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HomeMy WebLinkAboutORD 1158ORDINANCE NO. 1158 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT FOR A NEW THREE-STORY 106-ROOM BOUTIQUE HOTEL AND TWO-STORY CONDOMINIUM UNIT INCLUDING SIXTEEN 3-BEDROOM LOCKOUT ROOMS (48 KEYS MAXIMUM) TOTALING A MAXIMUM OF 154 UNITS/KEYS, EXHIBIT "A" ATTACHED. CASE NO. DA 07-02 WHEREAS, the Planning Commission by its Resolution No. 2477 has recommended approval of Case No. DA 07-02; 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 Agreement 07-02, Exhibit "A" attached, by Ordinance No. 1158 is hereby approved. SECTION 2: That the City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in the Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall 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 10th day of July 2008, by the following vote, to wit: AYES: FERGUSON, FINERTY, KELLY, SPIEGEL, and BENSON NOES: NONE ABSENT: NONE ABSTAIN: NONE JV#N M. BENSON, AYOR ATTEST: iRA E LE D. KLASSE ITY CLERK CITY OF PALM DESERT, CALIFORNIA —I— I.(p-o'g [This page has intentionally been left blank.] ORDINANCE NO. 1158 CASE NO. DA 07-02 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Palm Desert 73-626 Highway 111 Palm Desert CA 92260 Attn: City Clerk Exempt from recording fees pursuant to Govt. Code Section 27383 (Space above for recorder's use) DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of this 10th day of July, 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 LARKSPUR ASSOCIATES, LLC ("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. The parties intend to refer to those definitions in conjunction with the use thereof in these Recitals. 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. On August 11, 1983, the City enacted by Ordinance No. 341, as amended on O:\Planning\Tony BagatoMord FllesTormats\Staff Reports\PP\PP 07-11, CUP 07-14, OA 07-02 Larkspur Associates\City Council\DA Ordinance4m 2 ORDINANCE NO. 1158 December 7, 1989 by Ordinance No. 589 (collectively, the "Development Agreement Ordinance"), procedures and requirements for the consideration of development agreements thereunder pursuant to the Development Agreement Legislation. C. Developer is the owner of a legal or equitable interest in the Property and is entitled to have filed the application for and to enter into this Agreement. The Project consists of the future development of the Property. 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 usage 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 development goals, policies, general land uses and development programs of the City as set forth in the City's General Plan, Commercial Core Area Specific Plan and is consistent with the existing zoning affecting the Properties. E. City has further 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, providing precise and supplemental criteria for the uses, design, circulation and development of the Property, including flexibility in land use options which may be altered in order to respond to future changes in the surrounding areas, eliminating uncertainty in planning for, and securing orderly 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 a high quality, aesthetically pleasing entry statement for the City; (iii) provide for the construction of storm water system improvements vital to the City; and (iv) further the development objectives of the City 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 in accordance with the Development Plan attached to this Agreement as Exhibit "A", and at a rate of development of its choosing, subject to the terms and conditions contained in this Agreement. F. Pursuant to Section 65867.5 of the Development Agreement Legislation, the City Council has found and determined that: (i) this Agreement implements the goals and policies of the City's General Plan, provides balanced and diversified land uses, and imposes appropriate standards and requirements with respect to land development and usage in order to maintain the overall quality of life and the environment within the City; (ii) this Agreement is in the best interests of and not detrimental to the public health, safety and general welfare of the City and its residents; (iii) adopting this Agreement is consistent with the City's General Plan, and each element thereof and the Commercial Core Area Specific Plan, and constitutes a present exercise of the City's police power; and (iv) this Agreement is being entered into O:\Pianning\Tony BagatoMord Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciMA Ordinance.doc 3 ORDINANCE NO. 1158 pursuant to and in compliance with the requirements of Government Code Section 65867 of the Development Agreement Legislation. G. 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 and intending to limit the City's future exercise of certain governmental powers, to the extent permitted by law. H. This Agreement has undergone extensive review by the City's staff, the Planning Commission and the City Council. Agreement. 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: DEFINITIONS. Defined Terms. Each reference in this Agreement to any of the following terms shall have the meaning set forth below for each such term. Agreement. This Development Agreement. Building Ordinances. Those building standards, of general and uniform application throughout the City and not imposed solely with respect to the Property, in effect from time to time that govern building and construction standards within the City, including, without limitation, the City's building, plumbing, electrical, mechanical, grading, sign, and fire codes. City Council. The legislative body of the City of Palm Desert. Development Plan. Development Plan means the development and associated amenities, and on -site and off -site improvements, as permitted under and described in the Development Plan (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. Effective Date. The date on which the Enacting Ordinance becomes effective. Enacting Ordinance. Ordinance 1158, enacted by the City Council on July 10 , 2008, approving this Agreement. GAPlanning\Tony BagatoMord Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 4 ORDINANCE NO. 1158 Existing Land Use Ordinances. The Land Use Ordinances in effect as of the Effective Date. Four -Star Hotel and Four -Star Hotel Standards. Four -Star Hotel shall mean a hotel where either of the following shall apply: (1) the hotel has or will meet the requirements of a brand included within the "Luxury' or "Upscale" segments as defined by J.D. Power and Associates; or (2) the hotel satisfies or will satisfy the published requirements sufficient for a ranking of no less than four (4) stars in the most recent annual awards list published by AAA or Mobil Travel Guides. The City Council may, by resolution, adopt alternative standards as may be necessary. Four -Star Hotel Standards shall mean the standards of a Four -Star Hotel. Hotel Manager. Hotel Manager means a reputable and experienced hotel management company or operator who shall have at least five (5) consecutive years of experience in the hotel management business in hotels that meet the Four Star Hotel Standards and have no fewer than ten (10) other properties (each in separate cities, or distinct and separate projects in any given city, nationally or internationally) under current management. Land Use Ordinances. The ordinances, resolutions, codes, rules, regulations and official policies of the City duly adopted and on file in the Office of the City Clerk, governing the development of the Property, including but not limited to, the permitted uses of land, the density and intensity of use of land, and the timing of development, all as applicable to the development of the Property. Specifically, but without limiting the generality of the foregoing, Land Use Ordinances shall include the City's General Plan, the City's zoning ordinance and the City's subdivision code, but shall exclude the Building ordinances. 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. Municipal Code means the Palm Desert Municipal Code. Personal Use means the use or occupancy of a unit by a Unit Owner, or when a guest of an Unit Owner does not rent and pay for the Owner's unit through the i- vtel Manager. Use of a unit arising out of an exchange program with an affiliated hotel property shall be subject to Transient Occupancy Tax based on the equivalent daily rental value for that room exchanged free of charge or otherwise reduced in the program and shall not be considered personal use by the owner; provided, however, that no provision herein shall be deemed to permit a timeshare, fractional, or other vacation ownership unit if otherwise prohibited by this Agreement or the Municipal Code. Proiect. The development and associated amenities, and on -site and off - site improvements, as permitted under and described in the Development Plan (Exhibit GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 5 ORDINANCE NO. 1158 "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. Property. The real property and any improvements thereon which is described in Exhibit "Bn to this Agreement. Transient Occupancy Tax means the tax described and subject to the provisions of Chapter 3.28 of the Municipal Code, as may be amended from time to time. Unit Owner means an individual or entity that acquires any ownership interest in, and holds title to, one or more condominium hotel units within the Project. Term; Amendment. Term. The term of this Agreement (the `Term") shall commence on the Effective Date and shall terminate on the ten (10) year anniversary date of the Effective Date, unless sooner terminated or extended as hereinafter provided. 