HomeMy WebLinkAboutORD 1156ORDINANCE NO. 1156
A ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, APPROVING DEVELOPMENT AGREEMENTS AS THEY RELATE
TO THE EXPANSION OF SAKS 5T" AVENUE AT THE EXISTING GARDENS ON
EL PASEO AND THE EL PASEO VILLAGE REMODEL.
CASE NO. DA 07-03 & DA 07-04 AS THEY RELATE TO CASE NO. PP 07-10 &
CUP 07-18:
WHEREAS, the Planning Commission by its Resolution No. 2467 has recommended
approval of said project; and
WHEREAS, at said public hearings, said City Council heard and considered all testimony
and arguments of all interested persons.
WHEREAS, the City Council of the City of Palm Desert, California, DOES HEREBY
ORDAIN, AS FOLLOWS:
SECTION 1: That the Development Agreements 07-03 and 07-04 by Ordinance No.
1156 have been subject to environmental review under the California Environmental Quality Act
and a Mitigated Negative Declaration has been adopted which addresses the Development
Agreements and the development projects underlying said Agreements. That the Development
Agreements are hereby found to be consistent with the City of Palm Desert General Plan and the
Palm Desert Commercial Core Area Specific Plan.
SECTION 2: That the Development Agreements 07-03 and 07-04 by Ordinance No.
1156 are hereby approved.
SECTION 3: The City Clerk of the City of Palm Desert, California, shall certify to the
passage adoption of this Ordinance and shall cause the same to be published once in the Desert
Sun, a newspaper of general circulation, circulated within the City of Palm Desert, and the same
be in full force and effect thirty (30) days after its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Palm Desert City
Council, held on this 12t1day of June2008, by the following vote, to wit:
AYES: FERGUSON, BELLY, SPIEGEL, and BENSON
NOES: FINERTY
ABSENT: NONE
ABSTAIN: NONE
JEAN M. BENSON, Mayor
ATTEST:
4RkLE D. KLASS , CITY CLERK
City of Palm Desert, California
("'tom'-Og
[This page has intentionally been left blank.]
ORDINANCE NO. 1156
DA 07-03
Recording Requested by
And When Recorded Return to:
City Clerk
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Exempt from Recorder's Fees
Pursuant to Government Code § 6103, 27383
DEVELOPMENT AGREEMENT
By and Between the
CITY OF PALM DESERT
And
EL PASEO LAND COMPANY LLC
Dated: June 12 , 2008
Page 1 of 24
\\iw-fnp0l\data$\uscrs\Robcrt.HargreavesNy DocumentsTalm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of this
12th day of June , 2008, by and between the City of Palm Desert, California, a municipal
corporation organized and existing under the laws of the State of California (the "City), and
E1 Paseo Land Company L.L.C., a limited liability company organized and existing under the
laws of the State of Delaware ("Developer"), with reference to the following facts,
understandings and intentions of the parties:
RECITALS:
A. These Recitals refer to and utilize certain capitalized terms which are defined in
this Agreement.
B. Government Code Sections 65684 through 65869.5 inclusive (the "Development
Agreement Legislation") authorize the City to enter into development agreements in connection
with the development of real property within its jurisdiction. Pursuant to the Development
Agreement Legislation, on August 11, 1983, the City enacted procedures and requirements for
the consideration of development agreements by Ordinance No. 341, as amended on December
7, 1999 by Ordinance No. 589 (collectively, the "Development Agreement Ordinance")
C. Developer is the owner of a legal or equitable interest in the Property and is
entitled to have filed the applications for the Project and to enter into this Agreement. The
Project consists of the future redevelopment of the Property with retail, office and restaurant
uses, together with a new one level parking structure. The Project is projected to generate a
Page 2 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
significant amount of property and sales tax revenue for the City's general fund and other funds.
The Property is located at an important location in the City and the coordinated development of
the Project pursuant to this Agreement represents an important and mutually beneficial economic
development and land use planning opportunity for the City and Developer.
D. The City has determined that the development of the Project as contemplated by
this Agreement is consistent with and in furtherance of the goals, policies, objectives, zoning,
general land uses and development programs of the City as set forth in the City's General Plan,
the Palm Desert Commercial Core Area Specific Plan and Zoning Code.
E. The City has determined that entry into this Agreement will further the goals and
objectives of the City's land use planning policies by, among other things, encouraging
investment in the E1 Paseo district, providing criteria for the uses, design and development of the
Property, including flexibility in land use options which may be altered in order to respond to
future economic conditions, eliminating uncertainty in planning, and securing orderly and
expeditious processing and development of the Project. The benefits conferred on the City by
Developer herein will (i) insure consistent, comprehensive planning which will result in
aesthetically pleasing, environmentally harmonious, and economically viable development
within the City; (ii) provide for the creation of pedestrian -oriented specialty retail, office and
restaurant uses for the City; (iii) provide increased property and sales tax revenue for the City
and its Redevelopment Agency; and (iv) further the development objectives of the City in the E1
Paseo district in an orderly manner, all of which will significantly promote the health, safety and
welfare of the residents of the City. In exchange for these benefits to the City, Developer desires
to receive the assurance that it may proceed with the Project without further regulation by City in
Page 3 of 24
\\iw-fnp01\data$\uscrs\Robert.Hargreaves\My Documents\Palm Desert PI Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
accordance with the Development Plan attached to this Agreement as Exhibit "A", and at a rate
and phasing of its choosing, subject to the terms and conditions contained in this Agreement.
F. By adopting this Agreement, the City Council has elected to exercise certain
governmental powers at the present time rather than deferring such actions until an undetermined
future date and has done so intending to bind the City and the City Council, now and in the
future, intending to limit the City's future exercise of certain governmental powers, to the extent
permitted by law.
G. In order to effectuate the foregoing, the parties desire to enter into this
Agreement.
NOW, THEREFORE, pursuant to the authority contained in the Development Agreement
Legislation, and in consideration of the mutual covenants and promises of the parties herein
contained, the parties agree as follows:
1. Definitions.
1.1 Defined Terms. Each reference in this Agreement to any of the following
terms shall have the meaning set forth below for each such term.
1.2 Agreement. This Development Agreement.
1.3 Building Ordinances. The uniform building codes adopted by the City, of
general application throughout the City and not imposed solely with respect to the Property,
including, without limitation, the City's building, plumbing, electrical, mechanical, and fire
codes.
Page 4 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LFTD redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
1.4 City Council. The legislative body of the City of Palm Desert.
1.5 Effective Date. The date on which the Enacting Ordinance becomes
legally effective.
1.6 Enacting Ordinance. Ordinance 1156 , enacted by the City Council
on June 12 , 2008, approving this Agreement.
1.7 Existing Land Use Re ulations. The City's land use regulations in effect
as of the Effective Date, which comprise the ordinances, resolutions, codes, rules, regulations
and official policies of the City applicable to the Property, including but not limited to, the
permitted uses of land, the density and intensity of use of land, the maximum height and size of
proposed buildings, provisions for reservation or dedication of land for public purposes, and
provisions relating to the timing of development, all as applicable to the development of the
Property. Specifically, but without limiting the generality of the foregoing, Existing Land Use
Regulations shall include the City's General Plan, the City's Commercial Core Area Specific
Plan, the City's zoning ordinance inclusive of the C-1 zoning standards and scenic preservation
overlay standards, the City's subdivision code, the City's redevelopment plans and rules, and the
City entitlements and approvals issued for the Project summarized in the Development Plan on
Exhibit "A" hereto, including but not limited to the January 8, 2008 Architectural Review
Commission approval, the City Council's February 28, 2008 approval of the precise development
and parking plans (PP 07-10), conditional use permits for the restaurants (CUP 07-18) and the
approval of the Mitigated Negative Declaration prepared for the Project. Existing Land Use
Regulations shall exclude the City's Building Ordinances so long as applied generally to
structures similar to the Project within the City.
Page 5 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
1.9 Mortgage. A mortgage, deed of trust, sale and leaseback arrangement (in
which all or a part of the Property, or an interest in it, is sold and leased back concurrently) or
other transactions in which all or a part of the Property, or an interest in it, is pledged as security,
contracted in good faith and for fair value.
1.9 Project. The development, associated amenities, and on -site and off -site
improvements, as permitted under and described in the Development Plan (attached hereto and
incorporated herein by this reference as Exhibit "A"), to be constructed on the Property, as the
same may hereafter be further refined, enhanced or modified pursuant to the provisions of this
Agreement. In general, the Project comprises the demolition of the existing E1 Paseo Village
shopping center and its redevelopment with 3 two-story buildings to form a new El Paseo
Village retail, office and restaurant project.
1.10 Property. The real properties and any improvements thereon which are
described in Exhibit "B" attached hereto and incorporated herein by this reference to this
Agreement.
2. Term; Amendment.
2.1 Term. The term of this Agreement (the "Term") shall commence on the
Effective Date and shall terminate on the fifth (5th) year anniversary date of the Effective Date,
unless sooner terminated or extended as hereinafter provided. This Section 2.1 shall have the
effect of extending the terms of all other City approvals, permits and entitlements pertaining to
the Project so that such terms are co -extensive with the five (5) year term provided herein.
2.2 Amendment. The parties to this Agreement at their sole discretion and by
their mutual written consent may from time to time amend the provisions and terms of this
Page 6 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
Agreement. An amendment to this Agreement is not triggered by adjustments to the Project
approved pursuant to the authority and discretion of the City's community development director
by the Existing Land Use Regulations.
3. General Development of the Project
3.1 Vested Right to Develop Project.
(a) The Project is defined and described in the Development Plan
attached to this Agreement as Exhibit "A".
(b) Developer shall immediately upon the Effective Date of this
Agreement have the vested right to develop the Project in accordance with the Development Plan
and, to the extent not inconsistent with or modified by the Development Plan, the Existing Land
Use Regulations. Developer does not have the obligation to develop the Project and may
proceed with some or all of the Project at its discretion, at a rate, sequence and phasing of
Developer's sole choosing. Developer's right to develop the Property in accordance with this
Section 3.1 shall be without regard to future changes or additions to the Existing Land Use
Regulations of the City, however enacted, whether by moratorium, initiative and/or referenda of
the City or of the voters of the City. Because the California Supreme Court held in Pardee
Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465 that failure of the parties to provide
for the timing of development resulted in a later adopted initiative restricting the timing of
development to prevail over the parties' agreement, it is the intent of the City and Developer to
acknowledge and provide that, notwithstanding anything to the contrary in the Existing Land Use
Regulations, Developer shall have the right (without the obligation) to develop the Property in
such order and at such rate and at such times as the Developer deems appropriate within the
exercise of its sole good faith business judgment in accordance with the Development Plan.
Page 7 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doe
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
(c) No moratorium, inclusive of moratoria contemplated by
Government Code Section 65858, shall be effective or applicable to this Property on account of
the vested rights provided through this Agreement.
3.2 Future Approvals such as Building Permits and Other Approvals and
Permits. Subject to (a) Developer's compliance with this Agreement, the Development Plan, and
the Existing Land Use Regulations, and (b) payment of the usual and customary processing fees
of general application set forth on a written fee schedule as may then be applicable, the City shall
process and issue to Developer promptly upon application thereof all necessary building permits,
occupancy certificates, grading, demolition and construction approvals, utility hook-ups and
other required permits for the construction, use and occupancy of the Project, or any portion
thereof, pursuant to Existing Land Use Regulations.
3.3 Effect of Agreement. This Agreement shall constitute a part of the
Enacting Ordinance, as if incorporated by reference therein in full. The parties acknowledge that
this Agreement is intended to grant Developer the vested right to develop the Project pursuant to
specified and known criteria and rules as set forth in the Development Plan and the Existing
Land Use Regulations, and to grant the City and the residents of the City certain benefits which
they otherwise would not receive. This Agreement shall control over the provisions of other
Project approvals, permits, conditions of approval, mitigation measures and entitlements as well
as the Existing Land use Regulations.
This Agreement shall be binding upon the City and its successors in accordance
with and subject to its terms and conditions notwithstanding any subsequent action of the City,
whether taken by minute order, ordinance or resolution of the City Council, by referenda,
Page 8 of 24
\\iw-fnp0l\data$\uscrs\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LETM redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
initiative, or otherwise. The parties acknowledge and agree that by entering into this Agreement
and relying thereupon, the Developer has obtained, subject to the terms and conditions of this
Agreement, a vested right to proceed with, but not the obligation to proceed with, development
of the Project in accordance with the Development Plan and the Existing Land Use Regulations.
The City has entered into this Agreement in order to secure the public benefits conferred upon it
hereunder which are essential to provide for the public health, safety and welfare of the City and
its residents, and this Agreement is an essential element in the achievement of those goals.
4. Specific Criteria Applicable to Development of the Project.
4.1 Applicable City Regulations. Except as set forth in the Development Plan
and subject to the provisions of Section 4.2 below, the Existing Land Use Regulations shall
govern the development of the Property hereunder and the issuance of all permits or approvals
required to develop the Property; provided, however, that (a) Developer shall be subject to
reasonable changes in processing, inspection and plan -check fees, charges imposed by City in
connection with the processing of applications for development and construction upon the
Property, and development impact fees, at the rates existing at the time of payment, so long as
such fees and charges are of general application and are not imposed solely with respect to the
Property or Project; and (b) Developer shall abide by the Building Ordinances in effect at the
time of each application.
4.2 Amendment to Applicable Regulations. In the event that the Existing
Land Use Regulations are amended by the City in a manner which provides more favorable site
development standards for the Property or Project or any part thereof than those in effect as of
the Effective Date, Developer shall have the right to notify the City in writing of its desire to be
subject to all or any such new standards for the remaining term of this Agreement. If City
Page 9 of 24
\\iw-fnp0l\data$\users\Robert.Hargrcaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
agrees, by action of the City Planning Director or City Manager, such new standards shall
become applicable to the Property or portions thereof. Should City thereafter amend such new
standards, upon the effective date of such amendment, the original new standards shall continue
to apply to the Property as provided above, but Developer may notify City in writing of its desire
to be subject to all or any such amended new standards and City may agree in the manner above
provided to apply such amended new standards to the Property.
5. Project Enhancements.
The City and Developer desire to cooperate with each other to secure
enhancements to the Project to be furnished by Developer, at its sole cost. The following
enhancements shall be provided as part of the Project: (a) inclusion of preferential parking
spaces for hybrid or hydrocarbon -fuel -alternative vehicles at the new El Paseo Village parking
structure; (b) Developer shall construct Project to the specifications that would be necessary to
obtain a green building rating under the 2008 Leadership in Energy and Environmental Design
(LEED) silver certification program ("Silver LEED specifications"); to the extent that Silver
LEED specifications are subjective or not clearly defined, Developer shall use its best efforts to
comply with reasonable interpretations of what those standards would be. In addition, Developer
shall submit the Project to the USGBC for LEED Silver certification under either the New
Construction rating system or under the Core & Shell and Commercial Interiors rating systems ;
(c) Developer shall use its best efforts to install and sustain shade landscaping in the new
Project's parking structure; (d) reciprocal parking within the Project's new parking structure shall
be provided for customers of the adjacent Gardens on El Paseo shopping center by means of a
private easement executed by Developer; (e) the City shall provide written notification to
Developer and shall consult with Developer in advance of any future consideration to place any
Page 10 of 24
\\iw-fnp0l\data$\uscrs\Robert.Hargreavcs\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
objects taller than four (4) feet within the public right of way in front of the Project; and (f)
within sixty (60) days of issuance of a certificate of occupancy for the parking structure and
tender by Developer to the City of a recordable easement for public parking in the parking
structure and a Parking Management Plan for the parking structure, both in a form acceptable to
the city attorney, the City shall pay Developer seven hundred fifty thousand dollars, ($750,000)
one source of which payment may be Facade Enhancement Program funds, for an estimated
100 parking spaces within the public easement in excess of the spaces that are replacement for
spaces eliminated from the Gardens on El Paseo parking structure by the Saks expansion.
6. Periodic Review of Compliance.
In accordance with Govt. Code Section 65865.1, the Planning Director or City
Manager shall review this Agreement each calendar year during the term of this Agreement by
providing Developer written notice commencing such review. The periodic review shall address
only those parts of the Project owned or controlled by Developer. At such periodic reviews,
Developer shall demonstrate its good faith compliance with the terms of this Agreement which
shall mean that it has acted in a commercially reasonable manner (taking into account
circumstances which then exist) and in good faith in attempting to adhere to this Agreement
("standard of review"). Should the City initially determine non-compliance in accordance with
this standard of review, then City shall provide Developer with written notice outlining the
circumstances of non-compliance and requesting a cure within ninety (90) days or a statement
from the Developer invoking an event(s) of force majeure as set forth in Section 7.1. After
compliance is achieved, the City shall issue a final written notice to Developer attesting to such
final compliance.
