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HomeMy WebLinkAboutOB-148RESOLUTION NO. OB-148 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTION OF A PURCHASE AND SALE AGREEMENT FOR PROPERTY KNOWN AS THE 128-ACRE SITE LOCATED SOUTH OF GERALD FORD DRIVE AND WEST OF PORTOLA AVENUE (APNs 694-300- 001, 002, 005, 014 AND 015 AND 694-310-002, 003 AND 006) PALM DESERT, CA, PROPERTY 11(a-h) OF THE LONG RANGE PROPERTY MANAGEMENT PLAN WITH LEWIS LAND DEVELOPERS, LLC RECITALS: A. Pursuant to AB X1 26 (enacted in June 2011), as modified by the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), the Palm Desert Redevelopment Agency (the "Former Agency") was dissolved as of February 1, 2012 and the Successor Agency was established, and the Oversight Board to the Successor Agency (the "Oversight Board") was constituted. B. AB 1484 (enacted June 2012) amended and supplemented AB X1 26 (AB X1 26 and AB 1484, together, being referred to below as the "Dissolution Act"). C. Pursuant to the Dissolution Act, the Successor Agency is tasked with winding down the affairs of the Former Agency. D. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), all real properties of the Former Agency transferred to the control of the Successor Agency by operation of law. E. On May 5, 2014, the Oversight Board adopted Resolution No. OB-073, approving a Long -Range Property Management Plan (the "LRPMP") which addresses the disposition of the real properties owned by the Successor Agency. F. As indicated in the DOF's letter dated June 2, 2014, the DOF has approved the LRPMP. G. Pursuant to HSC Section 34191.3, the DOF-approved LRPMP shall govern, and supersede all other provisions of the Dissolution Act relating to, the disposition and use of the real property assets of the Former Agency. H. Pursuant to the approved LRPMP, the Oversight Board authorizes the execution of a Purchase and Sale Agreement (see Exhibit A) with Lewis Land Developers, LLC for Property 11(a-h) of the LRPMP (APNs 694-300-001, 002, 005, 014 and 015 and 694-310-002, 003 and 006) totaling approximately 128 acres, in the amount of $13,085,000.00 (fair market value). In accordance with the terms of California Health and Safety Code Section 34191.5(c)(2)(B), the proceeds of this property sale will distributed as property taxes to the affected taxing entities. -1- RESOLUTION NO. OB-148 J. The Oversight Board is adopting this Resolution to direct the execution of the Purchase and Sale Agreement (see Exhibit A) with Lewis Land Developers, LLC for fair market value as directed by the approved LRPMP. K. Notice of the proposed action presented in this Resolution was posted on the Successor Agency's website (being a page on the City's website) and at three public places: beginning on July 22, 2016. NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals, and each of them, are true and correct. Section 2. The Oversight Board hereby authorizes and directs the Successor Agency to complete the execution of the Purchase and Sale Agreement (see Exhibit A) with Lewis Land Developers, LLC for fair market value as directed by the approved LRPMP. The Executive Director of the Successor Agency is hereby authorized to execute the Purchase and Sale Agreement to complete the disposition of the property. Section 3. The members of the Oversight Board and officers and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution. MIS Section 4. This Resolution shall become effective in accordance with HSC Section .. 34181(f). APPROVED and ADOPTED this 1ST day of AUGUST , 2016. AYES: BUCK, PACK, RODRIGUEZ, STENDELL, and SPIEGEL NOES: NONE ABSENT: JONATHAN and KINNAMON ABSTAIN: NONE ATTEST: RA ELLE D. KLASSER, S - "ETARY OVERSIGHT BOARD FOR THE SUCCESSOR ' ENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ROBERT A. SPIE6E , C -2- RESOLUTION NO. OB-148 EXHIBIT A OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY PURCHASE AND SALE AGREEMENT FOR PROPERTY KNOWN AS THE 128 ACRE SITE LOCATED SOUTH OF GERALD FORD DRIVE AND WEST OF PORTOLA AVENUE, PALM DESERT, CA (APNs 694-300-001, 002, 005, 014 AND 015 AND 694-310-002, 003 AND 006) PROPERTY 11(a-h) OF THE LONG RANGE ROPERTY MANAGEMENT PLAN WITH THE CITY OF PALM DESERT -3- RESOLUTION NO. OB-148 CONTRACT NO. SA35570A REAL ESTATE PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS This Real Estate Purchase and Sale Agreement and Joint Escrow Instructions (this "Agreement"), dated for reference purposes only as of AUGUST 1 , 2016 is entered into between LEWIS LAND DEVELOPERS, LLC, a Delaware limited liability company ("Buyer"), and the SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ("Seller"), for the purchase and sale of that certain real property consisting of approximately 128.95 acres located in the City of Palm Desert, County of Riverside ("County"), State of California, known as A.P. Nos. 694-300-001, 694-300-002, 694-300-005, 694-300-014, 694- 300-015, 694-310-002, 694-310-003 and 694-310-006 (the "Property"), as legally described on Exhibit A attached hereto and identified on the map attached hereto as Exhibit A-1. As used herein the term "Property" shall include all of Seller's right, title and interest in and to all entitlements, easements, mineral rights, oil and gas rights, water, water rights, air rights, development rights and privileges appurtenant thereto and all improvements located thereon, excepting any right, title or interest to any public rights of way or public easements. The term "Seller" or "Successor Agency" or "Agency" in all cases herein refers to the Successor Agency to the Palm Desert Redevelopment Agency and the term "City" as used herein means the City of Palm Desert, a municipal corporation. The term "Effective Date" as used in this Agreement shall be the date of State Approval of this Agreement as set forth in Recital G. RECITALS This Agreement is entered into with reference to the following facts: A. Pursuant to AB X 1 26 (which became effective at the end of June 2011), as modified by the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Cal. 4th 231(2011)), the Palm Desert Redevelopment Agency (the "Redevelopment Agency") was dissolved as of February 1, 2012 and the Agency was constituted to wind down the affairs of the former Redevelopment Agency; and B. AB 1484 (which became effective at the end of June 2012) amended and supplemented AB X1 26 (AB X 1 26 and AB 1484, together, being referred to below as the "RDA Dissolution Act"); and C. Pursuant to the RDA Dissolution Act, all assets, properties, contracts, leases, books and records, buildings, and equipment of the former Redevelopment Agency have been transferred to the control of the Agency; and D. Agency owns the fee interest in the Property; and E. Buyer desires to purchase the Property; and F. On August 1, 2016, the Oversight Board adopted its Resolution No. OB-148 approving this Agreement (the "Oversight Board Approval"); and G. On , 2016, the State of California, Department of Finance ("DOF") approved this Agreement as required by the RDA Dissolution Act (the "State 81097.00000L9090060.2 1 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A Approval"). Seller and Buyer agree that such approval by DOF is a condition to the execution and enforceability of this Agreement. NOW, THEREFORE, the parties hereto agree as follows: 1. PURCHASE PRICE: The purchase price for the Property shall be Thirteen Million Eighty-five Thousand and no/100 Dollars ($13,085,000.00) (the "Purchase Price") to be paid all cash to Seller at Closing, less the Deposit made by Buyer pursuant to Section 2. 