain real
property by the PALM DESERT REDEVELOPMENT AGENCY to CALIFORNIA STATE
UNIVERSTTY. Said public hearing is being held pursuant to Section 33433 of the Health and Safety
Code. Such real property consists of approximately 202 acres of land and is located at the northeast
corner of Frank Sinatra Drive and Cook Street in the City of Palm Desert.
A copy of the proposed Disposition and Development Agreement regarding such disposition
and a summary of the cost thereof to the Agency,the estimated value of the interest to be conveyed
determined at the highest and best uses permitted under the Redevelopment Plan for Project Area
No. 2, the estimated value of the interest to be conveyed or leased, determined at the use and with
the conditions, covenants, and development costs required by the proposed Disposition and
Development Agreement, the purchase price thereof, and an explanation of why the sale of the
property will assist in the elimination of blight are available for public inspection and copying at a
cost not to exceed the cost of duplication at the Office of the City Clerk of the City of Palm Desert,
73-510 Fred Waring Drive, Palm Desert, California 92260.
The date, time, and place of said hearing will be as follows:
Date: Thursday, June 24, 1999
Time: 7:00 p.m.
Place: City Council Chamber
Palm Desert Civic Center
73-510 Fred Waring Drive
Palm Desert, California 92260
Any person wishing to be heard regarding this matter may appear at the above date, time and
place. � --
r
'i/ / �/ �, .
t/� / '
Date: June 8, 1999 ���t�����'�"/�,/� ��-�/�� x�'
-�� Sheila R. Gil�igari, City Clerk�
City of Palm Desert , �
w
- � • .EAL ESTATE ANALYSI�. ���ERVICES CO.
° POST OFFICE BOX 2809, PALM DESERT, CALIFORNIA 92261
�' TELEPHONE: (760) 340-1429; FAX: (760) 340-2041
June 10, 1999
Mr. Carlos L. Ortega
Executive Director
PALM DESERT REDEVELOPMENT AGENCY
CITY OF PALM DESERT
73-510 Fred Waring Drive
Palm Desert, California 92260
REFERENCE: Proposed Sale Of Land To CSU
SUBJECT: Report Pursuant To Section 33433 Of The California Health And Safety Code
NOTE: This report is based on the terms and conditions of the DDIA as of April 21, 1999.
Dear Mr. Ortega,
Section 33433 of the California Health and Safety Code stipulates that before any property of the Agency, acquired
directly or indirectly with tax increment funds, is sold or leased for development purposes pursuant to the
redevelopment plan, the sale or lease shall first be approved by the legislative body by resolution after public
hearing. The land the Agency proposes to sell to CSU falls into the category covered by Section 33433.
I have prepared a comprehensive report (included as an attachment to this letter) which is required in order to
comply with Section 33433. Pursuant to the report, I have concluded that the following findings can be included
in the resolution approvinq the sale:
FINDING #1: The Property is currently completely unimproved, and the devetopment of the Project will
assist in the elimination of blight in the area.
FINDING #2: Sale of the Property is consistent with the implementation plan adopted pursuant to Section
33490 of the California Health and Safety Code.
FINDING #3: The consideration is not less that the fair reuse value.
The rationale for these findings can be found in the attached report.
Yours truly,
Leonard R. Wolk, President
Real Estate Analysis Services Company (REASCO)
"LTR C33"I23 08-Jun-99 06:07 PM
� RE,PORT PUFiSUANT TO SECTION 33433 OF THE CAUFORNIA HEALTH AND SAFETY CODE
— page 1 —
�
This report was prepared to comply with the requirements of California Health and Safety Code Section 33433.
The report contains the following sections: Section 1, A summary of the terms and conditions of the proposed
Disposition and Development Agreement (the "DDA") between the Palm Desert Redevelopment Agency (the
"Agency") and the Trustees of the California State University ("CSU") concerning the proposed acquisition by CSU of
certain real property owned by the Agency; Section 2, The cost of the DDA to the Agency; Section 3, The
estimated value of the interest to be conveyed, determined at the highest and best uses permitted under the
Redevelopment Plan; Section 4, The estimated value of the interest to be conveyed, determined at the use and with
the conditions, covenents and development costs required by the DDA (the "reuse value"); and Section 5,
Recommended Findings to be included in the resolution approving the sale.
SECTION 1• Summary of the DDA:
�► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
A.The Subiect Property:
The Agency is the owner of certain real property (the "Site") in the City of Palm Desert (the "City") located at the
northeast corner of Frank Sinatra Drive and the Cook Street Extension, northeast of the Desert Willow Golf
Resort at Palm Desert, within a mile of Interstate 10 and four miles from State Route 111. The Site is legally
described in Exhibit A, attached herein. For purposes of the DDA, the Site is comprised of approximately 200
acres divided into two separate parcels, namely Parcel A, composed of approximately 40 acres and located
immediately at the intersection of Frank Sinatra Drive and the Cook Street Extension and Parcel B, composed
of approximately 160 acres, east of and contiguous to Parcel A.
B. Disposition of Parcel A:
1.The primary mission of CSU is to offer undergraduate and graduate instruction through the master's
degree in the liberal arts and sciences, and professional education, including teacher education.
Regional access to students is an integral part of CSU's mission.
2.The Agency intends to transfer Parcel A to CSU; the purchase price to be paid by CSU shall be $0.
3. Consistent with its mission, after satisfaction of all the conditions of the DDA, CSU has made a firm
commitment to accept Parcel A and relocate the Coachella Valley Center of California State University,
San Bernardino (the "Center") from its current location in purchased quarters at the College of the Desert
in Palm Desert, California to permanent facilities to be developed on Parcel A. CSU intends to construcl
and equip facilities for the Center on Parcet A with funds to be raised through a capital campaign and a
public/private partnership sponsored by California State University, San Bernardino; such facilities wil
yield significant educational, cultural and economic benefits to the Coachella Valley region. Maintenance
and operational costs for the Center will be paid by CSU.
4.The Agency agrees to transfer Parcel A to CSU when Parcel A is ready for development by CSU as par
of the Center.
"LTR C33"/12 08-Jun-99 06:07 PM
, REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
— page 2 —
SECTIUN 1: Summary of the DDA (continued):
•► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
B. Disposition of Parcel A (continued):
5.At the close of escrow for Parcel A, the Agency shall transfer fee simple title of Parcel A to CSU. Parcel A
escrow shall close after satisfaction of the following conditions: (1). CSU shall have committed to the
Agency, in writing, to relocate the Center to Parcel A and to operate it therefrom; (2). CSU shall have
presented to the Planning Committee satisfactory proof that it has obtained adequate financing
commitments for the development and operation of the Center on Parcel A. The Planning Committee will
consist of nine members; four members to be identified by the Mayor of Palm Desert; four members to
be identified by the President of CSU, San Bernardino; the Mayor and the President will jointly identify
the ninth member,who will be the chair.
6.CSU shall begin construction of the Center within _years from the recording date of the Grant Deed by
which the Agency conveyed Parcel A to CSU, and shall complete construction of the three buildings
(three Phases) which constitute the Center and open them for operation according to the following
schedule: (a). The first building of the Center shall be open and operating within 5 years after the
recording date of the Grant Deed. (b). The second building of the Center shall be open and operating
within 7 years after the recording date of the Grant Deed. and (c). The third building of the Center shall
be open and operating within 9 years after the recording date of the Grant Deed, unless such time period
is extended by the mutual agreement of the Agency and CSU. If CSU does not comply with this
schedule, then, after due notice and without a timely cure by CSU, at the option of the Agency, the DDA
shall terminate, the Parcel B Option shall be cancelled, and at the option of the Agency, the portions of
Parcel A upon which construction has not begun or been completed shall revert to the Agency and the
Agency will be free to use or dispose of the unimproved or incomplete portions of Parcel A and all of
Parcel B in any lawful manner.
C. Disposition of Parcel B:
1.The Agency has granted to CSU an Option to purchase Parcel B of the Site. The Option term will begin on
the DDA execution date and will end 25 years after the execution date of the DDA. During the Option
term; Parcel B will be made available to CSU, at a purchase price of $0, in the event that the State of
California (the "State") authorizes CSU to develop a fully independent campus of the CSU system (the
"University Campus") on the Site (Parcels A and B).
2. Pending the exercise of the Option, CSU, the City and the Agency will participate in a planning process to
determine mutually compatible, temporary land uses for Parcel B until construction begins on the
University Campus.
3.Within 180 days after construction of the third building of Parcel A has begun, CSU will initiate a feasibility
study to include a timetable for the growth and development of the Site, including the transition from the
Center, to the University Campus on Parcels A and B, with an ultimate estimated size of 25,000 full time
equivalent ("FTE") students.
"LTR C33"/17 09-Jun-99 04:05 PM
, REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
— page 3 —
SECTlOn 1• Summary of the DDA (continued):
�► Reference is made to the DDA for full particulars of any provision described he�ein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
C.Disposition of Parcel B (continued): ,
4. If it has been decided that CSU will develop the University Campus, the Parties agree that the parcels
comprising Parcel B will be conveyed to CSU in phases, subject to CSU providing reasonably
satisfactory evidence to the Agency of its ability and intention to construct the University Campus in
phases, including evidence of its ability to ultimately complete the entire University Campus within a
mutually agreed—to time frame. Each parcel of Parcel B will be conveyed to CSU, in a manner and
program mutually acceptable to CSU and the Agency, when CSU is ready and able to commence
construction of the improvements on the applicable parcel.
5. CSU may exercise the Option to purchase Parcel B subject to the satisfaction or waiver (by the Agency)
of the followinq condition:
a.CSU shall have first purchased all of Parcel A and shall have constructed all improvements thereon
described in the Master Plan, and shall be operating the Center therefrom. CSU may not exercise
the Option to purchase Parcel B until all improvements to be constructed on Parcel A have been
completed, and CSU is operating the Center on Parcel A.
6. Before a parcel of Parcel B is conveyed to CSU, CSU shall have presented to the Planning Committee,
and the Planning Committee shall have approved, satisfactory proof that CSU has obtained adequate
financing committments for the construction and operation of the applicable parcel.
7. If CSU exercises the Option to purchase Parcel B, then CSU shall begin constructing the improvements
constituting the University Campus on each phase conveyed to CSU within 18 months, and shall
complete construction within 36 months, after recording the Grant Deed resulting from the close of
escrow for the applicable parcel of Parcel B, unless such time period is extended by the mutual
agreement of the Agency and CSU. If CSU does not comply with this schedule, then, after due notice
and without a timely cure by CSU, at the option of the Agency, the DDA shall terminate, the Parcel B
Option (applicable to phases for which the Option has not been exercised) shall be cancelled, and at the
option of the Agency, the unimproved or incomplete portions of Parcel B shall revert to the Agency, and
the Agency will be free to use or dispose of, in any lawful manner, the portion of the Site still owned by
the Agency and the unimproved or incomplete parcels of Parcel A and Parcel B owned by CSU.
C. Use of the Site:
1. CSU agrees that it shall, in perpetuity, use Parcel A only for the operation of the Center or as part of the
University Campus (if one should be built), and if CSU exercises the option for Parcel B, it shall use both
Parcels A and B only for the operation of the University Campus.
2. ff any portion of the Site transferred by the Agency to CSU is reasonably determined by the Parties to be
unnecessary for CSU's campus, or is not being used primarily as part of a public institution of higher
education operated by CSU, then, after due notice and without a timely cure by CSU, at the option of the
Agency, such portion of the Site, whether improved or not, shafl revert to the Agency.
"LTR C33"/13 09-Jun-99 04�10 PM
, REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
- page 4 -
SECTION 2: Cost of the aqreement (the 'DDA') to the Agenc�
�
The cost of the DDA to the Agency is comprised of 3 components: (1). The land acquisition cost; (2). The cost of any
improvements to be provided by the Agency; and (3). The expected interest on the source of funds to finance the
agreement (the Nland carry cosY').
