HomeMy WebLinkAboutRes 99-6 and 366 DDA T.Barlett 0.67 Acres SE Corner of Portola x Hwy 111 PALM DESERT REDEVELOPMENT AGENCY
INTEROFFICE MEMORANDUM
DATE: JANUARY 14, 1999
TO: CITY MANAGER, HONORABLE MAYOR AND MEMBERS OF THE CITY
COUNCIL
EXECUTIVE DIRECTOR, HONORABLE CHAIRMAN AND MEMBERS OF
REDEVELOPMENT AGENCY BOARD
FROM: DENNIS M. COLEMAN, REDEVELOPMENT FINANCE MANAGER
SUBJECT: DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN PALM
DESERT REDEVELOPMENT AGENCY AND TIMOTHY BARTLETT AND THE
SUMMARY REPORT
Recommendation:
That the City Council/Agency Board open the joint public hearing and following testimony
take the following actions:
1. That the City Council adopt Resolution No.99-6 - a resolution of the City of
Palm Desert approving the sale by the Palm Desert Redevelopment Agency to
Timothy Bartlett of approximately 0.67 acres of real property on the southeast corner
of Portola Avenue and Highway 111.
2. That the Agency Board adopt Resolution No. 366 - a resolution of the Palm
Desert Redevelopment Agency approving the sale to Timothy Bartlett of
approximately 0.67 acres of real property on the southeast corner of Portola Avenue
and Highway 111.
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
Timothy Bartlett (the "Developer") concerning the proposed sale of certain real property by
the Agency to Mr. Bartlett. The report is created to comply with the requirements of
California Health and Safety Code Section 33433.
A. Summary of DDA
The Agency is the owner of certain real property in the City of Palm Desert, on the
southeast corner of Highway 111 and Portola Avenue. Such property is generally
described in Tentative Tract Map No. 2012. The Agency proposes to develop, or
cause to be developed, on such real property, a 4500 square foot retail/commercial
facility The area in question used to house a savings and loan building which has
since been demolished. The development of the project described below will
eliminate blight conditions.
DDA- Palm Desert Redevelopment Agency
&Timothy Bartlett Summary Report
January 14, 1999
B. The Subject Property
The Agency proposes to sell to Mr. Bartlett approximately 0.67 acres of land identified
as Lot 1 and Lot 2 of Tentative Tract No. 2012. Mr. Bartlett proposes to develop a
4500 square foot building to house a retail tenant subject to the approval of the
Agency. The real property contained in this description is referred to as the "Subject
Property."
1. Reuse Value of the Subject Property
The Fair Reuse Value for the Subject Property shall be $174,857 or $5.99 per
square foot (see attached report). The terms shall be all cash due upon close
of escrow with a $10,000.00 deposit upon opening of escrow.
2. Obligations of Developer
The Developer will be obligated to construct a 4500 square foot
retail/commercial facility to house a retail tenant, subject to the approval of the
Agency. The Developer is also responsible for the construction of a bus shelter
facility on the land adjacent to Highway 111.
In addition, the Developer shall construct approximately 24 to 28 parking
spaces above the amount required for retail development. The Developer is
required to enter into an Easement Agreement with the Agency for the public
use of the additional spaces.
The Developer is also responsible for the construction of landscape
improvements. The landscape improvements shall be sufficient enough to
provide the appearance of a park.
The Developer is required to maintain the bus shelter, the public parking
spaces, and the landscape improvements.
4. Reuse Analysis of the Project
Attached hereto as Exhibit 1 is the report required pursuant to Section 33433
outlining the findings of this transaction performed by Real Estate Analysis
Services Co. ("REASCO"). Such analysis is hereby incorporated by reference.
2
DDA- Palm Desert Redevelopment Agency
&Timothy Bartlett Summary Report
January 14, 1999
Staff is requesting that the City Council/Agency Board approve the DDA subject to form
which will allow the Chairman, Vice Chairman, or the Executive Director to finalize and
execute the agreement. Staff is therefore recommending that the City Council/Agency Board
adopt the two necessary resolutions approving the DDA and the sale of the subject property
to Mr. Bartlett.
REVIEWED AND CONCUR:
Dennis M. Coleman Executive Director
Redevelopment Finance Manager
City Manager
DMC:mh
Attachments (as noted)
CITY COUNCIL ACTION.
APPROVED DENI�p
NivC BY RDA ',F;CE I VED OTHER
t�ET T/qC DATE__ �-��iL
DES .�.�
VERIFIED BY ikieA
. M '
3SENT
C'
TIN C idinni on file wtth City Clecc's OfficezAI D H- v,�:
nai on File _..t
with .!, lex,'.
3
EXHIBIT 1
REASCO REAL ESTATE ANALYSIS SERVICES CO.
POST OFFICE BOX 2809, PALM DESERT, CALIFORNIA 92261
TELEPHONE: (760) 340- 1429; FAX: (760) 340-2041
June 12, 1998
Mr. Carlos L. Ortega Copy to: Dave Yrigoyen
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 Tim Bartlett
SUBJECT: Report Pursuant To Section 33433 Of The California Health And Safety Code
Dear Mr, Ortega,
Section 33433 of California Health and Safety Code stipulates that before any property owned by the Palm
Desert Redevelopment Agency (the "Agency"), which was acquired directly or indirectly with tax increment funds, is
sold or leased for uevelopment purposes pursuant to the redeveiupment plan, the sale or lease shall first be
approved by the legislative body by resolution after public hearing. 1 i wr property the Agency proposes to sell to Tim
Bartlett falls into the c ategory 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 concludtAi that the following findings can be included
in the resolution appr ovinq 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 valae.
The rationale for thes, findings can be found in the attached report.
Yours truly,
•
£ 1 " / /
Leonard R. Wolk, President
Real Estate Analysis :.ervices Company (REASCO)
'LTR C33742 12-Jun-98 02:23 PM
REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA 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 thr Palm Desert Redevelopment Agency (the
"Agency") and Tim Eiartlett ('TB") concerning the proposed acquisition by TB 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 unuor the Redevelopment Plan; Section 4, The
estimated value of the interest to be conveyed, determined at the .me 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 app vying the sale.
SECTION 1: Summary of the DDA:
e, Reference is ;made to the DDA for full particulars of any F.rc,vision described herein, and in the event
of any inconsistency between the provisions herein and the DDA, the DDA shall control.
A.The Subject Property:
The Agency is the owner of certain real property (the "Property") in the City of Palm Desert (the "City") located
at the southeast corner of Portola Avenue and Highway 111 the Property is comprised of approximately
0.67 acres, aid is legally described in Exhibit A,attached herein
B. Purchase and sale of the Property:
1.The Agency proposes to sell the Property to TB for a purcn,ise price of $174,857 ($260,980 per acre;
$5.99 per square foot), on which TB intends to construct a 4,500 square foot (approximate) building
(the"Project') which will be occupied by a golf and tennis retail store.
2.The purchase price shall be payable, as follows: Within two (2) business days after the DDA has been
fully executed, TB shall make a $4.000 earnest money deposit into an interest bearing escrow account,
to be cre.ited to the purchase price, subject to the condition below. Prior to, or on the close of escrow,
TB shall deposit into escrow the remainder of the purchase price ($170,857). Escrow shall close no later
than four (4) months after the Project has been approved by the Palm Desert City Council (the "Escrow
Close Da,e"). The accrued interest shall be credited to the ,)urchase price. However, if escrow does not
close by the Escrow Close Date due to a default by TB, theft the Agency shall receive the $4,000 deposit
plus all th,. interest accruing after the Escrow Close Date.
Refer to Article._of the DDA for further details.
'LTR C33'743 19-Jun-98 09:35 AM
19—Jun-98 ..."LTR_C3.)"...Prepared by: REASCO — P.O. Box2809,.Paln) i)esert, CA 92261; (760) 340-1429.
60 39Cd NnOM N31 :O`JSti32t i170Z-017E-0SL Ei:0i 866T/61/90
REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
— page 2 —
SECTION 1: Summary of the DDA (continued);
e► Reference is made to the DDA for full particulars of any provision described herein, and in the event
of any incons,stency between the provisions herein and the DOA. the DDA shall control.
C. Development of the Property:
1.The total cost of constructing the Project, including the eosts for developing and constructing all the
improvements, shall be borne by TB.The Agency shall deliver the site to TB as is.
2.TB shall construct a 4,500 square foot(approximate) build ng on the site.
3.TB shall construct and maintain 28 extra parking spaces, designated as public spaces, in addition to
the numt;er of parking spaces required for the Project.
4.TB shall Lonstruct and maintain sufficient landscaping on if le site to give the appearance of a park.
5.TB shall L onstruct and maintain a bus stop on Highway 11 ' adjacent to the Property. The design of the
bus stop Shall have bean previously approved by the Age: y.
Refer to Article of the DDA for further details.
E. Limitations on transfers and security interests:
1.Prior to the issuance of a Certificate of Occupancy for the Project, TB shall not sell, assign, transfer,
mortgagL, hypothecate or convey (collectively a 'Trari::ter") the Property or any of TB's rights or
obligations pursuant to the DDA without the Agency's prior written consent.
2.After a Certificate of Occupancy has been issued for tFir! Project, TB may transfer the Project to a
Transferee provided that: (1). The Transferee has the experience and other necessary characteristics, (as
determined by the Agency) to manage and operate the Project; and (2). The Transferee assumes all
obligations of TB pursuant to the DDA.
Refer to Article of the DDA for further details.
F.Use of the Property:
1.The Property, including the landscaping, shall be maintained in a manner substantially comparable to the
highest Level of maintenance provided to up—scale retail stores in Palm Desert. The bus stop shall be
maintained In a manner substantially comparable to similar lies stops in Palm Desert.
Refer to Article _of the DDA for further details.
"LTR C33%44 19-Jun-9B 09:50 AM
19-Jun-98 ...1LTR_C3:,'...Prepared by: REASCO — P.O. Box 2809, Pain- Desert, CA 92261; (760) 340-1429.
V0 39Vd >nori N31 :OOSti38 IVOZ-BVE-09L Ei:l T 866i/6i/90
REPORT PURSUANT TO SECTION 33433 OF THE CALIF ORNIA HEALTH AND SAFETY CODE
— page 3 —
SECTION 2: Cost of the agreement/the 'DDA') to the Agency:
The cost of the DDA to the Agency is comprised of three components: (1). The Property 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 cost').
A. Property acquisition cost:
The Agency purchas ad the Property, which was improved with a bang building, on March 2, 1990, at a total purchase
price of$867,229. i herefore.the Property acquisition cost can be expressed,as follows:
ACRES SO. FT.
1. Size of Property 0.67 29,185
2. Cost/acre;/sq.ft. $1,294,372 $29.71
3. Total cost $867,229 $867,229
8. Cost of any impi ovetnents to be provided by the Agency:
Agency will not be praviding any improvements.
C. Calculation of tha expected land carry cost:
DOLLAR AMOUNT
1.Agency's acquisition cost for the Property:
a.Total amt unt $867,229
b.Per acre $1,294,372
2.The Agency's Estimated cost of funds rate 6.125%
3. Property acquit.ition date 02—Mar-90
4. Expected escrow close date 07—Mar-99
S.Term until expected escrow close(year 9.02
6.Estimated interest cost (NPV) per acre $506,604
7.Times number of acres 0.67
8. Land carry cosi $339,425
D. Total cost of the DDA to the Agency:
PER ACRE PER SQ_ FT.
OF LAND OF LAND
DOLLAR AMOUNT SOLD . SOLD
1. Property acquisition cost $867,229 $1.294,372 $29.71
2. Plus improvemi:nt cost $0 $0 $0.00
3.Plus land carry c:ost $339,425 $506,604 $11.63
4.Total cost of the DDA to the Agency $1,206,654 $1,800,976 $41.33
"LTR C33"/45 12-Jun-98 02:38 PM
12—Jun-98 ..."LTR_C3 "...Prepared by: REASCO — P.O. Box 2809, Palm Desert, CA 92261; (760) 340-1429.
S0 39Vd N10M N31 :CDSd3e1 IV0Z-0tE-09L Ei:Oi 8661/61/90
REPORT PURSUANT TO SECTION 33433 OF THE CALIF URNIA HEALTH AND SAFETY CODE
•
-- page 4 —
SECTION 3: The estimated value of the interest to be conveyed, determined at the highest and best uses
permitted under the Redevelopment Plan:
Knowledgeable reel estate professionals have concluded that because of its location and zoning, the Property has a
valuation of about $ i 5.00 par square foot, or $653,400 per acre. Ther r:fore, the estimated value of the interest to be
conveyed (the Property) determined at the highest and best permitted uses can be expressed, as follows:
ACRES SQ. FT.