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 Agreement and the Exhibits hereto. Any amendment to this Agreement or the Exhibits hereto as provided herein shall be effected only upon compliance with the procedures for amendment, if any, required by the Development Agreement Legislation and the Development Agreement Ordinance. The City shall, after any such amendment takes effect, cause an appropriate notice of such amendment to be recorded in the official records of the County of Riverside. General Development of the Project Project. The Project is defined and described in the Development Plan attached to this Agreement as Exhibit "A". Developer shall have the vested right to develop the Project in accordance with, and development of the Project during the Term shall be governed by, the Development Plan and, to the extent not inconsistent with or modified by the Development Plan, the Existing Land Use Ordinances. Developer's right to develop the Property in accordance with this Section 3.1 shall be without regard to future ordinances, resolutions, rules, regulations and policies of the City or referenda of the voters of the City, including, without limitation, those with respect to moratoriums for utility service, other than ordinances, resolutions, rules, regulations and policies of the City which limit or condition the rate, timing or sequencing of development of the Property and which are required solely as a result of then existing shortages of utility service capacity or facilities. Buildina Permits and Other Approvals and Permits. Subject to (a) Developer's compliance with this Agreement, the Development Plan, the Existing Land Use Ordinances and the Building Ordinances, and (b) payment of the usual and GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciKDA Ordinance.doc 6 ORDINANCE NO. 1158 customary fees and charges of general application charged for the processing of such applications, permits and certificates and for any utility connection, or similar impact fees and charges of general application then in effect, the City shall process and issue to Developer upon application therefore all necessary use permits, building permits, occupancy certificates, and other required permits for the construction, use and occupancy of the Project, or any portion thereof, as applied for, including connection to all utility systems under the City's jurisdiction and control (to the extent that such connections are physically feasible and that such utility systems are capable of adequately servicing the Project). Procedures and Standards. The standards for granting or withholding permits or approvals required hereunder in connection with the development of the Project shall be governed as provided herein by the standards, terms and conditions of this Agreement and the Development Plan, and to the extent not inconsistent therewith, the Existing Land Use Ordinances, but the procedures for processing applications for such permits pre -approvals (including the usual and customary fees of general application charged for such processing) shall be governed by such ordinances and regulations as may then be applicable and which are consistent with the Development Plan. 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 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 Ordinances, and to grant the City and the residents of the City certain benefits which they otherwise would not receive. 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 ordinance or resolution of the City Council, by referenda, 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 its development of the Project in accordance with the proposed uses of the Property, the density and intensity of development of the Property and the requirements and guidelines for the construction or provision of on -site and off -site improvements as set forth in the Development Plan and the Existing Land Use Ordinances, and the City has entered into this Agreement in order to secure the public benefits conferred upon it hereunder which are essential to alleviate current and potential problems in the City and to protect 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. Operating Memoranda. The parties acknowledge that refinements and further development of the Project may demonstrate that changes are appropriate with respect to the details and performance of the parties under this Agreement. The parties desire to retain a certain degree of flexibility with respect to those items covered in general terms under this Agreement. If and when the parties mutually find that changes, GAPlanning\Tony Bagato\word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciNDA Ordinance.doc 7 ORDINANCE NO. 1158 adjustments, or clarifications are appropriate to further the intended purposes of this Agreement, they may, unless otherwise required by law, effectuate such changes, adjustments, or clarifications without amendment to this Agreement through one or more operating memoranda mutually approved by the parties, which, after execution, shall be attached hereto as addenda and become a part hereof and may be further changed and amended from time to time as necessary. The City Manager is authorized to approve such an operating memorandum on behalf of the City without further approval of the City Council. Unless otherwise required by law or by this Agreement, no such changes, adjustments, or clarifications shall require prior notice or hearing, public or otherwise. Specific Criteria Applicable to Development of the Proiect. Applicable Ordinances. Except as set forth in the Development Plan and subject to the provisions of Section 4.2 below, the Existing Land Use ordinances shall govern the development of the Property hereunder and the granting or withholding of all permits or approvals required to develop the Property; provided, however, that (a) Developer shall be subject to all changes in processing, inspection and plan -check, impact fees and charges imposed by City in connection with the processing of applications for development and construction upon the Property so long as such fees and charges are of general application and are not imposed solely with respect to the Property, (b) Developer shall abide by the Building ordinances in effect at the time of such applications, and (c) Developer and/or Operator of the project shall comply with all ordinances relating to operation including but not limited to Transient Occupancy Tax. Amendment to Applicable Ordinances. In the event that the Palm Desert zoning ordinance is amended by the City in a manner which provides more favorable site development standards for the Property 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 agrees, by resolution of the City Council or by action of a City official whom the City Council may designate, 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. Easements: Abandonments. City shall cooperate with Developer in connection with any arrangements for abandoning existing utility or other easements and the relocation thereof or creation of any new easements within the Property necessary or appropriate in connection with the development of the Project; and if any such easement is owned by City, City shall, at the request of Developer and in the manner and to the extent permitted by law, take such action and execute such documents as may be necessary to abandon existing easements and relocate them, as necessary or appropriate in connection with the development of the Project, all at the cost and expense of the Developer. In addition, to the extent that temporary or permanent easements on GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 8 ORDINANCE NO. 1158 property adjacent or in close proximity to the Property will be required in order for Developer to develop all or portions of the Project, the City shall cooperate with Developer in efforts to obtain or secure any such required easements. Height Requirements. Buildings constructed on the Property as part of the Project shall not exceed a height of thirty-seven feet (37') at the parapets or forty-two feet (42') at the tower in accordance with the Development Plan. The height limits shall be measured in the manner of other height limits under Title 25 of the Municipal Code. Parking Requirements. The Project shall provide a minimum of two hundred three (203) parking spaces in accordance with the Development Plan. Density Requirements. The Project shall not exceed a density of one hundred fifty four (154) hotel rooms/keys that may be allocated within the components of the Project as provided in the Development Plan. LEED Requirements. Developer shall design, develop and construct the Project as required to secure the "Silver" or higher designation, as selected by the Developer in the exercise of its reasonable discretion, as established by the U.S. Green Building Council under the Leadership in Energy and Environmental Design ("LEED") program. Cooling Station Capacity. An emergency backup power generator onsite ,..• capable of cooling the Project shall be installed and maintained as part of the Project. The Project shall be used as a "cooling station" for the City in the event of power outage. Hotel Requirements. The requirements of this Section 4.9 and Section 4.10 are necessary to preserve the commercial nature of the Property and insure that the Project retains its character as a four -star boutique commercial hotel. While the project contains condominium units in addition to more traditional hotel units, the condominium units are commercial hotel condominium units and are not intended to, nor shall be used, as long- term residential units. The Developer shall comply with and use the property in accordance with the restrictive covenants set forth in Section 5.1 of the Disposition and Development Agreement between the Developer and the Redevelopment Agency of the City of Palm Desert dated on or about the date of this Agreement and pertaining to the Property. One hundred (100) percent of the condominium units shall be made available as rental units for hotel guests by the Hotel Manager when not being used by the Unit Owner for the Unit Owner's Personal Use (as defined in Section 1.14 of this Agreement). The Unit Owners, through the CC&Rs shall assign their units to the Hotel Manager for the purposes of rental to transient guests when not being used for Personal w Use. GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 9 ORDINANCE NO. 11 Sg A Unit Owner shall be allowed to use the unit for Personal Use no more than two (2) weeks between November 1st and May 1st of each year and for no more than two (2) weeks between May 2nd and October 31 st of each year without paying the Transient Occupancy Tax. Every condominium unit shall be subject to the Transient Occupancy Tax, except for Personal Use described above, and each condominium unit shall be made available to hotel guest for transient use. No condominium unit shall be rented or let for more than twenty-nine (29) consecutive days. No condominium unit shall be used or converted into any form of permanent residence. No condominium unit shall be used as a timeshare, factional or other vacation ownership as such terms are defined in Business and Professions Code Section 11212, as may be amended from time to time. The Developer shall enter into a contract for operation of the Project with a reputable and experienced hotel manager or operator who shall have at least five (5) consecutive years of experience in the hotel management business in hotels that meet the Four Star Hotel Standards and have no fewer than ten (10) other properties (each in separate cities, or distinct and separate projects in any given City, nationally or internationally) under current management ("Hotel Manager"). The applicant shall provide the Director of Community Development with appropriate documentation to demonstrate that the Hotel Manager meets the requirements of this subsection. Any future changes in the Hotel Manager