A. Land acquisition cost:
The Agency acquired the subject land in September, 1993 as a result of an Exchange Agreement for a price of
$51,735 per acre. Therefore, the land acquisition cost per Parcel can be expressed as follows:
PARCEL A LAND PARCEL B LAND II TOTAL SITE
ACRES S�. FT. ACRES SQ. FT. ACRES SQ. FT.
1. Amount of land 40 1,742,400 160 6,969,600 200 8,712,000
2. CosUacre;/sq. ft. $51,735 $1.19 $51,735 $1.19I $51,735 $1.19
3. Total cost $2,069,400 $2,069,400 $8,277,600 $8,277,600 $10,347,000 $10,347,000
B. Cost of anV improvements to be provided by the Agency_
The Agency will neither provide nor pay for any of the improvements. CSU will be solely responsible for
providing and paying the construction costs of all the improvements, including the infrastructure.
C. Calculation of the expected land carry cost:
The land acquisition cost was financed by a combimation of a bond issue and a loan from the City.
The apportioninq of the land carry cost is as described the following table:
PARCEL A FUNDS SOURCE PARCEL B FUNDS SOURCE
BONDS CITY LOAN BONDS CITY LOAN
1.Amount of funds $1,069,400 $1,000,000 $4,277,600 $4,000,000
2.The Agency's estimated cost of funds rate 6.125% 5.40% 6.125% 5.400%
3. Expected payment term (years) 30 30 30 30
4. Estimated interest cost (NPV) per acre $33,266 $41,055 $33,266 $41,055
5.Times number of acres 20.67 19.33 83 77
6. Land carry cost $687,632 $793,566 $2,750,529 $3,174,263
D. Total cost of the DDA to the Aqency;
IMPROVE- LAND CARRY
LAND COST -MENT COST COST TOTAL COST
1. Parcel A land:
a.Total amount $2,069,400 $0 $1,481,198 $3,550,598
b. Per acre $51,735 $0 $37,030 $88,765
c. Per square foot $1.19 $0 $0.85 $2.04
2. Parcel B land:
a.Total amount $8,277,600 $0 $5,924,793 $14,202,393
b. Per acre $�1,735 $0 $37,030 $88,765
c. Per square foot $1.19 $0 $0.85 $2.04
3.Total site:
a.Total amount $10,347,000 $0 $7,405,991 $17,752,991
b. Per acre $51,735 $0 $37,030 I $88,765
c. Per square foot $1.19 $0 $0.85 � $2.04
"LTR C33"!14 08-Jun-99 06:07 PM
. {iEPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
— page 5 —
SECTIO.fd 3: The estimated value of the interest to be conveyed, determined at the highest and best uses
� permitted under the Redevelopment Plan:
Knowledgeable real estate professionals have concluded that because of its zoning and tocation, the subject Site
has a valuation of $72 000 per acre Therefore the fair market value of the Site can be expressed, as follows:
PARCEL A LAND PARCEL B LAND I TOTAL SITE
ACRES SQ. FT. ACRES S�. FT. ACRES S�. FT.
1. Amount of land 40 1,742,400 160 6,969,600 200 8,712,000
2. Value/acre; /sq.ft. $72,000 $1.65 $72,000 $1.65 $72,000 $1.65
3. Total value $2,880,000 $2,880,000 $11,520,000 $11,520,000 $14,400,000 $14,400,000
SECTION 4: The estimated value of the interest to be conveyed, determined at the use and with the
conditions covenants and development costs required by the DDA (the 'Fair Reuse Value'):
In accordance with the terms and conditions of the DDA, CSU is required to develop Parcel A solely as the
permanent Coachella Valley Center of California State University, San Bernardino, and if the State authorizes CSU to
develop an independent campus of the CSU system on the Site, CSU will be required to build only the necessary
university facilities on the remainder of the Site. Pursuant to the audited budget of the CSU system f�r the latest fiscal
year, total expenses are approximately equal to total revenues, so the CSU system is essentially operated as a
non—profit entity. Capital funding for acquisition and construction for the CSU system is accomplished by the State
issuing General Obligation Bonds. According to the Dean of the Center, because of the current backlog of approved
projects, it would take at least 15 years before the State could issue bonds to pay for the land and improvements for
the subject project, and no other State funds are available for this purpose.
Therefore, because of the land usage and the timing of facilities development imposed on CSU by the
terms and conditions of the DDA, the fair reuse value of the 'interest to be conveyed' is essentially $0.
SECTION 5• Findinqs to be included in the resolution approvinq the sale:
The resolution shall contain the following findings: (1). The sale or lease of the property will assist in the elimination
of btight; (2). The sale or lease of the property is consistent with the implementation plan adopted pursuant to
Section 33490 of the California Health and Safety Code; and one of the following two additional findings: (3). The
consideration is not less than the fair market value at its highest and best use in accordance with the redevelopment
plan or (4). The consideration is not less than the fair reuse value at the use and with the covenants and conditions
and development costs authorized by the sale. -
The followinq findinqs can be included in the resolution ap�rovinq the sale:
FINDING #1: The Site is currently completely unimproved, and the development of the CSU project will
assist in the elimination of blight in the area.
FINDING #2: Sale of the Site is consistent with the implementation plan adopted pursuant to Section
33490 of the California Health and Safety Code.
FINDING #3: The consideration ($0) is not less that the fair reuse value ($0).
"LTR C33"/15 09-Jun-99 04:19 PM
� DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated as of
, 1999, is entered into by and between the PALM DESERT REDEVELOPMENT
AGENCY, a public body, corporate and politic (the "Agency"), and THE TRUSTEES OF THE
CALIFORNIA STATE UNIVERSITY ("CSU"), and is executed with reference to the following
circumstances as described herein.
RECITALS
A. The purpose of this Agreement is to effectuate the Redevelopment Plan for Project Area
_of the Agency(the "Redevelopment Plan"), in the City of Palm Desert, California,by facilitating
improvements to real property within the Project Area(as defined below).
B. The Redevelopment Plan has been approved and adopted by Ordinance No. of the
City of Palm Desert adopted
C. The Agency is a public body, corporate and politic, exercising governmental functions
and powers, and organized and existing under the Community Redevelopment Law of the State of
California.
D. CSU, or California State University, is an entity of the State of California, and is
governed by its Board of Trustees. It receives its authority from the California Education Code.
E. Construction of the Project will assist in the elimination of blight in the Project Area,
provide additional jobs, and substantially improve the economic and physical conditions in the Project
Area in accordance with the purposes and goals of the Redevelopment Plan.
F. The land uses specified in this Agreement and the provisions relating to construction of
the Project are consistent with the provisions of the Redevelopment Plan and each of its applicable
elements.
G. The Agency and CSU desire to develop the university campus described below and the
related infrastructure in a coordinated, cooperative, and timely manner.
H. CSU's primary mission is to offer undergraduate and graduate instruction through the
master's degree in the liberal arts and sciences and professional education, including teacher education
(Education Code Section 66608). Regional access for students to this instruction is an integral part of
CSU's mission.
I. The Agency is the owner of certain real property (the "Site") generally located at the
northeast corner of Frank Sinatra Drive and Cook Street, within the City of Palm Desert, California,
within one mile of Interstate 10 and four miles from State Route 111. The Site is legally described in
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Exr�it A, attached hereto and incorporated by reference herein. For purposes of this Agreement, the
Site consists of two parcels, namely, Parcel A, composed of approximately 40 acres, and Parcel B,
composed of approximately 160 acres. CSU may request an increase of the size of Parcel A,beyond the
40 acres, and the Agency agrees to consider such request provided that CSU has submitted all
documents requested by the Agency for such consideration. Agency's consideration shall be sole and
absolute with no obligation by the Agency to grant such a request. Parcel A shall be divided into 3
parcels for a phased development, and Parcel B shall be subdivided into such number of parcels as the
Parties shall agree upon as provided herein. The Site is close to the center of the Coachella Valley.
Cook Street and the interchange on Interstate 10 will provide excellent access to the Site for students
residing in the region. The City of Palm Desert (the "City"), the Agency, and CSU intend to encourage,
support and provide for other means of transportation to the Site including bus, car-pooling and bicycle.
J. Consistent with its mission, CSU currently operates from the College of the Desert the
Coachella Valley Center of California State University, San Bernardino (the "Center").
K. The Agency, the City, and CSU entered into a Memorandum of Understanding (the
"MOU") dated November 9, 1994, which initiated a process by which CSU would study the feasibility
of relocating the Center from its current location at leased quarters at the College of the Desert to Parcel
A, and, if the State of California(the "State") authorizes CSU to convert the Center to a University
Campus, as described below, CSU will develop the University Campus on Parcel A and Parcel B.
L. Following execution of the MOU, the City and Agency entered into a cooperative
planning process with CSU to determine mutually acceptable short and long term land uses to occur on
the Site. The process resulted in the adoption by the Coachella Valley Center Master Plan Advisory
Committee (the "Committee") of a Master Plan (the "Master Plan") for the California State University,
San Bernardino Permanent Coachella Valley Off-Campus Center, dated March 1997.
M. As a result of the development of the Master Plan, the Agency and CSU have negotiated
this Agreement, by which the Agency shall convey Parcel A to CSU, and CSU shall acquire Parcel A
and relocate the Center to Parcel A from its current location in leased quarters at the College of the
Desert, and shall construct and equip facilities for the Center on Parcel A with funds raised through a
capital campaign and a private/public partnership sponsored by California State University, San
Bernardino. CSU has provided to the Agency proof satisfactory to the Agency of its commitment to
relocate the Center to Parcel A. Such a facility will yield significant educational, cultural, and economic
benefits to the Coachella Valley region. Pursuant to this Agreement, CSU will begin construction of the
Center within 5 years from date of execution of this Agreement. In addition, pursuant to this
Agreement, the Agency shall grant to CSU an option to purchase Parcel B, as described in Article 3,
below.
N. The Agency and CSU desire to enter into this Agreement in order to establish
commitments for the development and provision of public services, public uses, and public
infrastructure related to the development of the Site by CSU. The Agency recognizes the benefit to the
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regi� and its citizens of having CSU acquire and develop the Site. CSU recognizes that it is in the best
interests of the state and its citizens to develop the Site for purposes of its higher education mission.
O. A material inducement to the Agency to enter into this Agreement is CSU's covenant to
construct the Improvements on the Site in accordance with the terms of this Agreement.
P. The City and the Agency served as co-lead agencies for the Environmental Impact Report
("the EIR") on the proposed uses of the Site as described in the Master Plan, as required by the MOU.
The City and Agency duly considered and certified the EIR as completed on , 1999.
Q. The Agency has completed the report required by California Health and Safety Code
Section 33433.
R. The Agency and the City held the public hearings required by California Health and
Safety Code Sections 33433 on [specifv dates]
S. The Agency and the City have determined that the Agency must furnish consideration for
the land comprising the Site as required by California Health and Safety Code Sections 33445(a)(1)
through 33445(a)(3).
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants
contained in this Agreement the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS.
Section 1.1 Definitions. The following terms as used in this Agreement shall have the
meanings given unless expressly provided to the contrary:
1.1.1 A enc means the Palm Desert Redevelopment Agency, a public body, corporate
and politic, exercising governmental functions and powers, and organized and existing under the
Community Redevelopment Law of the State of California.
1.1.2 Aeencv Board means the board of directors of the Palm Desert Redevelopment
Agency.
1.1.3 A�reement means this Disposition and Development Agreement.
1.1.4 Center Improvements means all buildings, landscaping, infrastructure, utilities, and
other improvements for the Center to be built on Parcel A or any part thereon, as described in the Master
Plan.
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f
.� 1.1.5 Citv means the City of Palm Desert, a municipal corporation.
1.1.6 Citv Council means the City Council of the City of Palm Desert, a municipal
corporation.
1.1.7 Center means the Coachella Valley Center of California State University, San
Bernardino, a state sponsored and financed off-campus center of approximately 78,642 square feet of
building improvements, to be developed on Parcel A, consistent with the Master Plan.