2. DEPOSIT: Buyer has previously deposited a cash sum equal to One Hundred Twenty-five Thousand Dollars ($125,000) (the "Deposit") in escrow (the "Escrow") with Foresite Escrow at 41995 Boardwalk, Suite G-2, Palm Desert, CA 92211, Attn: Esther Lopez ("Escrow Holder"). The Deposit shall be held in the Escrow until the Feasibility Deadline (as defined in Section 10 below) with the interest earned thereon inuring to the benefit of Buyer. If on or before the Feasibility Deadline, Buyer delivers to Seller and Escrow Holder written notice approving the feasibility of the Property, the Deposit shall thereafter be non-refundable to Buyer, except as otherwise set forth in this Agreement, and shall remain in Escrow until the Closing or earlier termination of this Agreement, and provided further that until the Closing occurs or until Seller receives the Deposit as liquidated damages pursuant to Section 7.E. hereof, Buyer shall be deemed the owner of the Deposit, and Seller and its successors and assigns shall not be entitled to withdraw from Escrow or to receive from Escrow all or any part of the Deposit. If this Agreement is terminated or deemed terminated on or before the Feasibility Deadline, Seller hereby authorizes Escrow Holder to immediately release the Deposit (and all of the interest earned on the Deposit) to Buyer without any additional documentation required from the parties. Seller releases Escrow Holder from all liability in connection with the release of the Deposit to Buyer in accordance with the preceding sentence, and following such release of the Deposit, neither party shall have any further rights or obligations hereunder (other than those arising from a party's breach of this Agreement). The Deposit shall be credited against the Purchase Price at the Closing. 3. INDEPENDENT CONSIDERATION. Within three (3) business days following the mutual execution and delivery of this Agreement to Escrow, Buyer shall deposit into Escrow the amount of One Hundred Dollars ($100.00) (the "Independent Consideration"). The Independent Consideration shall be non-refundable to Buyer as independent consideration for the rights and options extended to Buyer hereunder, including, without limitation, the right and option to terminate this Agreement as provided herein. The Independent Consideration shall be disbursed to Seller immediately following Buyer's deposit thereof into Escrow. In all instances under this Agreement in which Buyer elects to terminate or is deemed to have terminated this Agreement and the Deposit is returned to Buyer, Seller shall retain the Independent Consideration when the Deposit is returned to Buyer. The Independent Consideration shall not be applicable to the Purchase Price or treated as consideration given by Buyer for any purpose other than as provided herein. The parties agree that it is their intention that the amount of the Independent Consideration is sufficient consideration, as such term is defined in Steiner v. Thexton, 48 Cal. 4th 411 (2010). Buyer and Seller hereby acknowledge and confirm that they have had an opportunity to review this provision with their respective, independent counsel. 8 I097.00000\29090060.2 2 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A 4. FAIR MARKET VALUE; NO SUBSIDY BY SELLER; NO AGENCY OBLIGATIONS. Buyer and Seller acknowledge and agree that the Purchase Price represents the current fair market value of the Property. Buyer and Seller further acknowledge and agree that neither Seller not City, in their regulatory capacity or otherwise, has provided or agreed to provide any subsidy to the Buyer in connection with Buyer's acquisition, development, use and/or operation of the Property, nor is there any plan to provide any such subsidy to the Buyer. 5. ESCROW: A. Closing. Buyer and Seller shall open escrow with Escrow Holder within three (3) business days after complete execution of this Agreement. Escrow shall close on the date (the "Closing Date" or "Closing") which is eighteen (18) months after the State Approval, provided the Closing Date may be extended by the Executive Director as set forth in Section 9. Buyer may elect to close the Escrow before the Closing Date upon thirty (30) days prior written notice to Seller. B. Escrow Instructions; Costs. The provisions hereof shall constitute joint instructions to Escrow Holder to consummate the purchase in accordance with the terms and provision hereof. The parties shall execute such additional escrow instructions, not inconsistent with the provisions hereof, as may be deemed reasonably necessary to carry out the intentions of the parties as expressed herein; provided, however, if the provisions of any such additional instructions contradict with the provisions of this Agreement, then the provisions of this Agreement shall control. At Closing, (i) real estate taxes shall be prorated between Buyer and Seller as of the closing date, and (ii) all other closing costs and prorations shall be paid by county custom. C. Deposit of Documents. (1) At or before the Closing, Seller shall deposit into escrow the duly executed and acknowledged Deed (defined below) conveying the Property to Buyer; (2) At or before the Closing, Buyer shall deposit into escrow the funds necessary to close this transaction; and (3) Seller and Buyer shall each deposit such other instruments as are reasonably required by the "Title Company" (defined below) or otherwise required to close the escrow and consummate the purchase of the Property in accordance with the terms hereof. D. Prorations. The Current Taxes shall be prorated as of the Closing Date based on the tax assessor's most recent tax bill for the Property except all delinquent taxes and assessments shall be paid by Seller. The parties shall cooperate in good faith following the Closing (and outside of the Escrow) to reconcile any prorations made at the Closing that do not accurately reflect the actual prorated cost or revenue. All prorations of amounts for which Seller is responsible but which Buyer pays or agrees to pay in the future shall be credited against the Purchase Price. 