shall require review and approval by the Director of Community Development. The Director of Community Development may modified the standards for the Hotel Manager upon finding that the Hotel Manager has comparable experience meeting the interests served by the standards. The Hotel Manager shall ensure that all portions of the hotel are maintained and operated in accordance with the Four Star Hotel Standards, including but not limited to the condominium units, lobby and hallways, front desk, concierge services, landscape and open space areas, parking, banquet/ballroom facilities, conference, restaurant, retail, recreational, and spa facilities, and other amenities and improvements. Conditions. Covenants and Restrictions. The Developer shall prepare and submit to the City CC&R's governing the Project, including the condominium portion of the Project. The CC&R's must be approved by the Community Development Director and the City Attorney and recorded against the Property in the Riverside County Recorder's Office prior to the issuance of a certificate of occupancy for the Project or any portion thereof. All CC&R's shall include the following provisions: The CC&R's shall specifically include the provisions of Section 4.8 and 4.9 of this Agreement and shall incorporate by reference the terms of this GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CouncMDA Ordinance.doc 10 ORDINANCE NO. 1158 Agreement and the Disposition and Development Agreement for the Property adopted on the same date as this Agreement. The CC&R's shall give the approved Hotel Manager the right, power and obligation to enforce the Four Star Hotel Standards including, without limitation, the right to enter any portion of the hotel and condominium units, and any individual condominium units upon sale or assignment of the Unit, to cure any failure to meet the Four Star Hotel Standards. The Hotel Manager shall provide transient rental services to all owners of the condominium units. The CC&Rs shall provide that the Unit Owners shall assign their units to the Hotel Manager for the purposes of rental to transient guests when not being used for Personal Use. The CC&R's shall give the Hotel Manager the exclusive right to provide to the condominium hotel, the property, and to unit owners, lessees and other occupants, any or all `on property" services commonly provided at Four -Star Hotels, restaurants and resorts, including without limitation, reservation programs, maid and housekeeping services, maintenance, laundry and dry cleaning, room service, catering and other food and beverage services, massage, personal training and other spa services. The use of such services, if offered, shall be conditioned upon payment of such charges or fees as may be imposed on unit owners or hotel guests by the Hotel Manager. Unit owners shall be required to enter into a unit maintenance agreement with the Hotel Manager, to be approved by the Director of Community Development. The CC&R's shall for the authority, but not the obligation, of the City to enforce, in its discretion, the provisions of the Development Plan and this Agreement. Subject to applicable California general law and Department of Real Estate regulations, the CC&R's shall provide that the obligation to pay the Transient Occupancy Tax shall constitute a lien by the City on the units for the amount owed, including any permitted penalties or interest, and that the City shall have the right, but not the duty, to foreclose on any such liens through equitable or legal proceedings. The CC&R's shall provide that they shall not be amended without the prior written approval of the Director of Community Development. Completion of Hotel and Condo -Hotel Components of Proiect. Developer shall complete construction of the hotel component of the Project prior to or concurrently with completion of construction of the condominium component of the Project. The City shall not issue a certificate of occupancy for the condominium component of the Project, or any part thereof, until the hotel component of the Project is completed and eligible for an unrestricted certificate of occupancy from the City and all other applicable requirements for issuance of a certificate of occupancy for the condominium component of the Project have been fulfilled. Art in Public Places, The City and Developer desire to cooperate with each other to secure the introduction and integration of public art into the Project for the purpose of enhancing the image of the City and the Project. Developer shall, at the request of the GAPlanningWony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CouncADA Ordinance.doc 11 ORDINANCE NO. 1158 City, provide such easements upon the Property as may be reasonably required for the installation and maintenance of such public art. The location of such easements shall be mutually approved by the City and Developer. In addition to providing such easements as may be reasonably required for the installation and maintenance of such public art, Developer shall pay to the City in lieu art fees at the time of and in connection with the development of the Property, or portions thereof, in accordance with the fee levels and other payment and procedural requirements of Chapter 4.10 of the Municipal Code of the City lawfully imposed at the time of development of the Property, or portions thereof. Periodic Review of Compliance. In accordance with Govt. Code Section 65865.1, the Department of Community Development/Planning Staff shall review this Agreement at least each calendar year during the term of this Agreement. At such periodic reviews, Developer must demonstrate its good faith compliance with the terms of this Agreement. Developer agrees to furnish such evidence of good faith compliance as the City, and after reasonable exercise of its discretion and after reasonable notice to Developer, may require. Permitted Delays: Supersede by Subseguent Laws. Permitted Delays. 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 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 Ordinances, or any other ordinance effecting 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. 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 any such modification or suspension based on the effect such modification or suspension would have on the purposes and intent of this GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Councif\DA Ordinance.doc 12 ORDINANCE NO. 1158 = 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, except that the Term shall be extended, in accordance with Section 7.1 above, for a period of time equal to the length of time the challenge was pursued. Events of Default; Remedies; Termination. 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 ninety (90) 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 ninety (90) day period, the commencement of the cure within such ninety (90) day period and the diligent prosecution to completion of the cure shall be deemed to be a cure within such period. 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 considered to be in default for purposes of termination of this Agreement, institution of legal proceedings with respect thereto, or issuance of any permit, map, certificate of occupancy, approval or entitlement with respect to the Project. Remedies. Upon the occurrence of an Event of Default, 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 not the right to damages. Notwithstanding the foregoing and except as otherwise provided in Section 8.4 hereof, if either Developer or City elects to terminate this Agreement as a result of the occurrence of an Event of Default, such proceeding of termination shall constitute such party's exclusive and sole remedy, and with respect to such election City and Developer hereby waive, release and relinquish any other right or remedy otherwise available under this Agreement or at law or equity. 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 specified in such express waiver. GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 13 ORDINANCE NO. 1158 Effect of Termination. Termination of this Agreement by one party due to the other party's default, or as a result of the exercise of the right of termination provided to the Developer under Section 8.2 hereof, shall not affect any right or duty emanating, from any approvals, permits, certificates or other entitlements with respect to the Property or the Project which were issued, approved or provided by the City prior to the date of termination of this Agreement. If City terminates this Agreement because of Developer's default, then City shall retain any and all benefits, including money, land or improvements conveyed to or received by the City prior to the date of termination of this Agreement, subject to any reimbursement obligations of the City. If Developer terminates this Agreement because of City's default, or as a result of the exercise of the right of termination provided to the Developer under Section 8.2 hereof, 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. 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. Third Party Actions. Any court action or proceeding brought by any third party to challenge this Agreement or any permit or approval 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. Encumbrances on Property. 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 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 modification. City further agrees that it will not unreasonably withhold its consent to any such requested modification. 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 Site or any portion thereof by a Mortgagee (whether pursuant to a GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciNDA Ordinance.doc 14 ORDINANCE NO. 1158 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. 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. 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, describing 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. Transfers and Assignments: Effect of Agreement on Title. Rights and Interests Appurtenant. The rights and interests conveyed as provided herein to Developer benefit and are appurtenant to the Property. Developer has the right to sell, assign and transfer 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 not be sold, transferred or assigned and such duties and obligations may not be delegated or assigned except in compliance with the following conditions: Said rights and together with and as an incident portions of the Property to which pursuant to any foreclosure of a Following any such sale, transfer i Developer under this Agreement, continue to be subject to the terry purchaser, transferee or assignee, interests may be sold, transferred or assigned only of the sale, lease, transfer or assignment of the they relate, including any transfer or assignment Mortgage or a deed in lieu of such foreclosure. )r assignment of any of the rights and interests of the exercise, use and enjoyment thereof shall is of this Agreement to the same extent as if the were Developer hereunder. Covenants Run with Land. 