1.1.8 Close of the Parcel A Escrow is defined in Section 2.4.
1.1.9 Close of the Parcel B Escrow is defined in Section 3.8.
1.1.10 CSU means the Trustees of the California State University, an agency of the State
of California, and receiving its authority from the California Education Code.
1.1.11 Escrow Holder means Title Company, a licensed
escrow holder mutually selected by the Agency and CSU.
1.1.12 Hazardous Materials means any chemical, material or substance now or hereafter
defined as or included in the definition of"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic substances," "pollutant or
contaminant," "imminently hazardous chemical substance or mixture," "hazardous air pollutant," "toxic
pollutant," or words of similar import under any local, state or federal law or under the regulations
adopted or publications promulgated pursuant thereto applicable to the Site, including, without
limitation: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §9601, et seq. ("CERCLA"); the Hazardous Materials Transportation Act, as amended, 49
U.S.C.§ 1801, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq.;
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq. The term
"Hazardous Materials" shall also include any of the following: any and all toxic or hazardous
substances, materials or wastes listed in the United States Department of Transportation Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and in
any and all amendments thereto in effect as of the date of the close of any escrow; oil, petroleum,
petroleum products (including, without limitation, crude oil or any fraction thereo�, natural gas, natural
gas liquids, liquified natural gas or synthetic gas usable for fuel, not otherwise designated as a hazardous
substance under CERCLA; any substance which is toxic, explosive, corrosive, reactive, flammable,
infectious or radioactive (including any source, special nuclear or by-product material as defined at 42
U.S.C. § 2011, et seq.), carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by
any governmental authority; asbestos in any form; urea formaldehyde foam insulation; transformers or
other equipment which contain dielectric fluid containing levels of polychlorinated byphenyls; radon
gas; or any other chemical, material or substance (i) which poses a hazard to the Site, to adjacent
properties, or to persons on or about the Site, (ii) which causes the Site to be in violation of any of the
� -4-
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afo�.*nentioned laws or regulations, or(iii) the presence of which on or in the Site requires investigation,
reporting or remediation under any such laws or regulations.
1.1.13 Improvements means all buildings, landscaping, infrastructure, utilities, and other
improvements to be built on the Site, or any part thereon, and shall mean both the Center Improvements
and the University Campus Improvements.
1.1.14 Master Plan has the meaning set forth in Recital .L.
1.1.15 O�ening; of Escrow means, with respect to Parcel A, the date upon which Escrow
Holder receives a fully executed copy of this Agreement, and with respect to Parcel B, the date upon
which the Agency and CSU actually open escrow pursuant to Section 3.8.
1.1.16 Ontion means the option to purchase Parcel B granted by the Agency to CSU in
accordance with Article 3 hereof.
1.1.17 Planning Committee means the University Development Planning Committee, as
defined in Section 5.5.
1.1.18 Project means CSU's development of the Site with the Improvements and
operation thereof as described in this Agreement and the Master Plan.
1.1.19 Schedule of Performance means the schedule shown in Exhibit B, attached hereto
and incorporated by reference herein.
1.1.20 Site means that certain real property described in Exhibit A, attached hereto and
incorporated herein by reference, which shall be or is contemplated to be developed by CSU. The Site is
composed of two major parcels, identified as Parcel A and Parcel B in Exhibit A.
1.1.21 University Campus shall mean the fully independent, full service, branch campus
of the California State University that may be developed on the Site (including both Parcel A and Parcel
B).
1.1.22 Universit_y Cam�us Improvements shall mean any and all buildings, landscaping,
infrastructure, utilities, and other improvements in connection with the University Campus to be built on
the Site (including Parcel A and Parcel B).
ARTICLE 2 PURCHASE AND SALE OF PARCEL A.
Section 2.1 Transfer of Parcel A. Subject to and in accordance with the terms and conditions
hereinafter set forth, the Agency agrees to transfer to CSU, and CSU agrees to accept from the Agency,
fee simple title to Parcel A, including all water, mineral, oil, gas, and geothermal rights to said parcel,
and including the right to extract the same from said parcel, to the extent such mineral rights are owned
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by 't�' Agency. The Agency shall perform this transfer by donating Parcel A when Parcel A is ready for
development thereof by CSU as part of the Center, as more fully set out below.
Section 2.2 Purchase Price. The purchase price for Parcel A to be paid by CSU (the "Purchase
Price") shall be the sum of$0.
Section 2.3 Condition of Parcel A.
2.3.1 Prior to and during the Parcel A Escrow period, CSU is granted permission to
enter onto Parcel A for the purpose of inspecting the Site, including testing the soil. CSU shall
indemnify, hold harmless, and defend the Agency against and hold the Agency and Parcel A harmless
from, all losses, costs, damages, liabilities, liens, and expenses, including,without limitation, reasonable
attorneys' fees, arising out of such entry and activities by CSU and its agents, employees, or contractors,
prior to the Close of the Parcel A Escrow, except to the extent any such losses, costs, damages,
liabilities, and expenses arise out of the gross negligence or willful acts of the Agency and/or the City.
At any time during its inspection of Parcel A,but within 55 calendar days of the opening of escrow,
CSU shall approve or disapprove of the condition of Parcel A. If CSU disapproves the condition Parcel
A this Agreement (including the Option) and the Parcel A Escrow shall terminate. CSU shall provide to
the Agency its approval or disapproval in writing.
2.3.2 The Agency shall convey Parcel A to CSU in an "as is" "where is" condition,
without any warranty whatsoever to CSU as to the condition of any portion of Parcel A, including
whether Parcel A contains any Hazardous Materials. CSU shall rely upon its own inspection of Parcel A
and CSU's own determination as to whether the physical condition of Parcel A shall be suitable for
CSU's purposes. CSU acknowledges and agrees that:
2.3.2.1 The Agency has made no representation or warranty with respect to Parcel
A except for those representations and warranties contained in this Agreement, and that prior to
the Close of the Parcel A Escrow, the Agency will make no representations and warranties with
respect to Parcel A, other than those contained in this Agreement.
2.3.2.2 CSU is purchasing Parcel A with the ultimate objective constructing new
improvements thereon.
2.3.2.3 CSU's decision to purchase Parcel A shall be based on the results of
CSU's analysis and the reports it shall obtain prior to the Close of the Parcel A Escrow.
2.3.2.4 The Agency has made no representation or warranty as to the accuracy or
completeness of any reports and other materials prepared by any persons, and CSU is not relying
on the accuracy and completeness of any reports and other materials prepared by persons other
than CSU, its agents, or contractors.
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990531 jarH�\MHLINT\WPDATA\CALSTATE\16002752.WPD
� 2.3.2.5 Except as specifically provided in this Agreement, the Agency has made
no representation or warranty with respect to the use, fitness for a particular reason, zoning,
value, improvements, square footages or any other condition of Parcel A.
Except for the Agency's representations, warranties and covenants contained in this
Agreement, CSU is purchasing Parcel A in "AS-IS," "WHERE-IS" condition "WITH ALL FAULTS."
CSU agrees that the Agency has no obligation to remedy any faults, defects, or other adverse conditions
described in any report or other material obtained by CSU or delivered by the Agency to CSU, including
the remediation of any Hazardous Material on Parcel A.
Section 2.4 Onening and Closin� of Escrow. Within 10 days after the Agency's approval of this
Agreement, the Agency and CSU shall cause an escrow (the "Parcel A Escrow") to be opened with
Escrow Holder for the transfer of Parcel A by the Agency to CSU. The Agency and CSU shall deposit
with Escrow Holder a fully executed duplicate original of this Agreement which shall serve as the
escrow instructions for the Parcel A Escrow. The Agency and CSU shall provide such additional escrow
instructions as shall be necessary and consistent with this Agreement. Escrow Holder is authorized to
act under this Agreement and to carry out its duties as Escrow Holder hereunder. Escrow shall close for
Parcel A within 60 days after the opening of the Parcel A Escrow, unless an extension of time is
mutually agreed to.
Section 2.5 Condition of Title: Title Insurance.
2.5.1 Promptly following the execution of this Agreement by both Parties, the Agency
shall order from Title Company ("Title Company"), or another title company
mutually acceptable to the Agency and CSU, for delivery to CSU and to the Agency, a preliminary
report for an ALTA Owner's Standard Coverage Policy of Title Insurance for Parcel A, setting forth all
liens, encumbrances, easements, restrictions, conditions, pending litigation,judgments, administrative
proceedings, and other matters affecting the Agency's title to Parcel A, together with copies of all
documents relating to title exceptions referred to in the Preliminary Report (collectively, the "Parcel A
Preliminary Report"). CSU shall approve or disapprove each exception shown on the Parcel A
Preliminary Report within 55 calendar days following the receipt of the Parcel A Preliminary Report.
Notwithstanding the foregoing, the Agency shall be under no obligation to remove any encumbrance to
title, but the Agency agrees to cooperate in good faith with CSU in CSU's efforts to eliminate any
encumbrance to title, provided the Agency is not obligated to pay any sums to the holder of such
encumbrance to obtain the release thereof.
2.5.2 The Agency shall provide an ALTA survey of Parcel A to CSU ("Survey").
Subject to the terms of Section 2.5.1 above, CSU shall approve or disapprove each encroachment,
overlap, or boundary line dispute, or any other matter that materially and adversely affects title to Parcel
A or that violates any law, rule, or regulation reflected on the Survey (each an "Exception")within 30
days after receiving said ALTA Survey or after the Opening of the Parcel A Escrow, whichever is later.
Any such Exception that CSU disapproves is termed a "Disapproved Exception."
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.�: If CSU is unable to obtain a discharge, satisfaction, release, or termination of a
Disapproved Exception, or if the Agency does not elect to do so, then CSU shall have the right, within
60 days of the Opening of Escrow, to:
2.5.2.1 waive the Disapproved Exception and proceed with Closing the Parcel A
Escrow, accepting title to Parcel A subject to the Disapproved Exception, or
2.5.2.2 terminate this Agreement, in which event both CSU and the Agency shall
be relieved of all further obligation and liability to each other under this Agreement (including
the Option) and all the funds and documents deposited with Escrow Holder shall be promptly
refunded or returned, as the case may be, by Escrow Holder to the depositing party, less
reasonable escrow cancellation fees; or
2.5.2.3 ask Agency for an extension of time to do further investigation prior to
making a decision, which request shall not be unreasonably withheld by Agency.
2.5.3 Upon satisfaction of the conditions to convey title to Parcel A, the Agency shall
convey title of Parcel A to CSU by Grant Deed. Title to Parcel A shall be conveyed subject to (i) all title
exceptions affecting Parcel A shown on the Preliminary Title Report for Parcel A approved by CSU, (ii)
the covenants, conditions and restrictions benefitting and burdening Parcel A as described in this
Agreement, and (iii) any other matters which arise out of the actions of CSU or its agents and
representatives ("Permitted Exceptions") but including all water, mineral, oil, gas, and geothermal rights
to said parcel, including the right to extract the same from said parcel held by the Agency, if any. The
Agency shall use reasonable efforts to cause any disapproved exceptions to be removed by the Close of
the Parcel A Escrow (so long as such exception may be removed without the Agency being obligated to
pay any sums to the holder thereo fl, but if the Agency is unable to remove any disapproved non-
monetary title exceptions, then the Agency shall not be in breach hereof but CSU shall have the right to
terminate this Agreement.
2.5.4 At the Close of the Parcel A Escrow, CSU may, at CSU's sole cost and expense,
purchase a CLTA or an ALTA Owner's Standard Coverage Policy of Title Insurance, issued by the Title
Company, in favor of CSU, insuring that title is vested in CSU free and clear of all liens, easements,
covenants, conditions, restrictions, and other encumbrances of record, other than the Permitted
Exceptions for Parcel A. CSU may obtain one or more extended coverage policies of title insurance or
special endorsements at its own cost.
Section 2.6 Parcel A Escrow Charges. CSU shall pay (i) all Parcel A Escrow charges, and (ii) .
all recording fees, documentary and local transfer taxes that are legally applicable to a transaction
wherein CSU is the transferee.