81097.00000\29090060.2 3 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A E. Balance of Purchase Price. Prior to 10:00 a.m. on the day of Closing, Buyer shall deposit with wire to Escrow Holder in immediately available funds the balance of the Purchase Price, together with such other amounts as may be required in order to pay Buyer's share of closing costs and prorations. F. Closing Procedure. Upon receipt of all funds and instruments described in this Section 5, and upon satisfaction or waiver of all contingencies and conditions set forth in this Agreement, Escrow Holder shall: County, California. (I) Record the Grant Deed in the Official Records of Riverside (2) Issue the Title Policy (as defined below) to the Buyer. (3) Deliver the Purchase Price to Seller, less any costs and expenses shown on the closing statements approved by Seller and Buyer, which costs and expenses shall be disbursed as instructed by Seller and Buyer in escrow instructions delivered to Escrow Holder prior to the Closing Date. 6. TITLE: Buyer has procured that current preliminary title report respecting the Property issued by Lawyer's Title/Commonwealth Land Title Company in Riverside, CA (the "Title Company") attached hereto as Exhibit B, along with legible copies of the documentation evidencing all exceptions shown therein (the "Title Report"). Within thirty (30) days following the Effective Date, Buyer shall disapprove in writing any exceptions contained in the Title Report to which Buyer objects (the "Disapproved Exceptions"); all exceptions not so objected to by Buyer in writing shall be referred to as "Approved Exceptions". Seller shall have ten (10) days after Buyer delivers such notice to advise Buyer if Seller will agree to remove any of such Disapproved Exceptions from title. If Seller does not so agree in writing to remove all of the Disapproved Exceptions, then, until the Feasibility Deadline, Buyer may elect to terminate this Agreement and recover the Deposit previously made and any interest actually earned thereon, in which event the parties shall have no further rights or obligations hereunder; or, alternatively, Buyer may elect to waive its objection to those Disapproved Exceptions in which event such Disapproved Exceptions will be deemed to be Approved Exceptions. At the Closing, Seller shall convey its fee interest in and to the Property to Buyer (or to such other Lewis Management Corp. affiliated entity as may be specified in Buyer's escrow instructions and approved by Agency) by deed in a form reasonably mutually acceptable to Buyer and Seller (the "Deed"). Title to the Property shall be subject only to (i) a lien for then current taxes, bonds and assessments not yet delinquent and (ii) the Approved Exceptions (collectively, the "Permitted Exceptions"). Immediately following recordation of the Deed, Escrow Holder shall issue to Buyer an A.L.T.A. Standard Coverage Owner's policy of title insurance, with coverage in the amount of the Purchase Price for the Property, showing fee simple title to the Property vested in Buyer, subject only to the Permitted Exceptions (the "Title Policy"). Buyer may elect to obtain an extended coverage policy at Buyer's cost. 8 t 097.000(H)\29090060.2 4 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A 7. "AS -IS" PURCHASE; RELEASE OF SELLER; LIQUIDATED DAMAGES A. Buyer's Independent Investigation. Buyer represents and warrants to Seller that Buyer shall, prior to the Feasibility Deadline, perform a diligent and thorough inspection and investigation of each and every aspect of the Property, either independently or through agents of Buyer's choosing, including, without limitation, the following matters (collectively, the "Property Conditions"): (1) All matters relating to title including, without limitation, the existence, quality, nature and adequacy of Seller's interest in the Property and the existence of physically open and legally sufficient access to the Property. (2) The zoning and other legal status of the Property, including, without limitation, the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances and private or public covenants, conditions and restrictions, and all governmental and other legal requirements such as taxes, assessments, use permit requirements and building and fire codes. (3) The quality, nature, adequacy, and physical, geological and environmental condition of the Property (including soils and any groundwater), and the presence or absence of any Hazardous Materials in, on, under or about the Property or any other real property in the vicinity of the Property. As used in this Agreement, "Hazardous Material" shall mean any material that, because of its quantity, concentration or physical or chemical characteristics, is now or hereafter deemed by any federal, state or local governmental authority to pose a present or potential hazard to human health or safety or to the environment. (4) The suitability of the Property for Buyer's intended use of the Property. (5) The economics and development potential, if any, of the Property. (6) All other matters of material significance affecting the Property. B. Hazardous Materials Disclosure. California law requires sellers to disclose to buyers the presence or potential presence of certain Hazardous Materials. Accordingly, Buyer is hereby advised that occupation of the Property may lead to exposure to Hazardous Materials such as, but not limited to, gasoline, diesel and other vehicle fluids, vehicle exhaust, office maintenance fluids, tobacco smoke, methane and building materials containing chemicals, such as formaldehyde. By execution of this Agreement, Buyer acknowledges that the notices and warnings set forth above satisfy the requirements of California Health and Safety Code Section 25359.7 and related statutes. C. As -Is Purchase. Buyer specifically acknowledges and agrees that Seller is selling and Buyer is purchasing Seller's interest in the Property on an "as -is with all faults" basis. Buyer is relying solely on its independent investigation and not on any representations or warranties of any kind whatsoever, express or implied, from Seller or its agents as to any matters concerning the Property, its suitability for Buyer's intended uses or any of the Property Conditions. Seller does not guarantee the legal, physical, geological, environmental or other conditions of the Property, nor does it assume any responsibility for the compliance of the 8 1097.00000\29090060.2 5 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A Property or its use with any statute, ordinance or regulation. It is Buyer's sole responsibility to determine all building, planning, zoning and other regulations relating to the Property and the uses to which it may be