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) and assigns, devisees, lessees, and all other persons acquiring any rights or interests in GAPlanning\Tony BagatoMord Files\Formats\Staff Reports\PMPP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 15 ORDINANCE NO. 1158 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; All of the provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land pursuant to applicable law; 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 - 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, 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: Larkspur Associates LLC 73626 Highway 111 Palm Desert, CA 92260 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 affected or, if mailed, on the delivery date or attempted delivery date shown on the return receipt. Indemnification. Developer's Obligation. Developer will defend, indemnify and hold the City and its elected officials, officers and employee free and harmless from any loss, cost or liability (including, without limitation, liability arising from injury or damage to persons or property, including wrongful death and worker's compensation claims) which results from (i) any obligation which arises from the development of the Property including, without limitation, obligations for the payment of money for material and labor; (ii) any failure on GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 16 ORDINANCE NO. 1158 the part of Developer to take any action which he is required to take as provided in this Agreement; (iii) any action taken by Developer which he prohibited from taking as provided in this Agreement and (iv) any claim which results from any willful or negligent act or omission of Developer. 12.2 Environmental Assurances. Developer shall indemnify and hold the city, its officers, agents and employees free and harmless from any liability deriving from the City's execution or performance of this Agreement, based or asserted, upon any act or omission of Developer, its officers, agents, employees, contractors, subcontractors and independent contractors for any violation of any federal, state or local law, ordinance or regulation relating to hazardous or toxic materials, industrial hygiene, or environmental conditions created by Developer or its officers, agents or employees, contractors, subcontractors and independent contractors after the Effective Date on, under which the Property, including, but not limited to soil and groundwater conditions, and Developer shall defend, at its expense, including attorneys fees, the City its officers, agents and employees in any action based or asserted upon any such alleged act or omission. The City may in its discretion participate in the defense of any such action. The provisions of this Section shall survive the termination or expiration of this Agreement. Miscellaneous 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. Consents. Unless otherwise herein provided, whenever approval, consent, acceptance or satisfaction (collectively, a "consent') is required of a party pursuant to this Agreement, it shall not be unreasonably withheld or delayed. Unless provision is otherwise specified in this Agreement or otherwise required by law for a specific time period, consent shall be deemed given within thirty (30) days after receipt of the written request for consent, and if a party shall neither approve nor disapprove within such thirty (30) day period, or other time period as may be specified in this Agreement or otherwise required by law for consent, that party shall then be deemed to have given its consent. If a party shall disapprove, the reasons therefor shall be stated in reasonable detail in writing. This Section does not apply to development approvals by the City. 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 purposes herein expressed for the development of the Project as private property. GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciWA Ordinance.doc 17 ORDINANCE NO. 1158 Severabilitv. 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. Exhibits. The following Exhibits, to which reference is made herein, are deemed incorporated into this Agreement in their entirety by reference thereto: Exhibit A Description of Project Exhibit B Legal Description of the Property 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. Except as otherwise specified in this Agreement and the Exhibits hereto, any prior correspondence, memoranda, agreements, warranties or representations are superseded in total by this Agreement and Exhibits hereto. 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. 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. Time. Time is of the essence of this Agreement and of each and every term and condition hereof. Prevailing Party's Attornev'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 the meaning or interpretation of 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. Notwithstanding the foregoing, City shall not be required to pay any costs or expenses (including without limitation, reasonable attorneys' fees and GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CouncIRDA Ordinance.doc 18 ORDINANCE NO. 1158 expenses) which Developer may incur in respect of any hearing held pursuant to Section 7 hereof. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. DEVELOPER: LARKSPUR ASSOCIATES, LLC, a California limited liability company By. /'t/A� �� Name- De L-4�4t✓ Title: 1414 vv iv By: Name: Title: CITY: CITY OF PALM DESERT, CALIFORNIA, a municipal corporation organized and existing under the laws of the State of California F%%jaVIA ► Iz �, . :��.. CALIFORNIACITY OF PALM DESERT, a Iff GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, OA 07-02 Larkspur Associates\City CoundIZA Ordinance.dm 19 ORDINANCE NO. 1158 State of California County of Riverside basis of satisfactory evidence to be the per the w'thirinstrument and acknowledged to his/ir authorized capacity(ies), and instrument the person or the entity up executed the instrument. before me, a notary public, personally appeared whoprovecIto me on the sonR whose irexecuted is/ subscribed to me that he/ the same in that by hisignature on the on behalf of which the person( acted, I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) taM ALVAREZ Q COMM. #11660511 A NOTARY PUBLIC-CALIFORNIA RIVERSIDE COUNTY i My Comm ExpUw APRIL 25, 2WO G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 20 ORDINANCE NO. 1158 State of California County of Riverside On July 16, 2008 before me, M. Gloria Martinez , a notary public, personally appeared Jear. M. Benson and Rachell.e D. Klassen who proved to me on the basis of satisfactory evidence to be the personas who na eW ii/ re subscribed to the within instrument and acknowledged to me that ho/she he executed the same in hWKerQ!6k authorized capacity ie , and that by hio /thei signature(s-) on the instrument the persorX(s , or the entity upon behalf of which the persoros acted, executed the instrumen`` . 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 ) J (seal) M. GlOR1A MARTINEZ CommWlon #t 1697036 Notary Public - Calffornla Rtverside County — My Comm. Explrw Oct 29, 201 GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 larkspur Associates\City Council\DA Ordinance.doc 21 ORDINANCE NO. 1158 EXHIBIT "A" DEVELOPMENT PLAN/PROJECT DESCRIPTION The Development Plan and Project Description shall consist of the following: 1. The Developer shall develop, build and operate a Four -Star boutique hotel with a maximum of 154 units/keys consisting of two fully integrated components: (1) a three-story Four Star boutique hotel with one hundred six (106) hotel rooms; and (2) a two-story condominium project consisting a maximum of sixteen (16) condominium hotel suites each with three (3) bedroom lockout rooms (forty-eight keys maximum) as specifically described the City's approvals of DA 07-02, PP 07-11 and CUP 07-14, and the site plans approved therein. 2. The maximum number of keys for the Project shall be one hundred fifty four (154). The Project also includes a two hundred three (203) underground parking spaces, a restaurant area, gift shop, conference and meeting rooms, spa, and amenities including a roof deck pool and bar, roof deck garden and roof deck patios on eleven (11) of the sixteen (16) condominium hotel units. 3. Subsequent land use approvals in accordance with the terms of this Development Agreement. 4. The Project is located at 45-400 Larkspur Lane, Palm Desert, California, APNs 627-262-008 and 627-262-011. GAPlanning\Tony Bagato\Word ResTormats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 22 ORDINANCE NO. 1158 EXHIBIT "B" LEGAL DESCRIPTION OF PROPERTY ALL OF LOTS 6 AND 7, A PORTION OF LOT 1 AND A PORTION OF LOT 5 IN BLOCK Q OF PALM DESERT UNIT NO. 1, AS PER MAP RECORDED IN BOOK 21, PAGES 50 TO 54 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 7; THENCE ON THE EASTERLY LINE OF SAID LOT 7 AND ITS SOUTHERLY PROLONGATION, SOUTH 0008'35" EAST, 400.00 FEET TO THE NORTHERLY LINE OF SHADOW MOUNTAIN DRIVE, 60.00 FEET WIDE; THENCE ON SAID NORTHERLY LINE, 500 SOUTH 89044'35" WEST, 199.96 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ON SAID CURVE THROUGH A CENTRAL ANGLE OF 90006'50", A DISTANCE OF 31.46 FEET TO THE EASTERLY LINE OF LARKSPUR LANE, 60 FEET WIDE; THENCE TANGENT TO SAID CURVE AND ON THE EASTERLY LINE, NORTH 00008'35" WEST, 379.96 FEET TO THE NORTHWEST CORNER OF SAID LOT 7; THENCE ON THE NORTHERLY LINE OF SAID LOT 7, NORTH 8944'35" EASTER, 62.11 FEET; THENCE LEAVING SAID NORTHERLY LINE, NORTH 66004'55" EAST, 96.85 FEET; THENCE NORTH 73°15'25" EAST, 36.83 FEET; THENCE SOUTH 13049'41" EAST, 19.88 FEET; THENCE SOUTH 12031'53" WEST, 30.76 FEET TO THE AFOREMENTIONED NORTHERLY LINE OF LOT 7; THENCE ON SAID NORTHERLY LINE, NORTH 89044'35" EAST, 36.01 FEE TO THE POINT OF BEGINNING. G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 23 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 # 2008-0419294 07/31/2008 08:00A Fee:NC Page I of 25 Recorded in official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 11111111111111111111111111111111111111 I 111111111111111 S R U PAGE SIZE DA I MISC LONG 1 RFD I M A L 465 426 PCOR NCOR SIVIF CH( f�; � ,: " 1, 1 . IT: CTY UNI COPY Development Agreement 07-02 MO3 0 Between City of Palm Desert, California and Larkspur Associates, LLC a California Limited Liability Company Legal Description of Property 45-400 Larkspur Lane/APN: 627-262-008 and 627-262-011 ORDINANCE NO. 1158 (Case Nos. DA 07-02, PP 07-11, and CUP 07-14) Dated: July 10, 2008 (Title of Document) fiz :4 irld 8- Inc HAI V i 8 7, S 3 C- H-1 301JA0 S--18] j 1. i > ORDINANCE NO. 1158 CASE NO. DA 07-02 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Palm Desert 73-626 Highway 111 Palm Desert CA 92260 Attn: City Clerk Exempt from recording fees pursuant to Govt. Code Section 27383 (Space above for recorder's use) DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (this "Agreement') is made and entered into as of this loth day of .July , 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 LARKSPUR ASSOCIATES, LLC ("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. The parties intend to refer to those definitions in conjunction with the use thereof in these Recitals. 