Page 11 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My DocumenlsTalm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
7. Permitted Delays, Force Majeure; Supersedure by Subsequent Laws.
7.1 Permitted Delays, Force Majeure. In addition to any other provisions of
this Agreement with respect to delay, Developer and City shall be excused from performance of
their obligations hereunder during any period of delay caused by acts of mother nature, civil
commotion, riots, strikes, picketing, or other labor disputes, shortage of personnel, materials or
supplies, or damage to or prevention of work in process by reason of fire, floods, earthquake, or
other casualties, litigation, acts or neglect of the other party, any referendum elections held on
the Enacting Ordinance, or the Land Use Regulations, or any other regulation affecting the
Project or the approvals, permits or other entitlements related thereto, or restrictions imposed or
mandated by governmental or quasi -governmental entities, enactment of conflicting provisions
of the Constitution or laws of the United States of America or the State of California or any
codes, statutes, regulations or executive mandates promulgated thereunder (collectively,
"Laws"), orders of courts of competent jurisdiction, or any other cause similar or dissimilar to
the foregoing beyond the reasonable control of City or Developer, as applicable. Each party
shall promptly notify the other party of any delay hereunder as soon as possible after the same
has been ascertained. The time of performance of such obligations shall be extended by the
period of any delay hereunder.
7.2 Supersedure of Subsequent Laws or Judicial Action. The provisions of
this Agreement shall, to the extent feasible, be modified or suspended as may be necessary to
comply with any new Law or decision issued by a court of competent jurisdiction (a "Decision"),
enacted or made after the Effective Date which prevents or precludes compliance with one or
more provisions of this Agreement. Promptly after enactment of any such new Law, or issuance
of such Decision, the parties shall meet and confer in good faith to determine the feasibility of
Page 12 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
any such modification or suspension based on the effect such modification or suspension would
have on the purposes and intent of this Agreement. In addition, Developer and City shall have
the right to challenge the new Law or the Decision preventing compliance with the terms of this
Agreement. In the event that such challenge is successful, this Agreement shall remain
unmodified and in full force and effect.
8. Events of Default; Remedies; Termination.
8.1 Events of Default. Subject to any extensions of time by mutual consent in
writing, and subject to the provisions of Section 7.1 above regarding permitted delays, the failure
of either party to perform any material term or provision of this Agreement shall constitute an
event of default hereunder ("Event of Default") if such defaulting party does not cure such failure
within thirty (30) days following receipt of written notice of default from the other party;
provided, however, that if the nature of the default is such that it cannot be cured within such
thirty (30) day period, an Event of Default shall not exist so long as the party charged therewith
shall have commenced the cure within such thirty (30) day period and shall be diligently
pursuing the cure. Any notice of default given hereunder shall specify in detail the nature of the
alleged Event of Default and the manner, if any, in which such Event of Default may be
satisfactorily cured in accordance with the terms and conditions of this Agreement. During the
time periods herein specified for cure of a failure of performance, the party charged therewith
shall not be subject, because of the alleged default of this Agreement, to (i) remedies, including
termination, for breach of this Agreement, (ii) institution of legal proceedings with respect
thereto, or (ill) suspension, red tag, revocation or withholding of any permit, map, certificate of
occupancy, approval or entitlement with respect to the Project.
Page 13 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
8.2 Remedies. Upon the occurrence of an Event of Default which has not
been cured, the nondefaulting party shall have such rights and remedies against the defaulting
party as it may have at law or in equity, including, but not limited to, the right to terminate this
Agreement or seek mandamus, specific performance, injunctive or declaratory relief, but
excluding monetary damages.
8.3 Waiver; Remedies Cumulative. Failure by a party to insist upon the strict
performance of any of the provisions of this Agreement by the other party shall not constitute
waiver of such party's right to demand strict compliance by such other party in the future. All
waivers must be in writing to be effective or binding upon the waiving party, and no waiver shall
be implied from any omission by a party to take any action with respect to such Event of Default.
No express written waiver of any Event of Default shall affect any other Event of Default, or
cover any other period of time not specified in such express waiver.
8.4 Effect of Termination. If Developer terminates this Agreement because of
City's default, then Developer shall be entitled to all of the benefits arising out of, or approvals,
permits, certificates or other entitlements, on account of, any exactions paid, given or dedicated
to, or received by, City prior to the date of termination of this Agreement. Except as otherwise
provided in this Section 8.4, all of the rights, duties and obligations of the parties hereunder shall
otherwise cease as of the date of the termination of this Agreement. The parties respective
obligations under Sections 5 and 9.4 shall survive termination and be of continuing force and
effect despite any such termination of this Agreement.
If this Agreement is terminated pursuant to any provision hereof, then the City shall, after
such action takes effect, cause an appropriate notice of such action to be recorded in the official
Page 14 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My DocumentsTalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
records of the County of Riverside. The cost of such recordation shall be borne by the party
causing such action.
8.5 Third Party Actions. Any court action or proceeding brought by any third
party to challenge this Agreement or any permit or approval or entitlement or Land Use
Regulation required from City or any other governmental entity for development or construction
of all or any portion of the Project, whether or not Developer is a party defendant to or real party
defendant in interest in such action or proceeding, shall constitute a permitted delay under
Section 7.1.
9. Encumbrances on Property.
9.1 Discretion to Encumber. The parties hereto agree that this Agreement
shall not prevent or limit Developer, in any manner, at Developer's sole discretion, from
encumbering the Property or any portion thereof or any improvements thereon with any
mortgage, deed of trust or other security device ("Mortgage") securing financing with respect to
the Property. The City acknowledges that the lenders providing such financing may require
certain operating memorandum or modifications to this Agreement, and the City agrees upon
request, from time -to -time, to meet with Developer and/or representatives of such lenders to
negotiate in good faith any such request for an operating memorandum or modification. City
further agrees that it will not unreasonably withhold its consent to any such requested operating
memorandum or modification.
9.2 Mortgage Protection. This Agreement shall be superior and senior to the
lien of any Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat,
render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, and
Page 15 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
any acquisition or acceptance of title or any right or interest in or with respect to the Property or
any portion thereof by a mortgagee (whether pursuant to a mortgage foreclosure, trustee's sale,
deed in lieu of foreclosure or otherwise) shall be subject to all of the terms and conditions of this
Agreement.
9.3 Mortgagee Not Obli ag ted. Notwithstanding the provisions of Section 9.2,
no mortgagee will have any obligation or duty under this Agreement to perform the obligations
of Developer or other affirmative covenants of Developer hereunder, or to guarantee such
performance, except that to the extent that any covenant to be performed by Developer is a
condition to the performance of a covenant by City, the performance thereof shall continue to be
a condition precedent to City's performance hereunder.
9.4 Estoppel Certificates. Either party may, at any time, and from time to
time, deliver written notice to the other party requesting such party to certify in writing that, to
the knowledge of the certifying party, (i) this Agreement is in full force and effect and a binding
obligation of the parties, (ii) this Agreement has not been amended or modified, or if so amended
or modified, identifying such amendments or modifications, and (iii) the requesting party is not
in default in the performance of its obligations under this Agreement, or if in default pursuant to
the required written notice described in Section 8.1, list therein the nature and amount of any
such defaults. A party receiving a request hereunder shall execute and return such certificate
within thirty (30) days following the receipt thereof. City acknowledges that a certificate
hereunder may be relied upon by transferees, assignees and lessees of the Developer and the
holders of any Mortgage.
10. Transfers and Assignments, Effect of Agreement on Title.
Page 16 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
10.1 Rights and Interests Appurtenant. The rights and interests provided
through this Agreement to Developer benefit and are appurtenant to the Property. Developer has
the right to sell, assign and transfer all or any portion of the Property and any and all of its rights
and interests hereunder and to delegate and assign any and all of its duties and obligations
hereunder. Such rights and interests hereunder may be sold, transferred or assigned and such
duties and obligations may be delegated or assigned.
10.2 Covenants Run with Land.
(i) All of the provisions, agreements, rights, powers, standards, terms,
covenants and obligations contained in this Agreement shall be binding upon the parties and their
respective heirs, successors (by merger, consolidation, or otherwise), assigns, and all other
persons acquiring any rights or interests in the Property, or any portion thereof, whether by
operation of laws or in any manner whatsoever, and shall inure to the benefit of the parties and
their respective heirs, successors (by merger, consolidation or otherwise) and assigns;
(ii) All of the provisions of this Agreement shall be enforceable as
equitable servitudes and constitute covenants running with the land pursuant to applicable law;
(iii) Each covenant to do or refrain from doing some act on the
Property hereunder (A) is for the benefit of and is a burden upon every portion of the Property,
(B) runs with such lands, and (C) is binding upon each party and each successive owner during
its ownership of the Property or any portions thereof, and shall benefit each party and its lands
hereunder, and each such other person or entity succeeding to an interest in such lands
Page 17 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My DocumentsTalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
11. Notices. Any notice to either party shall be in writing and given by delivering the
same to such party in person or by sending the same by registered or certified mail, return receipt
requested, with postage prepaid or nationally recognized overnight courier, to the following
addresses:
If to City:
City Clerk of the City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
If to Developer:
E1 Paseo Land Company, LLC
c/o Davis Street Land Company
622 Davis Street, Suite 200
Evanston, I1160201
Attn: Robert Perlmutter
Either party may change its mailing address at any time by giving written notice of such change
to the other party in the manner provided herein. All notices under this Agreement shall be
deemed given, received, made or communicated on the date personal delivery is effected or, if
mailed, on the delivery date or attempted delivery date shown on the return receipt or overnight
service (e.g. Fedex) receipt.
12.0 Miscellaneous
12.1 Relationship of Parties. It is understood that the Project is a private
development, that neither party is acting as the agent of the other in any respect hereunder, and
that each party is an independent contractor. It is further understood that none of the terms or
provisions of this Agreement are intended to or shall be deemed to create a partnership, joint
venture or joint enterprise between the parties hereto.
Page 18 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My DocumentsTalm Desert EI Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
12.2 Not a Public Dedication. Except as otherwise expressly provided herein,
nothing herein contained shall be deemed to be a gift or dedication of the Property, or of the
Project or any portion thereof, to the general public, for the general public, or for any public use
or purpose whatsoever, it being the intention and understanding of the parties that this
Agreement be strictly limited to and for the private purposes herein expressed for the
development of the Project as private property.
12.3 Severability. If any term, provision, covenant or condition of this
Agreement shall be determined invalid, void or unenforceable by judgment or court order, the
remainder of this Agreement shall remain in full force and effect, unless enforcement of this
Agreement as so invalidated would be unreasonable or grossly inequitable under all the relevant
circumstances or would frustrate the purposes of this Agreement.
12.4 Exhibits. The Exhibits, to which reference is made herein, are deemed
incorporated into this Agreement in their entirety by reference thereto.
12.5 Entire Agreement. This written Agreement and the Exhibits hereto
contain all the representations and the entire agreement between the parties with respect to the
subject matter hereof, including but not limited to the vesting of Project entitlements. Except as
otherwise specified in this Agreement and the Exhibits hereto, any prior correspondence,
memoranda, agreements, resolutions, minutes, ordinances, warranties or representations are
superseded in total by this Agreement and Exhibits hereto.
12.6 Governing Law; Construction of Agreement. This Agreement, and the
rights and obligations of the parties, shall be governed by and interpreted in accordance with the
laws of the state of California. The provisions of this Agreement and the Exhibits hereto shall be
Page 19 of 24
\\iw-fnp0l\dataS\users\Robert.Hargreaves\My Documents\Pahn Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
construed as a whole according to their common meaning and not strictly for or against any party
and consistent with the provisions hereof, in order to achieve the objectives and purposes of the
parties hereunder. The captions preceding the text of each Section, subsection and the Table of
Contents hereof are included only for convenience of reference and shall be disregarded in the
construction and interpretation of this Agreement. Wherever required by the context, the
singular shall include the plural and vice versa, and the masculine gender shall include the
feminine or neuter genders, or vice versa.
12.7 Separate Signature Pages. For convenience, the signatures of the parties
of this Agreement may be executed and acknowledged on separate pages which, when attached
to this Agreement, shall constitute this as one complete Agreement.
12.8 Time. Time is of the essence of this Agreement and of each and every
term and condition hereof.
12.9 Prevailing Party's Attorney's Fees and Costs. If any party to this
Agreement shall fail to perform any of its obligations hereunder, or if a dispute arises with
respect to any provision hereof or the performance of the obligations of any party hereto, the
defaulting party or the party not prevailing in such dispute, as the case may be, shall promptly
pay any and all costs and expenses (including without limitation, all court costs and reasonable
attorneys' fees and expenses) incurred by the other party with respect to such to such dispute or
in enforcing or establishing its rights hereunder.
12.10 Further Cooperation. Each party shall cooperate with and provide
reasonable assistance to the other party, such as timely execution, filing and recording of any
instruments or writings necessary or desirable to carry out the terms of this Agreement.
Page 20 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert I'l Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
Attest:
DEVELOPER:
El Paseo Land Company, LLC, a Delaware limited
liability company
By: i
Robert Perlmutter
Its: Manager
CITY:
CITY OF PALM DESERT, CALIFORNIA, a
municipal corporation organized and existing under
the laws o the State of California
By: 4/4
JeanN. Benson, Mayor
Page 21 of 24
\\iw-fnp0l\data$\users\Robert.Ilargreaves\My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doe
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
STATE OF ILLINOIS
COUNTY OF COOK
, Notary Public
On Jtl NE Z , 2008 before me, (here insert name
and title of notary), personally appeared 1203� r �i E,Z�KJrt-2 , personally
known to me to be the person whose name is 4r6 subscribed to the within instrument and
acknowledged to me that(�Oske/tl)�y executed the same in(iOhet/their authorized capacity(i6),
and that by(fili$Mr/t11dir signature( on the instrument the persono, or the entity upon behalf of
which the person(4 acted, executed the instrument.
WITNESS my hand and official seal.
------------
OFFICIAL SEAL.
KWERLY A MARTIN
Signature NOTARY PUBLIC- STATE OF ILL**$
My CoAMSSION EXPIRES-.0*12
State of California } SS
}
County of Riverside }
On June 18 , 2008, before me, M. Gloria Martinez , a Notary Public,
personally appeared Jean M. Benson & Rachelle D. Klassen , who proved to me on the
basis of satisfactory evidence to be the person D whose name's i�/aft+ subscribed to the within
instrument and acknowledged to me that 116/,Oe he executed the same in Ws/li'e the i,
authorized capacit >es , and that by qs*r(tNir signatures bn the instrument the person, or
the entity upon behalf of which the persoqfq acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
' M. GLORLA MARRnNEt
Chalon +f 1697036
Signature Rtiwsiag Cam,
Comm. EVIrata Oct 29, 20
Page 22 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
EXHIBIT "A"
DEVELOPMENT PLAN
The Project Development Plan represents City approval of demolition of the El Paseo Village
shopping center on the Property described on Exhibit "B" and replacement with an approximate
75,000 square foot retail, restaurant and/or office complex and a new one-story parking structure.
The Project Development Plan shall include and shall be constructed consistent with the
following:
1. The City approved plans by Developer on file with the City.
2. The City approved Precise Plan PP 07-10 and Conditional Use Permits CUP07-1S.
3. The City approved Mitigated Negative Declaration prepared in compliance with the
California Environmental Quality Act (CEQA).
4. The City Architectural Review Commission approval.
5. The Existing Land Use Regulations except that the following specific development standards
shall apply irrespective of any conflict or inconsistency with any existing Land Use
Regulation:
a. The Project is allowed to encroach into the eastern and western corner lot
setback of the "daylight triangle" pursuant to Palm Desert Municipal Code
Section 25.25.016.
b. The Project is allowed to reach a maximum height of 42 feet.
The new one-story parking deck at the Project shall be constructed with a
minimum of 295 parking spaces. The total number of spaces is allowed to
fluctuate thereafter by no more than 5%.
d. Tenant improvements are allowed to fluctuate from the Project Development
Plan so long as they do not substantially alter the overall aesthetic of the
approved Project.