put. D. Affordable Housing Integration Requirements. Buyer specifically acknowledges and agrees that the Property is subject to the affordable housing integration requirements as generally described in the Request for Qualifications/Proposals for Successor Agency to the Palm Desert Redevelopment Agency Property Disposition dated May 1, 2015, as amended by Addendum No. 1 dated May 26, 2015 and Addendum No. 2 dated June 15, 2015. E. Release/Indemnity. Buyer shall defend, indemnify, and hold harmless Seller, the City and their respective officials, officers, employees, consultants, contractors and agents (collectively, "Indemnitees") from and against any and all actual and alleged claims, losses, damages, fines, costs, penalties, expenses (including reasonable attorneys' fees, costs of experts and other litigation expenses), and liabilities of any type or nature, including those related or due to death or injury to any person and injury to any property, proximately resulting from any negligent acts or omissions by Buyer related to the activities described or contemplated by this Agreement. No officials, officers, employees, consultants, contractors or agents of Seller or City shall be personally liable to Buyer, any voluntary or involuntary successors or assignees, or any lender or other party holding an interest in the Property, in the event of any default or breach by Seller or City, or for any amount which may become due to Buyer or to its successors or assignees, or on any obligations arising under this Agreement. No officials, officers, employees, consultants, contractors or agents of Buyer shall be personally liable to City or Seller in the event of any default or breach by Buyer, or for any amount which may become due to Seller or City, or on any obligations arising under this Agreement. The provisions of this Section 7.E. shall survive the Closing hereunder or the termination of this Agreement and shall not be merged into the Deed. F. LIQUIDATED DAMAGES: BUYER AND SELLER AGREE THAT IF, AFTER THE FEASIBILITY DEADLINE, BUYER DEFAULTS ON ITS OBLIGATION TO PURCHASE THE PROPERTY PURSUANT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE DAMAGES TO SELLER WOULD BE DIFFICULT AND IMPRACTICAL TO DETERMINE. ACCORDINGLY, BUYER AND SELLER HAVE AGREED TO FIX AS LIQUIDATED DAMAGES THE DEPOSIT OF $125,000 SPECIFIED IN SECTION 2, AND SUCH AMOUNT SHALL BE PAYABLE TO SELLER AS LIQUIDATED DAMAGES, AND SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT. BUYER AND SELLER AGREE THAT THIS LIQUIDATED DAMAGES PROVISION IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING AS OF THE EFFECTIVE DATE, GIVEN THE DIFFICULTY AND IMPRACTICALITY OF DETERMINING SELLER'S DAMAGES, THE COSTS OF NEGOTIATING AND DRAFTING THIS AGREEMENT, PERFORMING SELLER'S OBLIGATIONS HEREUNDER, KEEPING THE PROPERTY OUT OF THE MARKETPLACE, COSTS OF SEEKING ANOTHER BUYER AND OTHER COSTS INCURRED IN CONNECTION HEREWITH. PAYMENT OF SUCH AMOUNT TO SELLER AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY 810997.00000\29090060.2 6 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A UNDER CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT INSTEAD, IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE. SELLER HEREBY WANES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AGREES THAT THESE LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY RELIEF OR OTHER REMEDY, INCLUDING WITHOUT LIMITATION SPECIFIC PERFORMANCE, TO WHICH SELLER OTHERWISE MIGHT BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN EQUITY. BUYER AND SELLER SPECIFICALLY ACKNOWLEDGE THEIR AGREEMENT TO THE FOREGOING LIQUIDATED DAMAGES PROVISION BY INITIALING THIS SECTION IN THE APPROPRIATE SPACES PROVIDED BELOW: Buyer's Initials Seller's Initials 8. POSSESSION; MAINTENANCE OF PROPERTY: Seller shall deliver to Buyer possession of the Property immediately on Closing, free of all uses, tenancies and occupancies unless approved by Buyer. Until possession is delivered to Buyer, subject to Buyer's authorization to enter the Property as set forth in Section 10, Seller agrees, at its sole cost and expense, to maintain and keep the Property and all the improvements thereon in not less than the same order and condition as they are on the date this Agreement is executed by Seller. Pending the Closing, Seller shall continue to manage and operate the Property and maintain insurance covering the Property in substantially the same manner as Seller has managed and operated the Property for the last twelve (12) months, and shall not commit waste or otherwise materially and adversely affect the Property. 9. EXECUTIVE DIRECTOR AUTHORITY: The Executive Director of the Agency ("Executive Director") shall have the authority to take all actions and execute all documents required or necessary for the Agency to perform its obligations under this Agreement, to extend each of the Closing Date or Feasibility Deadline for up to 90 days (or for an additional period beyond said 90 days with the approval of the Board of Directors of Seller), and to otherwise complete the Closing and conveyance of the Property to Buyer pursuant to this Agreement. Further, Executive Director may execute any entitlement applications in connection with the Buyer's future use of the Property, where the signature of the Agency is required as the owner of the Property. 10. DUE DILIGENCE/AUTHORIZATION TO ENTER/SELLER DOCUMENTS: Buyer shall have until the date that is ninety (90) days following the Effective Date (the "Feasibility Deadline") to determine the feasibility of the Property for Buyer's intended use in Buyer's sole discretion by its delivery of its written notice of feasibility approval (the "Buyer Feasibility Approval") to Seller and Escrow Holder on or before 5:00 p.m. Pacific Time on or before the Feasibility Deadline. Buyer's failure to deliver to Seller and Escrow Holder the Buyer Feasibility Approval on or before the Feasibility Deadline shall automatically be deemed to constitute Buyer's termination of this Agreement. Upon the Effective Date of this Agreement, Buyer may enter upon the Property until the earlier of the Closing or termination of this Agreement to conduct any investigation, test, study or analysis related to the development thereof, including, but not limited to, soils studies, Phase I 81097.00000\29090060.2 7 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A and/or Phase II toxic studies, engineering studies, tree surveys, archeological studies, biological studies, utilities and constraints study, hydrology studies and any other matters necessary to evaluate the development of the Property. Buyer shall pay all costs with respect to such studies and tests and shall be solely responsible for the disposal of any soil samples (including any Hazardous Materials or other wastes in these