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. On August 11, 1983, the City enacted by Ordinance No. 341, as amended on GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 2 ORDINANCE NO. 1158 December 7, 1989 by Ordinance No. 589 (collectively, the "Development Agreement Ordinance"), procedures and requirements for the consideration of development agreements thereunder pursuant to the Development Agreement Legislation. C. Developer is the owner of a legal or equitable interest in the Property and is entitled to have filed the application for and to enter into this Agreement. The Project consists of the future development of the Property. 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 usage 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 development goals, policies, general land uses and development programs of the City as set forth in the City's General Plan, Commercial Core Area Specific Plan and is consistent with the existing zoning affecting the Properties. E. City has further 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, providing precise and supplemental criteria for the uses, design, circulation and development of the Property, including flexibility in land use options which may be altered in order to respond to future changes in the surrounding areas, eliminating uncertainty in planning for, and securing orderly 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 a high quality, aesthetically pleasing entry statement for the City; (iii) provide for the construction of storm water system improvements vital to the City; and (iv) further the development objectives of the City 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 in accordance with the Development Plan attached to this Agreement as Exhibit "A", and at a rate of development of its choosing, subject to the terms and conditions contained in this Agreement. F. Pursuant to Section 65867.5 of the Development Agreement Legislation, the City Council has found and determined that: (i) this Agreement implements the goals and policies of the City's General Plan, provides balanced and diversified land uses, and imposes appropriate standards and requirements with respect to land development and usage in order to maintain the overall quality of life and the environment within the City; (ii) this Agreement is in the best interests of and not detrimental to the public health, safety and general welfare of the City and its residents; (iii) adopting this Agreement is consistent with the City's General Plan, and each element thereof and the Commercial Core Area Specific Plan, and constitutes a present exercise of the City's police power; and (iv) this Agreement is being entered into GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 3 ORDINANCE NO. 1158 pursuant to and in compliance with the requirements of Government Code Section 65867 of the Development Agreement Legislation. G. 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 and intending to limit the City's future exercise of certain governmental powers, to the extent permitted by law. H. This Agreement has undergone extensive review by the City's staff, the Planning Commission and the City Council. i. In order to effectuate the foregoing, the parties desire to enter into this Agreement. 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: DEFINITIONS. Defined Terms. Each reference in this Agreement to any of the following terms shall have the meaning set forth below for each such term. Agreement. This Development Agreement. Building Ordinances. Those building standards, of general and uniform application throughout the City and not imposed solely with respect to the Property, in effect from time to time that govern building and construction standards within the City, including, without limitation, the City's building, plumbing, electrical, mechanical, grading, sign, and fire codes. City Council. The legislative body of the City of Palm Desert. Development Plan, Development Plan means the development and associated amenities, and on -site and off -site improvements, as permitted under and described in the Development Plan (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. Effective Date. The date on which the Enacting Ordinance becomes effective. Enacting Ordinance. Ordinance 1158, enacted by the City Council on July 10 , 2008, approving this Agreement. GAPlanningJony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 4 ORDINANCE NO. 1158 Existing Land Use Ordinances. The Land Use Ordinances in effect as of the Effective Date. Four -Star Hotel and Four -Star Hotel Standards. Four -Star Hotel shall mean a hotel where either of the following shall apply: (1) the hotel has or will meet the requirements of a brand included within the "Luxury" or "Upscale" segments as defined by J.D. Power and Associates; or (2) the hotel satisfies or will satisfy the published requirements sufficient for a ranking of no less than four (4) stars in the most recent annual awards list published by AAA or Mobil Travel Guides. The City Council may, by resolution, adopt alternative standards as may be necessary. Four -Star Hotel Standards shall mean the standards of a Four -Star Hotel. Hotel Manager. Hotel Manager means a reputable and experienced hotel management company or operator who shall have at least five (5) consecutive years of experience in the hotel management business in hotels that meet the Four Star Hotel Standards and have no fewer than ten (10) other properties (each in separate cities, or distinct and separate projects in any given city, nationally or internationally) under current management. Land Use Ordinances. The ordinances, resolutions, codes, rules, regulations and official policies of the City duly adopted and on file in the Office of the City Clerk, governing the development of the Property, including but not limited to, the permitted uses of land, the density and intensity of use of land, and the timing of development, all as applicable to the development of the Property. Specifically, but without limiting the generality of the foregoing, Land Use Ordinances shall include the City's General Plan, the City's zoning ordinance and the City's subdivision code, but shall exclude the Building ordinances. 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. Municipal Code means the Palm Desert Municipal Code. Personal Use means the use or occupancy of a unit by a Unit Owner, or when a guest of an Unit Owner does not rent and pay for the Owners unit through the i-lutel Manager. Use of a unit arising out of an exchange program with an affiliated hotel property shall be subject to Transient Occupancy Tax based on the equivalent daily rental value for that room exchanged free of charge or otherwise reduced in the program and shall not be considered personal use by the owner; provided, however, that no provision herein shall be deemed to permit a timeshare, fractional, or other vacation ownership unit if otherwise prohibited by this Agreement or the Municipal Code. Proiect. The development and associated amenities, and on -site and off - site improvements, as permitted under and described in the Development Plan (Exhibit GAP)anning\Tony Bagato\Word FilesTormats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 5 ORDINANCE NO. 1158 "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. Property. The real property and any improvements thereon which is described in Exhibit "B" to this Agreement. Transient Occupancy Tax means the tax described and subject to the provisions of Chapter 3.28 of the Municipal Code, as may be amended from time to time. Unit Owner means an individual or entity that acquires any ownership interest in, and holds title to, one or more condominium hotel units within the Project. Term; Amendment. Term. The term of this Agreement (the "Term") shall commence on the Effective Date and shall terminate on the ten (10) year anniversary date of the Effective Date, unless sooner terminated or extended as hereinafter provided. 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 Agreement and the Exhibits hereto. Any amendment to this Agreement or the Exhibits hereto as provided herein shall be effected only upon compliance with the procedures for amendment, if any, required by the Development Agreement Legislation and the Development Agreement Ordinance. The City shall, after any such amendment takes effect, cause an appropriate notice of such amendment to be recorded in the official records of the County of Riverside. General Development of the Proiect Project. The Project is defined and described in the Development Plan attached to this Agreement as Exhibit "A". Developer shall have the vested right to develop the Project in accordance with, and development of the Project during the Term shall be governed by, the Development Plan and, to the extent not inconsistent with or modified by the Development Plan, the Existing Land Use Ordinances. Developer's right to develop the Property in accordance with this Section 3.1 shall be without regard to future ordinances, resolutions, rules, regulations and policies of the City or referenda of the voters of the City, including, without limitation, those with respect to moratoriums for utility service, other than ordinances, resolutions, rules, regulations and policies of the City which limit or condition the rate, timing or sequencing of development of the Property and which are required solely as a result of then existing shortages of utility service capacity or facilities. Building Permits and Other Approvals and Permits. Subject to (a) Developer's compliance with this Agreement, the Development Plan, the Existing Land Use Ordinances and the Building Ordinances, and (b) payment of the usual and GAPlanning\Tony Bagato\Word ResTormats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciRDA Ordinance.doc 6 ORDINANCE NO. 1158 customary fees and charges of general application charged for the processing of such applications, permits and certificates and for any utility connection, or similar impact fees and charges of general application then in effect, the City shall process and issue to Developer upon application therefore all necessary use permits, building permits, occupancy certificates, and other required permits for the construction, use and occupancy of the Project, or any portion thereof, as applied for, including connection to all utility systems under the City's jurisdiction and control (to the extent that such connections are physically feasible and that such utility systems are capable of adequately servicing the Project). Procedures and Standards. The standards for granting or withholding permits or approvals required hereunder in connection with the development of the Project shall be governed as provided herein by the standards, terms and conditions of this Agreement and the Development Plan, and to the extent not inconsistent therewith, the Existing Land Use Ordinances, but the procedures for processing applications for such permits pre -approvals (including the usual and customary fees of general application charged for such processing) shall be governed by such ordinances and regulations as may then be applicable and which are consistent with the Development Plan. 