Page 23 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert FI Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
EXHIBIT "B"
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTIES
El Paseo Village Shopping Center:
LOT 2 OF TRACT NO. 11881, IN THE CITY OF PALM DESERT, AS
SHOWN BY MAP ON FILE IN BOOK 99, PAGE(S) 48 AND 49 OF MAPS, IN THE OFFICE
OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPTING ONE -SIXTEENTH OF ALL COAL, OIL, GAS AND OTHER
MINERAL DEPOSITS IN SAID LAND AS RESERVED IN PATENT FROM THE STATE OF
CALIFORNIA, RECORDED JULY 17, 1925, IN BOOK 9, PAGE 102 OF PATENTS,
RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
Assessors Parcel Number: 627-252-004-4 AND 627-252-005-5
Page 24 of 24
\\iw-fnp0l\data$\users\Robert.Hargreaves\My DocumentsTalm Desert l:l Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-04
Recording Requested by
And When Recorded Return to:
City Clerk
City of Palm Desert
73 -5 10 Fred Waring Drive
Palm Desert, CA 92260
Exempt from Recorder's Fees
Pursuant to Government Code § 6103, 27383
DEVELOPMENT AGREEMENT
By and Between the
CITY OF PALM DESERT
And
GARDENS SPE II, LLC
Dated: June 12 , 2008
Page 1 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of this
12thday of June , 2008, by and between the City of Palm Desert, California, a municipal
corporation organized and existing under the laws of the State of California (the "City), and
Gardens SPE II, LLC, a limited liability company organized and existing under the laws of the
State of Delaware ("Developer"), with reference to the following facts, understandings and
intentions of the parties:
RECITALS:
A. These Recitals refer to and utilize certain capitalized terms which are defined in
this Agreement.
B. Government Code Sections 65684 through 65869.5 inclusive (the "Development
Agreement Legislation") authorize the City to enter into development agreements in connection
with the development of real property within its jurisdiction. Pursuant to the Development
Agreement Legislation, on August 11, 1983, the City enacted procedures and requirements for
the consideration of development agreements by Ordinance No. 341, as amended on December
7, 1989 by Ordinance No. 589 (collectively, the "Development Agreement Ordinance")
C. Developer is the owner of a legal or equitable interest in the Property and is
entitled to have filed the applications for the Project and to enter into this Agreement. The
Project consists of the expansion of the Saks Fifth Avenue building and modifications to the
existing parking structure, which is projected to increase property and sales tax revenue for the
Page 2 of 23
5313835v3
ORDINANCE NO. 1156 DA 07-04
City's general fund and other funds. The Property is located at an important location in the City
and the coordinated development of the Project pursuant to this Agreement represents an
important and mutually beneficial economic development and land use planning opportunity for
the City and Developer.
D. The City has determined that the development of the Project as contemplated by
this Agreement is consistent with and in furtherance of the goals, policies, objectives, zoning,
general land uses and development programs of the City as set forth in the City's General Plan,
the Palm Desert Commercial Core Area Specific Plan and Zoning Code.
E. The City has determined that entry into this Agreement will further the goals and
objectives of the City's land use planning policies by, among other things, encouraging
investment in the El Paseo district, providing criteria for the uses, design and development of the
Property, including flexibility in land use options which may be altered in order to respond to
future economic conditions, eliminating uncertainty in planning, and securing orderly and
expeditious processing and development of the Project. The benefits conferred on the City by
Developer herein will (1) insure consistent, comprehensive planning which will result in
aesthetically pleasing, environmentally harmonious, and economically viable development
within the City; (ii) provide for increased and enhanced pedestrian -oriented retail shopping for
the City; (iii) provide increased property and sales tax revenue for the City and its
Redevelopment Agency; and (iv) further the development objectives of the City in the El Paseo
district in an orderly manner, all of which will significantly promote the health, safety and
welfare of the residents of the City. In exchange for these benefits to the City, Developer desires
to receive the assurance that it may proceed with the Project without further regulation by City in
Page 3 of 23
5313835v3
ORDINANCE NO. 1156
DA 07-04
accordance with the Development Plan attached to this Agreement as Exhibit "A", and at a rate
and phasing of its choosing, subject to the terms and conditions contained in this Agreement.
F. By adopting this Agreement, the City Council has elected to exercise certain
governmental powers at the present time rather than deferring such actions until an undetermined
future date and has done so intending to bind the City and the City Council, now and in the
future, intending to limit the City's future exercise of certain governmental powers, to the extent
permitted by law.
G. In order to effectuate the foregoing, the parties desire to enter into this
Agreement.
NOW, THEREFORE, pursuant to the authority contained in the Development Agreement
Legislation, and in consideration of the mutual covenants and promises of the parties herein
contained, the parties agree as follows:
1. Definitions.
1.1 Defined Terms. Each reference in this Agreement to any of the following
terms shall have the meaning set forth below for each such term.
1.2 Agreement. This Development Agreement.
1.3 Building Ordinances. The uniform building codes adopted by the City, of
general application throughout the City and not imposed solely with respect to the Property,
including, without limitation, the City's building, plumbing, electrical, mechanical, and fire
codes.
Page 4 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
1.4 City Council. The legislative body of the City of Palm Desert.
1.5 Effective Date. The date on which the Enacting Ordinance becomes
legally effective.
1.6 Enacting Ordinance. Ordinance 1156, enacted by the City Council on
June 12 , 2008, approving this Agreement.
1.7 Existing Land Use Regulations. The City's land use regulations in effect
as of the Effective Date, which comprise the ordinances, resolutions, codes, rules, regulations
and official policies of the City applicable to the Property, including but not limited to, the
permitted uses of land, the density and intensity of use of land, the maximum height and size of
proposed buildings, provisions for reservation or dedication of land for public purposes, and
provisions relating to the timing of development, all as applicable to the development of the
Property. Specifically, but without limiting the generality of the foregoing, Existing Land Use
Regulations shall include the City's General Plan, the City's Commercial Core Area Specific
Plan, the City's zoning ordinance inclusive of the C-1 zoning standards and scenic preservation
overlay standards, the City's subdivision code, the City's redevelopment plans and rules, and the
City entitlements and approvals issued for the Project summarized in the Development Plan on
Exhibit "A" hereto, including but not limited to the January 8, 2008 Architectural Review
Commission approval, the City Council's February 28, 2008 approval of the precise development
and parking plans (PP 07-10) and the approval of the Mitigated Negative Declaration prepared
for the Project. Existing Land Use Regulations shall exclude the City's Building Ordinances so
long as applied generally to structures similar to the Project within the City.
Page 5 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
1.8 Mortgage. A mortgage, deed of trust, sale and leaseback arrangement (in
which all or a part of the Property, or an interest in it, is sold and leased back concurrently) or
other transactions in which all or a part of the Property, or an interest in it, is pledged as security,
contracted in good faith and for fair value.
1.9 Project. The development, associated amenities, and on -site and off -site
improvements, as permitted under and described in the Development Plan (attached hereto and
incorporated herein by this reference as Exhibit "A"), to be constructed on the Property, as the
same may hereafter be further refined, enhanced or modified pursuant to the provisions of this
Agreement. In general, the Project comprises a two-story expansion of the existing Saks Fifth
Avenue building in the existing Gardens on El Paseo shopping center and associated
modifications to the existing parking structure on the Property.
1.10 Property. The real properties and any improvements thereon which are
described in Exhibit "B" attached hereto and incorporated herein by this reference to this
Agreement.
2. Term; Amendment.
2.1 Term. The term of this Agreement (the "Term") shall commence on the
Effective Date and shall terminate on the fifth (5th) year anniversary date of the Effective Date,
unless sooner terminated or extended as hereinafter provided. This Section 2.1 shall have the
effect of extending the terms of all other City approvals, permits and entitlements pertaining to
the Project so that such terms are co -extensive with the five (5) year term provided herein.
2.2 Amendment. The parties to this Agreement at their sole discretion and by
their mutual written consent may from time to time amend the provisions and terms of this
Page 6 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
Agreement. An amendment to this Agreement is not triggered by adjustments to the Project
approved pursuant to the authority and discretion of the City's community development director
by the Existing Land Use Regulations.
3. General Development of the Project
3.1 Vested Right to Develop Project.
(a) The Project is defined and described in the Development Plan
attached to this Agreement as Exhibit "A".
(b) Developer shall immediately upon the Effective Date of this
Agreement have the vested right to develop the Project in accordance with the Development Plan
and, to the extent not inconsistent with or modified by the Development Plan, the Existing Land
Use Regulations. Developer does not have the obligation to develop the Project and may
proceed with some or all of the Project at its discretion, at a rate, sequence and phasing of
Developer's sole choosing. Developer's right to develop the Property in accordance with this
Section 3.1 shall be without regard to future changes or additions to the Existing Land Use
Regulations of the City, however enacted, whether by moratorium, initiative and/or referenda of
the City or of the voters of the City. Because the California Supreme Court held in Pardee
Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465 that failure of the parties to provide
for the timing of development resulted in a later adopted initiative restricting the timing of
development to prevail over the parties' agreement, it is the intent of the City and Developer to
acknowledge and provide that, notwithstanding anything to the contrary in the Existing Land Use
Regulations, Developer shall have the right (without the obligation) to develop the Property in
such order and at such rate and at such times as the Developer deems appropriate within the
exercise of its sole good faith business judgment in accordance with the Development Plan.
Page 7 of 23
5313835v3
ORDINANCE NO. 1156
(c) No moratorium, inclusive of moratoria contemplated by
Government Code Section 65858, shall be effective or applicable to this Property on account of
the vested rights provided through this Agreement.
3.2 Future Approvals such as Building Permits and Other Approvals and
Permits. Subject to (a) Developer's compliance with this Agreement, the Development Plan, and
the Existing Land Use Regulations, and (b) payment of the usual and customary processing fees
of general application set forth on a written fee schedule as may then be applicable, the City shall
process and issue to Developer promptly upon application thereof all necessary building permits,
occupancy certificates, grading, demolition and construction approvals, utility hook-ups and
other required permits for the construction, use and occupancy of the Project, or any portion
thereof, pursuant to Existing Land Use Regulations.
3.3 Effect of Agreement. This Agreement shall constitute a part of the
Enacting Ordinance, as if incorporated by reference therein in full. The parties acknowledge that
this Agreement is intended to grant Developer the vested right to develop the Project pursuant to
specified and known criteria and rules as set forth in the Development Plan and the Existing
Land Use Regulations, and to grant the City and the residents of the City certain benefits which
they otherwise would not receive. This Agreement shall control over the provisions of other
Project approvals, permits, conditions of approval, mitigation measures and entitlements as well
as the Existing Land use Regulations.
This Agreement shall be binding upon the City and its successors in accordance
with and subject to its terms and conditions notwithstanding any subsequent action of the City,
whether taken by minute order, ordinance or resolution of the City Council, by referenda,
Page 8 of 23
5313835v3
ORDINANCE NO. 1156 DA 07-04
initiative, or otherwise. The parties acknowledge and agree that by entering into this Agreement
and relying thereupon, the Developer has obtained, subject to the terms and conditions of this
Agreement, a vested right to proceed with, but not the obligation to proceed with, development
of the Project in accordance with the Development Plan and the Existing Land Use Regulations.
The City has entered into this Agreement in order to secure the public benefits conferred upon it
hereunder which are essential to provide for the public health, safety and welfare of the City and
its residents, and this Agreement is an essential element in the achievement of those goals.
4. Specific Criteria Applicable to Development of the Project.
4.1 Applicable City Regulations. Except as set forth in the Development Plan
and subject to the provisions of Section 4.2 below, the Existing Land Use Regulations shall
govern the development of the Property hereunder and the issuance of all permits or approvals
required to develop the Property; provided, however, that (a) Developer shall be subject to
reasonable changes in processing, inspection and plan -check fees, charges imposed by City in
connection with the processing of applications for development and construction upon the
Property, and development impact fees, at the rates existing at the time of payment, so long as
such fees and charges are of general application and are not imposed solely with respect to the
Property or Project; and (b) Developer shall abide by the Building Ordinances in effect at the
time of each application,
4.2 Amendment to Applicable Regulations. In the event that the Existing
Land Use Regulations are amended by the City in a manner which provides more favorable site
development standards for the Property or Project or any part thereof than those in effect as of
the Effective Date, Developer shall have the right to notify the City in writing of its desire to be
subject to all or any such new standards for the remaining term of this Agreement. If City
Page 9 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
agrees, by action of the City Planning Director or City Manager, such new standards shall
become applicable to the Property or portions thereof. Should City thereafter amend such new
standards, upon the effective date of such amendment, the original new standards shall continue
to apply to the Property as provided above, but Developer may notify City in writing of its desire
to be subject to all or any such amended new standards and City may agree in the manner above
provided to apply such amended new standards to the Property.
5. Project Enhancement.
The City and Developer desire to cooperate with each other to secure the
following enhancement to the Project to be furnished by Developer, at its sole cost:
(a) Developer shall use its best efforts to install and sustain shade landscaping within the existing
parking structure on the Property.
6. Periodic Review of Compliance.
In accordance with Govt. Code Section 65865.1, the Planning Director or City
Manager shall review this Agreement each calendar year during the term of this Agreement by
providing Developer written notice commencing such review. The periodic review shall address
only those parts of the Project owned or controlled by Developer. At such periodic reviews,
Developer shall demonstrate its good faith compliance with the terms of this Agreement which
shall mean that it has acted in a commercially reasonable manner (taking into account
circumstances which then exist) and in good faith in attempting to adhere to this Agreement
("standard of review"). Should the City initially determine non-compliance in accordance with
this standard of review, then City shall provide Developer with written notice outlining the
circumstances of non-compliance and requesting a cure within ninety (90) days or a statement
Page 10 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
from the Developer invoking an event(s) of force majeure as set forth in Section 7.1. After
compliance is achieved, the City shall issue a final written notice to Developer attesting to such
final compliance.
7. Permitted Delays, Force Majeure; Supersedure by Subsequent Laws.
7.1 Permitted Delays, Force Majeure. In addition to any other provisions of
this Agreement with respect to delay, Developer and City shall be excused from performance of
their obligations hereunder during any period of delay caused by acts of mother nature, civil
commotion, riots, strikes, picketing, or other labor disputes, shortage of personnel, materials or
supplies, or damage to or prevention of work in process by reason of fire, floods, earthquake, or
other casualties, litigation, acts or neglect of the other party, any referendum elections held on
the Enacting Ordinance, or the Land Use Regulations, or any other regulation affecting the
Project or the approvals, permits or other entitlements related thereto, or restrictions imposed or
mandated by governmental or quasi -governmental entities, enactment of conflicting provisions
of the Constitution or laws of the United States of America or the State of California or any
codes, statutes, regulations or executive mandates promulgated thereunder (collectively,
"Laws"), orders of courts of competent jurisdiction, or any other cause similar or dissimilar to
the foregoing beyond the reasonable control of City or Developer, as applicable. Each party
shall promptly notify the other party of any delay hereunder as soon as possible after the same
has been ascertained. The time of performance of such obligations shall be extended by the
period of any delay hereunder.
7.2 Supersedure of Subsequent Laws or Judicial Action. The provisions of
this Agreement shall, to the extent feasible, be modified or suspended as may be necessary to
Page 11 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
comply with any new Law or decision issued by a court of competent jurisdiction (a "Decision"),
enacted or made after the Effective Date which prevents or precludes compliance with one or
more provisions of this Agreement. Promptly after enactment of any such new Law, or issuance
of such Decision, the parties shall meet and confer in good faith to determine the feasibility of
any such modification or suspension based on the effect such modification or suspension would
have on the purposes and intent of this Agreement. In addition, Developer and City shall have
the right to challenge the new Law or the Decision preventing compliance with the terms of this
Agreement. In the event that such challenge is successful, this Agreement shall remain
unmodified and in full force and effect.
8. Events of Default; Remedies; Termination.
8.1 Events of Default. Subject to any extensions of time by mutual consent in
writing, and subject to the provisions of Section 7.1 above regarding permitted delays, the failure
of either party to perform any material term or provision of this Agreement shall constitute an
event of default hereunder ("Event of Default") if such defaulting party does not cure such failure
within thirty (30) days following receipt of written notice of default from the other party;
provided, however, that if the nature of the default is such that it cannot be cured within such
thirty (30) day period, an Event of Default shall not exist so long as the party charged therewith
shall have commenced the cure within such thirty (30) day period and shall be diligently
pursuing the cure. Any notice of default given hereunder shall specify in detail the nature of the
alleged Event of Default and the manner, if any, in which such Event of Default may be
satisfactorily cured in accordance with the terms and conditions of this Agreement. During the
time periods herein specified for cure of a failure of performance, the party charged therewith
shall not be subject, because of the alleged default of this Agreement, to (i) remedies, including
Page 12 of 23
5313835v3
ORDINANCE NO. 1156 DA 07-04
termination, for breach of this Agreement, (ii) institution of legal proceedings with respect
thereto, or (iii) suspension, red tag, revocation or withholding of any permit, map, certificate of
occupancy, approval or entitlement with respect to the Project.
8.2 Remedies. Upon the occurrence of an Event of Default which has not
been cured, the nondefaulting party shall have such rights and remedies against the defaulting
party as it may have at law or in equity, including, but not limited to, the right to terminate this
Agreement or seek mandamus, specific performance, injunctive or declaratory relief, but
excluding monetary damages.
8.3 Waiver; Remedies Cumulative. Failure by a party to insist upon the strict
performance of any of the provisions of this Agreement by the other party shall not constitute
waiver of such party's right to demand strict compliance by such other party in the future. All
waivers must be in writing to be effective or binding upon the waiving party, and no waiver shall
be implied from any omission by a party to take any action with respect to such Event of Default.