samples), which obligation shall survive the termination of this Agreement. Buyer shall exercise due care, follow best commercial practices in connection with such entry and testing, and shall comply with all laws, ordinances, rules, regulations, orders and the like in connection with any entry onto or testing of the Property. Prior to any entry onto the Property, Buyer shall obtain and maintain, and shall require that its agents, consultants, contractors and representatives (collectively, the "Agents") to obtain and maintain in full force during the term of this Agreement, at Buyer's sole cost and expense, a policy of comprehensive liability insurance, including property damage, which will insure Agency, City and their respective officers, members, employees and agents against liability for injury to persons, damage to property, and death of any person arising in connection with Buyer or its Agents entry upon the Property and/or conducting of tests or studies thereon. The policy shall he approved as to form and insurance (including approval of the insurance company) by the Agency, and shall be in an amount not less than One Million Dollars ($1,000,000). Buyer shall provide Agency with a certificate for any insurance policy required hereunder, including an endorsement that states that the policy will not be cancelled except after thirty (30) days' notice in writing to Agency and names the additional insureds as required herein. Buyer shall provide Agency with evidence of such insurance coverage prior to any entry onto the Property by Buyer or its Agents. Following any such tests or studies, Buyer shall leave the Property in substantially similar condition as of the Effective Date of this Agreement, and Buyer shall indemnify, defend and hold harmless Seller, City, and their respective officers, members, employees and agents from and against any liabilities, claims, damages (including injury or damage to person or property), losses, costs, expenses and fees (including reasonable attorneys' and experts' fees and costs) to the extent resulting from the entry, inspections and studies conducted by Buyer and its Agents on, under, or about the Property, except that Buyer shall have no liability under this Section 10 for, and no obligation to remedy, any liabilities, claims, damages, costs, expenses, fees, conditions or defects on or under the Property to the extent (i) not caused by Buyer or its Agents, (ii) resulting from any conditions or defects discovered during Buyer's investigations and inspections, including the discovery of any Hazardous Materials and the results or findings of any tests, or (iii) to the extent resulting from the acts or omissions of Seller, or Seller's agents, engineers, contractors, consultants and representatives. Without limiting the foregoing, Buyer shall have no liability for any diminution in the value of the Property resulting from the activities excluded in (ii) above, provided in the event Buyer or its Agents discover any toxic or Hazardous Materials on or under the Property, Buyer and its Agents shall cease any further investigation in that area of the Property, notify Seller by phone and email within twenty four (24) hours of that discovery, exercise reasonable due care so as not to exacerbate that condition and properly dispose of any soils samples which contain such toxic or Hazardous Materials. Nothing in this Section is intended to limit or modify the indemnity contained in Section 7.E. The foregoing indemnity shall survive beyond the Closing, or, if the sale is not consummated, beyond the termination of this Agreement. To the extent Seller has not previously done so, Seller shall make available to Buyer for Buyer's review and inspection, during the term of this Agreement at the office of Seller and upon at least twenty-four (24) hours' prior notice, and in each case to the extent the materials are in the 81097.00000\29090060.2 8 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A Seller's possession or control, copies of all soil and hydrology reports, environmental or toxic material reports, biological reports, archeological reports, engineering reports, traffic studies, environmental impact studies, or any public records which concern the Property (collectively the "Documents"). Buyer shall have the right, at Buyer's cost, to make copies of the Documents for Buyer's review and approval but if this Agreement is terminated, Buyer shall, upon the written request of Seller, return all such Documents and copies to Seller. Seller makes no representation or warranties whatsoever regarding the existence, availability, completeness or accuracy of the Documents. Buyer shall promptly deliver to Seller copies of any reports relating to any testing or other inspection of the Property performed by Buyer or its agents, employees or contractors (the "Buyer Work Product"), but shall not deliver copies of any such reports to any other person or entity without Seller's prior written approval. Seller acknowledges and agrees that any and all of the Buyer Work Product is provided by Buyer for informational purposes only and do not constitute representations or warranties of Buyer of any kind, including any representations and warranties concerning the accuracy or completeness of any information in the Buyer Work Product. 11. CONDITIONS TO BUYER'S PERFORMANCE: Buyer's obligations to purchase the Property under this Agreement are subject to Buyer's written approval of the following conditions precedent ("Buyer's Closing Conditions"), but Buyer shall have the right to waive any such condition(s) in writing within the time period specified in such condition, or if not specified, prior to the Closing. If Buyer waives any of Buyer's Closing Conditions, then Seller shall be relieved of any further obligation or liability, including any representation or warranty, in connection with such condition. In the event Buyer determines that any such condition is objectionable, unacceptable, or cannot be satisfied within the period specified below, or if no time period is specified then prior to Closing, Buyer may, in its sole and absolute discretion, fail to approve said condition. In such event, then (without limiting Buyer's remedies in the event of a breach of this Agreement by Seller which are provided in Section 21 below) the Deposit and all interest earned thereon while in Escrow, shall be returned immediately to Buyer by Escrow Holder, and neither party shall have any further rights or obligations hereunder. If the Closing occurs and Buyer has failed to disapprove of any of the following Buyer's Closing Conditions, then such condition(s) shall be deemed waived. A. Feasibility Study. Buyer's approval of the feasibility of the Property for Buyer's intended use in accordance with Section 10 prior to the Feasibility Deadline. B. Truth and Accuracy of Seller's Representations and Warranties. Seller's representations and warranties as set forth in this Agreement shall be true and correct on the Effective Date of this Agreement and on the Closing Date. C. Title. Escrow Holder is irrevocably and unconditionally committed to issue to Buyer the Title Policy with no exceptions to coverage other than the Permitted Exceptions, and no person or entity has any right to use or occupy the Property, except as shown in any Permitted Exceptions in the Title Policy. D. State Approval. Seller shall have obtained State Approval of this Agreement. 