Section 2.7 Conditions to Close of the Parcel A Escrow. The obligations of the Agency and
CSU under this Agreement to close the escrow for the conveyance of Parcel A, shall be subject to the
satisfaction or waiver of each of the following conditions:
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,,,� 2.7.1 CSU shall have committed, in writing, to relocate the Center to Parcel A and to
operate it therefrom.
2.7.2 CSU shall have obtained adequate financing commitments for development and
operation of Parcel A as a part of the Center, and shall have presented to the Planning Committee proof
of such financing commitments, in a form satisfactory to the Planning Committee, including any
supporting documents reasonably requested by the Planning Committee.
2.7.3 The representations and warranties of the Agency and CSU contained in this
Agreement shall be true and correct as of the Close of the Parcel A Escrow.
2.7.4 The Agency shall have delivered all documents required to be delivered by the
Agency pursuant to Section 2.8 hereof.
2.7.5 The Title Company shall have issued a commitment to issue a Policy of Title
Insurance, as required herein, on the Close of the Parcel A Escrow, subject only to the Permitted
Exceptions on Parcel A,with liability equal to such sum as requested by CSU, showing Parcel A vested
in CSU.
2.7.6 Parcel A shall have been subdivided by into 3 parcels, corresponding to 3 phases of
development, and the division of such parcels and the phases of development shall have been approved
by the Agency, and such phasing plan shall have been incorporated into the Master Plan. �This has not
yet been approved by Elisabeth Walter--JeffJ
2.7.7 If the foregoing conditions are not satisfied, and the Parcel A Escrow has not
closed, by , 200_, then either the Agency or CSU shall have the right to terminate this
Agreement. [I believe we should have an outside date for this because, otherwise, Parcel A may stay
in escrow in definitely, but this has not yet been approved by Elisabeth Walter.--JeffJ
Section 2.8 De�osits into Parcel A Escrow. The Agency agrees to deliver to Escrow Holder
prior to the Close of the Parcel A Escrow, the following instruments and documents, the delivery of each
of which shall be a condition of the Close of the Parcel A Escrow:
2.8.1 A Grant Deed, duly executed and acknowledged by the Agency, conveying a fee
simple interest in Parcel A to CSU. Said Grant Deed shall be in the form attached hereto as Exhibit B;
2.8.2 The Agency's affidavit as contemplated by California Revenue and Taxation Code
§18662 ("Withholding Affidavit");
2.8.3 A Certification of Non-Foreign Status in accordance with I.R.C. Section 1445 (the
"FIRPTA Certificate"); and
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..a� 2.8.4 Such proof of the Agency's authority and authorization to enter into this
transaction as the Title Company may reasonably require in order to issue CSU's policy of title
insurance.
Section 2.9 Parcel A Escrow's Closin�Actions. On the Close of the Parcel A Escrow, Escrow
Holder shall close the Parcel A Escrow as follows:
2.9.1 Record the Grant Deed (marked for return to CSU)with the Riverside County
Recorder;
2.9.2 Obtain conformed copies of all instruments so recorded, bearing the County
Recorder's file marks, and deliver a copy of same to the attorneys for the Agency and CSU;
2.9.3 Issue the Title Policy, or cause the Title Company to issue the Title Policy, to
CSU, with CSU as the insured;
2.9.4 If applicable, prorate any taxes, assessments, rents, and other charges, if any, as of
the Close of the Parcel A Escrow, if and to the extent CSU shall be liable for payment thereof after the
Close of the Parcel A Escrow.
2.9.5 Charge CSU for those costs and expenses to be paid by CSU under the terms of
the Parcel A Escrow and disburse any net funds remaining after the preceding disbursements to CSU;
2.9.6 Prepare and deliver to both CSU and the Agency one signed copy of Escrow
Holder's closing statement showing all receipts and disbursements of the Parcel A Escrow; and
2.9.7 Deliver to CSU the FIRPTA Certificate and the Withholding Affidavit.
Section 2.10 Additional Provisions. The Agency and CSU may execute additional appropriate
escrow instructions if necessary as prepared by the Escrow Holder, which are consistent herewith. If
there is any inconsistency between the terms hereof and the terms of the additional escrow instructions,
the terms hereof shall control unless an intent to amend the terms hereof is expressly stated in such
instructions. Any amendment of these escrow instructions shall be in writing and signed by both the
Agency and CSU. At the time of any amendment, Escrow Holder shall agree to carry out its duties as
escrow holder under such amendment. Escrow Holder is instructed to send copies of notices, demands
and communications between the Agency and CSU to or from the Agency or to or from CSU, to both
parties to the addresses and in the manner established in Section 8.1 of this Agreement.
ARTICLE 3 OPTION TO PURCHASE PARCEL B.
Section 3.1 Grant of Option. The Agency hereby grants to CSU an option (the "Option") to
purchase Parcel B.
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,,,,� Section 3.2 Term. The term of the Option shall commence on the date hereof, and shall expire
25 years from the date of execution of this Agreement.�Per our last discussions with CSU, the term of
the Option was to eYpire within 30 years. I have changed this to 25 years per the direction of the
Agency Board. --JeffJ
Section 3.3 O_ption Price. The Purchase Price of the Parcel B property pursuant to the Option is
$0.00.
Section 3.4 Exercise of the Option in Phases. The Parties agree that it is impractical for CSU to
commit to commence construction of the entire campus upon the Close of the Parcel B Escrow.
Therefore, if CSU provides reasonably satisfactory evidence to the Agency of its intention and ability to
do so in phases, including evidence of its ability to ultimately complete the entire University Campus
within the time frame set forth in Section 3.7.2 hereof, then the parcels comprising Parcel B shall be
conveyed in a phased fashion, with each parcel being conveyed to CSU, in a manner and program
mutually acceptable to the Agency and CSU, from time to time as CSU is ready and able to commence
construction of the Improvements on the applicable portion, as provided below. [Per Elisabeth Walter,
CSU does not agree to the financing commitment as a condition to the conveyance of Parcel B. --
JeffJ
Section 3.5 Use of Parcel B Pendin�Exercise of the Option. Pending the exercise of the Option,
CSU, the City, and the Agency shall enter a planning process to determine mutually compatible
temporary land uses to occur on Parcel B until such time as construction begins on the University
Campus. The Agency and CSU envision this planning process as a cooperative one which could result
in joint use facilities as well as the possibility of temporary income producing activities (which income
shall be retained by the Agency). The Agency shall have the right to temporarily lease or license Parcel
B, or to enter into concession agreements thereof, and such lessees, licenses, and concessionaires shall
have the right to construct improvements thereon, provided that such uses are reasonably compatible
with adjacent uses, and provided further, that the leases and licenses with respect to the applicable
parcels comprising Parcel B shall expire or be terminable by the date upon which the Agency and CSU,
pursuant to such planning process, anticipate that the CSU shall require title to such parcel for the
development thereof. Moreover, the Agency shall have the right to construct any improvements thereon
for public purposes, subject to the review and recommendations of the Planning Committee and CSU. If
the Agency develops any temporary improvements on Parcel B or any portion thereof, then CSU shall
not be entitled to exercise this Option with respect to such portions without the Agency's prior written
consent until the later of(i) January 1, 2010, or(ii) the expiration of the period of time the Agency
intended to use such improvements for other public purposes, so as to allow the Agency a reasonable
time to use and benefit from any improvements constructed by the Agency on Parcel B, but no later than
the expiration of any lease, license, or concession agreement on such portion of Parcel B.
Section 3.6 Condition of Parcel B.
3.6.1 Prior to exercise of the Option, CSU shall have the right to enter onto Parcel B for
the purpose of inspecting and testing the soil, provided such entry is performed without unreasonable
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inte��rence with the then existing users of Parcel B or damage to any improvements thereon. CSU shall
indemnify, hold hannless, and defend the Agency against and hold the Agency and Parcel B harmless
from, all losses, costs, damages, liabilities, liens, and expenses, including, without limitation,reasonable
attorneys' fees, arising out of such entry and activities by CSU and its agents, employees, or contractors,
except to the extent any such losses, costs, damages, liabilities, and expenses arise out of the gross
negligence or willful acts of the Agency and/or the City.
3.6.2 If CSU exercises the Option, then the Agency shall convey to CSU each parcel
comprising Parcel B in an "as is" "where is" condition, without any warranty whatsoever to CSU as to
the condition of any portion of Parcel B, including whether Parcel B contains any Hazardous Materials.
By exercising the Option, CSU shall be deemed to have inspected Parcel B and CSU shall be deemed to
have determined that the physical condition of Parcel B is suitable for CSU's purposes. CSU
acknowledges and agrees:
3.6.2.1 The Agency has made no representation or warranty with respect to
Parcel B except for those representations and warranties contained in this Agreement, and that
prior to the Close of the Parcel B Escrow, the Agency will make no representations and
warranties with respect to Parcel B other than those contained in this Agreement.
3.6.2.2 CSU is purchasing Parcel B with the ultimate objective of demolishing
any existing improvements, using any improvements already in place, and/or constructing new
improvements thereon.
3.6.2.3 CSU's decision to purchase Parcel B will be based on the results of its
analysis and the reports it obtains prior to the exercise of the Option.
3.62.4 The Agency has made no representation or warranty as to the accuracy or
completeness of any reports and other materials prepared by any persons, and CSU is not relying
on the accuracy and completeness of any such reports and other materials prepared by persons
other than CSU, its agents, or contractors.
3.6.2.5 Except as specifically provided in this Agreement, the Agency has made
no representation or warranty with respect to the use, fitness for a particular reason, zoning,
value, improvements, square footages or any other condition of Parcel B.
Except for the Agency's representations, warranties and covenants contained in this
Agreement, CSU is purchasing Parcel B in "AS-IS," "WHERE-IS" condition "WITH ALL FAULTS."
CSU agrees that the Agency has no obligation to remedy any faults, defects, or other adverse conditions
described in any report or other material obtained by CSU or delivered by the Agency to CSU, including
the remediation of any Hazardous Material on Parcel B.
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� Section 3.7 Conditions to Exercise the Option. CSU's right to exercise the Option, and the
Agency's obligation under this Agreement to transfer Parcel B, or any phase thereof, to CSU pursuant to
the Option shall be subject to the satisfaction or waiver of each of the following conditions:
3.7.1 CSU shall have purchased Parcel A, shall have constructed the Improvements as
described in the Master Plan, and shall be operating the Center therefrom. Notwithstanding anything
provided herein to the contrary, CSU may not exercise the Option for Parcel B until all the
Improvements to be constructed on Parcel A as specified in the Master Plan have been completed and
CSU is operating the Center from Parcel A.
3.7.2 CSU shall set forward its financial plan for development and operation of the Phase
to be transferred and shall have presented to the Planning Committee reasonable proof of such financial
commitments,[OPENJ and the Planning Committee shall have approved such commitments as being
acceptable for constructing and operating the improvements on such phase.
3.7.3 The Agency and CSU shall have mutually agreed upon the sequence of phasing of
the transfer of the parcels comprising Parcel B as the University Campus develops and is built out.
3.7.4 The parcels comprising Parcel B shall have been subdivided by CSU into phases
that have been approved by the Agency, and such phasing plan shall have been incorporated into the
Master Plan.
[OPENJ 3.7.4.1 CSU and the Planning Committee shall have developed and mutually
approved, which approval shall not unreasonably be withheld, a development performance schedule
and budget relating to the development of each phase of the Universiry Campus.
Section 3.8 Ouening and Closin�of Parcel B Escrow. Within 10 days after CSU's delivery of its
notice of exercise of the Option, if all conditions to the valid exercise of the Option set forth in Section
3.7 have been satisfied, then the Agency and CSU shall cause an escrow (the "Parcel B Escrow") to be
opened with Escrow Holder for the transfer of the applicable phase of Parcel B by the Agency to CSU.