1.Amount of Property to be conveyed 0.67 29,185
2. Estimated value/ac;re; /sc1 ft $653,400 $15.00
3. Total estimated value $437,778 $437,778
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'):
The terms and conditions of the DDA will require the developer to provide 28 public parking spaces, a bus stop and
sufficient landscaping to create a park—like setting for the developee nt. The calculation of the reuse value for the
Property to be purchr.sod will include the following elements:(1).the fan rr arketvalue of the Property;(2).the construction
cost of the 28 public parking spaces and the bus stop; (3). the Ianik aping cost; and (4). the present value of the
annual cost to maintain the parking spaces,the bus stop and the landscaping for 30 years.
Calculation of the I air Reuse value for the Property purchase:
ACRES SQ. FT.
1.Amount of Property to be conveyed 0.67 29,185
TOTAL PER ACRE PER SO. FT.
2. The estimated fair market value of the Property $437,778 $653,400 $15.00
3. Less the cost of 26 parking spaces @ $3,000 each ($84,000) ($125,373) ($2.88)
4. Less the landscaphig cost (Tim's bid)
($38,829) ($57,954) ($1.33)
5. Less the cost of Ulu bus stop aim's bid) ($7,950) ($11,866) ($0.27)
6. Less the cost of m=,intairting the bus stop (from Tim):
a. Cost per year $1,600
b. Cost for 30 years $48,000
c.Present value for 30 years @ 6% discount rate ($22,024) ($32,871) ($0.75)
7. Less the cost of meintaining the parking spaces and
the landscaping t7a $0.27 per square foot(Tim's bid):
a. Cost per s ear $8,000
b. Cost for 30 years $240,000
c.Present value for 30 years Q 6% discount rate ($1 10,11 9) ($164,356) ($3.77)
8. Fair Reuse value of the Property = $174,857 $260,980 $5.99
The developer has agreed to pay $174,857, or $5.99 per square toot for the Property,
which is equal to th Fair Reuse value.
"LTR C33"/46 12-Jun-98 02:48 PM
12—Jun-98 ...'LTR_C3:1^._.Prepared by: REASCO — P.O. Box 2809, Palrn Desert, CA 92261; (760) 340-1429.
90 39Vd M1oM N37 :03903N DMZ-0t'E-09L Ei:0T 866T/FT/90
REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
• -- page 5 —
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 trio. California Health and Safety Code; and one cal the following two additional findings: (3). The
consideration is not less than the fair market value at its highest and bust 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 approving the sale:
FINDING #1: The Property is currently completely unimproved, and the development of the Project will
assi:ct in the elimination of blight In the area.
FINDING #2: Sale of the Property is consistent with the implementation plan adopted pursuant to Section
334J0 of the California Health and Safety Code.
FINDING #3: The consideration is not less that the fair reuse ti alue.
"LTR C33147 12-Jun-98 02;57 PM
12—Jun-98 ...'LTR_C3:"...Prepared by: REASCO — P.O. Box 2809, Palm Desert, CA 92261; (760) 340-1429.
LO 39Cd >110M N31 :OOSt/3Zl TVOZ-0VE-09L EI:01 8661/61/90
RESOLUTION NO. 366
A RESOLUTION OF THE PALM DESERT REDEVELOPMENT
AGENCY APPROVING THE SALE TO TIMOTHY BARTLETT OF
APPROXIMATELY.67 ACRES OF REAL PROPERTY LOCATED AT
THE SOUTHEAST CORNER OF HIGHWAY 111 AND PORTOLA
THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS,
DETERMINES,RESOLVES AND ORDERS AS FOLLOWS:
Section 1. On January 14, 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 sale of certain real property(the"Property")located in
the Agency's Project Area No. 1, as described in that certain Disposition and Development
Agreement(the"DDA")between the Agency and Timothy Bartlett, at which time all persons
desiring to comment on or ask questions concerning the sale of the Property to Timothy Bartlett
were given the opportunity to do so. Prior to the public hearing,information concerning the
Agency's proposed sale of the Property to Timothy Bartlett 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 the Desert Sun on December 28, 1998 and January 4, 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 Timothy Bartlett received prior to and at the public hearing on said conveyance.
Section 3. The DDA provides that Timothy Bartlett, shall have the right to
construct certain improvements on the Property as therein described, including, among other
things, a 4500 square foot commercial/retail facility with certain public improvements.
Section 4. The Agency has obtained a report of the fair reuse value of the
Property from REASCO,who has determined that such value of the Property, at the highest and
best use of the Property, given the covenants and conditions imposed, is approximately $5.99
per square foot.
Section 5. Project Area No. 1 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. 1 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. 1 is characterized by the
existence of inadequate public improvements,public facilities and open spaces which cannot be
1
RESOLUTION NO. 366
remedied by private or governmental action without redevelopment.
Section 6. The Agency hereby finds that the sale of the Property pursuant to the
DDA will assist in the elimination of blight by Timothy Bartlett's construction of the
improvements described in the DDA on previously vacant utilized land which will assist in the
revitalization of Project Area No. 1, encourage private sector investment and create job
opportunities, all for the health, safety and welfare of the residents and taxpayers of the City.
Section 7. The Agency hereby finds that the consideration to be paid by Timothy
Bartlett 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. 1 of the Agency, and the report
provided pursuant to Section 33433 of the Health and Safety Code.
Section 8. The Agency hereby approves the DDA, subject as to form, and the sale
of the Property to Timothy Bartlett in accordance with the terms and conditions of the DDA
pursuant to the requirements of Health and Safety Code Section 33433(b), and the Chairman,
Vice Chairman or Executive Director are authorized to finalize and execute the DDA and such
other documents and agreements, including escrow instructions,recommended by the Executive
Director to facilitate and implement terms and conditions of the DDA.
PASSED,APPROVED and ADOPTED this 14th day of January, 1999,by the
following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Attest: Robert A. Spiegel, Chairman
Sheila R. Gilligan, Secretary
2
RESOLUTION NO. 99-6
A RESOLUTION OF THE CITY OF PALM DESERT APPROVING THE
SALE BY THE PALM DESERT REDEVELOPMENT AGENCY TO
TIMOTHY BARTLETT OF APPROXIMATELY.67 ACRES OF REAL
PROPERTY LOCATED AT SOUTHEAST CORNER OF HIGHWAY 111
AND PORTOLA
THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS,
DETERMINES, RESOLVES AND ORDERS AS FOLLOWS:
Section 1. On January 14, 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 sale of certain real property (the"Property") located in
the Agency's Project Area No. 1, as described in that certain Disposition and Development
Agreement(the"DDA")between the Agency and Timothy Bartlett, at which time all persons
desiring to comment on or ask questions concerning the sale of the Property to Timothy Bartlett
were given the opportunity to do so. Prior to the public hearing, information concerning the
Agency's proposed sale of the Property to Timothy Bartlett,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 the Desert Sun on December 28, 1998 and January 4, 1999.
Section 2. The City Council has reviewed and considered all written and oral
comments, questions and concerns regarding the Agency's proposed conveyance of the Property
to Timothy Bartlett received prior to and at the public hearing on said conveyance.
Section 3. The DDA provides that Timothy Bartlett, shall have the right to
construct certain improvements on the Property as therein described, including, among other
things,a 4500 square foot commercial/retail facility with certain public improvements.
Section 4. The Agency has obtained a report of the fair reuse value of the
Property from REASCO,who has determined that the fair market value of the Property, at the
highest and best use of the Property, given the covenants and conditions imposed, is
approximately $5.99 per square foot.
Section 5. Project Area No. 1 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. 1 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. 1 is characterized by the
1
RESOLUTION NO. 99-6
existence of inadequate public improvements,public facilities and open spaces which cannot be
remedied by private or governmental action without redevelopment.
Section 6. The City Council hereby finds that the sale of the Property pursuant to
the DDA will assist in the elimination of blight by Timothy Bartlett's construction of the
improvements described in the DDA on previously utilized land,which will assist in the
revitalization of Project Area No. 1, encourage private sector investment and create job
opportunities, all for the health, safety and welfare of the residents and taxpayers of the City.
Section 7. The City Council hereby finds that the consideration to be paid by
Timothy Bartlett 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. 1 of the Agency, and the report
provided pursuant to Health and Safety Code Section 33433.
Section 8. The City Council hereby approves the DDA, subject as to form, and
the sale of the Property to Timothy Bartlett in accordance with the terms and conditions of the
DDA pursuant to the requirements of Health and Safety Code Section 33433(b).
PASSED,APPROVED and ADOPTED this 14th day of January, 1999 by the
following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Robert A. Spiegel, Mayor
Attest:
Sheila R. Gilligan, City Clerk
2
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
PALM DESERT REDEVELOPMENT AGENCY
AND
TIMOTHY BARTLETT
DATED
, 1999
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 2
Section 1.1 Definitions 2
1.1.1 Affiliate 2
1.1.2 Agency 2
1.1.3 Agency Board 2
1.1.4 Agreement 2
1.1.5 City 2
1.1.6 City Council 2
1.1.7 Certificate of Occupancy 2
1.1.8 Close of Escrow 2
1.1.9 Close of Escrow Date 2
1.1.10 Default 2
1.1.11 Desert Willow Project 2
1.1.12 Escrow 2
1.1.13 Escrow Holder 2
1.1.14 Hazardous Materials 2
1.1.15 Improvements 3
1.1.17 Party 3
1.1.18 Permitted Exceptions 3
1.1.19 Plans and Specifications 3
1.1.20 Project 3
1.1.21 Property 3
1.1.22 Schedule of Performance 3
1.1.23 Scope of Development 3
ARTICLE 2 PURCHASE AND SALE OF THE PROPERTY 4
Section 2.1 Purchase and Sale 4
Section 2.2 Purchase Price 4
Section 2.3 Opening and Closing of Escrow 4
Section 2.4 Condition of Title: Title Insurance 6
Section 2.5 Escrow Charges 6
Section 2.6 Conditions to Close of Escrow 6
Section 2.7 Escrow Holder 7
Section 2.8 Condition of the Property 7
Section 2.9 Deposit into Escrow 10
2.9.1 Agency's Deposits into Escrow 10
2.9.2 Developer's Deposits into Escrow 10
Section 2.10 Authorization to Record Documents and Disburse Funds 10
Section 2.11 Escrow's Closing Actions. 10
Section 2.12 Environmental Indemnity 11
Section 2.13 Additional Instructions 11
ARTICLE 3 DEVELOPMENT OF THE PROPERTY 11
Section 3.1 Development of the Project 11
Section 3.2 Agency's Right to Review Plans and Specifications 12
Section 3.3 Preliminary Site Plan 12
Section 3.4 Basic Concept Drawings 12
Section 3.5 Preliminary Drawings 12
Section 3.6 Landscaping and Finish Grading 12
Section 3.7 Final Construction Drawings and Related Documents 12
Section 3.8 Approval of Construction Plans 12
Section 3.9 Construction Contract 13
Section 3.10 Construction Loan 13
Section 3.11 Changes in Construction Drawings 13
Section 3.12 Cost of Construction 13
Section 3.13 Rights of Access 14
Section 3.14 Local. State and Federal Laws 14
Section 3.15 City and Other Governmental Agency Permits and Approvals 14
Section 3.16 Anti-discrimination During Construction 14
Section 3.17 Taxes. Assessments. Encumbrances and Liens 14
Section 3.18 No Agency Created 14
Section 3.19 Consent by City 14
Section 3.20 Plans and Data 14
Section 3.21 Certificates of Occupancy 15
ARTICLE 4 LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS 15
Section 4.1 Restriction on Transfer of Developer's Rights and Obligations 15
Section 4.2 Mortgages and Deeds of Trust 16
Section 4.3 Rights of Holders 16
Section 4.4 Noninterference with Holders 16
ARTICLE 5 USE OF THE PROPERTY 17
Section 5.1 Use of Property 17
Section 5.2 Maintenance 17
Section 5.3 Obligation to Refrain from Discrimination 18
Section 5.4 Form of Nondiscrimination and Non-Segregation Clauses 18
Section 5.5 CC&RS 18
ARTICLE 6 EVENTS OF DEFAULT,REMEDIES AND TERMINATION 18
Section 6.1 Defaults--Definition 18
Section 6.2 Remedies in the Event of Default 19
6.2.1 Remedies Prior to the Close of Escrow 19
6.2.2 Remedies for Default After the Close of Escrow 19
Section 6.3 Liberal Construction 20
Section 6.4 No Personal Liability 20
Section 6.5 Rights and Remedies are Cumulative 20
Section 6.6 Inaction Not a Waiver of Default 20
Section 6.7 Force Majeure 20
ARTICLE 7 INSURANCE: INDEMNITY 21
Section 7.1 Insurance 21
Section 7.2 Indemnity 21
ARTICLE 8 GENERAL PROVISIONS 22
Section 8.1 Notices 22
Section 8.2 Construction 23
Section 8.3 Interpretation 23
Section 8.4 Time of the Essence 23
Section 8.5 Warranty Against Payment of Consideration for Agreement 23
Section 8.6 Attorneys' Fees 23
Section 8.7 Entire Agreement. Waivers and Amendments 23
Section 8.8 Severability 24
Section 8.9 Headings 24
Section 8.10 No Third Party Beneficiaries other than the City 24
Section 8.11 Governing Law: Jurisdiction: Service of Process 24
Section 8.12 Survival 24
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated
as of , is entered into by and between the PALM DESERT REDEVELOPMENT
AGENCY, a public body, corporate and politic (the "Agency"), and TIMOTHY BARTLETT
("Developer").