81097.00000\29090060.2 9 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A E. Seller's Other Obligations. Seller shall have performed all of its other covenants and obligations as set forth in this Agreement. 12. CONDITIONS TO SELLER'S PERFORMANCE: The following are conditions precedent to Seller's obligation to sell the Property to Buyer "Seller's Closing Conditions"): A. Seller shall have obtained State Approval of this Agreement. B. Buyer shall have performed all of its obligations hereunder and all of Buyer's representations and warranties shall be true and correct. Each of Seller's conditions precedent are intended solely for the benefit of Seller and is deemed to be material to and of the essence of this Agreement. If any of Seller's conditions precedent are not satisfied as provided above, Seller may, at its option, terminate this Agreement. In such event, then (without limiting Seller's remedies) the Deposit and all interest earned thereon while in Escrow, shall be delivered to Seller by Escrow Holder except in the event that Seller terminates this agreement pursuant to Section 12.A, in which case such amounts shall be returned immediately to Buyer by Escrow Holder, and neither party shall have any further rights or obligations hereunder. If the Closing occurs and Seller has failed to disapprove of any of Seller's Closing Conditions, then such condition(s) shall be deemed waived. 13. SELLER'S REPRESENTATIONS AND WARRANTIES: Seller hereby makes the representations and warranties set forth in this Agreement for the benefit of Buyer and its successors and assigns for a period of six (6) months from and after the Closing Date, after which Seller's representations and warranties will be of no further force or effect. Seller shall notify Buyer in writing within ten (10) business days after Seller's Executive Director receives actual knowledge that any representation or warranty has become untrue or misleading in light of information obtained by Seller after the Effective Date of this Agreement, and if such ten (10) business day period would expire after the Closing, then the Closing shall be extended until the expiration of the ten (10) business day period. As used herein, "Seller's knowledge" shall mean the present actual, not constructive, knowledge of Seller's current Executive Director, without any investigation or inquiry or duty to do so. All representations and warranties contained in the Agreement shall be deemed remade at Closing except as otherwise disclosed to Buyer in writing, shall survive the Closing for the prescribed six month period and shall not merge with the Deed. A. To Seller's knowledge, there is no litigation, arbitration or proceeding pending, or threatened, before any court or administrative agency or any other condition that relates to or affects the Property, Seller's performance hereunder, Buyer's intended use of the Property, or which will result in a lien, charge, encumbrance or judgment against any part of or any interest in the Property, except (i) as disclosed in the Title Report, or (ii) as otherwise disclosed to Buyer in writing. B. To Seller's knowledge, the Property is not in violation of any federal, state or local law, statute, regulation, code or ordinance. C. Seller is not a foreign person, foreign corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the Internal Revenue Code Section 81097. 00000129090060.2 10 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A 1145 and any related regulations and Seller is exempt from the withholding obligations imposed by California Revenue and Taxation Code Sections 18805, 18815, and 26131. D. To Seller's knowledge, no person or entity has the right to use, occupy, possess or reside on the Property except as disclosed in the Title Report and Seller has not, to Seller's knowledge, nor has City, to Seller's knowledge, granted any person or entity any such rights . 14. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. A. Buyer represents and warrants that it is a limited liability company duly organized under the laws of Delaware, in good standing and authorized to conduct business in State of California, has the capacity and full power and authority to enter into and carry out the agreements contained in and the transactions contemplated by this Agreement, and that this Agreement has been duly authorized and executed by Buyer, and upon delivery to and execution by Seller, shall be a valid and binding agreement of Buyer. B. There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending or, to the actual knowledge of Buyer threatened, against Buyer which, if adversely determined, could individually or in the aggregate materially interfere with the consummation by Buyer of the transaction contemplated by this Agreement. The term "actual knowledge" means the present actual, not constructive, knowledge of Robert Martin without any further investigation or inquiry or duty to do so. C. In compliance with Executive Order 13224 and the USA Patriot Act of 2001, Buyer and Seller each affirmatively represents and warrants to the other that (a) neither it, nor any of its officers, directors, or principals, has committed or supported terrorist acts; or (b) neither it, nor any of its officers, directors, or principals is identified on the list of Specially Designated Nations and Blocked Persons generated by the Office of Foreign Assets Control. 15. COMMISSIONS: Seller will pay to Edward J. Schiller of Innovative Land Concepts, Inc. ("Schiller") a finder's fee equal to one percent (1%) of the Purchase Price, subject to (i) approval by the Oversight Board and the California Department of Finance and (ii) the Close of Escrow for the Property by Buyer. Buyer through a separate agreement has agreed to pay Schiller, at its own expense, an additional finder's fee. Buyer and/or business entities affiliated with Buyer, and certain of their employees is/are a BRE licensee(s) but Buyer is acting solely as a principal in this transaction. Buyer was represented primarily by Robert Martin (Broker License No.00963777) who is an employee of Lewis Management Corp., an affiliate of Seller, and such licensee is not receiving any commission or fee as a licensee in this transaction and is representing Buyer only. Other than disclosed above, each party represents to the other that it has not dealt with any broker, agent, or finder for which a commission or fee is payable with respect to the Property or this Agreement, and each party shall indemnify, defend and hold harmless the other from any claims, demands, liabilities, or judgments for commissions or fees arising from such party's breach of this Section. The foregoing indemnification, defense and hold harmless obligations of the parties shall survive Closing and any termination of this Agreement. 