No express written waiver of any Event of Default shall affect any other Event of Default, or
cover any other period of time not specified in such express waiver.
8.4 Effect of Termination. If Developer terminates this Agreement because of
City's default, then Developer shall be entitled to all of the benefits arising out of, or approvals,
permits, certificates or other entitlements, on account of, any exactions paid, given or dedicated
to, or received by, City prior to the date of termination of this Agreement. Except as otherwise
provided in this Section 8.4, all of the rights, duties and obligations of the parties hereunder shall
otherwise cease as of the date of the termination of this Agreement. The parties respective
Page 13 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
obligations under Sections 5 and 9.4 shall survive termination and be of continuing force and
effect despite any such termination of this Agreement.
If this Agreement is terminated pursuant to any provision hereof, then the City shall, after
such action takes effect, cause an appropriate notice of such action to be recorded in the official
records of the County of Riverside. The cost of such recordation shall be borne by the party
causing such action.
8.5 Third Party Actions. Any court action or proceeding brought by any third
party to challenge this Agreement or any permit or approval or entitlement or Land Use
Regulation required from City or any other governmental entity for development or construction
of all or any portion of the Project, whether or not Developer is a party defendant to or real party
defendant in interest in such action or proceeding, shall constitute a permitted delay under
Section 7.1.
9. Encumbrances on Property.
9.1 Discretion to Encumber. The parties hereto agree that this Agreement
shall not prevent or limit Developer, in any manner, at Developer's sole discretion, from
encumbering the Property or any portion thereof or any improvements thereon with any
mortgage, deed of trust or other security device ("Mortgage") securing financing with respect to
the Property. The City acknowledges that the lenders providing such financing may require
certain operating memorandum or modifications to this Agreement, and the City agrees upon
request, from time -to -time, to meet with Developer and/or representatives of such lenders to
negotiate in good faith any such request for an operating memorandum or modification. City
Page 14 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
further agrees that it will not unreasonably withhold its consent to any such requested operating
memorandum or modification.
9.2 Mortgage Protection. This Agreement shall be superior and senior to the
lien of any Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat,
render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, and
any acquisition or acceptance of title or any right or interest in or with respect to the Property or
any portion thereof by a mortgagee (whether pursuant to a mortgage foreclosure, trustee's sale,
deed in lieu of foreclosure or otherwise) shall be subject to all of the terms and conditions of this
Agreement.
9.3 Mortgagee Not Obligated. Notwithstanding the provisions of Section 9.2,
no mortgagee will have any obligation or duty under this Agreement to perform the obligations
of Developer or other affirmative covenants of Developer hereunder, or to guarantee such
performance, except that to the extent that any covenant to be performed by Developer is a
condition to the performance of a covenant by City, the performance thereof shall continue to be
a condition precedent to City's performance hereunder.
9.4 Estoppel Certificates. Either party may, at any time, and from time to
time, deliver written notice to the other party requesting such party to certify in writing that, to
the knowledge of the certifying party, (1) this Agreement is in full force and effect and a binding
obligation of the parties, (ii) this Agreement has not been amended or modified, or if so amended
or modified, identifying such amendments or modifications, and (iii) the requesting party is not
in default in the performance of its obligations under this Agreement, or if in default pursuant to
the required written notice described in Section 8.1, list therein the nature and amount of any
Page 15 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
such defaults. A party receiving a request hereunder shall execute and return such certificate
within thirty (30) days following the receipt thereof. City acknowledges that a certificate
hereunder may be relied upon by transferees, assignees and lessees of the Developer and the
holders of any Mortgage.
10. Transfers and Assignments; Effect of Agreement on Title.
10.1 Rights and Interests Appurtenant. The rights and interests provided
through this Agreement to Developer benefit and are appurtenant to the Property. Developer has
the right to sell, assign and transfer all or any portion of the Property and any and all of its rights
and interests hereunder and to delegate and assign any and all of its duties and obligations
hereunder. Such rights and interests hereunder may be sold, transferred or assigned and such
duties and obligations may be delegated or assigned.
10.2 Covenants Run with Land.
(i) All of the provisions, agreements, rights, powers, standards, terms,
covenants and obligations contained in this Agreement shall be binding upon the parties and their
respective heirs, successors (by merger, consolidation, or otherwise), assigns, and all other
persons acquiring any rights or interests in the Property, or any portion thereof, whether by
operation of laws or in any manner whatsoever, and shall inure to the benefit of the parties and
their respective heirs, successors (by merger, consolidation or otherwise) and assigns;
(ii) All of the provisions of this Agreement shall be enforceable as
equitable servitudes and constitute covenants running with the land pursuant to applicable law;
Page 16 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
(iii) Each covenant to do or refrain from doing some act on the
Property hereunder (A) is for the benefit of and is a burden upon every portion of the Property,
(B) runs with such lands, and (C) is binding upon each party and each successive owner during
its ownership of the Property or any portions thereof, and shall benefit each party and its lands
hereunder, and each such other person or entity succeeding to an interest in such lands
11. Notices. Any notice to either party shall be in writing and given by delivering the
same to such party in person or by sending the same by registered or certified mail, return receipt
requested, with postage prepaid or nationally recognized overnight courier, to the following
addresses:
If to City:
City Clerk of the City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
If to Developer:
Gardens SPE II, LLC
c/o Davis Street Land Company
622 Davis Street, Suite 200
Evanston, Ill 60201
Attn: Robert Perlmutter
Either party may change its mailing address at any time by giving written notice of such change
to the other party in the manner provided herein. All notices under this Agreement shall be
deemed given, received, made or communicated on the date personal delivery is effected or, if
mailed, on the delivery date or attempted delivery date shown on the return receipt or overnight
service (e.g. Fedex) receipt.
12.0 Miscellaneous
Page 17 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
12.1 Relationship of Parties. It is understood that the Project is a private
development, that neither party is acting as the agent of the other in any respect hereunder, and
that each party is an independent contractor. It is further understood that none of the terms or
provisions of this Agreement are intended to or shall be deemed to create a partnership, joint
venture or joint enterprise between the parties hereto.
12.2 Not a Public Dedication. Except as otherwise expressly provided herein,
nothing herein contained shall be deemed to be a gift or dedication of the Property, or of the
Project or any portion thereof, to the general public, for the general public, or for any public use
or purpose whatsoever, it being the intention and understanding of the parties that this
Agreement be strictly limited to and for the private purposes herein expressed for the
development of the Project as private property.
12.3 Severability. If any term, provision, covenant or condition of this
Agreement shall be determined invalid, void or unenforceable by judgment or court order, the
remainder of this Agreement shall remain in full force and effect, unless enforcement of this
Agreement as so invalidated would be unreasonable or grossly inequitable under all the relevant
circumstances or would frustrate the purposes of this Agreement.
12.4 Exhibits. The Exhibits, to which reference is made herein, are deemed
incorporated into this Agreement in their entirety by reference thereto.
12.5 Entire Agreement. This written Agreement and the Exhibits hereto
contain all the representations and the entire agreement between the parties with respect to the
subject matter hereof, including but not limited to the vesting of Project entitlements. Except as
otherwise specified in this Agreement and the Exhibits hereto, any prior correspondence,
Page 18 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
memoranda, agreements, resolutions, minutes, ordinances, warranties or representations are
superseded in total by this Agreement and Exhibits hereto.
12.6 Governing Law; Construction of Agreement. This Agreement, and the
rights and obligations of the parties, shall be governed by and interpreted in accordance with the
laws of the state of California. The provisions of this Agreement and the Exhibits hereto shall be
construed as a whole according to their common meaning and not strictly for or against any party
and consistent with the provisions hereof, in order to achieve the objectives and purposes of the
parties hereunder. The captions preceding the text of each Section, subsection and the Table of
Contents hereof are included only for convenience of reference and shall be disregarded in the
construction and interpretation of this Agreement. Wherever required by the context, the
singular shall include the plural and vice versa, and the masculine gender shall include the
feminine or neuter genders, or vice versa.
12.7 Separate Signature Pages. For convenience, the signatures of the parties
of this Agreement may be executed and acknowledged on separate pages which, when attached
to this Agreement, shall constitute this as one complete Agreement.
12.8 Time. Time is of the essence of this Agreement and of each and every
term and condition hereof.
12.9 Prevailing_Party's Attorney's Fees and Costs. If any party to this
Agreement shall fail to perform any of its obligations hereunder, or if a dispute arises with
respect to any provision hereof or the performance of the obligations of any tarty hereto, the
defaulting party or the party not prevailing in such dispute, as the case may be, shall promptly
pay any and all costs and expenses (including without limitation, all court costs and reasonable
Page 19 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
attorneys' fees and expenses) incurred by the other party with respect to such to such dispute or
in enforcing or establishing its rights hereunder.
12.10 Further Cooperation. Each party shall cooperate with and provide
reasonable assistance to the other party, such as timely execution, filing and recording of any
instruments or writings necessary or desirable to carry out the terms of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
DEVELOPER:
Gardens SPE II, LLC, a Delaware limited liability
company
Robert Perlmutter
Its: Manager
CITY:
CITY OF PALM DESERT, CALIFORNIA, a
municipal corporation organized and existing under
the laws of the State of California
By: r
M. Benson, Ma
Attest:
Rachel a D. K assen, City Clerk
Page 20 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
STATE OF ILLINOIS
COUNTY OF COOK
On Ju lJE 2.. , 2008 before me, KiKaEy.L-Y A. KNzT,,,j, NotWePil M� iame
and title of notary), personally appeared '�.oaE;L-i personally
known to me to be the person(4) whose name is are subscribed to the within instrument and
acknowledged to me thaLh�6jshe/tl6y executed the same in ii l6r/thdir authorized capacity(�es),
and that by( ler/tl{eir signature(o on the instrument the person(o, or the entity upon behalf of
which the person(A) acted, executed the instrument.
WITNESS my hand and official seal
F
FFICK SEAL
B AYA MARTIN
L&C . STATE OF ILLP=
M *4 WftSW W Z
Signature
State of California )SS
County of Riverside ) }
On June 18 5 2008, before me, M. Gloria Martinez , a Notary Public,
personally appeared Jean M. Benson & Rachelle D. Klassen , who proved to me on the
basis of satisfactory evidence to be the persons whose name(D �I e subscribed to the within
instrument and acknowledged to me that 1)6/sVe executed the same in hits/he the ram -
authorized capacity ies�, and that by hV/her their,signature(o on the instrument the personX[js' , or
the entity upon behalf of which the persor4j—s, acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
0 M. GLORIA MARTINEZ
_ ommbebn #� 1697036
-� ary Public - Collfomla_
R1V0 County
MVN:0t
omm. Expkea Oct 29, 201
Page 21 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
EXHIBIT "A"
DEVELOPMENT PLAN
The Project Development Plan represents City approval of an approximate 27,000 square
foot two-story expansion of the existing Saks Fifth Avenue Building and associated
improvements, including without limitation modifications to the existing two-story parking
structure, all of which are located at the existing Gardens at El Paseo shopping center on the
Property described on Exhibit "B".
The Project Development Plan-shall:in�lude and shall be constructed consistent with the
following:
1. The City,�appreved.plans by Develope on file with the City.
2. The City approved Precise Plan PP 07-10.
3. The City approved Mitigated Negative Declaration prepared in compliance with the
California Environmental Quality Act (CEQA).
4. The City Architectural Review Commission approval.
5. The Existing Land Use Regulations except that the following specific development
standards shall apply irrespective of any conflict or inconsistency with any existing Land
Use Regulation:
a. In consideration of the present state of excess parking capacity in the parking
structure, and the condition of approval which requires access be granted to the new
parking deck at the El Paseo Village project, the Project is allowed to operate below the
parking requirements of 1 space for each 250 square feet of net floor area set forth in the
Existing Land Use Regulations. After the project is constructed, the total number of
spaces is allowed to fluctuate by no more than 2%.
b. Tenant improvements are allowed to fluctuate from the Project Development Plan
so long as they do not substantially alter the overall aesthetic of the approved Project.
Page 22 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
EXHIBIT "B"
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTIES
The Gardens on El Paseo Shopping Center:
PARCELS 1 AND 2 OF PARCEL MAP NO. 4655, IN THE CITY OF PALM
DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON
FILE IN BOOK 7, PAGE 42 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
EXCEPTING ONE -SIXTEENTH OF ALL COAL, OIL, GAS AND OTHER
MINERAL DEPOSITS IN SAID LAND, AS RESERVED IN PATENT FROM STATE OF
CALIFORNIA, RECORDED JULY 17, 1925 IN BOOK. 9,102 OF PATENTS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
Assessors Parcel Number: 627-261-006-4
Page 23 of 23
53138350
RECORDING REQUESTED BY, AND
WHEN RECORDED, MAIL TO:
City Clerk's Office
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
FOR THE BENEFIT OF THE
CITY OF PALM DESERT
- NO FEE -
6103 OF THE GOVT. CODE
DOC # 2008-0350515
06/26/2008 08:00A Fee:NC
Page 1 of 29
Recorded in Official Records
County of Riverside
Larry W. Ward
Assessor, County Clerk & Recorder
11EI 11111111111 IN II111 1111111111111111111111
S
R
U
PAGE
SIZE
DA
MISC
LONG
RFD COPY
M
A
L
465
426
PCOR
NCOR
SMF
XAM
NCHG E
��
UNI
1 v a c—
T:
CTY
( V
Development Agreement 07-03
Between M
City of Palm Desert, California o23
and
El Paseo Land Company, LLC
a Delaware Limited Liability Company
Legal Description of Properties
APN: 627-252-004-4 and 627-252-005-5
ORDINANCE NO. 1156
Case No. DA 07-03 & DA 07-04 as they relate to Case No. PP 07-10 & CUP 07-18
Dated: JUNE 12, 2008
(Title of Document)
W
c) ..
r
M
[This page has intentionally been left blank.]
ORDINANCE NO. _tpi6_
A ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, APPROVING DEVELOPMENT AGREEMENTS AS THEY RELATE
TO THE EXPANSION OF SAKS 5T" AVENUE AT THE EXISTING GARDENS ON
EL PASEO AND THE EL PASEO VILLAGE REMODEL.
CASE NO. DA 07-03 & DA 07-04 AS THEY RELATE TO CASE NO. PP 07-10 &
CUP 07-18:
WHEREAS, the Planning Commission by its Resolution No. 2467 has recommended
approval of said project; and
WHEREAS, at said public hearings, said City Council heard and considered all testimony
and arguments of all interested persons.
WHEREAS, the City Council of the City of Palm Desert, California, DOES HEREBY
ORDAIN, AS FOLLOWS:
SECTION 1: That the Development Agreements 07-03 and 07-04 by Ordinance No.
1156 have been subject to environmental review under the California Environmental Quality Act
and a Mitigated Negative Declaration has been adopted which addresses the Development
Agreements and the development projects underlying said Agreements. That the Development
Agreements are hereby found to be consistent with the City of Palm Desert General Plan and the
Palm Desert Commercial Core Area Specific Plan.
SECTION 2: That the Development Agreements 07-03 and 07-04 by Ordinance No.
1156 are hereby approved.
SECTION 3: The City Clerk of the City of Palm Desert, California, shall certify to the
passage adoption of this Ordinance and shall cause the same to be published once in the Desert
Sun, a newspaper of general circulation, circulated within the City of Palm Desert, and the same
be in full force and effect thirty (30) days after its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Palm Desert City
Council, held on this 120day of June2008, by the following vote, to wit:
AYES: FERGUSON, KELLY, SPIEGEL, and BENSON
NOES: FINERTY
ABSENT: NONE
ABSTAIN: NONE
ATTEST:
RACHELLE D. KLA.SS , CITY CLERK
City of Palm Desert, California
M. BENSON, Mayor
EACH DOCUMENT TO WMCH THIS CERTIFICATE IS
ATTACHED. IS CERTIFIED TO BE A FULL, TRUE AND
CORRECT COPY OF THE ORIGINAL ON FILE AND ON
RECORD lO W OFFICE.
Dated~
D. IQASSEN, CRY Clerk
[This page has intentionally been left blank.]
ORDINANCE NO. 1156
DA 07-03
Recording Requested by
And When Recorded Return to:
City Clerk
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Exempt from Recorder's Fees
Pursuant to Government Code § 6103, 27383
DEVELOPMENT AGREEMENT bq-G'j
By and Between the
CITY OF PALM DESERT
And
EL PASEO LAND COMPANY LLC
Dated: June 12 2008
Page 1 of 24
\\iw-fnp01`.dataS\users\Robert.Hargreaves\My DocumentsTalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of this
12t1hay of June , 2008, by and between the City of Palm Desert, California, a municipal
corporation organized and existing under the laws of the State of California (the "City), and
El Paseo Land Company L.L.C., a limited liability company organized and existing under the
laws of the State of Delaware ("Developer"), with reference to the following facts,
understandings and intentions of the parties:
RECITALS:
A. These Recitals refer to and utilize certain capitalized terms which are defined in
this Agreement.