RECITALS
This Agreement is entered into with reference to the following facts:
A. The purpose of this Agreement is to effectuate the Redevelopment Plan for Project Area
1, Original 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. 80 of the
City of Palm Desert adopted July 16, 1975.
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. 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.
E. 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.
F. A material inducement to the Agency to enter into this Agreement is the agreement by
Developer to pay the amounts to the Agency or the City as provided herein.
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
1.1.1 Affiliate means an entity that controls, is controlled by, or is under common
control with Developer, and, if a subsidiary, Developer holds at least a 50% interest in the economic
interests in such entity.
1.1.2 Agency 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.
1.1.3 Agency Board means the board of directors of the Palm Desert Redevelopment
Agency.
1.1.4 Agreement means this Disposition and Development Agreement.
1.1.5 City means the City of Palm Desert, a municipal corporation.
1.1.6 City Council means the City Council of the City of Palm Desert, a municipal
corporation.
1.1.7 Certificate of Occupancy means a certificate issued by the City of Palm Desert
pursuant to the City's building code as defined in such code approving a retail/commercial facility, as the
case may be, for use by occupants.
1.1.8 Close of Escrow is defined in Section 2.3.
1.1.9 Close of Escrow Date for the Property means the date upon which the Agency by
grant deed shall convey title to the Property to Developer and such grant deed is recorded in the Official
Records of the County of Riverside in accordance with this Agreement.
1.1.10 Default is defined in Section 6.1.
1.1.11 Escrow is defined in Section 2.3.
1.1.12 Escrow Holder means First American Title Company, or another licensed escrow
holder mutually selected by the Parties.
1.1.13 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 Property, 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
2
"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 Close of Escrow Date; oil, petroleum, petroleum
products (including, without limitation, crude oil or any fraction thereof), natural gas, natural gas liquids,
liquefied 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 Property, to adjacent
properties, or to persons on or about the Property, (ii) which causes the Property to be in violation of any
of the aforementioned laws or regulations, or (iii)the presence of which on or in the Property requires
investigation, reporting or remediation under any such laws or regulations.
1.1.14 Improvements means all buildings, landscaping, infrastructure, utilities, and other
improvements to be built on the Property, or any part thereon, as described in the Scope of
Development.
1.1.15 Parking Easement means the easement described in Section 5.1.1 in the form
attached hereto as Exhibit F and incorporated herein by this reference.
1.1.16 Party means any party to this Agreement. The "Parties" means all parties to this
Agreement.
1.1.17 Permitted Exceptions are defined in Section 2.4.5.
1.1.18 Plans and Specifications means all Basic Concept Drawings, Preliminary
Drawings, landscaping and grading plans, engineering drawings, Final Construction Drawings, and any
other plans or specifications required for construction of the Project(as such capitalized terms are used
in Article 3).
1.1.19 Project means the development of the Property with the Improvements and
operation thereof as a retail/commercial facility, as described in this Agreement and the Scope of
Development.
1.1.20 Property is that certain real property to be developed by Developer described in
Exhibit A, attached hereto and incorporated by reference herein.
1.1.21 Public Improvements means the description of the public improvements set forth
in Exhibit E.
1.1.22 Schedule of Performance means the schedule on Exhibit B.
3
1.1.23 Scope of Development means the description of the Project set forth in Exhibit C.
ARTICLE 2 PURCHASE AND SALE OF THE PROPERTY.
Section 2.1 Purchase and Sale. Subject to and in accordance with the terms and conditions
hereinafter set forth, the Agency agrees to sell to Developer, and Developer agrees to purchase from the
Agency, fee simple title to the Property.
Section 2.2 Purchase Price. The purchase price for the Property to be paid by Developer (the
"Purchase Price") shall be the sum One Hundred Seventy-Four Thousand Eight Hundred Fifty-Seven
Dollars ($174,857). The Parties acknowledge that the Property contains approximately 29,185 gross
square feet. The Purchase Price shall be payable as follows: Within two (2) business days after the full
execution of this Agreement by both parties, Developer shall deposit with Escrow Holder the sum of
Ten Thousand and 00/100 Dollars ($10,000.00) as earnest money ("Deposit"). Developer shall deposit
the balance of the Purchase Price with Escrow Holder prior to the Close of Escrow. All funds held by
Escrow Holder on Deposit, or otherwise, shall be held in an interest bearing account with all interest
credited to Developer, invested as directed by Developer, and applied to the Purchase Price; provided,
however, if escrow does not close by March 31, 1999 due to Developer's Default, then the Agency shall
receive the deposit and all accrued interest on such escrow deposit.
Section 2.3 Opening and Closing of Escrow. Within five (5) business days after the Agency's
approval of this Agreement, the Agency and Developer shall cause an escrow (the "Escrow") to be
opened with Escrow Holder for the sale of the Property by the Agency to Developer. The Parties 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 Developer 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 (the
"Close of Escrow") on or before March 31, 199. By written notice to the Agency, Developer shall be
entitled to set the Close of Escrow Date on any business day which is at least five (5)business days after
Developer approves or waives its due diligence conditions set forth in Sections 2.6.1, 2.6.2 and 2.6.3,
below, but in no event later than May 1, 1999.
Section 2.4 Condition of Title: Title Insurance.
2.4.1 Developer has received from First American Title Company ("Title Company"), a
preliminary report for CLTA Owner's Standard Coverage Policy for the Property ("Preliminary
Report"), setting forth all liens, encumbrances, easements, restrictions, conditions, pending litigation,
judgments, administrative proceedings, and other matters affecting the Agency's title to the Property
(each an"Exception"),together with copies of all documents relating to Exceptions referred to in the
Preliminary Report. Developer shall approve or disapprove each Exception shown on the Preliminary
Report within ten(10) business days after the Opening of Escrow. Any title Exceptions that are
approved or accepted by Developer are referred to as "Permitted Title Exceptions."
4
2.4.2 Developer has received an ALTA survey of the Property prepared by a registered
surveyor or professional engineer("Survey"). Developer shall deliver a copy of such Survey to the
Agency. Developer shall approve or disapprove each encroachment, overlap, or boundary line dispute,
or any other matter that materially and adversely affects title to the Property or that violates any law,
rule, or regulation reflected on the Survey (each an "Exception") within ten (10) business days after the
Opening of Escrow. All matters that are shown on the Survey and to which Developer does not object in
the foregoing 10 business day period shall be referred to as "Permitted Survey Objections."
2.4.3 Any monetary liens and special assessments affecting the Property, other than
current non-delinquent real property taxes not then due and payable, are hereby disapproved (a •
"Monetary Disapproved Exception"). The Agency authorizes Escrow Holder to disburse from the cash
portion of the Purchase Price any proceeds otherwise disbursable to the Agency upon the Close of
Escrow,the sum sufficient to discharge any Monetary Disapproved Exception.
2.4.4 If any title or survey Exception other than a Monetary Disapproved Exception is
disapproved or deemed disapproved (each a "Non-Monetary Disapproved Exception"), then the Agency
may, at the Agency's option, exercisable at the Agency's sole and absolute discretion, within thirty (30)
days following expiration of the 10 business day period provided under Section 2.4.1 and Section 2.4.2,
above, elect to use its best efforts to cause each Non-Monetary Disapproved Exception to be discharged,
satisfied, released, or terminated, as the case may be, of record, and in a form that is reasonably
satisfactory to Developer, all at the Agency's sole cost and expense. If the Agency makes such election,
then the Agency shall have until the Close of Escrow to cause same to be discharged. The Agency shall
notify Developer as soon as reasonably possible if the Agency reasonably believes that the Agency will
succeed or not succeed in causing any such Non-Monetary Disapproved Exception to be removed at the
Close of Escrow, and shall keep Developer informed as to the progress of the Agency's efforts in that
regard.
If the Agency is unable to obtain a discharge, satisfaction, release, or termination
of a Non-Monetary Disapproved Exception, or if the Agency does not elect to do so, then Developer
shall have the right to:
2.4.4.1 waive the Non-Monetary Disapproved Exception and proceed with
Closing, accepting title to the Property subject to the Non-Monetary Disapproved Exception,
without any price reduction, (at which time such Exception shall be deemed a Permitted
Exception), or
2.4.4.2 terminate this Agreement, in which event both Developer and the Agency
shall be relieved of all further obligation and liability to each other under this Agreement and all
the funds and documents deposited with Escrow Agent shall be promptly refunded or returned,
as the case may be, by Escrow Agent to the depositing party, less escrow cancellation fees of
$500.
2.4.5 At the Close of Escrow,the Agency shall convey title to the Property to
Developer(or its Permitted Assignee) by grant deed substantially in the form attached hereto as Exhibit
D and incorporated herein by this reference (the "Grant Deed"). Title to the Property shall be conveyed
5
subject to (i)non-delinquent current real property taxes and assessments not yet due for the tax year
during which the conveyance occurs, (ii) all Permitted Title Exceptions and Permitted Survey
Exceptions.
2.4.6 At the Close of Escrow, the Agency shall, at the Agency's sole cost and expense,
cause to be delivered to Developer a CLTA Owner's Standard Policy of Title Insurance, Form 1970B, or
its equivalent, issued by First American Title Company (or another title company mutually approved by
the Parties) (the "Title Company") in favor of Developer in the amount of the Purchase Price, insuring
that title is vested in Developer free and clear of all liens, easements, covenants, conditions, restrictions,
and other encumbrances of record, other than the Permitted Exceptions for the Property. Developer may
obtain one or more extended coverage policies of title insurance or special endorsements at its own cost.
Section 2.5 Escrow Charges. The Agency shall be responsible for any recording fees,
documentary and local transfer taxes, and one-half of any customary escrow fees and charges arising
hereunder. Developer shall be responsible for one-half of any customary escrow fees.
Section 2.6 Conditions to Close of Escrow. The obligation of the Agency and Developer
under this Agreement to close Escrow shall be subject to the satisfaction or waiver of each of the
following conditions:
2.6.1 Developer's approval of the physical condition of the Property, which Developer
shall approve or disapprove by written notice delivered to the Agency within thirty (30) days after the
Opening of Escrow.
2.6.2 The City's adoption of general and specific plan amendments and zoning of the of
the Property to the appropriate use and density for the Project.
2.6.3 Developer's approval of the condition of title to the Property as described in
Section 2.4.
2.6.4 That there shall not be any threat at the Close of Escrow of condemnation of the
Property by any entity with the power of eminent domain.
2.6.5 That as of the Close of Escrow the representations and warranties of the Agency
contained in this Agreement are all true and correct.
2.6.6 The Agency's delivery of all documents required to be delivered by the Agency
pursuant to Section 2.9 hereof.
2.6.7 The Title Company shall have committed to issue an ALTA (1990) extended
coverage Owner's Title Insurance Policy, with any endorsements requested by Developer, and with
liability equal to the Purchase Price, showing fee simple title to the Property vested in Developer or
Developer's assignee or designee, subject only to the Permitted Exceptions, at the Close of Escrow.
6
2.6.8 As of the Closing Date, no litigation or proceedings shall have been instituted or
shall be pending or threatened challenging the development of the Project, the zoning of the Property or
the general or specific plan amendments referred to in Section 2.6.2.
Section 2.7 Escrow Holder.
2.7.1 Escrow Holder is authorized on the Close of Escrow to:
(i) Pay and charge the Agency and Developer, as applicable, for any fees, charges
and costs payable under this Article, as set forth on the settlement statements approved by the Parties.