81097.00000\29090060.2 11 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A 16. FOREIGN INVESTOR DISCLOSURE: Seller understands that if Seller is unable to certify that it is U.S. citizen or a resident of the State of California at the time of the Closing, Buyer shall be entitled to withhold from the purchase price such amounts as are necessary to satisfy Buyer's withholding obligations under the Foreign Investment in Real Property Tax Act and under California Revenue and Taxation Code Sections 18805, 18815 and 26131. 17. FUTURE LEASES, COMMITMENTS AND ENCUMBRANCES: From and after the Effective Date of this Agreement, except to the extent required by law or otherwise, Seller shall not (a) execute, modify and/or approve any leases, contracts or commitments affecting the Property that would extend beyond the Closing Date without Buyer's written approval; which approval may be given or withheld in Buyer's sole discretion; or (b) voluntarily encumber the Property with any liens, encumbrances or other instruments creating a cloud on title or securing a monetary obligation with the Property. 18. CONDEMNATION/CASUALTY: If after the Effective Date of this Agreement and prior to the Closing all or any part of the Property is taken or threatened to be taken by eminent domain or condemnation or is destroyed by fire, earthquake or other casualty, Buyer may elect either (a) to terminate this Agreement as to the entire Property, in which event all the Deposit and interest earned thereon while in Escrow, shall be returned to Buyer, and this Agreement shall be null and void and of no further force or effect, or (b) to consummate purchase of the Property as herein provided, in which event Seller shall pay or assign to Buyer all condemnation awards or payments in respect of the Property and/or all insurance proceeds paid or payable to Seller as a consequence of such casualty. If this Agreement is terminated in full pursuant to this Section 18, neither party shall have any further rights, duties, obligations or liabilities, at law or in equity, arising out of or relating to this Agreement except for those that specifically survive termination of this Agreement pursuant to other provisions hereof. 19. NO RECORDING: Neither this Agreement nor any memorandum or short form thereof may be recorded by Buyer. 20. AMENDMENTS: This Agreement expresses the agreement of the parties. There are no other understandings, oral or written, which in any manner alter or enlarge its terms. This Agreement supersedes any and all prior agreements between the parties hereto regarding the Property. Seller and Buyer agree to execute such additional documents as may be reasonable and necessary to carry out the provisions of this Agreement. This Agreement may be amended, but only in writing and only if such writing is executed by both parties. 21. BUYER'S REMEDIES; NO MONEY DAMAGES: If Seller defaults on its obligation to deliver title to the Property to Buyer in the manner required hereby or otherwise breaches this Agreement, Buyer shall have the right to seek specific performance of this Agreement or Buyer may terminate this Agreement, in which case Buyer shall be entitled to an immediate return of the Deposit and any interest earned thereon while in the Escrow and Buyer shall have no further right to seek damages. The failure of Buyer to receive approval of any applicable development permits, maps, or other entitlements for the Property shall not constitute a default or breach of Seller's obligations contained in this Agreement. Buyer acknowledges that Seller would not have entered into this Agreement if doing so would subject it to the risk of 8 1097.00000\29090060.2 12 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A incurring liability in money damages, either for breach of this Agreement, anticipatory breach, repudiation of the Agreement, or for any actions with respect to its negotiation, preparation, implementation or application. The parties further acknowledge that money damages and remedies at law generally are inadequate, and specific performance is the most appropriate remedy for the enforcement of this Agreement and should be available to Buyer. Therefore, the parties hereby acknowledge and agree that it is a material part of Buyer's consideration to Seller that Seller shall not be at any risk whatsoever of liability for money damages relating to or arising from this Agreement, and except for the express indemnity obligations hereunder and non -damages remedies, including the remedy of specific performance, Buyer, for itself, its successors and assignees, hereby release Agency, the City and their respective officers, members, employees and agents from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments of the United States Constitution, or any other law or ordinance which seeks to impose any money damages, whatsoever, upon the parties because the parties entered into this Agreement, because of the terms of this Agreement, or because of the manner of implementation or performance of this Agreement. 22. ATTORNEYS' FEES: If this Agreement or the transaction contemplated herein gives rise to a lawsuit or other legal proceeding between the parties hereto, the prevailing party shall be entitled to recover its costs and reasonable attorneys' fees and costs of litigation in addition to any other judgment of the court. 23. ASSIGNMENT: Without Seller's consent, Buyer's rights and obligations hereunder may be assigned to a partnership, corporation, limited liability company or other entity that is controlled directly or indirectly by any one or more of Richard Lewis, Robert Lewis, Roger Lewis, Randall Lewis or John Goodman (the "Lewis Principals"), including without limitation, any entity in which the Lewis Principals (or any one or more of them) own more than 50% of the voting or financial interest of such entity and in which Buyer or the Lewis Principals (or any one or more of them) is the manager thereof), provided that Buyer notifies Seller in writing within ten (10) business days of such assignment, and provided that said assignee assumes all of the obligations of Buyer under this Agreement and agrees to perform all the obligations of Buyer hereunder as if such assignee were the original Buyer hereunder. Any such assignee shall have all the benefits, including rights to specific performance, damages, and enforcement of Seller's representations and warranties that Buyer has under this Agreement. No such assignment, however, shall relieve Buyer of any of its obligations hereunder. "Financial Interest" means any interest in the profits and/or losses of, and/or equity in, such entity. 