The Agency and CSU shall deposit with Escrow Holder a fully executed duplicate original of this
Agreement which shall serve as the escrow instructions for the Escrow. The Agency and CSU shall
provide such additional escrow instructions as shall be necessary and consistent with this Agreement.
Escrow Holder is authorized to act under this Agreement and to carry out its duties as Escrow Holder
hereunder. The Escrow concerning the applicable phase of Parcel B shall close (the "Close of the Parcel
B Escrow"), as soon as reasonably possible after the satisfaction of the conditions precedent for the
Close of the Parcel B Escrow (or such phase thereo fl, but, in any event, within 180 days after the
opening of such Escrow (unless an extension of such time is mutually agreed to by CSU and the
Agency). Any portion of Parcel B which is not conveyed pursuant to the foregoing provisions due to the
fact that all the conditions precedent described in Section 3.7 shall be continue to be subject to the
Option, which may be exercised with respect to such additional parcels when the conditions precedent to
exercising same have been satisfied.
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.� Section 3.9 Condition of Title: Title Insurance.
3.9.1 Promptly following the execution of this Agreement by both Parties, and again
promptly following the opening of the Parcel B Escrow, the Agency shall order from
Title Company("Title Company"), or another title company mutually acceptable to the Agency and
CSU, for delivery to CSU and to the Agency, a preliminary report for a CLTA Owner's Standard
Coverage Policy of Title Insurance for Parcel B, setting forth all liens, encumbrances, easements,
restrictions, conditions,pending litigation,judgments, administrative proceedings, and other matters
affecting the Agency's title to Parcel B, together with copies of all documents relating to title exceptions
referred to in the preliminary report (collectively, the "Parcel B Preliminary Report"). CSU shall
approve or disapprove each exception shown on the Parcel B Preliminary Report within 55 calendar
days following the receipt of the Parcel B Preliminary Report. Notwithstanding the foregoing, the
Agency shall be under no obligation to remove any encumbrance to title, but the Agency agrees to
cooperate in good faith with CSU in CSU's efforts to eliminate any encumbrance to title, provided the
Agency shall not be obligated to pay any sums to the holders of such encumbrances to obtain the release
thereof.
3.9.2 The Agency shall provide to CSU an ALTA survey of Parcel B ("Survey") and
the accompanying preliminary title report, as soon as available to the Agency, but no later than 20 days
after execution of this Agreement. Subject to the terms of Section 3.9.1 above, CSU shall approve or
disapprove each encroachment, overlap, or boundary line dispute, or any other matter that materially and
adversely affects title to Parcel B or that violates any law, rule, or regulation reflected on the Survey
(each an "Exception") within 55 calendar days after the Opening of the Parcel B Escrow. Any such
Exception that CSU disapproves is termed a "Disapproved Exception."
If CSU is unable to obtain a discharge, satisfaction, release, or termination of a
Disapproved Exception, or if the Agency does not elect to do so, then CSU shall have the right within 60
days of the Opening of the Parcel B Escrow to:
3.9.2.1 waive the Disapproved Exception and proceed with Closing the Parcel B
Escrow, accepting title to Parcel B subject to the Disapproved Exception, or
3.9.2.2 rescind its exercise of the Option and terminate the Parcel B Escrow, in
which event both CSU and the Agency shall be relieved of all further obligation and liability to
each other under the Option, and all the funds and documents deposited with Escrow Holder
shall be promptly refunded or returned, as the case may be, by Escrow Holder to the depositing
party, less any reasonable escrow cancellation fees; or
3.9.2.3 ask Agency for an extension of time to do further investigation prior to
making a decision, which extension shall not be unreasonably denied by the Agency.
3.9.3 At the Close of the Parcel B Escrow, or the applicable phase thereof, the Agency
shall convey title in fee simple to Parcel B (or the applicable phase thereo� to CSU by grant deed. Title
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to P�cel B (or the applicable phase thereo fl shall be conveyed subject to (i) all title exceptions affecting
Parcel B (or the applicable phase thereo fl shown on the Preliminary Title Report for Parcel B approved
by CSU, (ii)the covenants, conditions and restrictions benefitting and burdening Parcel B (or the
applicable phase thereo fl as described in this Agreement, and (iii) any other matters which arise out of
the actions of CSU or its agents and representatives ("Parcel B Permitted Exceptions"), but including all
water, mineral, oil, gas, and geothermal rights to said parcel, including the right to extract the same held
by the Agency, if any. CSU agrees to approve or disapprove any title exceptions within 55 calendar
days after receipt of the preliminary title report and all documents noted as exceptions thereof
subsequent to the opening of the Parcel B Escrow. The Agency shall use reasonable efforts to cause any
disapproved exceptions to be removed by the Close of the Parcel B Escrow(so long as such exception
may be removed without the Agency being obligated to pay any sums to the holder thereo�, provided
same may be removed without any payment by the Agency to the holder of the encumbrance so
disapproved,but if the Agency is unable to remove any disapproved title exceptions, then the Agency
shall not be in breach hereof but CSU shall have the right to terminate this Agreement.
3.9.4 At the Close of the Parcel B Escrow, or the applicable phase thereof, CSU may, at
CSU's sole cost and expense, purchase a ALTA Owner's Standard Policy of Title Insurance, issued by
the Title Company, in favor of CSU, insuring that title is vested in CSU free and clear of all liens,
easements, covenants, conditions, restrictions, and other encumbrances of record, other than the Parcel B
Permitted Exceptions. CSU may obtain one or more extended coverage policies of title insurance or
special endorsements at its own cost.
Section 3.10 Parcel B Escrow Charges. CSU shall pay (i) all Parcel B Escrow charges, and (ii)
all recording fees, documentary and local transfer taxes, if any are legally required to be paid by the
CSU.
Section 3.11 Conditions to Close of the Parcel B Escrow. The obligations of the Agency and
CSU under this Agreement to close the Parcel B Escrow, with respect to any phase thereof, shall be
subject to the satisfaction or waiver of each of the following conditions:
3.11.1 The representations and warranties of the Agency and CSU contained in this
Agreement shall be true and correct as of the Close of the Parcel B Escrow (or the applicable phase
thereo�.
3.11.2 The Agency shall have delivered all documents required to be delivered by the
Agency pursuant to Section 3.12 hereof.
3.11.3 The Title Company shall have issued a commitment to issue a policy of title
insurance as required on the Close of the Parcel B Escrow in Section 3.9.
Section 3.12 Deposits into Parcel B Escrow. The Agency agrees to deliver to Escrow Holder
prior to the Close of the Parcel B Escrow, or the applicable phase thereof, the following instruments and
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doa�=nents, the delivery of each of which shall be a condition of the Close of the Parcel B Escrow, or
such phase thereof:
3.12.1 A Grant Deed, duly executed and acknowledged by the Agency, conveying a fee
simple interest in the applicable phase of Parcel B to CSU in fee simple. Said Grant Deed shall be in the
form attached hereto as Exhibit B;
3.12.2 The Agency's affidavit as contemplated by California Revenue and Taxation Code
§18662 ("Withholding Affidavit")(or any successor thereto);
3.12.3 A Certification of Non-Foreign Status in accardance with I.R.C. Section 1445 (the
"FIRPTA Certificate") (or any successor thereto); and
3.12.4 Such proof of the Agency's authority and authorization to enter into this
transaction as the Title Company may reasonably require in order to issue CSU's policy of title
insurance.
Section 3.13 Parcel B Escrow's Closin�Actions. On the Close of the Parcel B Escrow, or the
applicable phase thereof, Escrow Holder shall close the Parcel B Escrow as follows:
3.13.1 Record the Grant Deed (marked for return to CSU)with the Riverside County
Recorder;
3.13.2 Issue the Title Policy or cause the Title Company to issue the Title Policy;
3.13.3 If applicable,prorate taxes, assessments, rents, and other charges, if any, as of the
Close of the Parcel B Escrow, if and to the extent CSU shall be liable for payment thereof after the Close
of the Parcel B Escrow.
3.13.4 Charge CSU for those costs and expenses to be paid by CSU under the terms of
the Parcel B Escrow and disburse any net funds remaining after the preceding disbursements to CSU.
3.13.5 Prepare and deliver to both CSU and the Agency one signed copy of Escrow
Holder's closing statement showing all receipts and disbursements of the Parcel B Escrow; and
3.13.6 Deliver to CSU the FIRPTA Certificate and the Withholding Affidavit.
Section 3.14 Additional Instructions. The Agency and CSU shall execute additional appropriate
escrow instructions,prepared by the Escrow Holder, which are consistent herewith. If there is any
inconsistency between the terms hereof and the terms of the additional escrow instructions, the terms
hereof shall control unless an intent to amend the terms hereof is expressly stated in such instructions.
Any amendment of these escrow instructions shall be in writing and signed by both the Agency and
CSU. At the time of any amendment, Escrow Holder shall agree to carry out its duties as escrow holder
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unc��:such amendment. Escrow Holder is instructed to send copies of notices, demands and
communications between the Agency and CSU to or from the Agency or to or from CSU, to both parties
to the addresses and in the manner established in Section 8.1 of this Agreement.
ARTICLE 4 USE, MAINTENANCE, AND NON-DISCRIMINATION OBLIGATIONS.
Section 4.1 Use of Propertv. CSU agrees that it shall,[in perpetuityJ, use Parcel A only for
operation of the Center or as part of the University Campus (if it should be built), and, if it exercises the
Option, it shall use both Parcel A and Parcel B only for operation of the University Campus, and for no
other purpose whatsoever, except as provided herein, and in all cases consistent with the Master Plan.
Notwithstanding the foregoing, CSU may lease or license (for terms of not to exceed 20 years, including
options) the operation of retail, commercial, restaurant and service uses that are incidental to and directly
supportive of the operation of the Center or the University Campus, as applicable, and to the extent that
are customarily associated with similar university campuses, but subject to the limitations set forth in
Section 4.6. Such permitted uses include a student union, student housing,bookstore, and food
concessionaires and/or restaurants; and provided that the total area of all Permmitted Commercial Uses
shall not be inconsistent with the area for Permitted Commercial Uses set forth in the Master Plan,
�openJ as from time to time amended with the approval of the Agency pursuant to the provisions of
Section 5.5.
[CSU has previously only agreed that the Properry may be used for CSUpurposes only for 99 years.
The Agency Board's last direction is that it be used for this purpose "in�ernetuitv." Also, CSU has
not agreed that the Agency shall have the right to approve changes to the Master Plan. --JeffJ
Section 4.2 Name. CSU agrees that the words "Palm Desert" shall be included, in perpetuity, in
the name of the Center, if the University Campus shall be built, that the name of the University Campus
shall be "California State University, Palm Desert," unless the City and CSU negotiate a mutually
agreeable alternative.
Section 4.3 A�encv's Reversion Rights With Respect to Unim�roved Portions of Parcel A.
4.3.1 [CSU has not yet agreed to the first sentence of this paragraph, which I added
so that there shall be a reasonable way of identifying which land will be subject to reversion if
unimproved. Otherwise, we will have a mess determining how this could operate. --JeffJ Between
the date hereof and , 200_, the Agency and CSU shall revise the Master Plan to divide
Parcel A into 3 discrete parcels of land for a phased development. CSU shall begin construction of the
Center within_years after the date hereof, and shall complete construction of the Center and open it
for operation in accordance with the following schedule: (i) the first building in the Center as described
in the Master Plan shall be open and operating within 5 years after the date of recording the Grant Deed,
(ii) the second building in the Center as described in the Master Plan shall be open and operating within
7 years after the date of recording the Grant Deed, and (iii) the third building in the Center as described
in the Master Plan shall be open and operating within 9 years after the date of recording the Grant Deed,
unless such time period is extended by the mutual agreement of the Agency and CSU. Such dates may
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be �,�ended with the mutual approval of the Agency and CSU. [CSU had previously agreed, with
respect to Parcel A, to open the first building within 8 years, the second building within 10 years, and
the third building within 12 years. Per the Agency Board's direction, this now reads that the first
building shall be completed within S years, the second building within 7 years, and the third building
within 9 years. --JeffJ
4.3.2 If CSU does not commence or complete construction by such dates, then, at the
option of the Agency, the phase of Parcel A for which construction has not then commenced or been
completed shall, at the option of the Agency, shall be subject to reversion to the Agency following 180
days' notice to CSU and if CSU does not cure such default prior to the end of such 180 day period, then
this Agreement (including the Option) shall terminate and be of no further force or effect, the
unimproved phase of Parcel A shall revert to the Agency, free and clear of any and all liens and
encumbrances that may have been create by or with the approval of CSU, and this Agreement (including
the Option, to the extent applicable to phases of Parcel B for which the Option has not theretofore been
exercised) shall terminate and be of no further force or effect, and the Agency will be free to use or
dispose of such unimproved parcel. In such event, CSU shall execute a grant deed to the Agency
conveying fee title to such land, free and clear of all liens and encumbrances created or permitted by
CSU.