B. Government Code Sections 65684 through 65869.5 inclusive (the "Development
Agreement Legislation") authorize the City to enter into development agreements in connection
with the development of real property within its jurisdiction. Pursuant to the Development
Agreement Legislation, on August 11, 1983, the City enacted procedures and requirements for
the consideration of development agreements by Ordinance No. 341, as amended on December
7, 1989 by Ordinance No. 589 (collectively, the "Development Agreement Ordinance")
C. Developer is the owner of a legal or equitable interest in the Property and is
entitled to have filed the applications for the Project and to enter into this Agreement. The
Project consists of the future redevelopment of the Property with retail, office and restaurant
uses, together with a new one level parking structure. The Project is projected to generate a
Page 2 of 24
�\iw-fnp01\dataS\users\Robett.Hargreaves\My DocumentsTalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
significant amount of property and sales tax revenue for the City's general fund and other funds.
The Property is located at an important location in the City and the coordinated development of
the Project pursuant to this Agreement represents an important and mutually beneficial economic
development and land use planning opportunity for the City and Developer.
D. The City has determined that the development of the Project as contemplated by
this Agreement is consistent with and in furtherance of the goals, policies, objectives, zoning,
general land uses and development programs of the City as set forth in the City's General Plan,
the Palm Desert Commercial Core Area Specific Plan and Zoning Code.
E. The City has determined that entry into this Agreement will further the goals and
objectives of the City's land use planning policies by, among other things, encouraging
investment in the El Paseo district, providing criteria for the uses, design and development of the
Property, including flexibility in land use options which may be altered in order to respond to
future economic conditions, eliminating uncertainty in planning, and securing orderly and
expeditious processing and development of the Project. The benefits conferred on the City by
Developer herein will (i) insure consistent, comprehensive planning which will result in
aesthetically pleasing, environmentally harmonious, and economically viable development
within the City; (ii) provide for the creation of pedestrian -oriented specialty retail, office and
restaurant uses for the City; (iii) provide increased property and sales tax revenue for the City
and its Redevelopment Agency; and (iv) further the development objectives of the City in the El
Paseo district in an orderly manner, all of which will significantly promote the health, safety and
welfare of the residents of the City. In exchange for these benefits to the City, Developer desires
to receive the assurance that it may proceed with the Project without further regulation by City in
Page 3 of 24
\\iw-inpO1\data$\users\Robert.Hargreaves\My DocumentsTalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
accordance with the Development Plan attached to this Agreement as Exhibit "A", and at a rate
and phasing of its choosing, subject to the terms and conditions contained in this Agreement.
F. By adopting this Agreement, the City Council has elected to exercise certain
governmental powers at the present time rather than deferring such actions until an undetermined
future date and has done so intending to bind the City and the City Council, now and in the
future, intending to limit the City's future exercise of certain governmental powers, to the extent
permitted by law.
G. In order to effectuate the foregoing, the parties desire to enter into this
Agreement.
NOW, THEREFORE, pursuant to the authority contained in the Development Agreement
Legislation, and in consideration of the mutual covenants and promises of the parties herein
contained, the parties agree as follows:
1. Definitions.
1.1 Defined Terms. Each reference in this Agreement to any of the following
terms shall have the meaning set forth below for each such term.
1.2 Agreement. This Development Agreement.
1.3 Building Ordinances. The uniform building codes adopted by the City, of
general application throughout the City and not imposed solely with respect to the Property,
including, without limitation, the City's building, plumbing, electrical, mechanical, and fire
codes.
Page 4 of 24
\`,iw-fnp01\data$\users\Robert.Hargreaves\My DocumentsPalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
1.4 City Council. The legislative body of the City of Palm Desert.
1.5 Effective Date. The date on which the Enacting Ordinance becomes
legally effective.
1.6 Enacting Ordinance. Ordinance 1156, enacted by the City Council
on June 12 , 2008, approving this Agreement.
1.7 Existing -Land Use Regulations. The City's land use regulations in effect
as of the Effective Date, which comprise the ordinances, resolutions, codes, rules, regulations
and official policies of the City applicable to the Property, including but not limited to, the
permitted uses of land, the density and intensity of use of land, the maximum height and size of
proposed buildings, provisions for reservation or dedication of land for public purposes, and
provisions relating to the timing of development, all as applicable to the development of the
Property. Specifically, but without limiting the generality of the foregoing, Existing Land Use
Regulations shall include the City's General Plan, the City's Commercial Core Area Specific
Plan, the City's zoning ordinance inclusive of the C-1 zoning standards and scenic preservation
overlay standards, the City's subdivision code, the City's redevelopment plans and rules, and the
City entitlements and approvals issued for the Project summarized in the Development Plan on
Exhibit "A" hereto, including but not limited to the January 8, 2008 Architectural Review
Commission approval, the City Council's February 28, 2008 approval of the precise development
and parking plans (PP 07-10), conditional use permits for the restaurants (CUP 07-18) and the
approval of the Mitigated Negative Declaration prepared for the Project. Existing Land Use
Regulations shall exclude the City's Building Ordinances so long as applied generally to
structures similar to the Project within the City.
Page 5 of 24
\\iw-fnp01''.data$`,users\Robert.Hargreaves`.My DocumentsTalm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
.ORDINANCE NO. 1156
DA 07-03
1.8 Mortgage. A mortgage, deed of trust, sale and leaseback arrangement (in
which all or a part of the Property, or an interest in it, is sold and leased back concurrently) or
other transactions in which all or a part of the Property, or an interest in it, is pledged as security,
contracted in good faith and for fair value.
1.9 Project. The development, associated amenities, and on -site and off -site
improvements, as permitted under and described in the Development Plan (attached hereto and
incorporated herein by this reference as Exhibit "A"), to be constructed on the Property, as the
same may hereafter be further refined, enhanced or modified pursuant to the provisions of this
Agreement. In general, the Project comprises the demolition of the existing El Paseo Village
shopping center and its redevelopment with 3 two-story buildings to form a new El Paseo
Village retail, office and restaurant project.
1.10 Property. The real properties and any improvements thereon which are
described in Exhibit "B" attached hereto and incorporated herein by this reference to this
Agreement.
2. Term; Amendment.
2.1 Term. The term of this Agreement (the "Term") shall commence on the
Effective Date and shall terminate on the fifth (5th) year anniversary date of the Effective Date,
unless sooner terminated or extended as hereinafter provided. This Section 2.1 shall have the
effect of extending the terms of all other City approvals, permits and entitlements pertaining to
the Project so that such terms are co -extensive with the five (5) year term provided herein.
2.2 Amendment. The parties to this Agreement at their sole discretion and by
their mutual written consent may from time to time amend the provisions and terms of this
Page 6 of 24
\`.iw-fnp01`.data$\users\Robeti.Hargreaves\My Documents`Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
Agreement. An amendment to this Agreement is not triggered by adjustments to the Project
approved pursuant to the authority and discretion of the City's community development director
by the Existing Land Use Regulations.
3. General Development of the Project
3.1 Vested Right to Develop Project.
(a) The Project is defined and described in the Development Plan
attached to this Agreement as Exhibit "A".
(b) Developer shall immediately upon the Effective Date of this
Agreement have the vested right to develop the Project in accordance with the Development Plan
and, to the extent not inconsistent with or modified by the Development Plan, the Existing Land
Use Regulations. Developer does not have the obligation to develop the Project and may
proceed with some or all of the Project at its discretion, at a rate, sequence and phasing of
Developer's sole choosing. Developer's right to develop the Property in accordance with this
Section 3.1 shall be without regard to future changes or additions to the Existing Land Use
Regulations of the City, however enacted, whether by moratorium, initiative and/or referenda of
the City or of the voters of the City. Because the California Supreme Court held in Pardee
Construction Co. v. City of Camarillo (1984) 37 Ca1.3d 465 that failure of the parties to provide
for the timing of development resulted in a later adopted initiative restricting the timing of
development to prevail over the parties' agreement, it is the intent of the City and Developer to
acknowledge and provide that, notwithstanding anything to the contrary in the Existing Land Use
Regulations, Developer shall have the right (without the obligation) to develop the Property in
such order and at such rate and at such times as the Developer deems appropriate within the
exercise of its sole good faith business judgment in accordance with the Development Plan.
Page 7 of 24
\\iw-fnp01\data$\users\Robert. Hargreaves \ My DocumentsPalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
(c) No moratorium, inclusive of moratoria contemplated by
Government Code Section 65858, shall be effective or applicable to this Property on account of
the vested rights provided through this Agreement.
3.2 Future Approvals such as Building Permits and Other Approvals and
Permits. Subject to (a) Developer's compliance with this Agreement, the Development Plan, and
the Existing Land Use Regulations, and (b) payment of the usual and customary processing fees
of general application set forth on a written fee schedule as may then be applicable, the City shall
process and issue to Developer promptly upon application thereof all necessary building permits,
occupancy certificates, grading, demolition and construction approvals, utility hook-ups and
other required permits for the construction, use and occupancy of the Project, or any portion
thereof, pursuant to Existing Land Use Regulations.
3.3 Effect of Agreement. This Agreement shall constitute a part of the
Enacting Ordinance, as if incorporated by reference therein in full. The parties acknowledge that
this Agreement is intended to grant Developer the vested right to develop the Project pursuant to
specified and known criteria and rules as set forth in the Development Plan and the Existing
Land Use Regulations, and to grant the City and the residents of the City certain benefits which
they otherwise would not receive. This Agreement shall control over the provisions of other
Project approvals, permits, conditions of approval, mitigation measures and entitlements as well
as the Existing Land use Regulations.
This Agreement shall be binding upon the City and its successors in accordance
with and subject to its terms and conditions notwithstanding any subsequent action of the City,
whether taken by minute order, ordinance or resolution of the City Council, by referenda,
Page 8 of 24
\\iw-fnp01\data$'•users\Robert. Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
initiative, or otherwise. The parties acknowledge and agree that by entering into this Agreement
and relying thereupon, the Developer has obtained, subject to the terms and conditions of this
Agreement, a vested right to proceed with, but not the obligation to proceed with, development
of the Project in accordance with the Development Plan and the Existing Land Use Regulations.
The City has entered into this Agreement in order to secure the public benefits conferred upon it
hereunder which are essential to provide for the public health, safety and welfare of the City and
its residents, and this Agreement is an essential element in the achievement of those goals.
4. Specific Criteria Applicable to Development of the Project.
4.1 Applicable City Regulations. Except as set forth in the Development Plan
and subject to the provisions of Section 4.2 below, the Existing Land Use Regulations shall
govern the development of the Property hereunder and the issuance of all permits or approvals
required to develop the Property; provided, however, that (a) Developer shall be subject to
reasonable changes in processing, inspection and plan -check fees, charges imposed by City in
connection with the processing of applications for development and construction upon the
Property, and development impact fees, at the rates existing at the time of payment, so long as
such fees and charges are of general application and are not imposed solely with respect to the
Property or Project; and (b) Developer shall abide by the Building Ordinances in effect at the
time of each application.
4.2 Amendment to Applicable Regulations. In the event that the Existing
Land Use Regulations are amended by the City in a manner which provides more favorable site
development standards for the Property or Project or any part thereof than those in effect as of
the Effective Date, Developer shall have the right to notify the City in writing of its desire to be
subject to all or any such new standards for the remaining term of this Agreement. If City
Page 9 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\,My DocumentsPaltn Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
agrees, by action of the City Planning Director or City Manager, such new standards shall
become applicable to the Property or portions thereof. Should City thereafter amend such new
standards, upon the effective date of such amendment, the original new standards shall continue
to apply to the Property as provided above, but Developer may notify City in writing of its desire
to be subject to all or any such amended new standards and City may agree in the manner above
provided to apply such amended new standards to the Property.
5. Project Enhancements.
The City and Developer desire to cooperate with each other to secure
enhancements to the Project to be furnished by Developer, at its sole cost. The following
enhancements shall be provided as part of the Project: (a) inclusion of preferential parking
spaces for hybrid or hydrocarbon -fuel -alternative vehicles at the new El Paseo Village parking
structure; (b) Developer shall construct Project to the specifications that would be necessary to
obtain a green building rating under the 2008 Leadership in Energy and Environmental Design
(LEED) silver certification program ("Silver LEED specifications"); to the extent that Silver
LEED specifications are subjective or not clearly defined, Developer shall use its best efforts to
comply with reasonable interpretations of what those standards would be. In addition, Developer
shall submit the Project to the USGBC for LEED Silver certification under either the New
Construction rating system or under the Core & Shell and Commercial Interiors rating systems ;
(c) Developer shall use its best efforts to install and sustain shade landscaping in the new
Project's parking structure; (d) reciprocal parking within the Project's new parking structure shall
be provided for customers of the adjacent Gardens on El Paseo shopping center by means of a
private easement executed by Developer; (e) the City shall provide written notification to
Developer and shall consult with Developer in advance of any future consideration to place any
Page 10 of 24
\\iw-fnpOl\data$\users\Robert.Hargreaves,ty Documents Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
objects taller than four (4) feet within the public right of way in front of the Project; and (f)
within sixty (60) days of issuance of a certificate of occupancy for the parking structure and
tender by Developer to the City of a recordable easement for public parking in the parking
structure and a Parking Management Plan for the parking structure, both in a form acceptable to
the city attorney, the City shall pay Developer seven hundred fifty thousand dollars, ($750,000)
one source of which payment may be Facade Enhancement Program funds, for an estimated
100 parking spaces within the public easement in excess of the spaces that are replacement for
spaces eliminated from the Gardens on El Paseo parking structure by the Saks expansion.
6. Periodic Review of Compliance.
In accordance with Govt. Code Section 65865.1, the Planning Director or City
Manager shall review this Agreement each calendar year during the term of this Agreement by
providing Developer written notice commencing such review. The periodic review shall address
only those parts of the Project owned or controlled by Developer. At such periodic reviews,
Developer shall demonstrate its good faith compliance with the terms of this Agreement which
shall mean that it has acted in a commercially reasonable manner (taking into account
circumstances which then exist) and in good faith in attempting to adhere to this Agreement
("standard of review"). Should the City initially determine non-compliance in accordance with
this standard of review, then City shall provide Developer with written notice outlining the
circumstances of non-compliance and requesting a cure within ninety (90) days or a statement
from the Developer invoking an event(s) of force majeure as set forth in Section 7.1. After
compliance is achieved, the City shall issue a final written notice to Developer attesting to such
final compliance.
Page 11 of 24
\\iw-fnp01\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
7. Permitted Delays, Force Majeure; Supersedure by Subsequent Laws.
7.1 Permitted Delays, Force Maieure. In addition to any other provisions of
this Agreement with respect to delay, Developer and City shall be excused from performance of
their obligations hereunder during any period of delay caused by acts of mother nature, civil
commotion, riots, strikes, picketing, or other labor disputes, shortage of personnel, materials or
supplies, or damage to or prevention of work in process by reason of fire, floods, earthquake, or
other casualties, litigation, acts or neglect of the other party, any referendum elections held on
the Enacting Ordinance, or the Land Use Regulations, or any other regulation affecting the
Project or the approvals, permits or other entitlements related thereto, or restrictions imposed or
mandated by governmental or quasi -governmental entities, enactment of conflicting provisions
of the Constitution or laws of the United States of America or the State of California or any
codes, statutes, regulations or executive mandates promulgated thereunder (collectively,
"Laws"), orders of courts of competent jurisdiction, or any other cause similar or dissimilar to
the foregoing beyond the reasonable control of City or Developer, as applicable. Each party
shall promptly notify the other party of any delay hereunder as soon as possible after the same
has been ascertained. The time of performance of such obligations shall be extended by the
period of any delay hereunder.
7.2 Supersedure of Subsequent Laws or Judicial Action. The provisions of
this Agreement shall, to the extent feasible, be modified or suspended as may be necessary to
comply with any new Law or decision issued by a court of competent jurisdiction (a "Decision"),
enacted or made after the Effective Date which prevents or precludes compliance with one or
more provisions of this Agreement. Promptly after enactment of any such new Law, or issuance
of such Decision, the parties shall meet and confer in good faith to determine the feasibility of
Page 12 of 24
\\iw-fnp01\data$\users\ Robert. Hargreaves\M y Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
any such modification or suspension based on the effect such modification or suspension would
have on the purposes and intent of this Agreement. In addition, Developer and City shall have
the right to challenge the new Law or the Decision preventing compliance with the terms of this
Agreement. In the event that such challenge is successful, this Agreement shall remain
unmodified and in full force and effect.