Before such payments are made, Escrow Holder shall notify the Agency and Developer of the fees,
charges, and costs necessary to close under the Escrow, by delivering draft settlement statements to the
Parties for their mutual approval.
(ii) Disburse funds and deliver the deeds and other documents to the parties entitled
thereto or for whose benefit they are written.
(iii) Record the Grant Deed.
2.7.2 Any amendment of these escrow instructions shall be in writing and signed by
both the Agency and Developer. At the time of any amendment, Escrow Holder shall agree to carry out
its duties as escrow holder under such amendment.
2.7.3 Escrow Holder is instructed to send copies of notices, demands and
communications between the Parties to or from the Agency or to or from Developer, to both parties to
the addresses and in the manner established in Section 8.1 of this Agreement.
Section 2.8 Condition of the Property.
2.8.1 Developer shall have the right, for the period commencing with the date hereof
through the date that is 30 days after the Opening of Escrow, to approve or disapprove the physical
condition of the Property. During such period, Developer is hereby granted permission to enter onto the
Property for the purpose of performing a Phase I Environmental Assessment, and inspecting and testing
the soil to determine the adequacy and quality of the underlying soil to meet its building requirements.
Developer shall indemnify, hold harmless, and defend the Agency against and hold the Agency and the
Property harmless from, all losses, costs, damages, liabilities, liens, and expenses, including, without
limitation, reasonable attorney fees, arising out of such entry and activities by Developer and its agents,
employees, or contractors,prior to the Close of 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.
2.8.2 The Agency shall convey the Property to Developer in an "as is" condition, and
except for those representations and warranties expressly set forth in this Agreement,the Agency makes
no warranty whatsoever to Developer as to the condition of any portion of the Property, including
whether the Property contains any Hazardous Materials. Subject to the provisions of Section 2.8.1,
7
Developer has inspected the Property and has determined that the Property is suitable for Developer's
purposes. Developer acknowledges and agrees:
2.8.2.1 The Agency has made no representation or warranty with respect to the
Property except for those representations and warranties contained in this Agreement, and that
prior to the Close of Escrow, the Agency will make no representations and warranties with
respect to the Property other than those contained in this Agreement.
2.8.2.2 It is purchasing the Property with the ultimate objective of demolishing
the existing improvements and constructing new improvements thereon.
2.8.2.3 Its decision to purchase the Property will be based on the results of its
analysis and the reports it obtains during the period described in Section 2.8.1 hereof.
2.8.2.4 The Agency has made no representation or warranty as to the accuracy or
completeness of any reports and other materials prepared by persons other than the Agency and
delivered by the Agency to Developer, and Developer is not relying on the accuracy and
completeness of any such reports and other materials prepared by persons other than the Agency.
2.8.2.5 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 the Property.
2.8.2.6 The Agency shall disclose to Developer prior to the execution of this
Agreement all material adverse conditions, defects and other matters relating to the Property of
which the Agency has actual knowledge which, in the Agency's sole judgment, would have a
material adverse impact upon the Property; provided that the foregoing disclosure obligation
shall apply only to the Property itself, and not to general or local economic or market conditions.
Except for the Agency's representations, warranties and covenants contained in this
Agreement, Developer is purchasing the Property in "AS-IS," "WHERE-IS" condition "WITH ALL
FAULTS." Developer 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 Developer or delivered by the
Agency to Developer, including the remediation of any Hazardous Material on the Property.
2.8.3 The Agency represents and warrants to Developer as of the date of this
Agreement and as of the Close of Escrow Date that:
2.8.3.1 The Agency has taken all actions required pursuant to its charter
documents to duly authorize the execution and performance of this Agreement and the execution
and performance of all of the closing documents set forth herein.
2.8.3.2 The Agency's execution and performance of this Agreement and the
closing documents will not violate any provision of any mortgage, lease, contract, agreement,
order,judgment or decree by which the Agency is bound. After the execution of this Agreement,
8
the Agency's performance of its obligations under this Agreement and the closing documents
will not require the consent of any federal, state or local court or governmental authority, or any
other person or entity.
2.8.3.3 This Agreement is valid and enforceable against the Agency in
accordance with its terms and each instrument to be executed by the Agency pursuant to this
Agreement will, when executed and delivered, be enforceable in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting creditors' rights generally.
2.8.3.4 There are no currently pending, and to the Agency's best knowledge,
there are no threatened or proposed, suits, actions, proceedings or investigations against or
initiated by the Agency which relate to or affect the Property, including without limitation any
suits or proceedings challenging the development of the Project or relating to any change of the
zoning laws or the general or specific plan amendments applicable to the Property.
For the purposes of this Agreement, the "actual knowledge" or"best knowledge" of the Agency
shall be limited to the actual knowledge of Carlos Ortega and David Yrigoyen or Dennis Coleman, and
no knowledge shall be implied or imputed to the Agency beyond the actual knowledge of such
individuals.
2.8.4 Developer represents and warrants to the Agency as of the date of this Agreement
and as of the Close of Escrow Date that:
2.8.4.1 Developer is an individual whose place of business is in Palm Desert,
California.
2.8.4.2 Developer has duly authorized the execution and performance of this
Agreement and the execution and performance of all of the closing documents set forth herein.
2.8.4.3 Developer's execution and performance of this Agreement and the
closing documents will not violate any provision of any mortgage, lease, contract, agreement,
instrument, order,judgment or decree by which Developer is bound.
2.8.4.4 This Agreement is valid and enforceable against Developer in accordance
with its terms and each instrument to be executed by Developer pursuant to this Agreement will,
when executed and delivered, be enforceable in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting creditors' rights generally.
2.8.5 The Agency hereby covenants and agrees to notify Developer promptly in
writing in the event that the Agency receives notice of the initiation or threat of any suit or proceeding
challenging the development of the Project or relating to any change of the zoning laws or the general or
specific plan amendments applicable to the Property.
Section 2.9 Deposit into Escrow.
9
2.9.1 Agency's Deposits into Escrow. The Agency hereby covenants and agrees to
deliver to Escrow Holder prior to the Close of Escrow the following instruments and documents,the
delivery of each of which shall be a condition of the Close of Escrow:
2.9.1.1 A Grant Deed duly executed and acknowledged by the Agency granting
and conveying to Developer good and marketable title to the Property. Said Grant Deed shall be
in the form attached hereto as Exhibit D;
2.9.1.2 The Agency's affidavit as contemplated by California Revenue and
Taxation Code §18662 ("Withholding Affidavit");
2.9.1.3 A Certification of Non-Foreign Status in accordance with I.R.C. Section
1445 (the "FIRPTA Certificate"); and
2.9.1.4 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 Developer's policy of
title insurance.
2.9.2 Developer's Deposits into Escrow. Developer shall deposit with Escrow Holder,
on or prior to the Close of Escrow,the balance of the Purchase Price in accordance with Section 2.2.
Section 2.10 Authorization to Record Documents and Disburse Funds.
Escrow Holder is hereby authorized to record the documents and disburse the funds and
documents called for hereunder upon the Close of Escrow, provided each of the following conditions has
then been fulfilled:
2.10.1 The Title Company can issue in favor of Developer an ALTA Extended Coverage
Owner's Policy of Title Insurance, with liability equal to the Purchase Price, showing the Property vested
in Developer subject only to the Permitted Title Exceptions.
2.10.2 The Agency shall have deposited in Escrow the documents required pursuant to
Section 2.9, and Developer shall have deposited in Escrow the Purchase Price as provided in Section 2.2
along with Developer's share of Escrow closing costs.
10
2.10.3 The Agency and Developer have confirmed to Escrow Holder that all of the other
closing conditions set forth in Section 2.6 have been satisfied or waived in writing.
Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any
instrument delivered through this Escrow if necessary or proper for issuance of Developer's policy of
title insurance.
Section 2.11 Escrow's Closing Actions. On the Close of Escrow, Escrow Holder shall close
Escrow as follows:
2.11.1 Record the Grant Deed (marked for return to Developer) with the Riverside
County Recorder(which shall be deemed delivery to Developer);
2.11.2 Issue the Title Policy or cause the Title Company to issue the Title Policy;
2.11.3 Prorate taxes, assessments, rents, and other charges as of the Close of Escrow in
accordance with the settlement statements approved by the Parties.
2.11.4 Disburse to the Agency the Purchase Price less prorated amounts and charges to
be paid by or on behalf of the Agency;
2.11.5 Charge Developer for those costs and expenses to be paid by Developer pursuant
to this Agreement and disburse any net funds remaining after the preceding disbursements to Developer;
2.11.6 Prepare and deliver to both Developer and the Agency one signed copy of Escrow
Holder's closing statement showing all receipts and disbursements of the Escrow; and
2.11.7 Deliver to Developer the FIRPTA Certificate and the Withholding Affidavit.
Section 2.12 Environmental Indemnity. Developer shall indemnify, protect, defend and hold
harmless the City (as a third party beneficiary) and the Agency, and the Agency's officials, officers,
attorneys, employees, consultants, agents, and representatives, from and against any and all claims,
liabilities, suits, losses, costs, expenses and damages, including but not limited to attorneys' fees and
costs, arising out of any claim for loss or damage to any property, including the Property, injuries to or
death of persons, or for the cost of cleaning up the Property and removing Hazardous Materials or toxic
substances, materials and waste therefrom, by reason of contamination or adverse effects on the environ-
ment, or by reason of any statutes, ordinances, orders,rules or regulations of any governmental entity or
agency requiring the clean-up of any Hazardous Materials caused by or resulting from any Hazardous
Material, or toxic substances or waste existing on or under, any portion of the Property acquired by
Developer that were not located on or under such property on or before the acquisition of such property
by Developer.
Section 2.13 Additional Instructions. The Parties shall execute appropriate escrow instructions,
prepared by the Escrow Holder, which are not inconsistent herewith. If there is any inconsistency
11
between the terms hereof and the terms of the escrow instructions,the terms hereof shall control unless
an intent to amend the terms hereof is expressly stated in such instructions.
ARTICLE 3 DEVELOPMENT OF THE PROPERTY.
Section 3.1 Development of the Project. Developer shall develop, or cause to be developed,
the Project on the Property, in accordance with the Scope of Development (Exhibit C), the Schedule of
Performance (Exhibit B), the Public Improvements (Exhibit E), all requirements of the City's Municipal
Code, and any and all applicable federal, state and local laws, rules and regulations in connection with
such construction, any conditions of approval required by the City (including conditions of approval for
the subdivision of the Property), the Plans and Specifications, and all terms, conditions and requirements
of this Agreement.
Section 3.2 Agency's Right to Review Plans and Specifications. In connection with
construction of the Project, Developer shall comply in all respects with Plans and Specifications
approved by the Agency or the City in accordance with this Agreement. The Agency shall have the right
to review all Plans and Specifications for the Improvements to ensure that the Improvements are
constructed to a high quality as described in the Scope of Development in the Agency's reasonable
judgment. If Plans and Specifications (including Basic Concept Drawings, Preliminary Drawings, and
Final Construction Drawings) are approved by the City Council or its applicable subdivisions (such as
the Planning Commission, Department of Building and Safety and/or the Department of Public Works),
then such Plans and Specifications shall be deemed approved by the Agency.
Section 3.3 Preliminary Site Plan. By the date set forth in the Schedule of Performance,
Developer shall prepare and submit to the Agency, for the Agency's review and written approval, a
Preliminary Site Plan and related documents for the Property, which Preliminary Site Plan shall be
consistent with the Scope of Development.
Section 3.4 Basic Concept Drawings. By the date set forth in the Schedule of Performance,
Developer shall prepare and submit to the Agency, for the Agency's review and written approval, Basic
Concept Drawings and related documents for the Property, which plans and drawings shall be consistent
with the Scope of Development. Developer may make changes and modifications to the Basic Concept
Drawings only after obtaining the Agency's prior written consent, which consent shall not unreasonably
be withheld or delayed. The construction of the Improvements on the Property shall be as generally
established in the Basic Concept Drawings except for such changes as may be mutually agreed upon by
Developer and the Agency. Approved Basic Concept Drawings will be the basis for preparation of
Preliminary Drawings and to initiate further detail and design features on a larger scale.
Section 3.5 Preliminary Drawings. Developer shall prepare and submit to the Agency, for the
Agency's review and written approval, Preliminary Drawings based upon the Scope of Development and
the Basic Concept Drawings. The Preliminary Drawings shall include, but not be limited to, floor plans,
a site plan, elevations, and specifications for the Project.