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 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 Ordinances, and to grant the City and the residents of the City certain benefits which they otherwise would not receive. 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 ordinance or resolution of the City Council, by referenda, 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 its development of the Project in accordance with the proposed uses of the Property, the density and intensity of development of the Property and the requirements and guidelines for the construction or provision of on -site and off -site improvements as set forth in the Development Plan and the Existing Land Use Ordinances, and the City has entered into this Agreement in order to secure the public benefits conferred upon it hereunder which are essential to alleviate current and potential problems in the City and to protect 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. Operating Memoranda. The parties acknowledge that refinements and further development of the Project may demonstrate that changes are appropriate with respect to the details and performance of the parties under this Agreement. The parties desire to retain a certain degree of flexibility with respect to those items covered in general terms under this Agreement. if and when the parties mutually find that changes, GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 7 ORDINANCE NO. 1158 adjustments, or clarifications are appropriate to further the intended purposes of this Agreement, they may, unless otherwise required by law, effectuate such changes, adjustments, or clarifications without amendment to this Agreement through one or more operating memoranda mutually approved by the parties, which, after execution, shall be attached hereto as addenda and become a part hereof and may be further changed and amended from time to time as necessary. The City Manager is authorized to approve such an operating memorandum on behalf of the City without further approval of the City Council. Unless otherwise required by law or by this Agreement, no such changes, adjustments, or clarifications shall require prior notice or hearing, public or otherwise. Specific Criteria Applicable to Development of the Project. Applicable Ordinances. Except as set forth in the Development Plan and subject to the provisions of Section 4.2 below, the Existing Land Use ordinances shall govern the development of the Property hereunder and the granting or withholding of all permits or approvals required to develop the Property; provided, however, that (a) Developer shall be subject to all changes in processing, inspection and plan -check, impact fees and charges imposed by City in connection with the processing of applications for development and construction upon the Property so long as such fees and charges are of general application and are not imposed solely with respect to the Property, (b) Developer shall abide by the Building ordinances in effect at the time of such applications, and (c) Developer and/or Operator of the project shall comply with all ordinances relating to operation including but not limited to Transient Occupancy Tax. Amendment to Applicable Ordinances. In the event that the Palm Desert zoning ordinance is amended by the City in a manner which provides more favorable site development standards for the Property 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 agrees, by resolution of the City Council or by action of a City official whom the City Council may designate, 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. Easements, Abandonments. City shall cooperate with Developer in connection with any arrangements for abandoning existing utility or other easements and the relocation thereof or creation of any new easements within the Property necessary or appropriate in connection with the development of the Project; and if any such easement is owned by City, City shall, at the request of Developer and in the manner and to the extent permitted by law, take such action and execute such documents as may be necessary to abandon existing easements and relocate them, as necessary or appropriate in connection with the development of the Project, all at the cost and expense of the Developer. In addition, to the extent that temporary or permanent easements on GAPlanning\Tony Bagato\Word Files\Fonnats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 8 ORDINANCE NO. 1158 property adjacent or in close proximity to the Property will be required in order for Developer to develop all or portions of the Project, the City shall cooperate with Developer in efforts to obtain or secure any such required easements. Height Requirements. Buildings constructed on the Property as part of the Project shall not exceed a height of thirty-seven feet (37') at the parapets or forty-two feet (42') at the tower in accordance with the Development Plan. The height limits shall be measured in the manner of other height limits under Title 25 of the Municipal Code. Parking Requirements. The Project shall provide a minimum of two hundred three (203) parking spaces in accordance with the Development Plan. Density Requirements. The Project shall not exceed a density of one hundred fifty four (154) hotel rooms/keys that may be allocated within the components of the Project as provided in the Development Plan. LEED Requirements. Developer shall design, develop and construct the Project as required to secure the "Silver" or higher designation, as selected by the Developer in the exercise of its reasonable discretion, as established by the U.S. Green Building Council under the Leadership in Energy and Environmental Design ("LEED") program. Cooling Station Capacity. An emergency backup power generator onsite capable of cooling the Project shall be installed and maintained as part of the Project. The Project shall be used as a "cooling station" for the City in the event of power outage. Hotel Requirements. The requirements of this Section 4.9 and Section 4.10 are necessary to preserve the commercial nature of the Property and insure that the Project retains its character as a four -star boutique commercial hotel. While the project contains condominium units in addition to more traditional hotel units, the condominium units are commercial hotel condominium units and are not intended to, nor shall be used, as long- term residential units. The Developer shall comply with and use the property in accordance with the restrictive covenants set forth in Section 5.1 of the Disposition and Development Agreement between the Developer and the Redevelopment Agency of the City of Palm Desert dated on or about the date of this Agreement and pertaining to the Property. One hundred (100) percent of the condominium units shall be made available as rental units for hotel guests by the Hotel Manager when not being used by the Unit Owner for the Unit Owner's Personal Use (as defined in Section 1.14 of this Agreement). The Unit Owners, through the CC&Rs shall assign their units to the Hotel Manager for the purposes of rental to transient guests when not being used for Personal Use. G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 9 ORDINANCE NO. 1 m A Unit Owner shall be allowed to use the unit for Personal Use no more than two (2) weeks between November 1st and May 1st of each year and for no more than two (2) weeks between May 2nd and October 31 st of each year without paying the Transient Occupancy Tax. Every condominium unit shall be subject to the Transient Occupancy Tax, except for Personal Use described above, and each condominium unit shall be made available to hotel guest for transient use. No condominium unit shall be rented or let for more than twenty-nine (29) consecutive days. No condominium unit shall be used or converted into any form of permanent residence. No condominium unit shall be used as a timeshare, factional or other vacation ownership as such terms are defined in Business and Professions Code Section 11212, as may be amended from time to time. The Developer shall enter into a contract for operation of the Project with a reputable and experienced hotel manager or operator who shall have at least five (5) consecutive years of experience in the hotel management business in hotels that meet the Four Star Hotel Standards and have no fewer than ten (10) other properties (each in separate cities, or distinct and separate projects in any given City, nationally or internationally) under current management ("Hotel Manager"). The applicant shall provide the Director of Community Development with appropriate documentation to demonstrate that the Hotel Manager meets the requirements of this subsection. Any future changes in the Hotel Manager shall require review and approval by the Director of Community Development. The Director of Community Development may modified the standards for the Hotel Manager upon finding that the Hotel Manager has comparable experience meeting the interests served by the standards. The Hotel Manager shall ensure that all portions of the hotel are maintained and operated in accordance with the Four Star Hotel Standards, including but not limited to the condominium units, lobby and hallways, front desk, concierge services, landscape and open space areas, parking, banquet/ballroom facilities, conference, restaurant, retail, recreational, and spa facilities, and other amenities and improvements. Conditions, Covenants and Restrictions. The Developer shall prepare and submit to the City CC&R's governing the Project, including the condominium portion of the Project. The CC&R's must be approved by the Community Development Director and the City Attorney and recorded against the Property in