Section 4.4 Agencv's Reversion Rights With Respect to Unimproved Portions of Parcel B.
4.4.1 If CSU exercises the Option, then CSU shall begin construction of the
improvements constituting the improvements on each phase conveyed to CSU within 18 months after
recording of the Grant Deed regarding the applicable phase of Parcel B, and complete construction
within 36 months after the conveyance of the applicable parcel (unless such time period is extended by
the mutual agreement of the Agency and CSU). If CSU does not commence construction within such
18-month period, or complete construction within such 36 month period, then, at the option of the
Agency, the parcel so conveyed shall be subject to reversion to the Agency following 180 days' notice to
CSU, and if CSU does not cure such default prior to the end of such 180 day period, then such phase of
Parcel B shall revert to the Agency, free and clear of any and all liens and encumbrances that may have
been create by or with the approval of CSU, and this Agreement (including the Option, to the extent
applicable to phases of Parcel B for which the Option has not theretofore been exercised) shall terminate
and be of no further force or effect, and the Agency will be free to use or dispose of the portion of the
Site still owned by the Agency, and the unimproved parcels of Parcel A and Parcel B owned by CSU. In
such event, CSU shall execute a grant deed to the Agency conveying fee title to such land, free and clear
of all liens and encumbrances created or permitted by CSU.
Section 4.5 A�encX's Ri�hts With Respect to a Chan�e of Use
4.5.1 If after the conveyance of any portion of the Site transferred by the Agency to
CSU (i) is determined by the parties, reasonably and in good faith, to be unnecessary for CSU's campus,
or(ii) is not primarily used by CSU as a part of a public institution of higher education operated by
CSU, whether or not such portion of the Site is improved by CSU, then, the Agency shall send to CSU
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writ�n notice of such determination and CSU shall have 12 months after receipt of such notice to
commence to use such portion of the Site as a part of a public institution of higher education operated by
CSU. If prior to the expiration of such 12 month period CSU has not commenced to use such portion of
the Site as a part of a public institution of higher education operated by CSU, then fee title to such
portion of the Site shall revert to the Agency. In such event, CSU shall execute a grant deed to the
Agency conveying fee title to such land, free and clear of all liens and encumbrances created or
permitted by CSU. Such reversion rights may be waived by the Agency at any time in the Agency's sole
and absolute discretion.
[The reversionary clause one of the biggest points with the CSU.
CSU says that the DDA must also contain (i) an equitable formula design to reimburse the State for
improvements made to any property subject to reversion, (ii) a process for the University and the
Agency to mutually determine whether a portion of the properry is unnecessary and/or will not be
used as part of a public institution for higher education (i.e., the determination cannot be made by tl:e
Agency alone, but must be subject CSU's veto rights), (iii) the DDA must include a process for
mutually determining that the future use of any portion of the properry. CSU also "strongly
recommends"a sunset clause, either by a number of years or when the improvements are all built. It
should be noted that the previous draft had all use restrictions expiring after 99 years (with the
reversionary clause in place for 30 years from now, and for the last 69 years CSU being obligated to
repay the Agency for the purchase price of the property).J
Section 4.6 Restriction on CSU's Transfer of the Site and Rights and Obli�ations Under this
A,�reement. CSU shall not, at any time, convey, sell, encumber, hypothecate, lease or otherwise transfer
(collectively, "Transfer") the Site or any portion thereof, or this Agreement, or any interest therein,
without the prior written consent of the Agency, which consent may or may not be given in the sole and
absolute discretion of the Agency. [This section previously expired after 30 years. Per the direction of
the Agency Board, I have drafted this so that the restrictions on transfer shall remain in effect in
perpetuiry. --JeffJ
Section 4.7 Obli¢ation to Refrain from Discrimination. CSU covenants and agrees for itself and
its successars and assigns, and for every successor in interest to the Site, or any part thereof, and to its
rights under this Agreement, that there shall be no discrimination against or segregation of any person,
or group of persons, on account of sex, marital status, age, handicap, race, color, religion, creed, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site,
and CSU (itself or any person claiming under or through CSU) shall not 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, subtenants, subleases, or vendors of the Site or any portion thereof.
Section 4.8 Form of Nondiscrimination and Non-Se�regation Clauses. CSU shall refrain from
restricting the rental, sale or lease of the Site or any portion thereof, on the basis of sex, age, handicap,
marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or
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con�:,�cts shall contain or be subject to substantially the following nondiscrimination or non-segregation
clauses:
1. In deeds: "The grantee herein covenants by and for himself, his 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 sex, marital
status,race, age,handicaps color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself
or any person claiming under or through him, 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, subtenants, subleases or vendors in the land herein conveyed. The foregoing covenants
shall run with the land."
2. In leases: "The lessee herein covenants by and for himself,his heirs, executors,
administrators and assigns, and all persons claiming under or through him, 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 sex, marital status, race, age, handicap, color, religion, creed, national origin or ancestry, in
the leasing, subleasing, transferring, use, or enjoyment of the land herein leased, nor shall the lessee
himself, or any person claiming under or through him, 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 land herein leased."
3. In contracts relating to the sale or transfer of the Site, or any interest therein: "There shall
be no discrimination against or segregation of any person or group of persons on account of sex, marital
status, race, age, handicap, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person
claiming under or through him, 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,
subtenants, sublessees or vendees of the land."
Section 4.9 Restrictive Covenants. CSU agrees that the covenants and agreements set forth in
the above Sections 4.1 through 4.8 shall burden all portions of the Site and shall run with the land for the
benefit of the Agency and its successors and assigns, and that the same shall remain in effect in
perpetuity unless stated otherwise within the specific terms set out above. The Agency and its
successors-in-interest may obtain by appropriate legal action specific performance of these covenants
and restrictions and injunctive relief prohibiting the breach of such covenants and restrictions. The
Grant Deed regarding Parcel A shall set forth the restrictive covenant on Parcel A as required by Section
2.8, above, restricting and burdening Parcel A, as set forth in this Article. If CSU exercises the Option
to purchase Parcel B, then a similar restrictive covenant restricting and burdening Parcel B shall be
recorded in the Grant Deed for Parcel B. Both such restrictive covenants shall be in a form and in
substance that shall be subject to the approval of CSU and the Agency's Executive Director; shall
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pro•�ie that the restrictive covenants shall remain in effect in perpetuity(unless stated otherwise within
the specific terms set out above); and shall provide that the restrictive covenant shall be enforceable by
the Agency and its successors-in-interest by appropriate legal action for specific performance of their
covenants and restrictions and for injunctive relief prohibiting the breach of their covenants and
restrictions.
Section 4.10 A e�ncv's Use Restrictions on Parcel A and Parcel B. The Agency agrees that from
the date hereof until the date CSU closes the Parcel B Escrow (or any phase thereof, as applicable), the
Agency shall use and maintain Parcel B (or the phase thereof still owned by the Agency) in a manner
consistent with the uses specified therefor in the Master Plan. To that end, the Agency shall not institute
any use on Parcel B that would interfere with CSU's prospective use of Parcel A as the Center or Parcels
A and B for the University Campus. The Agency's obligation in this respect may include the Agency's
good faith cooperation with the City and CSU in the potential development of a city park adjacent to the
Center on the northwest corner of the Site, as contemplated and further set forth in the Master Plan.
Notwithstanding the foregoing, however, the foregoing obligation shall terminate upon CSU's decision
not to build the University Campus on the Site or CSU's release of the Option.
ARTICLE 5 DEVELOPMENT OF THE PROJECT.
Section 5.1 Feasibilitv Studv. Within 180 days of the beginning of construction of the third
phase of Parcel A as set forth in the Master Plan, CSU shall initiate a feasibility study that shall include a
timetable for the growth and development of the Site, including the transition from the off-campus
Center to a full-service independent California State University Campus with an estimated ultimate size
of 25,000 full time equivalent students (FTE). If CSU determines as a result of the feasibility study that
it shall not develop a full-service independent California State University Campus, then the Agency shall
have the option to terminate the Option.
Section 5.2 Development of the Center. CSU shall develop, or cause to be developed, the Center
on Parcel A, in accordance with the Master Plan, the Schedule of Performance, and any and all federal,
state and local laws, rules and regulations (to the extent applicable to CSU) in connection with such
construction, and all terms, conditions and requirements of this Agreement.
Section 5.3 Division into Phases. Parcel A and Parcel B shall be divided into discrete parcels
for development in phases. CSU shall subdivide Parcel A and Parcel B into such design corresponding
to CSU's ultimate development plan therefor, which development plan and subdivision plan shall be
subject to the Planning Committee's approval. The division of Parcel A shall be completed by
, 200_.
Section 5.4 Development of the University Campus. If CSU exercises the Option, then CSU
shall develop, or cause to be developed, the University Campus on the entire Site (including Parcel A
and Parcel B), in accordance with the Master Plan, the Schedule of Performance, and any and all federal,
state and local laws, rules and regulations (to the extent applicable to CSU) in connection with such
construction, and all terms, conditions and requirements of this Agreement.
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�
Section 5.5 University Development Planning Committee. CSU shall establish the University
Development Planning Committee (the "Planning Committee")whose charge will be to review all
interim and permanent development proposed for Parcel A and/or Parcel B, advising and recommending
action to the President of California State University, San Bernardino,regarding land owned by the State
and/or regarding land owned by the Agency. It will be the Planning Committee's responsibility to
shepherd proposed construction and site development plans through appropriate City and University
review processes for comment and consultation. The Planning Committee will review proposed
developments prior to its submission to higher authority for final action. The Committee shall also
review, comment upon, and approve proposed revisions to the Master Plan (Exhibit B). In no case shall
it forward plans with a positive recommendation, or approve any changes to the Master Plan, without a
2/3 (six [6] members voting affirmatively) vote in favor of the subject. [The CSU's position is that it
does not have to obtain either the Agency's nor the Planning Committee's approval to amendment to
the Master Plan. --Jeff.J
The Planning Committee will be composed of nine (9) members. Four(4)will be identified by
the Mayor of Palm Desert. Four(4) will be identified by the President of California State University,
San Bernardino. The Mayor and the President will jointly identify the ninth member, who will be the
Chair. The President shall fortnally appoint the Committee.
Section 5.6 Subdivision. CSU shall undertake to develop the plans and engineering work
necessary to subdivide Parcel B into such phases as is reasonable and practical, necessary to develop the
Center and the University Campus, respectively, on Parcel A and Parcel B. This shall not mean that
CSU is required to comply with the Subdivision Map Act. The development of the phases shall be
subject to the review and approval of the Planning Committee.
Section 5.7 Amendment of Master Plan. CSU shall not adopt any modifications or amendments
to the Master Plan without first obtaining the Agency's prior written approval to such modifications or
amendments. [The CSU's position is that it does not have to obtain either the Agency's nor the
Planning Committee's approval to amendment to the Master Plan. --Jeff.J
Section 5.8 Air Emissions. CSU understands it is subject to the applicable jurisdiction of the
South Coast Air Quality Management District (SCAQMD) and will work with same to minimize its
impact upon the air quality of the Coachella Valley region. CSU intends to maintain its leadership
position in reducing air emissions of noxious gases and other air pollutants. CSU is committed to
mitigation measures related to regional and project impacts upon air quality.