24. NOTICES: All notices or tender required or permitted herein shall be in writing and shall be sent to the address set forth below (or such other address as a party may hereafter designate for itself by written notice to the other parties as required hereby) of the party for whom such notice or communication is intended: If to Seller: Successor Agency to the Palm Desert Redevelopment Agency Attention: Executive Director 81097.00000\29090060.2 13 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A City of Palm Desert 739510 Fred Waring Drive Palm Desert, CA 92260 Fax: 760-341-6372 With copy to: Best Best & Krieger LLP Attn: Robert Hargreaves 74-760 Highway 111, Suite 200 Indian Wells, CA 92210 FAX: 760-340-6698 If to Buyer: Attn: John M. Goodman Lewis Land Developers, LLC c/o Lewis Management Corp. 1156 North Mountain Avenue Upland, CA 91786 P. O. Box 670 91785-0670 Telephone: (909) 985-0971 Fax: (909) 949-6700 With copy to: Attn: General Counsel Lewis Management Corp. 1156 North Mountain Avenue Upland, CA 91786 P. O. Box 670 91785-0670 Telephone: (909) 985-0971 Fax: (909) 949-6725 Any such notice or communication shall be sufficient if sent by registered or certified mail, return receipt requested, postage prepaid; by hand delivery; by overnight courier service; or by fax is receipt is confirmed by the recipient. Any such notice or communication shall be effective on the business day delivered to the office of the addressee or upon refusal of such delivery, or three business days after deposit by first class mail. Notice transmitted after 5:00 p.m. or on Saturday or Sunday shall be deemed to have been given on the next business day. Should any 81097.00000\29090060.2 14 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A act or notice required hereunder fall due on a weekend or holiday, the time for performance shall be extended to the next business day. 25. MISCELLANEOUS: A. Section headings contained herein are included solely for convenience of reference and shall in no way affect the construction of this Agreement. B. Time is of the essence of this Agreement. C. This Agreement shall be governed by the laws of the State of California. D. Each party shall execute, acknowledge, and deliver, after the Effective Date of this Agreement, including at or after closing, such further assurances, instruments and documents as the other may reasonably request in order to fulfill the intent of this Agreement and the transactions contemplated hereby. E. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect and shall in no way be impaired or invalidated, and the parties agree to substitute for the invalid or unenforceable provision a valid and enforceable provision that most closely approximates the intent and economic effect of the invalid or unenforceable provision. F. This Agreement may be executed in counterparts, and transmitted by facsimile by and to each of the parties, and each such counterpart shall be deemed an original, and all of them together shall constitute a single instrument. G. If a party hereto believes the other party is in breach or default under this Agreement, the non -breaching party shall deliver written notice of the alleged breach or default to the other party, and the other party shall have ten (10) business days after receipt of such written notice in which to cure the breach or default, and if the breach or default is actually cured within such ten (10) business day period, the breaching party shall not be in breach or default under this Agreement by reason of the matter(s) alleged in the non -breaching party's notice that have been so cured. H. Except as expressly set forth herein, this Agreement is not intended nor shall it be construed to create any third party beneficiary rights in any person who is not expressly made a party and signatory hereto. I. If Buyer executes this Agreement before Seller, such execution and delivery of the Agreement shall be deemed an offer to buy the above described Property for the price and upon the terms and conditions herein stated. INTENTIONALLY LEFT BLANK; SIGNATURES FOLLOW IMMEDIATELY ON NEXT PAGE 81097.00000\29090060 2 15 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A SELLER BUYER Successor Agency Lewis Land Developers, LLC, a Delaware limited to the Palm Desert Redevelopment Agency liability company By: Name: Title: Date: Approved as to Form: By: Name: Title: Special Legal Counsel Date: Attest: By: Name: Title: City Clerk Date: List of Exhibits A Description of Property A-1 Map of Property B Title Report By: Lewis Management Corp., a Delaware corporation, Its Manager By: Name: Title: Date: 81097.0000\29090060.2 16 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A The undersigned representative of Escrow Holder hereby accepts the foregoing instructions and agrees to comply with them in connection with the purchase and sale of the Property. Escrow Holder: Foresite Escrow Effective Date By: Authorized Representative 81097.00000\29090060.2 17 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A Exhibit A Description of the Property Approximately 128.95 acres known as APNs 694-300-001, -002, -005, -014, and -015, and 694- 310-002, -003, and 006 in the City of Palm Desert, County of Riverside, California 810) 7.0(X)00\29090060.2 18 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A Exhibit A-1 Map of Property 81097.00000\29090060.2 19 RESOLUTION NO. OB-148 CONTRACT NO. SA35570A Exhibit B Title Report [to be inserted] 81097.00000\290900602 20 MK1RM, .GERALD-FORD-DR P P.R.-5 P.R.-5 1110_-1111-__ SCHOLAR LN W SCHOLAR LN E P.R.-20 A'N:694300005 P.R.-5 Alm APN: 694310005 P,R.75 WOODWARD. DR WINDFLOWE t CT IIIIII APN: 694300001� APN: 6943000C2 RRg:5 APN: 69430000 a APN: 694300006 w JULIE LN��16 Q COLLEGE DR— F j: a� 11111 JERI,LN_� P.R. J COSMOPOLITA 1 LN ..NMSTAUA PORTOLA POIN-E LN' IMPERIAL CT W Z J a' KINGSTON CT W— = KINGS -ON CT Ems} a W 2 ACADEMY .N MPIPIr.- JET PETUNIA -PLACE W III I I CHINOUK CIR KOKOPELLI i PETUNIA PLACE IET �CHINOOK CIR I 111�Q Kf1KAPFLI. P.R.-5 Future 132 Acre Request For Proposals to be Released Summer 2015 For info Contact: City of Palm Desert - Economic Development Department (760) 346-0611 li VIOA.-rc Ci}c P - Pnhlic Inctituti nn P.R. - Planned Residential P.C.D. - Planned Community Development g,'jj VICINITY MAI'