the Riverside County Recorder's Office prior to the issuance of a certificate of occupancy for the Project or any portion thereof. All CC&R's shall include the following provisions: The CC&R's shall specifically include the provisions of Section 4.8 and 4.9 of this Agreement and shall incorporate by reference the terms of this GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciADA Ordinance.doc 10 ORDINANCE NO. 1158 Agreement and the Disposition and Development Agreement for the Property adopted on the same date as this Agreement. The CC&R's shall give the approved Hotel Manager the right, power and obligation to enforce the Four Star Hotel Standards including, without limitation, the right to enter any portion of the hotel and condominium units, and any individual condominium units upon sale or assignment of the Unit, to cure any failure to meet the Four Star Hotel Standards. The Hotel Manager shall provide transient rental services to all owners of the condominium units. The CC&Rs shall provide that the Unit Owners shall assign their units to the Hotel Manager for the purposes of rental to transient guests when not being used for Personal Use. The CC&R's shall give the Hotel Manager the exclusive right to provide to the condominium hotel, the property, and to unit owners, lessees and other occupants, any or all `on property' services commonly provided at Four -Star Hotels, restaurants and resorts, including without limitation, reservation programs, maid and housekeeping services, maintenance, laundry and dry cleaning, room service, catering and other food and beverage services, massage, personal training and other spa services. The use of such services, if offered, shall be conditioned upon payment of such charges or fees as may be imposed on unit owners or hotel guests by the Hotel Manager. Unit owners shall be required to enter into a unit maintenance agreement with the Hotel Manager, to be approved by the Director of Community Development. The CC&R's shall for the authority, but not the obligation, of the City to enforce, in its discretion, the provisions of the Development Plan and this Agreement. Subject to applicable California general law and Department of Real Estate regulations, the CC&R's shall provide that the obligation to pay the Transient Occupancy Tax shall constitute a lien by the City on the units for the amount owed, including any permitted penalties or interest, and that the City shall have the right, but not the duty, to foreclose on any such liens through equitable or legal proceedings. The CC&R's shall provide that they shall not be amended without the prior written approval of the Director of Community Development. Completion of Hotel and Condo -Hotel Components of Project. Developer shall complete construction of the hotel component of the Project prior to or concurrently with completion of construction of the condominium component of the Project. The City shall not issue a certificate of occupancy for the condominium component of the Project, or any part thereof, until the hotel component of the Project is completed and eligible for an unrestricted certificate of occupancy from the City and all other applicable requirements for issuance of a certificate of occupancy for the condominium component of the Project have been fulfilled. Art in Public Places. The City and Developer desire to cooperate with each other to secure the introduction and integration of public art into the Project for the purpose of enhancing the image of the City and the Project. Developer shall, at the request of the GAPfanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 11 ORDINANCE NO. 1158 City, provide such easements upon the Property as may be reasonably required for the installation and maintenance of such public art. The location of such easements shall be mutually approved by the City and Developer. In addition to providing such easements as may be reasonably required for the installation and maintenance of such public art, Developer shall pay to the City in lieu art fees at the time of and in connection with the development of the Property, or portions thereof, in accordance with the fee levels and other payment and procedural requirements of Chapter 4.10 of the Municipal Code of the City lawfully imposed at the time of development of the Property, or portions thereof. Periodic Review of Compliance. In accordance with Govt. Code Section 65865.1, the Department of Community Development/Planning Staff shall review this Agreement at least each calendar year during the term of this Agreement. At such periodic reviews, Developer must demonstrate its good faith compliance with the terms of this Agreement. Developer agrees to furnish such evidence of good faith compliance as the City, and after reasonable exercise of its discretion and after reasonable notice to Developer, may require. Permitted Delays; Supersede by Subsequent Laws. Permitted Delays. 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 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 Ordinances, or any other ordinance effecting 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. 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 any such modification or suspension based on the effect such modification or suspension would have on the purposes and intent of this GAPlanning\Tony Bagato\Word ResTormats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Councll\DA Ordinance.doc 12 ORDINANCE NO. 1158 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, except that the Term shall be extended, in accordance with Section 7.1 above, for a period of time equal to the length of time the challenge was pursued. Events of Default; Remedies; Termination. 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 ninety (90) 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 ninety (90) day period, the commencement of the cure within such ninety (90) day period and the diligent prosecution to completion of the cure shall be deemed to be a cure within such period. 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 parry charged therewith shall not be considered to be in default for purposes of termination of this Agreement, institution of legal proceedings with respect thereto, or issuance of any permit, map, certificate of occupancy, approval or entitlement with respect to the Project. Remedies. Upon the occurrence of an Event of Default, the nondefaulting party shall have such rights and remedies against the defaulting parry 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 not the right to damages. Notwithstanding the foregoing and except as otherwise provided in Section 8.4 hereof, if either Developer or City elects to terminate this Agreement as a result of the occurrence of an Event of Default, such proceeding of termination shall constitute such parry's exclusive and sole remedy, and with respect to such election City and Developer hereby waive, release and relinquish any other right or remedy otherwise available under this Agreement or at law or equity. 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 parry 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 specified in such express waiver. G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciRDA Ordinance.doc 13 ORDINANCE NO. 1158 Effect of Termination. Termination of this Agreement by one party due to the other parry's default, or as a result of the exercise of the right of termination provided to the Developer under Section 8.2 hereof, shall not affect any right or duty emanating, from any approvals, permits, certificates or other entitlements with respect to the Property or the Project which were issued, approved or provided by the City prior to the date of termination of this Agreement. If City terminates this Agreement because of Developer's default, then City shall retain any and all benefits, including money, land or improvements conveyed to or received by the City prior to the date of termination of this Agreement, subject to any reimbursement obligations of the City. If Developer terminates this Agreement because of City's default, or as a result of the exercise of the right of termination provided to the Developer under Section 8.2 hereof, 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. 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. Third Party Actions. Any court action or proceeding brought by any third party to challenge this Agreement or any permit or approval 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 parry defendant to or real party defendant in interest in such action or proceeding, shall constitute a permitted delay under Section 7.1. Encumbrances on Property. 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 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 modification. City further agrees that it will not unreasonably withhold its consent to any such requested modification. Mortme 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 Site or any portion thereof by a Mortgagee (whether pursuant to a GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 14 ORDINANCE NO. 1158 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. 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. 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, describing 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. Transfers and Assignments: Effect of Agreement on Title. Rights and Interests Appurtenant. The rights and interests conveyed as provided herein to Developer benefit and are appurtenant to the Property. Developer has the right to sell, assign and transfer 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 not be sold, transferred or assigned and such duties and obligations may not be delegated or assigned except in compliance with the following conditions: Said rights and together with and as an incident portions of the Property to which pursuant to any foreclosure of a Following any such sale, transfer c Developer under this Agreement, continue to be subject to the terry purchaser, transferee or assignee, interests may be sold, transferred or assigned only of the sale, lease, transfer or assignment of the they relate, including any transfer or assignment Mortgage or a deed in lieu of such foreclosure. )r assignment of any of the rights and interests of the exercise, use and enjoyment thereof shall s of this Agreement to the same extent as if the were Developer hereunder. Covenants Run with Land. 