Section 5.9 Compliance b�Contractors. CSU shall require contractors to take appropriate
measures necessary to reduce construction related impacts upon local traffic, air quality and noise.
Section 5.10 Erosion Control. CSU shall implement erosion control measures to protect against
the impacts of construction and project generated urban runoff.
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„,�: Section 5.11 Safetv. CSU shall coordinate campus development with local law enforcement and
fire protection agencies, and establish a campus office of public safety as the University Campus
develops. Once established, the office would enter into mutual aid agreements with appropriate local
agencies, as required by law.
Section 5.12 Communitv. CSU shall work with the City and the Agency, and other local
agencies, to develop programs for reducing impacts of campus development with respect to housing, air
quality, traffic, public services and noise. CSU shall coordinate initial Center and University Campus
development with local school districts, community colleges, and other public independent colleges and
universities in the region. CSU shall coordinate toxic materials disposal plans and procedures with any
necessary agencies. CSU shall coordinate campus efforts with the community concerning alternative
powered vehicle use and ride sharing programs.
Section 5.13 Cost of Construction. The cost of constructing the Project, including the costs for
developing and constructing the Improvements thereon, and the cost of all infrastructure, shall be the
sole responsibility of CSU.
Section 5.14 Local, State and Federal Laws. CSU shall carry out the construction of the
Improvements on the Site in conformity with all laws applicable to CSU, including all applicable federal
and state occupation, safety and health standards, including prevailing wage laws and public bidding
requirements.
Section 5.15 Anti-discrimination Durine Construction. CSU, for itself and its successors and
assigns, agrees that it shall not discriminate against any employee or applicant for employment because
of age, sex, marital status, race, handicap, color, religion, creed, ancestry, or national origin in the
construction of the Improvements, as required by law.
Section 5.16 Taxes Assessments. Encumbrances and Liens. CSU shall pay when due, when
legally obligated to do so, all real property taxes and assessments, if any, assessed or levied on portions
of the Site from time to time owned by CSU.
Section 5.17 No Agencv Created. In performing this Agreement, CSU not the agent of the
Agency or the City. The Agency and the City are not agents of CSU. Neither the Agency nor the City
shall have any responsibility whatsoever for payment to any contractor or supplier of CSU. CSU shall
not have any responsibility whatsoever for payment to any contractor or supplier of the Agency or the
City.
ARTICLE 6 EVENTS OF DEFAULT REMEDIES AND TERMINATION.
Section 6.1 Defaults--Definition.
Occurrence of any or all of the following breaches shall constitute a default ("Event of
Default”) under this Agreement:
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,,,�' 6.1.1 A breach of any material term of this Agreement by any Party not involving the
payment of money, and failure of such Party to cure such breach within the time period stated, or
if no cure period is stated, then within thirty (30) days after the non-defaulting Party has given
notice to the defaulting Party; provided, however, if such breach is not reasonably curable within
such thirty (30) day period, then such Party shall be deemed in Default only if such Party does
not commence to cure such breach within such thirty(30) day period and thereafter fails to
diligently pursue a cure of such breach to completion;
6.1.2 CSU's abandonment or suspension of construction of the Improvements on any
Parcel (or any phase thereo fl for a period of ninety (90) days after written notice of such
abandonment or suspension from the Agency, and CSU's failure to cure such default within such
90 day period, unless such suspension is due to Force Majeure (as provided in Section 8.3,
below);
6.1.3 The Agency's failure or refusal to provide any requested approvals without
reason which cause CSU to be deemed in breach of this Agreement or default or threat thereof;
6.1.4 The Agency's use of Parcel B in a manner that adversely affects CSU's use or
development of Parcel A or Parcel B in a material manner;
6.1.5 Any breach of this Agreement by any Party involving the payment of money, and
the continuance of such breach for a period of thirty (30) days after the non-defaulting Party has
given written notice to the defaulting Party, as specified in Section 8.1.
6.1.6 CSU's Transfer (as defined in Section 4.6), or the occurrence of any involuntary
Transfer, of the Site or any part thereof or interest therein, or any rights or obligations of CSU
under this Agreement, in violation of this Agreement (including, without limitation, Section 4.6);
It is specifically acknowledged that any breach by the City, the Agency or CSU, of any other agreement
between CSU and the Agency or the City, shall be a breach hereof and of each other agreement between
CSU and the Agency or the City, and any breach hereof shall be a breach by CSU, the Agency or the
City, as applicable, of each other agreement between CSU and the Agency or the City.
Section 6.2 Remedies in the Event of Default. In the event of a Default by any Party, the non-
defaulting Party shall have the right to terminate this Agreement (including the Option) by delivering
written notice thereof to the defaulting Party and to Escrow Holder, subject to the rights of the defaulting
Party to cure such Default as provided in Section 6.1. Such Party may also seek against the defaulting
Party any available remedies at law or equity, including but not limited to, the right to receive damages
or to pursue an action for specific performance.
Section 6.3 No Personal Liabilitv. No representative, agent, attorney, consultant, or employee of
the Agency shall personally be liable to CSU or any successor in interest of CSU, in the event of any
Default or breach by the Agency, or for any amount which may become due to CSU or any successor in
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inte�st, on any obligation under the terms of this Agreement. No representative, agent, attorney,
consultant, or employee of CSU shall personally be liable to the Agency or any successor in interest of
the Agency, in the event of any Default or breach by CSU, or for any amount which may become due to
the Agency or any successor in interest, on any obligation under the terms of this Agreement.
Section 6.4 Rights and Remedies are Cumu_l_ative. The rights and remedies of the parties are
cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude
the exercise by it, at the same time or different times, of any other rights or remedies for the same default
or any other default by the non-defaulting Party.
Section 6.5 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 rights to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. The
acceptance by a Party of less than the full performance from the other Party shall not constitute a waiver
of such Party's right to demand and receive the full amount due, unless such Party executes a specific
accord and satisfaction.
ARTICLE 7 INDEMNITY.
Section 7.1 Indemnitv. From and after the date of recordation of a grant deed to CSU with
respect any portion of the Site, CSU shall indemnify, defend,protect, and hold harmless the Agency and
the City, and their agents, employees, attorneys, and representatives, from and against all losses,
liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs
and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to,
or arising out of or in connection with:
(i) the development of the Improvements on such portion of the Site or the use,
ownership, management, occupancy, or possession of such portion of the Site,
(ii) any of CSU's activities on such portion of the Site (or the activities of CSU
agents, employees, lessees, representatives, licensees, guests, invitees, contractors,
subcontractors, or independent contractors on such portion of the Site),
except to the extent such losses or liabilities are caused by the negligence or conduct of the Agency or
the City or its agents or contractors. CSU shall defend (with counsel reasonably approved by the
Agency and the City in writing), at CSU's expense, including attorneys' fees and costs, the Agency and
the City, and the Agency's and the City's council members, board members, officers, employees, agents,
attorneys, and consultants, in any legal action or threatened legal action (including arbitrations and
mediations)based upon such alleged acts or omissions. The Agency and the City may in their discretion
participate in the defense of any such legal action.
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.,a� Section 7.2 A�encv's Indemnitv. The Agency shall indemnify, defend, protect, and hold
harmless CSU, and its agents, employees, attorneys, and representatives, from and against all losses,
liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs
and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to,
or arising out of or in connection with any portion of the Site with respect to matters occumng on such
portion of the Site prior to the recordation of the grant deed by the Agency, except to the extent such
losses or liabilities are caused by the negligence or conduct of CSU or its agents or contractors. The
Agency shall defend (with counsel reasonably approved by the CSU in writing), at the Agency's
expense, including attorneys' fees and costs, CSU and CSU's board members, officers, employees,
agents, attorneys, and consultants, in any legal action or threatened legal action(including arbitrations
and mediations)based upon such alleged negligence. CSU may in its discretion participate in the
defense of any such legal action.
ARTICLE 8 GENERAL PROVISIONS.
Section 8.1 Notices. All notices and demands shall be given in writing by certified mail,
postage prepaid, and return receipt requested, or by personal delivery. Notices shall be considered given
upon the earlier of(a)personal delivery or(b) 2 business days following after deposit or delivery shown
on the return receipt in the United States mail,postage prepaid, certified or registered, return receipt
requested. A copy of all notices shall be sent to Escrow Holder. Notices shall be addressed as provided
below for the respective Party; provided that if any Party gives notice in writing of a change of name or
address, notices to such Party shall thereafter be given as demanded in that notice:
The Agency: Mr. Carlos L. Ortega
Executive Director
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
(Telephone: 760-346-0611)
(Facsimile: 760-341-6372)
with a copy to: Richards, Watson & Gershon
A Professional Corporation
333 South Hope Street, 38th Floor
Los Angeles, California 90071
Attention: Jeffrey A. Rabin and William L. Strausz
(Telephone: 213-626-8484)
(Facsimile: 213-626-0078)
CSU: Mr. David DeMauro
Vice President for Administration and Finance
California State University, San Bernardino
5500 University Parkway
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„�:. San Bernardino, California 92407
(Telephone: 909-8 80-5130)
(Facsimile: 909-880-7032)
With a copy to: Ms. Elisabeth Sheh Walter
University Counsel
Office of General Counsel
The California State University
401 Golden Shore, 4”'Floor
Long Beach, California 90802-4275
(Telephone: 562-985-2873)
(Facsimile: 562-985-2925)
Section 8.2 Construction. The Parties agree that each Party and its counsel have reviewed and
revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or
exhibits thereto. This Agreement shall be construed as a whole according to its fair language and
common meaning to achieve the objectives and purposes of the Parties.
Section 8.3 Force Majeure. Notwithstanding anything to the contrary in this Agreement, CSU's
unexcused material failure to complete the Improvements required to be completed according to this
Agreement, the Schedule of Performance and/or the Master Plan shall be a breach hereof, provided,
however, nonperformance shall be excused when performance is prevented or delayed by reason of any
of the following forces reasonably beyond the control of such party: (i) war, insurrection, riot, flood,
severe weather, earthquake, fire, casualty, acts of public enemy, governmental restriction, litigation, acts
or failures to act of any governmental agency or entity, including the Agency, or(ii) inability to secure
necessary labor,materials or tools, strikes, lockouts, delays of any contractor, subcontractor or supplier.
In the event of an occurrence described in clauses (ii) and (ii) above, such nonperformance shall be
excused and the time of performance shall be extended by the number of days the matters described in
clauses (i) and (ii) above prevent or delay performance.
Section 8.4 Interpretation. In this Agreement the neuter gender includes the feminine and
masculine, and singular number includes the plural, and the words "person" and "party" include
corporation, partnership, firm, trust, or association wherever the context so requires.
Section 8.5 Time of the Essence. Time is of the essence of this Agreement.
Section 8.6 WarrantX A�ainst Pavment of Consideration for A�reement. CSU, the Agency and
the City,warrant that they have not paid or given, and will not pay or give, to any third person, any
money or other consideration for obtaining this Agreement, other than normal costs of conducting
business and costs of professional services such as architects, engineers and attorneys.
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.� Section 8.7 Entire Agreement, Waivers and Amendments. The Agreement may be executed in
duplicate originals. Escrow Holder may accept escrow instructions in counterparts. This Agreement,
together with all attachments and exhibits hereto, and all agreements executed pursuant hereto,
constitutes the entire understanding and agreement of the Parties. This Agreement integrates all of the
terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous
agreements between the Parties with respect to the subject matter hereof. No subsequent agreement,
representation or promise made by either Party hereto, or by or to any employee, officer, agent or
representative of either Party, shall be of any effect unless it is in writing and executed by the Party to be
bound thereby. No person is authorized to make, and by execution hereof CSU and the Agency
acknowledge that no person has made, any representation, warranty, guaranty or promise except as set
forth herein; and no agreement, statement, representation or promise made by any such person which is
not contained herein shall be valid or binding on CSU or the Agency.