12
Section 3.6 Landscaping and Finish Grading. Developer shall prepare and submit to the
Agency, for the Agency's review and written approval, final landscaping and finish grading plans for the
Project, which shall be included with the Final Construction Drawings.
Section 3.7 Final Construction Drawings and Related Documents. After receipt of the
Agency's approval of Preliminary Drawings, Developer shall prepare and submit to the Agency, for the
Agency's review and written approval, Final Construction Drawings for the applicable development
phase of the Project, which shall include complete construction documents, site development elevations,
final landscaping plans, finish grading plans, and related documents. The Final Construction Drawings
shall be in sufficient detail necessary to obtain building permits.
Section 3.8 Approval of Construction Plans. The Agency shall approve or disapprove such
plans, drawings, and related documents referred to in Sections 3.3 through 3.7 above, in a timely
fashion. Any disapproval shall state in writing the reasons for disapproval. Developer, upon receipt of a
disapproval, shall revise such portion of the plans, drawings or related documents in a manner that
satisfies the reasons for disapproval and shall resubmit such revised portions to the Agency as soon as
possible after receipt of the notice of disapproval. The Agency shall approve or disapprove such revised
portions in the same manner as provided in this Agreement for approval or disapproval of plans,
drawings, and related documents initially submitted to the Agency. Any items submitted to and
approved by the Agency shall not be subject to subsequent disapproval by the Agency.
Section 3.9 Construction Contract. Developer shall retain one or more reputable and
financially responsible general contractors (each, a "General Contractor")to undertake the construction
of the Project. Each General Contractor shall be acceptable to and approved in writing by the Agency,
licensed in California, and experienced in completing the improvements to be constructed at the
Property by Developer. On or before the date set forth in the Schedule of Performance, Developer shall
enter into a written contract or contracts (the "Construction Contracts") with the General Contractor(s)
for performing the work constituting the construction of all of the Project. Each such Construction
Contract shall be a guaranteed maximum cost contract insuring construction of the improvements for a
fixed price, subject to such reasonable adjustments as are customarily allowed with respect to construc-
tion contracts, and shall obligate the General Contractor to commence and complete such construction in
accordance with this Agreement and all applicable federal, state and local laws, rules and regulations.
Each such Construction Contract shall provide for retention of at least 10 percent from each progress
payment (except there shall be no retention for any items excused from retention as specified in the
Construction Contract)until the final payment and said final payment shall not be paid to the General
Contractor until the portion of the Project covered by such Construction Contract shall have been
completed to Developer's satisfaction, and Developer shall have obtained all appropriate lien waivers
from the General Contractor and its subcontractors, or bonds acceptable to Developer in form and
amount, insuring against loss arising from any mechanics', laborers', materialmen's or other like liens
filed against the Property.
Section 3.10 Construction Loan. On or before the date set forth therefor in the Schedule of
Performance, Developer shall submit to the Agency, for approval by the Agency's Executive Director
(which approval will not be unreasonably withheld or delayed), evidence of construction financing
commitment for the Project. Adequate financing shall consist of binding construction loan
13
commitments and commitments of equity funds in an aggregate amount equal to all hard costs of
designing and constructing the Improvements of the Project and all soft costs for owning and operating
the Project until maturity of the construction loan, as shown on the Proforma and Construction Budget.
If Developer fails to provide the Agency with proof of adequate financing by the date set forth in the
Schedule of Performance, then the Agency shall have the option of terminating this Agreement and the
Agency shall be released from any and all further obligations to Developer under the terms of this
Agreement.
Section 3.11 Changes in Construction Drawings. If Developer desires to make any material
changes in the Final Construction Drawings and related documents after their approval by the Agency,
Developer shall submit the proposed changes to the Agency for its approval. If approved, the Agency
shall notify Developer of such approval in writing within 30 days after submission to the Agency.
Developer shall revise such portions as are disapproved and resubmit them to the Agency within 30 days
of receipt of written disapproval.
Section 3.12 Cost of Construction. The cost of constructing the Project, including the costs for
developing and constructing the Improvements thereon, shall be borne by Developer.
Section 3.13 Rights of Access. In addition to those rights of access to and across the Property
to which the Agency and the City may be entitled by law, members of the staffs of the Agency and the
City shall have a reasonable right of access to the Property, without charge or fee, at any reasonable
time, upon reasonable notice to Developer(which may be telephonic notice to Timothy R. Bartlett, or
his construction foreman) to inspect the work being performed at the Property. Developer may require
that a representative from Developer accompany the Agency's or City's staff members during any such
inspection.
Section 3.14 Local. State and Federal Laws. Developer shall carry out the construction of the
Improvements on the Property in conformity with all applicable laws, including all applicable federal
and state occupation, safety and health standards. Developer represents and warrants that all of the
Improvements to be constructed by Developer shall be constructed in compliance with the current City
and State of California standards and laws.
Section 3.15 City and Other Governmental Agency Permits and Approvals. Before
commencement of construction or development of any work of improvement on the Property, Developer
shall (at Developer's expense) secure, or cause to be secured, any and all permits which may be required
by the City or any other governmental agency having jurisdiction over such construction or
development.
Section 3.16 Anti-discrimination During Construction. Developer, 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.
14
Section 3.17 Taxes. Assessments, Encumbrances and Liens. Developer shall pay when due all
real property taxes and assessments assessed or levied on portions of the Property from time to time
owned by Developer.
Section 3.18 No Agency Created. In performing this Agreement, Developer is an independent
contractor and not the agent of the Agency or the City. The Agency and the City are not agents of
Developer. Neither the Agency nor the City shall have any responsibility whatsoever for payment to
any contractor or supplier of Developer. Developer shall not have any responsibility whatsoever for
payment to any contractor or supplier of the Agency or the City.
Section 3.19 Consent by City. Any consent or approval by the Agency required by this article
shall be deemed satisfied or given to the extent the City consents or approves any such matter or issues a
discretionary permit or approval.
Section 3.20 Plans and Data. If this Agreement is terminated for any reason, then Developer
shall deliver to the Agency, without cost or expense to the Agency, copies of any and all maps,
architecture, engineering, subdivision approvals, permits, entitlements, rights, contracts, plans, drawings,
studies, designs, reports, surveys, and data pertaining to the Project and its development (collectively,
"Site Designs") which are in the possession of Developer,together with a bill of sale therefor. The Site
Designs shall then be the sole property of the Agency and may be used by the Agency, free of all claims
or interests of Developer or any other person, other than the interest therein held by Developer's
construction lender, whose interest shall be on a parity with that of the Agency in the Site Designs. The
Agency may use, grant, license or otherwise dispose of the Site Designs to any person for development
of the Project or any other purpose, subject to the rights of Developer's construction lender.
Section 3.21 Certificates of Occupancy. Upon Developer's completion of the construction of
the Project, Developer will apply to the City for one or more Certificates of Occupancy for the
Improvements. The City's issuance of final Certificate(s) of Occupancy for the Improvements shall
constitute the acknowledgment of the Agency and the City that Developer has complied in all respects
with its development obligations set forth in Article 3 of this Agreement.
ARTICLE 4 LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS.
Section 4.1 Restriction on Transfer of Developer's Rights and Obligations.
4.1.1 Prior to issuance of a Certificate of Occupancy for the Project,Developer shall not
sell, assign, transfer,mortgage, hypothecate, or convey (collectively, a "Transfer") the Property or any
part thereof or any of Developer's rights or obligations hereunder, without the Agency's prior written
consent, which consent may be granted or withheld in the Agency's sole and absolute discretion, except
for the execution of one or more mortgages, deeds of trust and related instruments securing Developer's
construction loan. Developer acknowledges that the identity of Developer is of particular concern to the
Agency, and it is because of Developer's identity that the Agency has entered into this Agreement with
Developer. No transfer or assignment of Developer's interest hereunder without the Agency's prior
written approval shall be deemed to release Developer from the obligations of Developer hereunder.
15
4.1.2 After the issuance of a Certificate of Occupancy for the entire Project, and the
opening of the Project for business, Developer shall have the right to Transfer the Property to any party
(a"Transferee") provided that:
4.1.2.1 the Transferee (and/or its management company, if any) has the
experience, quality, character,trade record, financial ability and reputation, as determined by
Agency in its reasonable business judgment,to own and lease the Project; and
4.1.2.2 the Transferee assumes in writing all obligations of Developer set forth in
this Agreement (except those pursuant to Articles 2 and 3, which shall be deemed satisfied upon
the Close of Escrow and the issuance of final Certificate(s) of Occupancy for the Improvements,
respectively).
In the event that Developer desires to Transfer the Property pursuant to Section 4.1.2.1,
Developer will so notify the Agency, and will provide the Agency with all pertinent information
regarding the Transferee. The Agency will approve or disapprove the Transferee (in its reasonable
business judgment) within thirty (30) days after receipt of written notice of Developer's intention to
make the Transfer. Upon the completion of any Transfer to a Transferee approved by the Agency as
provided in this Section 4.1.2.1, the Transferee shall assume all of Developer's rights and obligations
under this Agreement, and Developer shall be released from all further liabilities and obligations under
this Agreement.
Section 4.2 Mortgages and Deeds of Trust. Notwithstanding any provisions of Section 4.2 to
the contrary, Developer shall have the right to mortgage or hypothecate its interest in-the Property and
the Project pursuant to one or more mortgages, deeds of trust, sales and leaseback, or any other form of
encumbrance or conveyance required for any reasonable method of financing from an institutional
lender approved by the Agency (which approval shall not unreasonably be withheld), for the purpose of
securing loans of funds to be used for financing the direct and indirect costs of the Project (including
land development costs, reasonable and customary developer fees, loan fees and costs, and other normal
and customary project costs), or for refinancing the construction financing with permanent financing.
Any institutional lender of record holding any such mortgage, deed of trust, or other security instrument
authorized by this Agreement shall be referred to as a"Holder."
Section 4.3 Rights of Holders. The Agency shall deliver a copy of any notice or demand to
Developer concerning any breach or default by Developer under this Agreement to each Holder who has
previously made a written request to the Agency for special notice hereunder. Any notice of breach or
default by Developer shall not be effective against any such Holder unless given to such Holder. Such
Holder shall have the right at its option to cure or remedy any such default and to add the cost thereof to
the secured debt and the lien of its security interest. If such breach or default can only be remedied or
cured by such Holder upon obtaining possession, such Holder may remedy or cure such breach or
default within a reasonable period of time after obtaining possession, provided such Holder seeks
possession with diligence through a receiver or foreclosure. Such Holder shall be permitted to undertake
or continue the construction or completion of the Improvements beyond the extent necessary to conserve
or complete the Improvements.
16
Section 4.4 Noninterference with Holders. The provisions of this Agreement do not limit the
right of Holders to foreclose or otherwise enforce any mortgage, deed of trust, or other security
instrument encumbering all or any portion of the Property, and the Improvements thereon, or to pursue
any remedies for the enforcement of any pledge or lien encumbering such portions of the Property. In
the event of a foreclosure sale under any such mortgage, deed of trust or other lien or encumbrance, or
sale pursuant to any power of sale contained in any such mortgage or deed of trust, the purchaser or
purchasers and their successors and assigns, and such portions of the Property shall be, and shall
continue to be, subject to all of the conditions, restrictions and covenants of all documents and
instruments recorded pursuant to this Agreement, including, without limitation, the restrictions set forth
in the grant deed on such property from the Agency to Developer. The Agency agrees to execute such
further documentation regarding the rights of any Holder as is customary with respect to construction or
permanent financing, as the case may be, to the extent that such documentation is reasonably requested
by any Holder and is reasonably approved by the Agency.
ARTICLE 5 USE OF THE PROPERTY.
Section 5.1 Use of Property.
5.1.1 Parking Easement over Parcels. The Developer shall convey an easement(the
"Parking Easement")to the Agency. The Parking Easement shall grant to the Agency the use of it for
parking for the General Public in perpetuity and shall be in the form attached hereto as Exhibit F and
incorporated herein by this reference.
5.1.2 Maintenance and Use of the Parking Lot. The Developer shall operate the
Parking Lot as a parking lot open to all members of the General Public, with the exception of the 16
parking spaces that are located closest to the 4,500 square foot commercial facility. These 16 parking
spaces shall be used by the Developer for his tenants' exclusive use for the tenants' business operations.
Any member of the General Public may use the other 24 parking spaces without any restriction
whatsoever and free of any charge.