8. Events of Default; Remedies; Termination.
8.1 Events of Default. Subject to any extensions of time by mutual consent in
writing, and subject to the provisions of Section 7.1 above regarding permitted delays, the failure
of either party to perform any material term or provision of this Agreement shall constitute an
event of default hereunder ("Event of Default") if such defaulting party does not cure such failure
within thirty (30) days following receipt of written notice of default from the other party;
provided, however, that if the nature of the default is such that it cannot be cured within such
thirty (30) day period, an Event of Default shall not exist so long as the party charged therewith
shall have commenced the cure within such thirty (30) day period and shall be diligently
pursuing the cure. Any notice of default given hereunder shall specify in detail the nature of the
alleged Event of Default and the manner, if any, in which such Event of Default may be
satisfactorily cured in accordance with the terms and conditions of this Agreement. During the
time periods herein specified for cure of a failure of performance, the party charged therewith
shall not be subject, because of the alleged default of this Agreement, to (i) remedies, including
termination, for breach of this Agreement, (ii) institution of legal proceedings with respect
thereto, or (iii) suspension, red tag, revocation or withholding of any permit, map, certificate of
occupancy, approval or entitlement with respect to the Project.
Page 13 of 24
'%\iw-fnp0I\data$\users\Robert.Hargreaves\My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
8.2 Remedies. Upon the occurrence of an Event of Default which has not
been cured, the nondefaulting party shall have such rights and remedies against the defaulting
party as it may have at law or in equity, including, but not limited to, the right to terminate this
Agreement or seek mandamus, specific performance, injunctive or declaratory relief, but
excluding monetary damages.
8.3 Waiver; Remedies Cumulative. Failure by a party to insist upon the strict
performance of any of the provisions of this Agreement by the other party shall not constitute
waiver of such party's right to demand strict compliance by such other party in the future. All
waivers must be in writing to be effective or binding upon the waiving party, and no waiver shall
be implied from any omission by a party to take any action with respect to such Event of Default.
No express written waiver of any Event of Default shall affect any other Event of Default, or
cover any other period of time not specified in such express waiver.
8.4 Effect of Termination. If Developer terminates this Agreement because of
City's default, then Developer shall be entitled to all of the benefits arising out of, or approvals,
permits, certificates or other entitlements, on account of, any exactions paid, given or dedicated
to, or received by, City prior to the date of termination of this Agreement. Except as otherwise
provided in this Section 8.4, all of the rights, duties and obligations of the parties hereunder shall
otherwise cease as of the date of the termination of this Agreement. The parties respective
obligations under Sections 5 and 9.4 shall survive termination and be of continuing force and
effect despite any such termination of this Agreement.
If this Agreement is terminated pursuant to any provision hereof, then the City shall, after
such action takes effect, cause an appropriate notice of such action to be recorded in the official
Page 14 of 24
\iw-fnp0l\data$\users\Robert.Hargreaves\My DocumentsTalm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
records of the County of Riverside. The cost of such recordation shall be borne by the party
causing such action.
8.5 Third Party Actions. Any court action or proceeding brought by any third
party to challenge this Agreement or any permit or approval or entitlement or Land Use
Regulation required from City or any other governmental entity for development or construction
of all or any portion of the Project, whether or not Developer is a party defendant to or real party
defendant in interest in such action or proceeding, shall constitute a permitted delay under
Section 7.1.
9. Encumbrances on Property.
9.1 Discretion to Encumber. The parties hereto agree that this Agreement
shall not prevent or limit Developer, in any manner, at Developer's sole discretion, from
encumbering the Property or any portion thereof or any improvements thereon with any
mortgage, deed of trust or other security device ("Mortgage") securing financing with respect to
the Property. The City acknowledges that the lenders providing such financing may require
certain operating memorandum or modifications to this Agreement, and the City agrees upon
request, from time -to -time, to meet with Developer and/or representatives of such lenders to
negotiate in good faith any such request for an operating memorandum or modification. City
further agrees that it will not unreasonably withhold its consent to any such requested operating
memorandum or modification.
9.2 Mortgage Protection. This Agreement shall be superior and senior to the
lien of any Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat,
render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, and
Page 15 of 24
\\iw-fnpOl\:data$\users\Robert.Hargreaves\My Documents`,Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
any acquisition or acceptance of title or any right or interest in or with respect to the Property or
any portion thereof by a mortgagee (whether pursuant to a mortgage foreclosure, trustee's sale,
deed in lieu of foreclosure or otherwise) shall be subject to all of the terms and conditions of this
Agreement.
9.3 Mortgagee Not Obligated. Notwithstanding the provisions of Section 9.2,
no mortgagee will have any obligation or duty under this Agreement to perform the obligations
of Developer or other affirmative covenants of Developer hereunder, or to guarantee such
performance, except that to the extent that any covenant to be performed by Developer is a
condition to the performance of a covenant by City, the performance thereof shall continue to be
a condition precedent to City's performance hereunder.
9.4 Estoppel Certificates. Either party may, at any time, and from time to
time, deliver written notice to the other party requesting such party to certify in writing that, to
the knowledge of the certifying party, (i) this Agreement is in full force and effect and a binding
obligation of the parties, (ii) this Agreement has not been amended or modified, or if so amended
or modified, identifying such amendments or modifications, and (iii) the requesting party is not
in default in the performance of its obligations under this Agreement, or if in default pursuant to
the required written notice described in Section 8.1, list therein the nature and amount of any
such defaults. A party receiving a request hereunder shall execute and return such certificate
within thirty (30) days following the receipt thereof. City acknowledges that a certificate
hereunder may be relied upon by transferees, assignees and lessees of the Developer and the
holders of any Mortgage.
10. Transfers and Assignments; Effect of Agreement on Title.
Page 16 of 24
\\iw-fnp01`.data$\users\Robert.Hargreaves�'My Documents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
10.1 Rights and Interests Appurtenant. The rights and interests provided
through this Agreement to Developer benefit and are appurtenant to the Property. Developer has
the right to sell, assign and transfer all or any portion of the Property and any and all of its rights
and interests hereunder and to delegate and assign any and all of its duties and obligations
hereunder. Such rights and interests hereunder may be sold, transferred or assigned and such
duties and obligations may be delegated or assigned.
10.2 Covenants Run with Land.
(i) All of the provisions, agreements, rights, powers, standards, terms,
covenants and obligations contained in this Agreement shall be binding upon the parties and their
respective heirs, successors (by merger, consolidation, or otherwise), assigns, and all other
persons acquiring any rights or interests in the Property, or any portion thereof, whether by
operation of laws or in any manner whatsoever, and shall inure to the benefit of the parties and
their respective heirs, successors (by merger, consolidation or otherwise) and assigns;
(ii) All of the provisions of this Agreement shall be enforceable as
equitable servitudes and constitute covenants running with the land pursuant to applicable law;
(ill) Each covenant to do or refrain from doing some act on the
Property hereunder (A) is for the benefit of and is a burden upon every portion of the Property,
(B) runs with such lands, and (C) is binding upon each party and each successive owner during
its ownership of the Property or any portions thereof, and shall benefit each party and its lands
hereunder, and each such other person or entity succeeding to an interest in such lands
Page 17 of 24
\\iw-fnp0 I \dataS\users\Robert.Hargreaves'My Docutnents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
11. Notices. Any notice to either party shall be in writing and given by delivering the
same to such party in person or by sending the same by registered or certified mail, return receipt
requested, with postage prepaid or nationally recognized overnight courier, to the following
addresses:
If to City:
City Clerk of the City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
If to Developer:
El Paseo Land Company, LLC
c/o Davis Street Land Company
622 Davis Street, Suite 200
Evanston, Ill 60201
Attn: Robert Perlmutter
Either party may change its mailing address at any time by giving written notice of such change
to the other party in the manner provided herein. All notices under this Agreement shall be
deemed given, received, made or communicated on the date personal delivery is effected or, if
mailed, on the delivery date or attempted delivery date shown on the return receipt or overnight
service (e.g. Fedex) receipt.
12.0 Miscellaneous
12.1 Relationship of Parties. It is understood that the Project is a private
development, that neither party is acting as the agent of the other in any respect hereunder, and
that each party is an independent contractor. It is further understood that none of the terms or
provisions of this Agreement are intended to or shall be deemed to create a partnership, joint
venture or joint enterprise between the parties hereto.
Page 18 of 24
\iw-fnp0l\data$'users\Robert.Hargreavcs\My Docunents\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
12.2 Not a Public Dedication. Except as otherwise expressly provided herein,
nothing herein contained shall be deemed to be a gift or dedication of the Property, or of the
Project or any portion thereof, to the general public, for the general public, or for any public use
or purpose whatsoever, it being the intention and understanding of the parties that this
Agreement be strictly limited to and for the private purposes herein expressed for the
development of the Project as private property.
12.3 Severability. If any term, provision, covenant or condition of this
Agreement shall be determined invalid, void or unenforceable by judgment or court order, the
remainder of this Agreement shall remain in full force and effect, unless enforcement of this
Agreement as so invalidated would be unreasonable or grossly inequitable under all the relevant
circumstances or would frustrate the purposes of this Agreement.
12.4 Exhibits. The Exhibits, to which reference is made herein, are deemed
incorporated into this Agreement in their entirety by reference thereto.
12.5 Entire Agreement. This written Agreement and the Exhibits hereto
contain all the representations and the entire agreement between the parties with respect to the
subject matter hereof, including but not limited to the vesting of Project entitlements. Except as
otherwise specified in this Agreement and the Exhibits hereto, any prior correspondence,
memoranda, agreements, resolutions, minutes, ordinances, warranties or representations are
superseded in total by this Agreement and Exhibits hereto.
12.6 Governing Law; Construction of Agreement. This Agreement, and the
rights and obligations of the parties, shall be governed by and interpreted in accordance with the
laws of the state of California. The provisions of this Agreement and the Exhibits hereto shall be
Page 19 of 24
\\iw-t'npOf`data$Nusers\Robert.Hargrcaves\.�ly DoCUments\Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156 DA 07-03
construed as a whole according to their common meaning and not strictly for or against any party
and consistent with the provisions hereof, in order to achieve the objectives and purposes of the
parties hereunder. The captions preceding the text of each Section, subsection and the Table of
Contents hereof are included only for convenience of reference and shall be disregarded in the
construction and interpretation of this Agreement. Wherever required by the context, the
singular shall include the plural and vice versa, and the masculine gender shall include the
feminine or neuter genders, or vice versa.
12.7 Separate Signature Pages. For convenience, the signatures of the parties
of this Agreement may be executed and acknowledged on separate pages which, when attached
to this Agreement, shall constitute this as one complete Agreement.
12.8 Time. Time is of the essence of this Agreement and of each and every
term and condition hereof.
12.9 Prevailing_ Party's Attorney's Fees and Costs. If any party to this
Agreement shall fail to perform any of its obligations hereunder, or if a dispute arises with
respect to any provision hereof or the performance of the obligations of any party hereto, the
defaulting party or the party not prevailing in such dispute, as the case may be, shall promptly
pay any and all costs and expenses (including without limitation, all court costs and reasonable
attorneys' fees and expenses) incurred by the other party with respect to such to such dispute or
in enforcing or establishing its rights hereunder.
12.10 Further Cooperation. Each party shall cooperate with and provide
reasonable assistance to the other party, such as timely execution, filing and recording of any
instruments or writings necessary or desirable to carry out the terms of this Agreement.
Page 20 of 24
\\iw-fnP01\data$\Users\Robert.Hargreaves\My Documents\Pa1m Desert E► Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
Attest:
r row�.-a ?A ►' /
DEVELOPER:
El Paseo Land Company, LLC, a Delaware limited
liability company
By: &
Robert Perlmutter
Its: Manager
CITY:
CITY OF PALM DESERT, CALIFORNIA, a
municipal corporation organized and existing under
the laws 4the State of California
Je#M. Benson, Mayor
Page 21 of 24
\`,iw-fnpOl\data$\users\Robert.Hargreaves\My DocumentsPalm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
Reco
LARRY W. WARD P.O. oxr751
COUNTY OF RIVERSIDE Riverside, CA 92502-0751
x ASSESSOR -COUNTY CLERK -RECORDER (951)486-7000
www.rivcrsideacr.com
�.xry arm'.
CERTIFICATION
Pursuant to the provisions of Government Code 27361.7, 1 certify under the penalty of perjury
that the following is a true copy of illegible wording found in the attached document:
(Print or type the page number(s) and wording below):
PAGE No. 21 of 24 of Ordinance No. 1156 DA 07-03
ATTEST:
�Rac le . Klas�sen, City C er
CITY SEAL
Palm Desert
Incorporated 1973 November 26
Date: June 18, 2008
Signature:
Print Name: M. Gloria Martinez
ACR 601 P-AS4RE0 (Rev. 09/2005)
ORDINANCE NO. 1156
DA 07-03
STATE OF ILLINOIS
COUNTY OF COOK
Notary Public
On .1 u foe 2-, , 2008 before me, KI TEq-t_ gy A. �"i�1 (here insert name
and title of notary), personally appeared o ER,i fa QA Its , personally
known to me to be the person whose name is e subscribed to the within instrument and
acknowledged to me that�Ke/tVy executed the same in( y�s Vr/thir authorized capacity(ids),
and that b hi - r/thAr signature(4) on the instrument the person(4, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature
State of California
County of Riverside
}SS
SEAL
KMMR�YA MARTIN
, P . STATE OF ILLINOIS
M!f CC6103SONEXVAS.0id12
On June 18 , 2008, before me, M. Gloria Martinez , a Notary Public,
personally appeared Jean M. Benson & Rachelle D. Klassen , who proved to me on the
basis of satisfactory evidence to be the persono whose name(D iX/(rep subscribed to the within
instrument and acknowledged to me that /s&/ le v executed the same in hXS/l r ei
authorized capacit 1e - , and that by hyA/Ver/ e
3r signature(T� on the instrument the person, or
the entity upon behalf of which the person(D acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Page 22 of 24
M. GLORIA MARTINEZ
Commiswn * 1697036
ej
Notary Public - Califomlo
RNOrside County -
My Comm• 159*es Oct 29, 201
\\iw-fnpO1\data$users\Robert.Hargreaves\My DocufnentsTalm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
ORDINANCE NO. 1156
DA 07-03
EXHIBIT "A"
DEVELOPMENT PLAN
The Project Development Plan represents City approval of demolition of the El Paseo Village
shopping center on the Property described on Exhibit "B" and replacement with an approximate
75,000 square foot retail, restaurant and/or office complex and a new one-story parking structure.
The Project Development Plan shall include and shall be constructed consistent with the
following:
1. The City approved plans by Developer on file with the City.
2. The City approved Precise Plan PP 07-10 and Conditional Use Permits CUP07-18.
3. The City approved Mitigated Negative Declaration prepared in compliance with the
California Environmental Quality Act (CEQA).
4. The City Architectural Review Commission approval.
5. The Existing Land Use Regulations except that the following specific development standards
shall apply irrespective of any conflict or inconsistency with any existing Land Use
Regulation:
The Project is allowed to encroach into the eastern and western corner lot
setback of the "daylight triangle" pursuant to Palm Desert Municipal Code
Section 25.25.016.
b. The Project is allowed to reach a maximum height of 42 feet.
The new one-story parking deck at the Project shall be constructed with a
minimum of 295 parking spaces. The total number of spaces is allowed to
fluctuate thereafter by no more than 5%.
d. Tenant improvements are allowed to fluctuate from the Project Development
Plan so long as they do not substantially alter the overall aesthetic of the
approved Project.
Page 23 of 24
\\iw-fnp0 I \data$\users\Robert.Hargreaves\My Documents`.Palm Desert El Paseo Village DA with LEED redline 5-14.doc
Error! Unknown document
,ORDINANCE NO. 1156
DA 07-03
EXHIBIT "B"
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTIES
El Paseo Village Shopping Center:
LOT 2 OF TRACT NO. 11881, IN THE CITY OF PALM DESERT, AS
SHOWN BY MAP ON FILE IN BOOK 99, PAGE(S) 48 AND 49 OF MAPS, IN THE OFFICE
OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPTING ONE -SIXTEENTH OF ALL COAL, OIL, GAS AND OTHER
MINERAL DEPOSITS IN SAID LAND AS RESERVED IN PATENT FROM THE STATE OF
CALIFORNIA, RECORDED JULY 17, 1925, IN BOOK 9, PAGE 102 OF PATENTS,
RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
Assessors Parcel Number: 627-252-004-4 AND 627-252-005-5
Page 24 of 24
\\iw-fnp0l\dataS\users\Robert.Hargreaves\.My Documents\Palm Desert El Pasco Village DA with LEED redline 5-14.doc
Error! Unknown document
RECORDING REQUESTED BY, AND
WHEN RECORDED, MAIL TO:
City Clerk's Office
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
FOR THE BENEFIT OF THE
CITY OF PALM DESERT
- NO FEE -
6103 OF THE GOVT. CODE
DOC # 2008-0350516
06/26/2008 08:00A Fee:NC
Page 1 of 27
Recorded in Official Records
County of Riverside
Larry W. Ward
Assessor, County Clerk & Recorder
11111111111111111111111 IN 111111111111111111111111111
S R U PAGE SIZE DA MISC LONG RFD COPY
a�
M A /�L 465 426 PCOR NCOR SMF NCH exJ
(_. T: CTY UNI
Development Agreement 07-04
Between e
L023
City of Palm Desert, California
and
Gardens SPE II, LLC
a Delaware Limited Liability Company
Legal Description of Property
APN: 627-261-006-4
ORDINANCE NO. 1156
Case No. DA 07-03 & DA 07-04 as they relate to Case No. PP 07-10 & CUP 07-18
Dated: JUNE 12, 2008
(Title of Document)
L
"< to
.a
iA J L-J
[This page has intentionally been left blank.]