Section 8.8 Severabilitv. Each and every provision of this Agreement is, and shall be construed
to be, a separate and independent covenant and agreement. If any term or provision of this Agreement
or the application thereof shall to any extent be held to be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to circumstances other than those to which it is
invalid or unenforceable, shall not be affected hereby, and each term and provision of this Agreement
shall be valid and shall be enforced to the extent permitted by law.
Section 8.9 Headin�s. All section headings and subheadings are inserted for convenience only
and shall have no effect on the construction or interpretation of this Agreement. The references in this
agreement to "Section" shall refer to the sections of this Agreement unless it is clear from the context
that another meaning is intended.
Section 8.10 No Third Partv Beneficiaries other than the Citv. The City shall be a named third
party beneficiary of this Agreement. This Agreement is made and entered into for the sole protection
and benefit of the Agency and CSU, the City and their successors and assigns. No other person shall
have any right of action based upon any provision of this Agreement.
Section 8.11 Governing Law• Jurisdiction; Service of Process. This Agreement and the rights of
the Parties shall be governed by California law. The Parties consent to the exclusive jurisdiction of the
California Superior Court for the County of Riverside. If any legal action is commenced by CSU
against the Agency, or by Agency against CSU, service of process on the Agency shall be made by
personal service upon the executive director or secretary of the Agency, or in such other manner as may
be provided by law. If any legal action is commenced by Agency against CSU, service of process on
CSU shall be made by personal service on the President of the Board of Trustees of CSU, or in such
other manner as may be provided by law. CSU agrees, for the benefit of the Agency, that it shall
designate an agent for service of process in the State of California in the manner prescribed by law, and
if it fails to do so, the Secretary of State of the State of California is designated as agent for CSU, with
full authority to receive such service of process on its behalf, which designation and authorization shall
survive the Close of Escrow and be irrevocable.
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.,� Section 8.12 Survival. The provisions hereof shall not terminate but rather shall survive any
conveyance hereunder and the delivery of all consideration.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the
day and year first above written.
"CSU": "The Agency":
THE TRUSTEES OF THE CALIFORNIA PALM DESERT REDEVELOPMENT
STATE IJr1IVERSITY AGENCY, a public body, corporate and politic
By:
Chairperson
By:
ATTEST:
By: Secretary
LIST OF EXHIBITS
Exhibit A -- Legal Description
Exhibit B -- Grant Deed
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� EXHIBIT A
LEGAL DESCRIPTION
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� EXHIBIT B
SCHEDULE OF PERFORMANCE
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,�.: EXHIBIT C
Master Plan
Parcel A: The Center
An off-campus permanent facility with a FTES of 735, of approximately 78,000 square feet in
accordance with the plans set forth in the Master Plan, the terms and provisions of which are
incorporated herein by this reference.
Parcel B: The University Campus
A fully independent CSU campus, . . . .
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�
EXHIBIT D
FORM OF GRANT DEED
[THIS SHALL BE BE MODIFIED TO CONFORM TO FINAL DRAFT OF THE DDA]
Recording Requested by:
Palm Desert Redevelopment Agency
And when recorded return to
and mail tax statements to:
Assessor's Parcel Map No.:
Exempt from Recording Fees Pursuant to G.C. 6103
GRANT DEED
The undersigned grantor(s) declare(s):
Documentary transfer tax is $
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic
hereby GRANTS to
THE TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY
the following described real property, including all water, oil, mineral, gas, and geothermal rights, and
including the right to extract the same from said real property, if and to the extent any such rights are
held by the Grantor(collectively, the "Property") located in the City of Palm Desert, County of
Riverside, State of California:
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� See Exhibit A attached hereto and incorporated herein by reference.
SUBJECT TO, all easements, covenants, conditions, restrictions, and rights of way of record.
RESERVING AND EXCEPTING THEREFROM,
l. This Grant of the Property is subject to the Redevelopment Plan for Project Area_of the Palm
Desert Redevelopment Agency and pursuant to a Disposition and Development Agreement (the
"Agreement") entered into by and between Grantor and Grantee dated , 1998, the
tertns of which are incorporated herein by reference. A copy of the Agreement is available for
public inspection at the offices of the Grantor, 73-510 Fred Waring Drive, Palm Desert,
California 92260. The Property is conveyed further subject to all easements, rights of way,
covenants, conditions, restrictions, reservations and all other matters of record.
2. The Property is conveyed upon the conditions hereinafter specified, upon the violation or failure
of any of which title to said parcel shall revert to and vest in Grantor, or its successor in interest;
provided, however, that no reversion of the Property shall occur until and unless: a failure or
violation of one of the conditions hereafter specified actually occurs; and Grantor gives Grantee
notice in writing thereof specifying the particular failure or violation and that the notice is given
pursuant to this Grant Deed and, at the expiration of the time stated in the Disposition and
Development Agreement as dependant upon the type of failure and from the receipt by Grantor
of such notice, the failure has not been remedied or the violation has not ceased. The conditions
are:
a. That the CSU shall begin construction of the Center(as defined in the Agreement) on the
Property within five (5) years of the recording of title to said property in the name of
CSU.
b. That the Property shall be used for the construction, operation, and maintenance thereon
of improvements for use operation of higher educational facilities as part of the California
State University, including university or college related service and administrative
facilities.
3. By acceptance hereof, Grantee agrees, for itself, its successors and assigns, to refrain from
restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion,
ancestry, sex, marital status, national origin or age of any person in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself or any
persons claiming under or through it 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, subtenants, sublessees, or vendees in the Property. The foregoing covenants
shall run with the land.
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,�. All deeds, leases or contracts entered into with respect to the Property 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 race, color, creed, religion, national origin, sex, marital status, age or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed,
nor shall the grantee 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, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants shall run with the land."
(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
be no discrimination against or segregation of any person or group of persons, on account of age,
race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing,
subleasing, transferring, use or occupancy, tenure or enjoyment of the land 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 land herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of, any
person, or group of persons on account of race, color, creed, religion, age, national origin, sex,
marital status or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land, nor shall the transferee 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, subtenants, sublessees or vendees of the land."
4. All covenants contained in this Grant Deed shall run with the land and shall be binding for the
benefit of Grantor and its successors and assigns and such covenants shall run in favor of the
Grantor and for the entire period during which the covenants shall be in force and effect, without
regard to whether the Grantor is or remains an owner of any land or interest therein to which
such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have
the right to exercise all of the rights and remedies provided herein or otherwise available, and to
maintain any actions at law or suits in equity or other property proceedings to enforce the curing
of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall
be enforceable only by the Grantor and its successors and assigns.
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5. �- All notices and demands shall be given in writing by certified mail,postage prepaid, and return
receipt requested, or by personal delivery. Notices shall be considered given upon the earlier of
(a)personal delivery or(b) 2 business days following after deposit or delivery shown on the
return receipt in the United States mail, postage prepaid, certified or registered, return receipt
requested. A copy of all notices shall be sent to Escrow Holder. Notices shall be addressed as
provided below for the respective Party; provided that if any Party gives notice in writing of a
change of name or address, notices to such Party shall thereafter be given as demanded in that
notice:
The Agency: Mr. Carlos L. Ortega
Executive Director
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
(Telephone: 760-346-0611)
(Facsimile: 760-341-6372)
with a copy to: Richards, Watson & Gershon
A Professional Corporation
333 South Hope Street, 38th Floor
Los Angeles, California 90071
Attention: Jeffrey A. Rabin and William L. Strausz
(Telephone: 213-626-8484
(Facsimile: 213-626-0078)
CSU: Mr. David DeMauro
Vice President for Administration and Finance
California State University, San Bernardino
5500 University Parkway
San Bernardino, California 92407
(Telephone: 909-880-5130)
(Facsimile: 909-880-7032)
With a copy to: Ms. Elisabeth Sheh Walter
University Counsel
Office of General Counsel
The California State University
401 Golden Shore, 4t''Floor
Long Beach, California 90802-4275
(Telephone: 562-985-2873)
(Facsimile: 562-985-2925)
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IN�'�TNESS WHEREOF, the undersigned has executed this Grant Deed as of the date set forth below.
Dated:
PALM DESERT REDEVELOPMENT AGENCY,
a public body, corporate and politic
By:
Chairman
Attest:
Secretary
State of California }
}
County of }
On , 19 ,before me, , a Notary
Public, personally appeared
, personally known to me (or 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.
WITNESS my hand and official seal.
Signature
(seal)
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� TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.1 A� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.2 A�ency Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.3 A�reement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.4 Center Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.5 Citv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.6 City Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.7 Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.8 Close of the Parcel A Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.9 Close of the Parcel B Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.1 l Escrow Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.12 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.13 Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.15 O�ening of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.16 Ontion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.18 Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.19 Schedule of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.20 Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.21 Universitv Campus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.22 Universit.��us Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 PURCHASE AND SALE OF PARCEL A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Transfer of Parcel A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Condition of Parcel A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.4 Openin�and Closin� of Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5 Condition of Title: Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.6 Parcel A Escrow Char�es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.7 Conditions to Close of the Parcel A Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.8 Deposits into Parcel A Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.9 Parcel A Escrow's Closing Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.10 Additional Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3 OPTION TO PURCHASE PARCEL B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.1 Grant of O�tion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section3.2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.3 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.4 Exercise of the Option in Phases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 Use of Parcel B Pendin�Exercise of the Option. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.7 Conditions to Exercise the Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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�- Section 3.8 O_penin� and Closing of Parcel B Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.9 Condition of Title: Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.10 Parcel B Escrow Char�es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.11 Conditions to Close of the Parcel B Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.12 De�osits into Parcel B Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Parcel B Escrow's Closing Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.14 Additional Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4 USE MAINTENANCE. AND NON-DISCRIMINATION OBLIGATIONS. . . . . . . . . . 17
Section 4.1 Use of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section4.2 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.3 Apen�'s Reversion Ri�hts With Respect to Unimproved Portions of Parcel A. . . 17
Section 4.4 A�ency's Reversion Ri�hts With Respect to Unimproved Portions of Parcel B. . . 18
Section 4.5 Agenc '�Ri�hts With Respect to a Chan�e of Use . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.6 Restriction on CSU's Transfer of the Site and Ri�hts and Obligations Under this
A�reement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.7 Obligation to Refrain from Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.8 Form of Nondiscrimination and Non-Se�gation Clauses . . . . . . . . . . . . . . . . . . . 19
Section 4.9 Restrictive Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.10 Agencv's Use Restrictions on Parcel A and Parcel B. . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 5 DEVELOPMENT OF THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.1 Feasibilit, S�tudv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.2 Development of the Center. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.3 Division into Phases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.4 Development of the University Campus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.6 Subdivision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.7 Air Emissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.8 Compliance bv Contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.9 Erosion Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.10 Safetv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.11 Communitv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.12 Cost of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.13 Local. State and Federal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.14 Anti-discrimination During Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.15 Taxes Assessments, Encumbrances and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.16 No A�,encv Created . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 6 EVENTS OF DEFAULT, REMEDIES AND TERMINATION. . . . . . . . . . . . . . . . . . . . 23
Section 6.1 Defaults--Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.2 Remedies in the Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.3 No Personal Liabilitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.4 Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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� . 25
�r Section 6.5 Inaction Not a Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 7 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.1 Indemnitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.2 A�encv's Indemnitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 8 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.2 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.4 Inter�retation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.5 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.6 WarrantX A�ainst Pavment of Consideration for A�reement . . . . . . . . . . . . . . . . . 27
Section 8.7 Entire Agreement Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.8 Severabilitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.9 Headin�s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.10 No Third Partv Beneficiaries other than the Citv . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.11 Governin Law• Jurisdiction• Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.12 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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990531 jarH:\MHLJN7IWPDATA\CALSTATE\16002752.WPD
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DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
PALM DESERT REDEVELOPMENT AGENCY
AND
THE TRUSTEES OF THE CALIFORNIA STATE iJNIVERSITY
DATED
, 1998