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) and assigns, devisees, lessees, and all other persons acquiring any rights or interests in GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciRDA Ordinance.doc 15 ORDINANCE NO. n58 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; All of the provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land pursuant to applicable law; 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 parry 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 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, 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: Larkspur Associates LLC 73626 Highway 111 Palm Desert, CA 92260 Either party may change its mailing address at any time by giving written notice of such change to the other parry in the manner provided herein. All notices under this Agreement shall be deemed given, received, made or communicated on the date personal delivery is affected or, if mailed, on the delivery date or attempted delivery date shown on the return receipt. Indemnification. Developer's Obligation. Developer will defend, indemnify and hold the City and its elected officials, officers and employee free and harmless from any loss, cost or liability (including, without limitation, liability arising from injury or damage to persons or property, including wrongful death and worker's compensation claims) which results from (i) any obligation which arises from the development of the Property including, without limitation, obligations for the payment of money for material and labor; (ii) any failure on GAPlanning\Tony BagatoMord Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City CounciNDA Ordinance.doc 16 ORDINANCE NO. 1158 the part of Developer to take any action which he is required to take as provided in this Agreement; (iii) any action taken by Developer which he prohibited from taking as provided in this Agreement and (iv) any claim which results from any willful or negligent act or omission of Developer. 12.2 Environmental Assurances. Developer shall indemnify and hold the city, its officers, agents and employees free and harmless from any liability deriving from the City's execution or performance of this Agreement, based or asserted, upon any act or omission of Developer, its officers, agents, employees, contractors, subcontractors and independent contractors for any violation of any federal, state or local law, ordinance or regulation relating to hazardous or toxic materials, industrial hygiene, or environmental conditions created by Developer or its officers, agents or employees, contractors, subcontractors and independent contractors after the Effective Date on, under which the Property, including, but not limited to soil and groundwater conditions, and Developer shall defend, at its expense, including attorneys fees, the City its officers, agents and employees in any action based or asserted upon any such alleged act or omission. The City may in its discretion participate in the defense of any such action. The provisions of this Section shall survive the termination or expiration of this Agreement. Miscellaneous 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. Consents. Unless otherwise herein provided, whenever approval, consent, acceptance or satisfaction (collectively, a "consent') is required of a party pursuant to this Agreement, it shall not be unreasonably withheld or delayed. Unless provision is otherwise specified in this Agreement or otherwise required by law for a specific time period, consent shall be deemed given within thirty (30) days after receipt of the written request for consent, and if a party shall neither approve nor disapprove within such thirty (30) day period, or other time period as may be specified in this Agreement or otherwise required by law for consent, that party shall then be deemed to have given its consent. If a party shall disapprove, the reasons therefor shall be stated in reasonable detail in writing. This Section does not apply to development approvals by the City. 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 purposes herein expressed for the development of the Project as private property. GAPlanning\Tony BagatoMord Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 17 ORDINANCE NO. 1158 Severabilitv. 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. Exhibits. The following Exhibits, to which reference is made herein, are deemed incorporated into this Agreement in their entirety by reference thereto: Exhibit A Description of Project Exhibit B Legal Description of the Property 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. Except as otherwise specified in this Agreement and the Exhibits hereto, any prior correspondence, memoranda, agreements, warranties or representations are superseded in total by this Agreement and Exhibits hereto. 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. 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. Time. Time is of the essence of this Agreement and of each and every term and condition hereof. Prevailing Partv's Attorneys 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 the meaning or interpretation of 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. Notwithstanding the foregoing, City shall not be required to pay any costs or expenses (including without limitation, reasonable attorneys' fees and GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 18 ORDINANCE NO. 1158 expenses) which Developer may incur in respect of any hearing held pursuant to Section 7 hereof. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. DEVELOPER: LARKSPUR ASSOCIATES, LLC, a California limited liability company By: Name: Title: i41-I--4J,�) Me,71ej By: _ Name: Title: CITY: CITY OF PALM DESERT, CALIFORNIA, a municipal corporation organized and existing under the laws of the State of California By: Mi aw M. BENSON, MAY, Attest: SS RA LE D. CITY CLERK CITY OF PALM DESERT, CALIFORNIA —1 — 1 CP — O'g G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 19 ORDINANCE NO. 115 State of California } County of Riverside } On (-j'j0 , before me, a notary public, personally appeared it i .r FA who roved to me on the basis of satisfactory evidence to be the person whose narie( isla subscribed to the within instrument and acknowledged to me that he/ executed the same in his/h it authorized capacity(ies), and that by his' it signatures;-s� on the instrument the persort(s) or the entity upon behalf of which the person(>� 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. IaM ALVAREZ �� Y A / COMM. #1660611 JC l U NOTARY PUBUCCNUFORMA A OUffy igna ure 0° MyConmmE� A .zo,u (seal) G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 20 ORDINANCE NO. 1158 State of California ) County of Riverside } On July 16, 2008 1 before me, M. Gloria Martinez a notary public, personally appeared Jean M. Benson and Rachelle D. Klassen who proved to me on the basis of satisfactory evidence to be the person whose name@) iA0 subscribed to the within instrument and acknowledged to me that hp/she a executed the same in gslK /t ei authorized capaci i s , and that by th ' signatures on the instrument the person@ or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) M. GLORIA MARTINEZ _ Commission # 1697036 Notary No RNIde County My Comm. Expirm Oct 29,201 G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 21 ORDINANCE NO. 1158 EXHIBIT "A" DEVELOPMENT PLAN/PROJECT DESCRIPTION The Development Plan and Project Description shall consist of the following: 1. The Developer shall develop, build and operate a Four -Star boutique hotel with a maximum of 154 units/keys consisting of two fully integrated components: (1) a three-story Four Star boutique hotel with one hundred six (106) hotel rooms; and (2) a two-story condominium project consisting a maximum of sixteen (16) condominium hotel suites each with three (3) bedroom lockout rooms (forty-eight keys maximum) as specifically described the City's approvals of DA 07-02, PP 07-11 and CUP 07-14, and the site plans approved therein. 2. The maximum number of keys for the Project shall be one hundred fifty four (154). The Project also includes a two hundred three (203) underground parking spaces, a restaurant area, gift shop, conference and meeting rooms, spa, and amenities including a roof deck pool and bar, roof deck garden and roof deck patios on eleven (11) of the sixteen (16) condominium hotel units. 3. Subsequent land use approvals in accordance with the terms of this Development Agreement. 4. The Project is located at 45-400 Larkspur Lane, Palm Desert, California, APNs 627-262-008 and 627-262-011. GAPlanning\Tony BagatoMord Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 22 ORDINANCE NO. 1158 EXHIBIT "B" LEGAL DESCRIPTION OF PROPERTY ALL OF LOTS 6 AND 7, A PORTION OF LOT 1 AND A PORTION OF LOT 5 IN BLOCK Q OF PALM DESERT UNIT NO. 1, AS PER MAP RECORDED IN BOOK 21, PAGES 50 TO 54 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 7; THENCE ON THE EASTERLY LINE OF SAID LOT 7 AND ITS SOUTHERLY PROLONGATION, SOUTH 0008'35" EAST, 400.00 FEET TO THE NORTHERLY LINE OF SHADOW MOUNTAIN DRIVE, 60.00 FEET WIDE; THENCE ON SAID NORTHERLY LINE, 500 SOUTH 89044'35" WEST, 199.96 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ON SAID CURVE THROUGH A CENTRAL ANGLE OF 90°06'50", A DISTANCE OF 31.46 FEET TO THE EASTERLY LINE OF LARKSPUR LANE, 60 FEET WIDE; THENCE TANGENT TO SAID CURVE AND ON THE EASTERLY LINE, NORTH 00008'35" WEST, 379.96 FEET TO THE NORTHWEST CORNER OF SAID LOT 7; THENCE ON THE NORTHERLY LINE OF SAID LOT 7, NORTH 8944'35" EASTER, 62.11 FEET; THENCE LEAVING SAID NORTHERLY LINE, NORTH 66004'55" EAST, 96.85 FEET; THENCE NORTH 73015'25" EAST, 36.83 FEET; THENCE SOUTH 13049'41" EAST, 19.88 FEET; THENCE SOUTH 12°31'53" WEST, 30.76 FEET TO THE AFOREMENTIONED NORTHERLY LINE OF LOT 7; THENCE ON SAID NORTHERLY LINE, NORTH 89044'35" EAST, 36.01 FEE TO THE POINT OF BEGINNING. GAPlanning\Tony Bagato\Word Files\Formats\Staff Reports\PP\PP 07-11, CUP 07-14, DA 07-02 Larkspur Associates\City Council\DA Ordinance.doc 23 [This page has intentionally been left blank.] ORDINANCE NO. 1158 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT FOR A NEW THREE-STORY 106-ROOM BOUTIQUE HOTEL AND TWO-STORY CONDOMINIUM UNIT INCLUDING SIXTEEN 3-BEDROOM LOCKOUT ROOMS (48 KEYS MAXIMUM) TOTALING A MAXIMUM OF 154 UNITS/KEYS, EXHIBIT "A" ATTACHED. CASE NO. DA 07-02 WHEREAS, the Planning Commission by its Resolution No. 2477 has recommended approval of Case No. DA 07-02; 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 Agreement 07-02, Exhibit "A" attached, by Ordinance No. 1158 is hereby approved. SECTION 2: That the City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in the Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall 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 10th day of Ju1Y 2008, by the following vote, to wit: AYES: FERGUSON, FINERTY, KELLY, SPIEGEL, and BENSON NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: RA E LE D. KLASSE ITY CLERK CITY OF PALM DESERT, CALIFORNIA --�_ lcp-o'g JV#N M. BENSON, MAYOR EACH DOCUMENT TO WHICH THIS CERTIFICATE 19 ATTACHED. IS CERTIFIED TO BE A FULL, TRUE AND CORRECT COPY OF THE ORIGINAL ON FILE AND ON RECORD IN VVIDF.BM