5.1.3 The Developer shall jointly and severally be responsible for maintenance and
repair of the Parking Lot. The Developer shall keep the Parking Lot clean and in good condition and
repair, and shall maintain in good condition any landscaping planted thereon.
Section 5.2 Obligation to Refrain from Discrimination. Developer covenants and agrees for
itself and its successors and assigns, and for every successor in interest to the Property, or any part
thereof, and their 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 Property, and Developer (itself or any person claiming under or through
Developer) 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 Property or any portion thereof.
17
Section 5.3 Form of Nondiscrimination and Non-Segregation Clauses. Developer shall
refrain from restricting the rental, sale or lease of the Property 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, handicap, 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 Property, 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."
ARTICLE 6 EVENTS OF DEFAULT,REMEDIES AND TERMINATION.
Section 6.1 Defaults--Definition.
Occurrence of any or all of the following shall constitute a default ("Default") under this
Agreement:
18
6.1.1 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;
6.1.2 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 thirty (30) days after the
non-defaulting Party has given written 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 prosecute such breach to completion;
6.1.3 Developer's Transfer(as defined in Section 4.2), or the occurrence of any
involuntary Transfer, of the Property or any part thereof or interest therein, or any rights or
obligations of Developer under this Agreement, in violation of this Agreement;
6.1.4 Developer's failure or refusal to keep in force and effect any material permit or
approval with respect to construction of the Project, and Developer's failure to cure such breach
within thirty (30) calendar days after notice from the Agency of Developer's breach; provided,
however, if such breach is not reasonably curable within such thirty (30) day period, then
Developer shall be deemed in Default only if Developer does not commence to cure such breach
within such thirty (30) day period and thereafter fails to diligently prosecute such breach to
completion;
6.1.5 Filing of a petition in bankruptcy by or against any Party or appointment of a
receiver or trustee of any property of any Party, or an assignment by any Party for the benefit of
creditors, or adjudication that such Party is insolvent by a court, and the failure of such Party to
cause such petition, appointment, or assignment to be removed or discharged within 90 days.
Section 6.2 Remedies in the Event of Default.
6.2.1 Remedies Prior to the Close of Escrow. In the event of a Default by any Party
prior to the Close of Escrow, the non-defaulting Party shall have the right to terminate this Agreement
provided it is not in breach of its obligation under this Agreement, 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 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.
6.2.2 Remedies for Default After the Close of Escrow. In the event of a Default by any
Party after the Close of Escrow, and prior to the issuance of a Certificate of Occupancy, a non-defaulting
party shall be entitled to the following remedies, as applicable:
A defaulting Party shall be liable to the non-defaulting Party for all damages, costs and losses
incurred by the non-defaulting Party, and the non-defaulting Party may seek against the
19
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 Liberal Construction. The rights established in this Article are to be interpreted in
light of the fact that the Agency will convey the Property to Developer for development and operation of
the Project thereon and not for speculation in undeveloped land or for construction of different
improvements. Developer acknowledges that it is of the essence of this Agreement that Developer is
obligated to complete all Improvements comprising the Project.
Section 6.4 No Personal Liability. No representative, agent, attorney, consultant, or employee
of the Agency shall personally be liable to the Developer or any successor in interest of Developer, in
the event of any Default or breach by the Agency, or for any amount which may become due to
Developer or any successor in interest, on any obligation under the terms of this Agreement.
Section 6.5 Rights 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 6.6 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 amount due 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.
Section 6.7 Force Majeure. Notwithstanding anything to the contrary in this Agreement,
either Party's unexcused material failure to complete the Improvements required by such Party to be
completed according to this Agreement, the Scope of Development,the Public Improvements, and
Schedule of Performance 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 (a "Force Majeure Delay"): (i) actual, industry wide delay or failure to perform
by Developer affecting all similar works of construction in the Coachella Valley, California, area,
attributable to any strike, lockout or other labor or industrial disturbance (whether or not on the part of
the employees of either party hereto), civil disturbance, future order claiming jurisdiction, act of the
public enemy, war,riot, sabotage, blockade, embargo, inability to secure customary materials, supplies
or labor through ordinary sources by reason of regulation or order of any government or regulatory
body; (ii) delay attributable to the failure of Developer to secure building permits and approvals
(including any failure to obtain a temporary certificate of occupancy) within the same time period that
normally prevailed for obtaining such permits and approvals at the time this Agreement was negotiated,
which time period the Agency and Developer hereby stipulate to be (_) weeks; or(iii) delay
attributable to lightning, earthquake, fire, storm, hurricane, tornado, flood, washout, explosion, or any
other similar industry-wide cause beyond the reasonable control of the party from whom performance is
required, or any of its contractors or other representatives. Any prevention, delay or stoppage due to any
20
Force Majeure Delay shall excuse the performance of the party affected for a period of time equal to any
such prevention, delay or stoppage (except the obligations of either party to pay money to the other party
or to close escrow).
ARTICLE 7 INSURANCE; INDEMNITY.
Section 7.1 Insurance.
7.1.1 Developer shall obtain and maintain at no cost or expense to the Agency, with a
reputable and financially responsible insurance company reasonably acceptable to the Agency,
commercial broad form general public liability insurance, insuring against claims and liability for bodily
injury, death, or property damage arising from the construction, use, occupancy, condition, or operation
of the Property,which insurance shall provide combined single limit protection of at least $3,000,000.
Such insurance policy shall name the City and the Agency and their council members, board members,
officers, employees, consultants, independent contractors, attorneys and servants as additional insureds.
7.1.2 Before commencement of any demolition or construction work by Developer on
any portion of the Property owned by Developer, Developer shall obtain and maintain in force until
completion of such work(i) "all risk" builder's risk insurance, including coverage for vandalism and
malicious mischief, in a form and amount and with a company reasonably acceptable to the Agency, and
(ii) workers' compensation insurance covering all persons employed by Developer in connection with
work on the Project, or any portion thereof. During the construction of Improvements on any portion of
the Property by Developer, such builder's risk insurance shall cover improvements in place and all
material and equipment at the job site furnished under contract, but shall exclude contractors',
subcontractors', and construction managers' tools and equipment and property owned by contractors' and
subcontractors' employees.
7.1.3 Developer shall also furnish or cause to be furnished to the Agency evidence
satisfactory to the Agency that any contractor with whom it has contracted for the performance of work
on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as
required by law.
7.1.4 With respect to each policy of insurance required above, Developer and each of
Developer's general contractors shall furnish to the Agency an endorsement to the insurance policy on
the insurance carrier's form setting forth the general provisions of the insurance coverage. The required
certificate shall be furnished by Developer prior to commencement of construction of any
Improvements.
7.1.5 All such policies required by this Section shall be nonassessable and shall contain
language to the effect that (i)the policies cannot be canceled or materially changed except after thirty
(30) days' written notice by the insurer to the Agency, and (ii) the Agency shall not be liable for any
premiums or assessments. All such insurance shall have deductibility limits which shall be
commercially reasonable.
21
Section 7.2 Indemnity. From and after the execution of this Agreement, Developer hereby
agrees to indemnify, defend, protect, and hold harmless the Agency and the City and any and all agents,
employees and representatives of the Agency and the City, from and against all losses, liabilities, claims,
damages (including foreseeable or unforeseeable consequential damages), penalties, fines, forfeitures,
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 the Property or the use, ownership,
management, occupancy, or possession of the Property,
(ii) any breach or Default by Developer hereunder, or
(iii) any of Developer's activities on the Property (or the activities of Developer's agents,
employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or
independent contractors on the Property),
regardless of whether such losses and liabilities shall accrue or are discovered before or after termination
or expiration of this Agreement, except to the extent such losses or liabilities are caused solely and
exclusively by the gross negligence or intentionally wrongful acts of the Agency. Developer shall
defend, at its expense, including attorneys' fees, the Agency and the City, and the Agency's and the
City's council members, board members, officers, agents, attorneys, consultants, independent
contractors, servants and employees in any legal action 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.
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) one business day following deposit or delivery with a
nationally recognized overnight courier delivery charges prepaid, or (c)three (3)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 delivered prior to the
Close of Escrow 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)
22
Developer: TIMOTHY R. BARTLETT
73-382 Salt Cedar Street
Palm Desert, CA 92260
Attention: Timothy R. Bartlett, President
(Telephone: 760-776-4141)
(Facsimile: 760-779-0714)
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 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 where ever the context so requires.
Section 8.4 Time of the Essence. Time is of the essence of this Agreement.
Section 8.5 Warranty Against Payment of Consideration for Agreement. Developer warrants
that it has 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 8.6 Attorneys' Fees. If any Party brings an action to enforce the terms hereof or
declare its rights hereunder,the prevailing Party in any such action shall be entitled to its reasonable
attorneys' fees to be paid by the losing Party as fixed by the court. If either the Agency or the City,
without fault, is made a Party to any litigation instituted by or against Developer, then Developer shall
defend the City and/or the Agency against and save it harmless from all costs and expenses including
reasonable attorney's fees incurred in connection with such litigation. If Developer, without fault, is
made a Party to any litigation instituted by or against the Agency or the City, then the Agency shall
defend Developer against and save it harmless from all costs and expenses including reasonable
attorney's fees incurred in connection with such litigation.
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 Developer and the Agency
acknowledge that no person has made, any representation, warranty, guaranty or promise except as set
23
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 Developer or the Agency.
Section 8.8 Severability. 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 Headings. 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 Party Beneficiaries other than the City. 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 Parties, 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
Developer against the Agency, or by Agency against Developer, 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 Developer,
service of process on Developer shall be made by personal service on Timothy R. Bartlett, or in such
other manner as may be provided by law. Developer 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 Developer,
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.
24
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.
"Developer":
"Agency":
TIMOTHY BARTLETT PALM DESERT REDEVELOPMENT
AGENCY, a public body, corporate and politic
By:
By:
Chairperson
ATTEST:
Secretary
25
LIST OF EXHIBITS
Exhibit A. -- Legal Description
Exhibit B. -- Schedule of Performance
Exhibit C. -- Scope of Development
Exhibit D. -- Grant Deed
Exhibit E. -- Public Improvements
Exhibit F. -- Form of Parking Easement
1
1
EXHIBIT A.
LEGAL DESCRIPTION
(TO BE PROVIDED)
1
EXHIBIT B.
SCHEDULE OF PERFORMANCE
1. Approval of the Project by the Architectural January 1999
Review Commission
2. Preliminary Approval of the Project by the Community January 1999
Development and Public Works Departments
3. Developer's Approval or Disapproval of Preliminary Title Report Within 10 business days after
Opening of Escrow
4. Developer's Approval or Disapproval of Survey Within 10 business days after
Opening of Escrow
5. Developer's Approval or Disapproval of the Physical Condition Within 30 days after Opening
of the Property of Escrow
6. Agency's Publication of Notice of Public Hearing January 1999
7. Execution of the DDA by Developer and tender to the Agency February 1999
8. Developer's Deposit of$10,000 with Escrow(Section 2.2) Within 2 days after the
Agency's execution of the
Agreement
9. Approval of the Project by the City Council and
approval of the DDA by the Agency Board January 1999
10. Close of Escrow Within 45 days after Opening
of Escrow [on or before
March 31, 1999
11. Developer's Delivery of Basic Concept Drawings January 1999
12. Developer's Delivery of Preliminary Drawings January 1999
13. Developer's Delivery of Landscaping and Grading Plans By: March 1999
14. Developer's Delivery of Final Construction Drawings By: March 1999
1
15. Developer's Delivery of Construction Loan Commitment By: March 1999
16. Building Permits March 1999
17. Commencement of Construction of the Project By: March 1999
2
EXHIBIT C.
SCOPE OF DEVELOPMENT
A. General
The Developer agrees to build a commercial building of approximately 4,500 sq. ft. The Project
shall be reviewed by all applicable regulatory committees, commissions, and other legislative
political subdivisions including, but not limited to the Architectural Review, Planning
Commission, Arts-in-Public Places, and the City Council.
B. Public Improvements
1. The Developer agrees to construct the Public Improvements as provided for in Exhibit E,
Public Improvements, Paragraph A-1 of this Agreement.
2. The Developer agrees to construct Public Improvements, as provided for in Exhibit E,
Public Improvements, Paragraph A-2, of this Agreement.
3. The Developer agrees to construct Public Improvements as provided for in Exhibit E,
Public Improvements, Paragraph A-3 of this Agreement.
C. The Developer agrees to lease the facility to retail tenants who specialize in golf and/or sporting
good sales, or other uses as approved by the City.
1
EXHIBIT D.