ORDINANCE NO. 1156
A ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, APPROVING DEVELOPMENT AGREEMENTS AS THEY RELATE
TO THE EXPANSION OF SAKS 5T" AVENUE AT THE EXISTING GARDENS ON
EL PASEO AND THE EL PASEO VILLAGE REMODEL.
CASE NO. DA 07-03 & DA 07-04 AS THEY RELATE TO CASE NO. PP 07-10 &
CUP 07-18:
WHEREAS, the Planning Commission by its Resolution No. 2467 has recommended
approval of said project; and
WHEREAS, at said public hearings, said City Council heard and considered all testimony
and arguments of all interested persons.
WHEREAS, the City Council of the City of Palm Desert, California, DOES HEREBY
ORDAIN, AS FOLLOWS:
SECTION 1: That the Development Agreements 07-03 and 07-04 by Ordinance No.
1156 have been subject to environmental review under the California Environmental Quality Act
and a Mitigated Negative Declaration has been adopted which addresses the Development
Agreements and the development projects underlying said Agreements. That the Development
Agreements are hereby found to be consistent with the City of Palm Desert General Plan and the
Palm Desert Commercial Core Area Specific Plan.
SECTION 2: That the Development Agreements 07-03 and 07-04 by Ordinance No.
1156 are hereby approved.
SECTION 3: The City Clerk of the City of Palm Desert, California, shall certify to the
passage adoption of this Ordinance and shall cause the same to be published once in the Desert
Sun, a newspaper of general circulation, circulated within the City of Palm Desert, and the same
be in full force and effect thirty (30) days after its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Palm Desert City
Council, held on this 120day of June2008, by the following vote, to wit:
AYES: FERGUSON, KELLY, SPIEGEL, and BENSON
NOES: FINERTY
ABSENT: NONE
ABSTAIN: NONE
ATTEST:
2 22
6 a
RACHELLE D. KLASS , CITY CLERK
City of Palm Desert, California
JF,4KN M. BENSON, Mayor
EACH DOCUMENT TO WHICH THIS CERTIFICATE IS
ATTACHED. IS CERTIFIED TO BE A FULL, TRUE AND
CORRECT C�OF THE ORIGINAL ON FILE AND ON
RECORD I �Y FFICE.
Dated:
D. KLASSEN, City Clerk
[This page has intentionally been left blank.]
ORDINANCE NO. 1156
DA 07-04
Recording Requested by
And When Recorded Return to:
City Clerk
City of Palm Desert
73 -5 10 Fred Waring Drive
Palm Desert, CA 92260
Exempt from Recorder's Fees
Pursuant to Government Code § 6103, 27383
DEVELOPMENT AGREEMENT
By and Between the
CITY OF PALM DESERT
And
GARDENS SPE II, LLC
Dated: June 12 , 2008
Page 1 of 23
53138350
ORDINANCE NO. 1156
DA 07-04
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of this
12thday of June , 2008, by and between the City of Palm Desert, California, a municipal
corporation organized and existing under the laws of the State of California (the "City), and
Gardens SPE 11, LLC, a limited liability company organized and existing under the laws of the
State of Delaware ("Developer"), with reference to the following facts, understandings and
intentions of the parties:
RECITALS:
A. These Recitals refer to and utilize certain capitalized terms which are defined in
this Agreement.
B. Government Code Sections 65684 through 65869.5 inclusive (the "Development
Agreement Legislation") authorize the City to enter into development agreements in connection
with the development of real property within its jurisdiction. Pursuant to the Development
Agreement Legislation, on August 11, 1983, the City enacted procedures and requirements for
the consideration of development agreements by Ordinance No. 341, as amended on December
7, 1989 by Ordinance No. 589 (collectively, the "Development Agreement Ordinance")
C. Developer is the owner of a legal or equitable interest in the Property and is
entitled to have filed the applications for the Project and to enter into this Agreement. The
Project consists of the expansion of the Saks Fifth Avenue building and modifications to the
existing parking structure, which is projected to increase property and sales tax revenue for the
Page 2 of 23
511181S s
ORDINANCE NO. 1156 DA 07-04
City's general fund and other funds. The Property is located at an important location in the City
and the coordinated development of the Project pursuant to this Agreement represents an
important and mutually beneficial economic development and land use planning opportunity for
the City and Developer.
D. The City has determined that the development of the Project as contemplated by
this Agreement is consistent with and in furtherance of the goals, policies, objectives, zoning,
general land uses and development programs of the City as set forth in the City's General Plan,
the Palm Desert Commercial Core Area Specific Plan and Zoning Code.
E. The City has determined that entry into this Agreement will further the goals and
objectives of the City's land use planning policies by, among other things, encouraging
investment in the El Paseo district, providing criteria for the uses, design and development of the
Property, including flexibility in land use options which may be altered in order to respond to
future economic conditions, eliminating uncertainty in planning, and securing orderly and
expeditious processing and development of the Project. The benefits conferred on the City by
Developer herein will (i) insure consistent, comprehensive planning which will result in
aesthetically pleasing, environmentally harmonious, and economically viable development
within the City; (ii) provide for increased and enhanced pedestrian -oriented retail shopping for
the City; (iii) provide increased property and sales tax revenue for the City and its
Redevelopment Agency; and (iv) further the development objectives of the City in the El Pasco
district in an orderly manner, all of which will significantly promote the health, safety and
welfare of the residents of the City. In exchange for these benefits to the City, Developer desires
to receive the assurance that it may proceed with the Project without further regulation by City in
Page 3 of 23
i}1igi50
ORDINANCE NO. 1156
DA 07-04
accordance with the Development Plan attached to this Agreement as Exhibit "A", and at a rate
and phasing of its choosing, subject to the terms and conditions contained in this Agreement.
F. By adopting this Agreement, the City Council has elected to exercise certain
governmental powers at the present time rather than deferring such actions until an undetermined
future date and has done so intending to bind the City and the City Council, now and in the
future, intending to limit the City's future exercise of certain governmental powers, to the extent
permitted by law.
G. In order to effectuate the foregoing, the parties desire to enter into this
Agreement.
NOW, THEREFORE, pursuant to the authority contained in the Development Agreement
Legislation, and in consideration of the mutual covenants and promises of the parties herein
contained, the parties agree as follows:
1. Definitions.
1.1 Defined Terms. Each reference in this Agreement to any of the following
terms shall have the meaning set forth below for each such term.
1.2 Agreement. This Development Agreement.
1.3 Building Ordinances. The uniform building codes adopted by the City, of
general application throughout the City and not imposed solely with respect to the Property,
including, without limitation, the City's building, plumbing, electrical, mechanical, and fire
codes.
Page 4 of 23
5313835%3
ORDINANCE NO. 1156 DA 07-04
1.4 City Council. The legislative body of the City of Palm Desert.
1.5 Effective Date. The date on which the Enacting Ordinance becomes
legally effective.
1.6 Enacting, Ordinance. Ordinance 1156, enacted by the City Council on
June 12 , 2008, approving this Agreement.
1.7 Existing Land Use Regulations. The City's land use regulations in effect
as of the Effective Date, which comprise the ordinances, resolutions, codes, rules, regulations
and official policies of the City applicable to the Property, including but not limited to, the
permitted uses of land, the density and intensity of use of land, the maximum height and size of
proposed buildings, provisions for reservation or dedication of land for public purposes, and
provisions relating to the timing of development, all as applicable to the development of the
Property. Specifically, but without limiting the generality of the foregoing, Existing Land Use
Regulations shall include the City's General Plan, the City's Commercial Core Area Specific
Plan, the City's zoning ordinance inclusive of the C-1 zoning standards and scenic preservation
overlay standards, the City's subdivision code, the City's redevelopment plans and rules, and the
City entitlements and approvals issued for the Project summarized in the Development Plan on
Exhibit "A" hereto, including but not limited to the January 8, 2008 Architectural Review
Commission approval, the City Council's February 28, 2008 approval of the precise development
and parking plans (PP 07-10) and the approval of the Mitigated Negative Declaration prepared
for the Project. Existing Land Use Regulations shall exclude the City's Building Ordinances so
long as applied generally to structures similar to the Project within the City.
Page 5 of 23
5;118350
ORDINANCE NO. 1156
DA 07-04
1.8 Mortgage. A mortgage, deed of trust, sale and leaseback arrangement (in
which all or a part of the Property, or an interest in it, is sold and leased back concurrently) or
other transactions in which all or a part of the Property, or an interest in it, is pledged as security,
contracted in good faith and for fair value.
1.9 Project. The development, associated amenities, and on -site and off -site
improvements, as permitted under and described in the Development Plan (attached hereto and
incorporated herein by this reference as Exhibit "A"), to be constructed on the Property, as the
same may hereafter be further refined, enhanced or modified pursuant to the provisions of this
Agreement. In general, the Project comprises a two-story expansion of the existing Saks Fifth
Avenue building in the existing Gardens on El Paseo shopping center and associated
modifications to the existing parking structure on the Property.
1.10 Property. The real properties and any improvements thereon which are
described in Exhibit "B" attached hereto and incorporated herein by this reference to this
Agreement.
2. Term; Amendment.
2.1 Term. The term of this Agreement (the "Term") shall commence on the
Effective Date and shall terminate on the fifth (5th) year anniversary date of the Effective Date,
unless sooner terminated or extended as hereinafter provided. This Section 2.1 shall have the
effect of extending the terms of all other City approvals, permits and entitlements pertaining to
the Project so that such terms are co -extensive with the five (5) year term provided herein.
2.2 Amendment. The parties to this Agreement at their sole discretion and by
their mutual written consent may from time to time amend the provisions and terms of this
Page 6 of 23
ORDINANCE NO. 1156 DA 07-04
Agreement. An amendment to this Agreement is not triggered by adjustments to the Project
approved pursuant to the authority and discretion of the City's community development director
by the Existing Land Use Regulations.
3. General Development of the Project
3.1 Vested Right to Develop Project.
(a) The Project is defined and described in the Development Plan
attached to this Agreement as Exhibit "A".
(b) Developer shall immediately upon the Effective Date of this
Agreement have the vested right to develop the Project in accordance with the Development Plan
and, to the extent not inconsistent with or modified by the Development Plan, the Existing Land
Use Regulations. Developer does not have the obligation to develop the Project and may
proceed with some or all of the Project at its discretion, at a rate, sequence and phasing of
Developer's sole choosing. Developer's right to develop the Property in accordance with this
Section 3.1 shall be without regard to future changes or additions to the Existing Land Use
Regulations of the City, however enacted, whether by moratorium, initiative and/or referenda of
the City or of the voters of the City. Because the California Supreme Court held in Pardee
Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465 that failure of the parties to provide
for the timing of development resulted in a later adopted initiative restricting the timing of
development to prevail over the parties' agreement, it is the intent of the City and Developer to
acknowledge and provide that, notwithstanding anything to the contrary in the Existing Land Use
Regulations, Developer shall have the right (without the obligation) to develop the Property in
such order and at such rate and at such times as the Developer deems appropriate within the
exercise of its sole good faith business judgment in accordance with the Development Plan.
Page 7 of 23
5i138?50
ORDINANCE NO. 1156
DA 07-04
(c) No moratorium, inclusive of moratoria contemplated by
Government Code Section 65858, shall be effective or applicable to this Property on account of
the vested rights provided through this Agreement.
3.2 Future Approvals such as Building Permits and Other Approvals and
Permits. Subject to (a) Developer's compliance with this Agreement, the Development Plan, and
the Existing Land Use Regulations, and (b) payment of the usual and customary processing fees
of general application set forth on a written fee schedule as may then be applicable, the City shall
process and issue to Developer promptly upon application thereof all necessary building permits,
occupancy certificates, grading, demolition and construction approvals, utility hook-ups and
other required permits for the construction, use and occupancy of the Project, or any portion
thereof, pursuant to Existing Land Use Regulations.
3.3 Effect of Agreement. This Agreement shall constitute a part of the
Enacting Ordinance, as if incorporated by reference therein in full. The parties acknowledge that
this Agreement is intended to grant Developer the vested right to develop the Project pursuant to
specified and known criteria and rules as set forth in the Development Plan and the Existing
Land Use Regulations, and to grant the City and the residents of the City certain benefits which
they otherwise would not receive. This Agreement shall control over the provisions of other
Project approvals, permits, conditions of approval, mitigation measures and entitlements as well
as the Existing Land use Regulations.
This Agreement shall be binding upon the City and its successors in accordance
with and subject to its terms and conditions notwithstanding any subsequent action of the City,
whether taken by minute order, ordinance or resolution of the City Council, by referenda,
Page 8 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
initiative, or otherwise. The parties acknowledge and agree that by entering into this Agreement
and relying thereupon, the Developer has obtained, subject to the terms and conditions of this
Agreement, a vested right to proceed with, but not the obligation to proceed with, development
of the Project in accordance with the Development Plan and the Existing Land Use Regulations.
The City has entered into this Agreement in order to secure the public benefits conferred upon it
hereunder which are essential to provide for the public health, safety and welfare of the City and
its residents, and this Agreement is an essential element in the achievement of those goals.
4. Specific Criteria Applicable to Development of the Project.
4.1 Applicable City Regulations. Except as set forth in the Development Plan
and subject to the provisions of Section 4.2 below, the Existing Land Use Regulations shall
govern the development of the Property hereunder and the issuance of all permits or approvals
required to develop the Property; provided, however, that (a) Developer shall be subject to
reasonable changes in processing, inspection and plan -check fees, charges imposed by City in
connection with the processing of applications for development and construction upon the
Property, and development impact fees, at the rates existing at the time of payment, so long as
such fees and charges are of general application and are not imposed solely with respect to the
Property or Project; and (b) Developer shall abide by the Building Ordinances in effect at the
time of each application,
4.2 Amendment to Applicable Regulations. In the event that the Existing
Land Use Regulations are amended by the City in a manner which provides more.favorable site
development standards for the Property or Project or any part thereof than those in effect as of
the Effective Date, Developer shall have the right to notify the City in writing of its desire to be
subject to all or any such new standards for the remaining term of this Agreement. If City
Page 9 of 23
5313835%3
ORDINANCE NO. 1156 DA 07-04
agrees, by action of the City Planning Director or City Manager, such new standards shall
become applicable to the Property or portions thereof. Should City thereafter amend such new
standards, upon the effective date of such amendment, the original new standards shall continue
to apply to the Property as provided above, but Developer may notify City in writing of its desire
to be subject to all or any such amended new standards and City may agree in the manner above
provided to apply such amended new standards to the Property.
5. Project Enhancement.
The City and Developer desire to cooperate with each other to secure the
following enhancement to the Project to be furnished by Developer, at its sole cost:
(a) Developer shall use its best efforts to install and sustain shade landscaping within the existing
parking structure on the Property.
6. Periodic Review of Compliance.
In accordance with Govt. Code Section 65865.1, the Planning Director or City
Manager shall review this Agreement each calendar year during the term of this Agreement by
providing Developer written notice commencing such review. The periodic review shall address
only those parts of the Project owned or controlled by Developer. At such periodic reviews,
Developer shall demonstrate its good faith compliance with the terms of this Agreement which
shall mean that it has acted in a commercially reasonable manner (taking into account
circumstances which then exist) and in good faith in attempting to adhere to this Agreement
("standard of review"). Should the City initially determine non-compliance in accordance with
this standard of review, then City shall provide Developer with written notice outlining the
circumstances of non-compliance and requesting a cure within ninety (90) days or a statement
Page 10 of 23
5313835%3
ORDINANCE NO. 1156 DA 07-04
from the Developer invoking an event(s) of force majeure as set forth in Section 7.1. After
compliance is achieved, the City shall issue a final written notice to Developer attesting to such
final compliance.
7. Permitted Delays, Force Majeure; Supersedure by Subsequent Laws.
7.1 Permitted Delays, Force Majeure. In addition to any other provisions of
this Agreement with respect to delay, Developer and City shall be excused from performance of
their obligations hereunder during any period of delay caused by acts of mother nature, civil
commotion, riots, strikes, picketing, or other labor disputes, shortage of personnel, materials or
supplies, or damage to or prevention of work in process by reason of fire, floods, earthquake, or
other casualties, litigation, acts or neglect of the other party, any referendum elections held on
the Enacting Ordinance, or the Land Use Regulations, or any other regulation affecting the
Project or the approvals, permits or other entitlements related thereto, or restrictions imposed or
mandated by governmental or quasi -governmental entities, enactment of conflicting provisions
of the Constitution or laws of the United States of America or the State of California or any
codes, statutes, regulations or executive mandates promulgated thereunder (collectively,
"Laws"), orders of courts of competent jurisdiction, or any other cause similar or dissimilar to
the foregoing beyond the reasonable control of City or Developer, as applicable. Each party
shall promptly notify the other party of any delay hereunder as soon as possible after the same
has been ascertained. The time of performance of such obligations shall be extended by the
period of any delay hereunder.
7.2 Supersedure of Subsequent Laws or Judicial Action. The provisions of
this Agreement shall, to the extent feasible, be modified or suspended as may be necessary to
Page 11 of 23
511W50
ORDINANCE NO. 1156 DA 07-04
comply with any new Law or decision issued by a court of competent jurisdiction (a "Decision"),
enacted or made after the Effective Date which prevents or precludes compliance with one or
more provisions of this Agreement. Promptly after enactment of any such new Law, or issuance
of such Decision, the parties shall meet and confer in good faith to determine the feasibility of
any such modification or suspension based on the effect such modification or suspension would
have on the purposes and intent of this Agreement. In addition, Developer and City shall have
the right to challenge the new Law or the Decision preventing compliance with the terms of this
Agreement. In the event that such challenge is successful, this Agreement shall remain
unmodified and in full force and effect.
8. Events of Default; Remedies; Termination.
8.1 Events of Default. Subject to any extensions of time by mutual consent in
writing, and subject to the provisions of Section 7.1 above regarding permitted delays, the failure
of either party to perform any material term or provision of this Agreement shall constitute an
event of default hereunder ("Event of Default") if such defaulting party does not cure such failure
within thirty (30) days following receipt of written notice of default from the other party;
provided, however, that if the nature of the default is such that it cannot be cured within such
thirty (30) day period, an Event of Default shall not exist so long as the party charged therewith
shall have commenced the cure within such thirty (30) day period and shall be diligently
pursuing the cure. Any notice of default given hereunder shall specify in detail the nature of the
alleged Event of Default and the manner, if any, in which such Event of Default may be
satisfactorily cured in accordance with the terms and conditions of this Agreement. During the
time periods herein specified for cure of a failure of performance, the party charged therewith
shall not be subject, because of the alleged default of this Agreement, to (i) remedies, including
Page 12 of 23
5111R15%1
ORDINANCE NO. 1156 DA 07-04
termination, for breach of this Agreement, (ii) institution of legal proceedings with respect
thereto, or (iii) suspension, red tag, revocation or withholding of any permit, map, certificate of
occupancy, approval or entitlement with respect to the Project.
8.2 Remedies. Upon the occurrence of an Event of Default which has not
been cured, the nondefaulting party shall have such rights and remedies against the defaulting
party as it may have at law or in equity, including, but not limited to, the right to terminate this
Agreement or seek mandamus, specific performance, injunctive or declaratory relief, but
excluding monetary damages.
8.3 Waiver; Remedies Cumulative. Failure by a party to insist upon the strict
performance of any of the provisions of this Agreement by the other party shall not constitute
waiver of such party's right to demand strict compliance by such other party in the future. All
waivers must be in writing to be effective or binding upon the waiving party, and no waiver shall
be implied from any omission by a party to take any action with respect to such Event of Default.
No express written waiver of any Event of Default shall affect any other Event of Default, or
cover any other period of time not specified in such express waiver.
8.4 Effect of Termination. If Developer terminates this Agreement because of
City's default, then Developer shall be entitled to all of the benefits arising out of, or approvals,
permits, certificates or other entitlements, on account of, any exactions paid, given or dedicated
to, or received by, City prior to the date of termination of this Agreement. Except as otherwise
provided in this Section 8.4, all of the rights, duties and obligations of the parties hereunder shall
otherwise cease as of the date of the termination of this Agreement. The parties respective
Page 13 of 23
DRDINANCE NO. 1156 DA 07-04
obligations under Sections 5 and 9.4 shall survive termination and be of continuing force and
effect despite any such termination of this Agreement.
If this Agreement is terminated pursuant to any provision hereof, then the City shall, after
such action takes effect, cause an appropriate notice of such action to be recorded in the official
records of the County of Riverside. The cost of such recordation shall be borne by the party
causing such action.
8.5 Third Party Actions. Any court action or proceeding brought by any third
party to challenge this Agreement or any permit or approval or entitlement or Land Use
Regulation required from City or any other governmental entity for development or construction
of all or any portion of the Project, whether or not Developer is a party defendant to or real party
defendant in interest in such action or proceeding, shall constitute a permitted delay under
Section 7.1.
9. Encumbrances on Property.
9.1 Discretion to Encumber. The parties hereto agree that this Agreement
shall not prevent or limit Developer, in any manner, at Developer's sole discretion, from
encumbering the Property or any portion thereof or any improvements thereon with any
mortgage, deed of trust or other security device ("Mortgage") securing financing with respect to
the Property. The City acknowledges that the lenders providing such financing may require
certain operating memorandum or modifications to this Agreement, and the City agrees upon
request, from time -to -time, to meet with Developer and/or representatives of such lenders to
negotiate in good faith any such request for an operating memorandum or modification. City
Page 14 of 23
53138350
ORDINANCE NO. 1156 DA 07-04
further agrees that it will not unreasonably withhold its consent to any such requested operating
memorandum or modification.
9.2 Mortgage Protection. This Agreement shall be superior and senior to the
lien of any Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat,
render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, and
any acquisition or acceptance of title or any right or interest in or with respect to the Property or
any portion thereof by a mortgagee (whether pursuant to a mortgage foreclosure, trustee's sale,
deed in lieu of foreclosure or otherwise) shall be subject to all of the terms and conditions of this
Agreement.
9.3 Mortgagee Not Obligated. Notwithstanding the provisions of Section 9.2,
no mortgagee will have any obligation or duty under this Agreement to perform the obligations
of Developer or other affirmative covenants of Developer hereunder, or to guarantee such
performance, except that to the extent that any covenant to be performed by Developer is a
condition to the performance of a covenant by City, the performance thereof shall continue to be
a condition precedent to City's performance hereunder.
9.4 Estoppel Certificates. Either party may, at any time, and from time to
time, deliver written notice to the other party requesting such party to certify in writing that, to
the knowledge of the certifying party, (i) this Agreement is in full force and effect and a binding
obligation of the parties, (ii) this Agreement has not been amended or modified, or if so amended
or modified, identifying such amendments or modifications, and (iii) the requesting party is not
in default in the performance of its obligations under this Agreement, or if in default pursuant to
the required written notice described in Section 8.1, list therein the nature and amount of any
Page 15 of 23
53139350
ORDINANCE NO. 1156
DA 07-04
such defaults. A party receiving a request hereunder shall execute and return such certificate
within thirty (30) days following the receipt thereof. City acknowledges that a certificate
hereunder may be relied upon by transferees, assignees and lessees of the Developer and the
holders of any Mortgage.
10. Transfers and Assignments; Effect of Agreement on Title.
10.1 Rights and Interests Appurtenant. The rights and interests provided
through this Agreement to Developer benefit and are appurtenant to the Property. Developer has
the right to sell, assign and transfer all or any portion of the Property and any and all of its rights
and interests hereunder and to delegate and assign any and all of its duties and obligations
hereunder. Such rights and interests hereunder may be sold, transferred or assigned and such
duties and obligations may be delegated or assigned.
10.2 Covenants Run with Land.
(i) All of the provisions, agreements, rights, powers, standards, terms,
covenants and obligations contained in this Agreement shall be binding upon the parties and their
respective heirs, successors (by merger, consolidation, or otherwise), assigns, and all other
persons acquiring any rights or interests in the Property, or any portion thereof, whether by
operation of laws or in any manner whatsoever, and shall inure to the benefit of the parties and
their respective heirs, successors (by merger, consolidation or otherwise) and assigns;
(ii) All of the provisions of this Agreement shall be enforceable as
equitable servitudes and constitute covenants running with the land pursuant to applicable law;
Page 16 of 23
5111835%3
ORDINANCE NO. 1156 DA 07-04
(ill) Each covenant to do or refrain from doing some act on the
Property hereunder (A) is for the benefit of and is a burden upon every portion of the Property,
(B) runs with such lands, and (C) is binding upon each party and each successive owner during
its ownership of the Property or any portions thereof, and shall benefit each party and its lands
hereunder, and each such other person or entity succeeding to an interest in such lands
11. Notices. Any notice to either party shall be in writing and given by delivering the
same to such party in person or by sending the same by registered or certified mail, return receipt
requested, with postage prepaid or nationally recognized overnight courier, to the following
addresses:
If to City:
City Clerk of the City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
If to Developer:
Gardens SPE 11, LLC
c/o Davis Street Land Company
622 Davis Street, Suite 200
Evanston, Ill 60201
Attn: Robert Perlmutter
Either party may change its mailing address at any time by giving written notice of such change
to the other party in the manner provided herein. All notices under this Agreement shall be
deemed given, received, made or communicated on the date personal delivery is effected or, if
mailed, on the delivery date or attempted delivery date shown on the return receipt or overnight
service (e.g. Fedex) receipt.
12.0 Miscellaneous
Page 17 of 23
ORDINANCE NO. 1156
DA 07-04
12.1 Relationship of Parties. It is understood that the Project is a private
development, that neither party is acting as the agent of the other in any respect hereunder, and
that each party is an independent contractor. It is further understood that none of the terms or
provisions of this Agreement are intended to or shall be deemed to create a partnership, joint
venture or joint enterprise between the parties hereto.
12.2 Not a Public Dedication. Except as otherwise expressly provided herein,
nothing herein contained shall be deemed to be a gift or dedication of the Property, or of the
Project or any portion thereof, to the general public, for the general public, or for any public use
or purpose whatsoever, it being the intention and understanding of the parties that this
Agreement be strictly limited to and for the private purposes herein expressed for the
development of the Project as private property.
12.3 Severability. if any term, provision, covenant or condition of this
Agreement shall be determined invalid, void or unenforceable by judgment or court order, the
remainder of this Agreement shall remain in full force and effect, unless enforcement of this
Agreement as so invalidated would be unreasonable or grossly inequitable under all the relevant
circumstances or would frustrate the purposes of this Agreement.
12.4 Exhibits. The Exhibits, to which reference is made herein, are deemed
incorporated into this Agreement in their entirety by reference thereto.
12.5 Entire Agreement. This written Agreement and the Exhibits hereto
contain all the representations and the entire agreement between the parties with respect to the
subject matter hereof, including but not limited to the vesting of Project entitlements. Except as
otherwise specified in this Agreement and the Exhibits hereto, any prior correspondence,
Page 18 of 23
51138350
ORDINANCE NO. 1156 DA 07-04
memoranda, agreements, resolutions, minutes, ordinances, warranties or representations are
superseded in total by this Agreement and Exhibits hereto.
12.6 Governing Law; Construction of Agreement. This Agreement, and the
rights and obligations of the parties, shall be governed by and interpreted in accordance with the
laws of the state of California. The provisions of this Agreement and the Exhibits hereto shall be
construed as a whole according to their common meaning and not strictly for or against any party
and consistent with the provisions hereof, in order to achieve the objectives and purposes of the
parties hereunder. The captions preceding the text of each Section, subsection and the Table of
Contents hereof are included only for convenience of reference and shall be disregarded in the
construction and interpretation of this Agreement. Wherever required by the context, the
singular shall include the plural and vice versa, and the masculine gender shall include the
feminine or neuter genders, or vice versa.
12.7 Separate Signature Pages. For convenience, the signatures of the parties
of this Agreement may be executed and acknowledged on separate pages which, when attached
to this Agreement, shall constitute this as one complete Agreement.
12.8 Time. Time is of the essence of this Agreement and of each and every
term and condition hereof.
12.9 Prevailing Party's Attorney's Fees and Costs. If any party to this
Agreement shall fail to perform any of its obligations hereunder, or if a dispute arises with
respect to any provision hereof or the performance of the obligations of any party hereto, the
defaulting party or the party not prevailing in such dispute, as the case may be, shall promptly
pay any and all costs and expenses (including without limitation, all court costs and reasonable
Page 19 of 23
ORDINANCE NO. 1156
DA 07-04
attorneys' fees and expenses) incurred by the other party with respect to such to such dispute or
in enforcing or establishing its rights hereunder.
12.10 Further Cooperation. Each party shall cooperate with and provide
reasonable assistance to the other party, such as timely execution, filing and recording of any
instruments or writings necessary or desirable to carry out the terms of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
DEVELOPER:
Gardens SPE 11, LLC, a Delaware limited liability
company
By:
Robert Perlmutter
Its: Manager
CITY:
CITY OF PALM DESERT, CALIFORNIA, a
municipal corporation organized and existing under
the laws of the State of California
Jean M. Benson, MAyor
Page 20 of 23
53t;sz50
ORDINANCE NO. 1156
DA 07-04
STATE OF ILLINOIS
COUNTY OF COOK
On J v tAE Z , 2008 before me, K ttAseq- V A. '' wq-Ty � ' NO ier; insert name
and title of notary), personally appeared KBE —T �t Y-L-Ku T T CQ , personally
known to me to be the person() whose name(AOai(e subscribed to the within instrument and
acknowledge tc me thaGAP& tq executed the same in( r/thjvfr authorized capacity(Vs),
Zi and that by r/tYir signatureon the instrument the person(,, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
r--
Signature p`
State of California
County of Riverside
SS
MMMAMM
OFFICIAL SEAL
KMABERLY A MARTIN
NOTARY KOX . STATE OF ILUNOIS
W COM" EXPRESA2l1N12
On June 18 , 2008, before me, M. Gloria Martinez , a Notary Public,
personally appeared Jean M. Benson & Rachelle D. Klassen , who proved to me on the
basis of satisfactory evidence to be the person whose namen i�re subscribed to the within
instrument and acknowledged to me that !�/*he Ze executed the same in W* thei
authorized capacit ies , and that by h�/Ver/ a rlsignaturceon the instrument the persona, or
the entity upon behalf of which the person s�j�"�acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Page 21 of 23
ORDINANCE NO. 1156
DA 07-04
EXHIBIT "A"
DEVELOPMENT PLAN
The Project Development Plan represents City approval of an approximate 27,000 square
foot two-story expansion of the existing Saks Fifth Avenue Building and associated
improvements, including without limitation modifications to the existing two-story parking
structure, all of which are located at the existing Gardens at El Paseo shopping center on the
Property described on Exhibit "B".
The Project Development Plan shall include and shall be constructed consistent with the
following:
The City approved plans by Developer on file with the City.
The City approved Precise Plan PP 07-10.
The City approved Mitigated Negative Declaration prepared in compliance with the
California Environmental Quality Act (CEQA).
4. The City Architectural Review Commission approval.
The Existing Land Use Regulations except that the following specific development
standards shall apply irrespective of any conflict or inconsistency with any existing Land
Use Regulation:
a. In consideration of the present state of excess parking capacity in the parking
structure, and the condition of approval which requires access be granted to the new
parking deck at the E1 Paseo Village project, the Project is allowed to operate below the
parking requirements of 1 space for each 250 square feet of net floor area set forth in the
Existing Land Use Regulations. After the project is constructed, the total number of
spaces is allowed to fluctuate by no more than 2%.
b. Tenant improvements are allowed to fluctuate from the Project Development Plan
so long as they do not substantially alter the overall aesthetic of the approved Project.
Page 22 of 23
53138350
ORDINANCE NO. 1.156
DA 07-04
EXHIBIT "B"
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTIES
The Gardens on E1 Pasco Shopping Center:
PARCELS 1 AND 2 OF PARCEL MAP NO. 4655, IN THE CITY OF PALM
DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON
FILE IN BOOK 7, PAGE 42 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
EXCEPTING ONE -SIXTEENTH OF ALL COAL, OIL, GAS AND OTHER
MINERAL DEPOSITS IN SAID LAND, AS RESERVED IN PATENT FROM STATE OF
CALIFORNIA, RECORDED JULY 17, 1925 1N BOOK. 9,102 OF PATENTS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
Assessors Parcel Number: 627-261-006-4
Page 23 of 23
5;i;sz50