FORM OF GRANT DEED
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 following described real property (the "Property") located in the City of Palm Desert,
County of Riverside, State of California:
Lot 1 and Lot 2 of Tract 2012, Palm Desert, Riverside County, California,
as per Map recorded in Book 40, Pages 25 and 26 of Maps, Official
Records, Riverside County, California.
SUBJECT TO, all easements, covenants, conditions,restrictions, and rights of way of record.
1
RESERVING AND EXCEPTING THEREFROM,the following easements for ingress and egress
over the portion of the Property described in Exhibit 1, attached hereto and incorporated by reference
herein, for the use and benefit of the real property described as Lot 1 and Lot 2 of Tract 2012, as per
Map recorded in Book 40, Pages 25 and 26, of Maps, Official Records, Riverside County, California
(the "Benefitted Parcel"),which easements shall run with the land and burden the above-referenced
property and run to the benefit of the Benefitted Parcel.
1. This Grant of the Property is subject to the Redevelopment Plan for Project Area
2 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 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 Grantee covenants by and for itself, its representatives, its successors and
assigns and every successor in interest to the Property or any part thereof,that during construction of
improvements and thereafter the Grantee shall not use or permit the use of the Property in violation of
the Redevelopment Plan for Project Area 1, as adopted by the City of Palm Desert by its Ordinance No.
509 of the City of Palm Desert adopted July 16, 1975 The Grantee further covenants and agrees for
itself, and its successors and its assigns,that for a period of 20 years after the date of recordation of this
Deed, the Grantee, such successors, and such assignees shall use the Property and every part thereof only
for only for the construction of the Project(as defined in the Agreement)thereon and use thereof for
which the Improvements are designed, and any other uses expressly permitted by the Agreement. The
Grantee further covenants and agrees that upon completion of the any Improvements described in the
Agreement, for a period of 20 years after the date of recordation of this Deed, the Grantee shall maintain
such Project and Public Improvements in good condition and repair and in the manner for similar
developments substantially comparable to the highest level of maintenance provided, respectively, of
similar age as the Project.
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.
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
2
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."
The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the
property described herein.
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.
3
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
4
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
EXIBIT E.
PUBLIC IMPROVEMENTS
A. Public Improvements
1. The Developer agrees to build an additional 24 parking spaces over and above what the
project requires. These 24 parking spaces shall be designated as public parking.
2. The Developer agrees to construct landscape improvements. These improvements shall
be sufficient enough to provide to the appearance of a park.
3. The Developer agrees to construct a bus shelter on Highway 111 adjacent to the property.
4. The total cost of constructing and developing the project, including design, testing, and
construction, shall be borne by the Developer. The Developer acknowledges that there is
no assistance being offered by the Agency for this project.
B. Maintenance
1. The Developer agrees that it will be the Developer's responsibility to maintain the Public
Improvements cited in Paragraphs 1-3 in Section A, of this Exhibit "E".
2. The Developer shall purchase and maintain as to the site commercial general liability
insurance covering personal injuries and damages to persons and property on the Site, in
the combined single limit of at least $3,000,000. The Developer shall cause the Agency
and its board members, agents, employees and attorneys, and any successor in interest of
the Agency, to be named as additional insureds on each policy of such insurance
maintained by the Participants with respect to the Site. The Developer shall deliver to
Agency certificates of insurance evidencing compliance with these provisions. Such
certificates shall also include the agreement of the carrier not to cancel or otherwise
terminate such coverage without first giving at least thirty (30) days prior written notice
to the Agency (Attention: Executive Director) and to each additional insured under any
policy carried pursuant to this Section 302.6.
C. Other
1. The Developer agrees that the cost of the conditions cited in this Exhibit have been
reflected in the purchase price as specified in Section 2.2. The Developer agrees that
Developer will not receive any relief or assistance for the conditions imposed in the
Exhibit or the Agreement.
1
EXHIBIT F
Recording requested by
and when recorded return to:
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attention: Secretary
Free Recording In Accordance
with Government Code Section 6103
EASEMENT AGREEMENT
This Easement Agreement is made and entered into as of the_day of , 199_, by and
between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic
("Agency"); and TIMOTHY R. BARTLETT, an individual referred to as a "Grantor"). The Agency and
the Grantor agree as follows:
RECITALS
A. The Agency owns that certain real property located in the City of Palm Desert, County of
Riverside, State of California, described in Exhibit A attached hereto and incorporated herein by this
reference (the "Agency Parcel").
B. The Agency and the Grantor are parties to a Disposition and Development Agreement for
the sale of property by the Agency to the Grantor.
C. The Grantor will develop the property for a commercial/retail facility for lease to a tenant.
D. As a condition of development, the Grantor will build 24 parking spaces for public use.
E. Pursuant to the Disposition and Development Agreement, the Grantor desires to convey
an easement in perpetuity to the Agency for the purpose of using a portion of the parking lot for the use
thereof by the public generally, including but not limited to visitors to and customers of the businesses
operated by the Grantors on each of the Grantor's Parcel.
NOW THEREFORE, in consideration of the mutual covenants and easements contained
herein, the parties hereto agree as follows:
1. Definition of Terms.
2
"Agency" means the Palm Desert Redevelopment Agency and any assignee of, or
successor to, its rights,powers and responsibilities. The Agency is a public body, corporate and politic,
exercising governmental functions and powers, and organized and existing under Chapter 2 of the
California Community Redevelopment Law.
"City" means the City of Palm Desert, County of Riverside, State of California.
"Easement" means the Easement described in Section 2 of this Easement Agreement.
"Easement Area" means those portions of the Grantors' Parcels subject to the Easement,
as described in Exhibit C (the "Easement Area").
"General Public" means the public generally, including but not limited to visitors to and
customers of the businesses operated by the Grantors on each of the Grantors' Parcels
"Grantor" means the individual owning in fee or holding leasehold interest in the
Grantor's Parcel.
"Grantor's Parcel" means the real property described in Exhibits B-1 hereto.
"DDA" means the Disposition and Development Agreement dated as of
1998, by and between the Agency and the Grantor.
"Parking Lot" means the public parking lot to be developed and operated on the Parking
Lot Site pursuant to the DDA and as further specified herein.
"Parking Lot Site" means the Easement Area on which the Parking Lot is to be located, as
shown on Exhibit D, attached hereto and incorporated by reference herein.
"Project Area" means the area of the City subject to the Redevelopment Plan. The exact
boundaries of the Project Area are specifically described in the Redevelopment Plan.
"Redevelopment Plan" means the Redevelopment Plan for Redevelopment Project No. 1
approved and adopted by the City Council of the City by Ordinance No. 80 on July 15, 1975.
"Site Map" means the map attached hereto as Exhibit D and incorporated herein by this
reference.
2. Easement. The Grantor hereby establishes and grants to the Agency a non-
exclusive easement, in perpetuity, in, to, over and across the Easement Area, for the purpose of allowing
the use of the Parking Lot by the General Public for the purpose of the pedestrian and vehicular ingress,
egress, and parking of passenger vehicles, as described in further detail below.
3. Reservation of Rights.
3
(a) The Grantor hereby reserves the right to temporarily close all or any
portion of the Parking Lot: (i) during customary non-business hours; (ii) as the Grantor deems legally
necessary and sufficient in order to prevent the dedication thereof or an accrual of any rights in any
particular person or the public generally; or (iii) as reasonably necessary to perform maintenance or
repairs. Any such temporary closing by the Grantor shall be subject to the prior written consent of the
Agency,which consent shall not unreasonably be withheld or delayed.
(b) The Grantor hereby reserves the right to institute reasonable, non-
discriminatory rules and regulations for the use of the Parking Lot Site and operation of the Parking Lot
in order to insure the free flow of traffic throughout the Parking Lot. The Grantor shall not permit the
Parking Lot Site to be used in a manner which would interfere with the free flow of vehicular and
pedestrian traffic throughout the Parking Lot. Any such rules or regulations shall be subject to the prior
written consent of the Agency, which consent shall not unreasonably be withheld or delayed.
4. Permitted Uses. The parties agree that the Parking Lot Site shall be used only for
the following purposes and for no other purposes whatsoever, unless all parties hereto agree otherwise in
writing:
(a) Pedestrian and vehicular ingress, egress, and vehicular parking by the
General Public. Parking shall be permitted only in designated parking stalls. No portion of the Parking
Lot Site shall be used for the repair or storage of vehicles;
(b) The temporary use (including erection of ladders, scaffolding and building
wall barricades) during periods of construction, remodeling or repair, for ingress and egress for vehicles
transporting materials and equipment and the use thereof by construction equipment; provided, however,
all such construction, remodeling or repair of buildings and building appurtenances shall diligently be
performed, and any such ladders, scaffolding and barricades shall promptly be removed upon completion
of such work;
(c) The construction, maintenance, repair, and rearrangement replacement of
parking sites or stalls, sidewalks,ramps, driveways, lanes, curbs, gutters, traffic control areas, signals,
traffic islands, traffic and parking lighting facilities, planters, planting boxes, edgers, sprinklers, valves,
and landscape shrubbery,to the extent those activities do not substantially reduce the number of spaces
within the Parking Lot;
(d) The installation, maintenance and operation of public utility services and
appurtenances necessary for servicing the improvements on the Grantors' Parcels, all of which shall be
located below the surface of the finished paving or above ground improvements.
5. Walls. Fences. and Barriers. Except as provided in Section 4(a) to the contrary,
the Grantor shall not erect any walls, fences, or other barriers on the Parking Lot Site which prevent or
impair the use or exercise of the Easement; provided, however, the Grantor may install curb stops or
such other reasonable traffic controls as may be necessary to guide and control the orderly flow of
traffic, so long as the access driveways are not closed or blocked.
4
6. Maintenance.
(a) The Grantor shall, at their own cost and expense, perform, or cause to be
performed, such maintenance as needed to keep the Parking Lot clean and in good condition and repair.
Such maintenance shall include, but not be limited to the following:
(i) Maintaining the surfaces in a smooth and evenly covered condition
with the type of surfacing material originally installed, or such substitute as shall in all respects be equal
or superior to them in quality,use, and durability;
(ii) Removing all standing water, papers, debris, filth, and refuse, and
thoroughly sweeping the paved areas, to the extent reasonably necessary to keep the paved areas in a
clean and orderly condition;
(iii) Maintaining such appropriate parking area entrance, exit, and
directional signs, markers and lights in the manner they are currently being maintained;
(iv) Repainting striping,markers, directional signs, etc., as necessary to
maintain them in a first-class condition;
(v) Paying all electrical, water, and other utility charges or fees;
(vi) Maintaining and repairing all storm drains and sewers, and all
electrical, water, and other utility lines or systems which are used in whole or in part to provide services
to the Parking Lot or which are necessary for the operation of the Parking Lot;
(vii) Operating, keeping in repair, and replacing when necessary, such
parking lot lighting facilities as are reasonably required;
(viii) Obtaining and maintaining in full force and effect commercial
general liability insurance and other insurance in accordance with the provisions of Section 10 of this
Easement Agreement; and
(ix) Maintaining all landscaping in a healthy, first class condition,
including weeding, trimming, gardening, replacing shrubs and other landscaping, and watering,
including repairing automatic sprinkler systems or water lines.
7. Mechanics' Liens. The Grantor shall pay all costs for construction done by it or
caused to be done by them on the Parking Lot as permitted or required by this Easement Agreement. The
Grantor shall keep the Parking Lot Site free and clear of all mechanics' liens resulting from construction
done by or for the Grantor(other than by reason of the Agency's initial construction of the Parking Lot).
The Grantor shall have the right to contest the correctness or the validity of any such lien if, immediately
on demand by the Agency, the Grantor procures and records a lien release bond issued by a corporation
authorized to issue surety bonds in California. The bond shall meet the requirements of Civil Code
§3143 and shall provide for the payment of any sum that the claimant may recover on the claim
5
(together with costs of suit, if it recovers in the action). The Grantor shall hold harmless, defend and
indemnify the Agency and the Parking Lot Site against all liability and loss of any type arising out of
work performed by the Grantor on the Parking Lot Site,together with reasonable attorneys' fees and all
costs and expenses reasonably incurred by the Agency in negotiating, settling, defending or otherwise
protecting against such claims. If the Grantor does not cause to be recorded the bond described in
California Civil Code Section 3142 or otherwise protect the Parking Lot Site under any alternative or
successor statute, and a final judgment has been rendered against the Grantor by a court of competent
jurisdiction for the foreclosure of a mechanics', materialman's, contractor's or subcontractor's lien claim,
and if the Grantor fails to stay the execution of the judgment by lawful means or to pay the judgment,
then the Agency shall have the right, but not the duty, to pay or otherwise discharge, stay or prevent the
execution of any such judgment or lien or both. The Grantor shall reimburse the Agency for all sums
paid by the Agency under this Section, together with all of the Agency's reasonable attorneys fees and
costs, plus interest on those sums, fees, and costs, at the maximum legal rate that may be charged by
non-exempt lenders under the usury laws of the State of California. On completion of any substantial
work of improvement,the Grantor performing such work shall file or cause to be filed a notice of
completion. The Grantor hereby appoints the Agency as the Grantor's attorney-in-fact to file the notice
of completion upon the Grantor's failure to do so after the work of improvement has been substantially
completed.
8. Insurance. The Grantor shall purchase and maintain as to the Parking Lot Site
commercial general liability insurance covering bodily injuries and damages to persons and property
occurring within Parking Lot Site, with a combined single limit of at least Three Million Dollars
($3,000,000.00), with a deductible of not more than $10,000.00. The Grantor shall cause the Agency, its
Board members, agents, employees and attorneys, and any successor in interest of the Agency, to be
named as additional insureds on each policy of such insurance maintained by it with respect to Parking
Lot Site. Such insurance policies shall be endorsed to provide that such coverage shall be primary and
that any insurance maintained by the Agency shall be excess insurance only. Such coverage shall be
endorsed to waive the insurer's rights of subrogation against the Agency. The Grantor shall deliver to
the Agency certificates of insurance evidencing compliance with these provisions. Such certificates
shall also include the agreement of the carrier not to cancel or otherwise terminate such coverage
without first giving at least thirty (30) days prior written notice to the Agency (attention: Executive
Director) and to each additional insured under any policy carried pursuant to this Section 10. If at any
time the amount or coverage of insurance which the Grantor is required to carry under this Section is, in
the Agency's reasonable judgment,materially less than the amount or type of insurance coverage
typically carried by owners or lessees of comparable properties in the State of California, then the
Agency shall have the right to require the Grantor to increase the amount or change the types of
insurance coverage required under this Section. Such requirements shall be designed to assure
protection from and against the kind and extent of risks which exist at the time a change in insurance is
required. The Agency shall notify the Grantor in writing of changes in insurance requirements. All
insurance purchased by the Grantor shall be from companies rated no less than B+VIII in Bests
Insurance Guide. The amount of insurance obtained pursuant to this Section shall not limit the liability
of the parties under this Agreement. If the Grantor does not deposit certificates evidencing acceptable
insurance policies with the Agency incorporating such changes within sixty (60) calendar days of receipt
of such notice,then the Agency may purchase such insurance and the Grantor shall immediately
reimburse the Agency for such insurance premiums,together with a 15%handling charge.
6
Notwithstanding said insurance policies,the Grantor shall be obligated for the full and total amount of
any damage, injury, or loss occurring in, on or about the Parking Lot Site.
9. Indemnification.
(a) The Grantor shall indemnify, defend, protect, and hold harmless the
Agency from and against any and all claims, losses, proceedings, damages, causes of action, liability,
costs and expenses, (including attorneys' fees) arising from or in connection with, or caused by (i) any
act, omission or negligence of the Grantor or any lessee, sublessee, licensee, concessionaire, contractor,
licensee, invitee, agent, servant or employee thereof(collectively, "Users"), wheresoever the same may
occur; (ii) any use of the Parking Lot, or any accident, injury, death or damage to any person or property
occurring in, on or about the Parking Lot, or any part thereof, or from the conduct of the Grantor's or
their Users' businesses or from any activity, work or thing done, permitted or suffered by the Grantor or
their Users in or about the Parking Lot Site or elsewhere (other than arising as a result of the Agency's
gross negligence or intentional misconduct); and (iii) any breach or default in the performance of any
obligations on the Grantor's part to be performed under the terms of this Easement Agreement, or
arising from any negligence of the Grantor, or any such claim or any action or proceeding brought
thereon; and in case any action or proceeding be brought against the Agency by reason of any such
claim, the Grantor, upon notice from the Agency, shall defend the same at the Grantor's expense by
counsel reasonably satisfactory to the Agency. The Grantor, as a material part of the consideration to the
Agency, hereby assumes all risk of damage to property or injury to persons in, upon or about the Parking
Lot Site arising from any cause other than the Agency's gross negligence or intentional acts, and the
Grantor hereby waives all claims in respect thereof against the Agency. These provisions are in addition
to, and not in lieu of, the insurance required to be provided by Section 8 hereof.
(b) Exemption of the Agency from Liability. The Grantor hereby assumes all
risks and liabilities of a landowner in the possession, use or operation of the Parking Lot Site (including
the Agency Parcel). The Grantor, on behalf of himself and his lessees, sublessees, licensees,
concessionaires or contractors, hereby agree that the Agency shall not be liable for injury to the
Grantor's business or their lessees', sublessees', licensees', concessionaires' or contractors' businesses or
any loss of income therefrom or for damage to the goods, wares, merchandise or other property of the
Grantor or his Users, or any other person in or about the Parking Lot Site, including any liability arising
from the physical condition of the Parking Lot Site or the presence of any hazardous or toxic materials
or substances on the Parking Lot Site, nor shall the Agency be liable for injury to the person of the
Grantor, or his Users, whether such damage or injury is caused by or results from hazardous or toxic
materials or substances, fire, steam, electricity, gas, water, or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause,whether the said damage or injury results from conditions arising upon
the Parking Lot Site or from other sources or places and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to the Grantor.Nothing contained herein
shall be construed as excusing the Agency, however, from liability for the Agency's gross negligence or
intentional misconduct.
7
10. Covenants Shall Run With the Land. All the agreements,rights, covenants, and
grants of easement contained in this Agreement shall run with the land (as defined in California Civil
Code Sections 1460 and 1462); shall inure to the benefit of the Agency, or its heirs, successors, and
assigns; and shall be binding upon the Grantor, its respective heirs, successors, and assigns, and all
other persons acquiring the Grantor's Parcel or any part thereof, whether by operation of law or in any
other manner whatsoever. The Easement shall be an appurtenant easement, and shall burden the
Easement Area for the benefit of the Agency Parcel.
11. Enforcement. In the event of the Grantor's default or breach in the performance
of any of the obligations or agreements herein, the Agency shall have the right, but not the obligation, to
cure such default for the account and at the expense of the Grantor, and the Agency shall have the right
to recover from the Grantor all damages, and all costs and other sums expended in connection therewith,
including reasonable attorneys' fees, plus interest thereon at the maximum legal rate permitted to be
charged by non-exempt lenders under the laws of the State of California. In addition, in the event of the
Grantor's default,the Agency may pursue any remedies or proceedings available to it at law or in equity
against the Grantor. The Agency may, in any such proceeding, recover damages from or on account of
such violation; secure by way of specific performance or otherwise the performance of such covenant,
condition, easement or restriction; or obtain any other remedy provided for at law or in equity.
12. Miscellaneous.
(a) Transferability of Easement. The rights and privileges of the Easement
shall be transferable only in connection with a transfer of the Project,to which they are appurtenant.
Subject to the foregoing, all terms of this Easement Agreement shall be binding upon and be enforceable
against the Grantor, and shall inure to the benefit of and be enforceable by the Agency and its legal
representatives, successors and assigns.
(b) Joint and Several Liability. The party defined as the "Grantor" shall be
jointly and severally liable for all of the Grantor's obligations set forth in this Easement Agreement.
(c) Termination of Liability. Whenever a bona fide transfer of any interest in
an of the Grantor's Parcels takes place, the transferor shall not be liable for breach of a covenant
occurring thereafter with respect to the transferred interest, on the condition precedent that the transferee
assumes in writing all liability and obligations of the transferor thereafter accruing and delivers an
original of such assumption agreement to the Agency or the Grantor, as the case may be..
(d) Notices. Unless otherwise specifically provided in this Easement
Agreement, all notices, demands or other communications given to the Agency shall be in writing, and
shall be sent by certified mail, return receipt requested, postage prepaid and addressed as follows, and
shall be deemed received only upon receipt thereof:
To Agency: Carlos L. Ortega
Executive Director
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
8
Palm Desert, CA 92260
Phone: (760) 346-0611
Fax: (760) 341-6372
To Grantor: Mr. Timothy R. Bartlett
73-382 Salt Cedar Street
Palm Desert, CA 92260
Phone: (760) 776-4141
Fax: (760) 779-0714
(e) Gender. The use herein of the neuter gender shall include the masculine
and the feminine, and the singular number shall include the plural, whenever the context so requires.
(f) No Third-Party Beneficiaries. No person shall have any enforceable rights
under this Easement Agreement other than the parties hereto and their successors and assigns, notwith-
standing any provisions hereof which contemplate that other persons may exercise certain privileges, or
any references herein to the General Public.
(g) No Waiver. No waiver by the Agency of any default of the Grantors shall
be implied from any omission by the Agency to take any action in respect of such default. No express
waiver of any default shall affect any default or cover any period of time other than the default and
period of time specified in such express waiver. One or more waivers of any default in the performance
of any term,provision or covenant contained in this Easement Agreement shall not be deemed a waiver
of any subsequent default in the performance of the same term, provision or covenant or any other term,
provision or covenant contained in this Easement Agreement. The consent or approval by the Agency to
or of any act or request of the Grantors requiring consent or approval shall not be deemed to waive or
render unnecessary the consent or approval to or of any subsequent similar acts or requests. The rights
and remedies given to the Agency by this Easement Agreement are cumulative, and none of such rights
and remedies shall be exclusive of any of the others, or of any other right or remedy at law or in equity
which the Agency might otherwise have by virtue of a default under this Easement Agreement.
(h) Estoppel Certificates. The Grantor covenants that upon receipt of written
request from the Agency, the Grantor shall, within 15 days after receipt of such request, give to the
Agency or other person specified by the Agency, an estoppel certificate stating: (i) whether the Grantor
to whom the request has been directed knows of any default by the Grantor under this Easement
Agreement, and if there are known defaults, specifying the nature thereof; (ii) whether to its knowledge
any provision of this Easement Agreement has been assigned, modified or amended in any way (and if it
has, then stating the nature thereof); (iii)that to such Grantor's knowledge,this Easement Agreement, as
of the date of the estoppel certificate, is in full force and effect; and (iv) any other information
reasonably required by the Agency.
(i) Not a Public Dedication. Nothing herein contained shall be deemed to be
a gift or dedication of the Easement Area or any portion of any part of the Parking Lot Site to the
General Public or for the General Public or for any public purpose whatsoever, it being the intention of
9
the parties to this Easement that the Easement conveyed pursuant to this Easement Agreement, and any
license to maintain the Agency Parcel, shall be strictly limited to and for the purposes herein expressed.
(j) Amendment. This Easement Agreement may be canceled, changed,
modified in whole or in part only by the written and recorded agreement executed by the Agency at the
time of such amendment or termination.
(k) Negation of Partnership. None of the terms or provisions hereof shall be
deemed to create a partnership between or among the parties hereto, nor shall it cause them to be
considered joint venturers, or members of any joint enterprise, in the operation of the Parking Lot or
otherwise.
(1) Entire Agreement. This instrument contains the entire agreement of the
parties hereto as to the rights herein granted and the obligations herein assumed, and no oral repre-
sentation shall be of any force or effect. No modification of this Easement Agreement shall be of any
force or effect until signed by the party to be charged.
(m) Severability. Invalidation of any covenant, condition, or restriction or any
other provision contained herein or the application thereof to any person or entity by judgment or court
order shall in no way affect any of the other covenants, conditions, restrictions, or provisions hereof, or
the application thereof to any other person or entity, and the same shall remain in full force and effect.
(n) Headings. The caption headings of the various sections and paragraphs of
this Easement Agreement are for convenience and identification only and shall not be deemed to limit,
expand or define the contents of the respective sections or paragraphs.
(o) Attorneys' Fees. In the event any party hereto shall commence any action
against any other party relating to this Easement Agreement or for the breach of any obligation
contained herein,the prevailing party shall be entitled to recover from the losing party reasonable
attorneys' fees, expenses, and court costs.
10
PALM DESERT REDEVELOPMENT TIMOTHY R. BARTLETT
AGENCY, a public body, corporate and politic
By:
Chairman
Attest:
Secretary
Approved as to form:
Richards, Watson& Gershon, a professional
corporation
By:
Jeffrey A. Rabin, Assistant City
Attorney
11
List of Exhibits
Exhibit A Grantor's Parcels
Exhibit B Easement Area
Exhibit C Site Plan
12