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HomeMy WebLinkAboutORD 687ORDINANCE NO. 687 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY AND WILLIAMS DEVELOPMENT CORPORATION CONCERNING THE SALE BY THE CITY OF THREE ACRES OF REAL PROPERTY TO THE DEVELOPER FOR THE PURPOSE OF CONSTRUCTING A PREVIOUSLY APPROVED AFFORDABLE SEVENTY-TWO UNIT SENIOR HOUSING APARTMENT PROJECT (PP/CUP 89-18) LOCATED AT 73-600 CATALINA WAY, PALM DESERT, CALIFORNIA. WHEREAS, the City Council of the City of Palm Desert, California did on June 25, 1992, hold a duly noticed public hearing to consider a Disposition and Development Agreement between the City. of Palm Desert and Williams Development Corporation concerning the sale by the City of three acres of real property to the developer for the purpose of facilitating the construction of a previously approved affordable seventy-two unit senior. housing apartment project (PP/CUP 89-18) located 73-600 Catalina Way, Palm Desert, California; WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons to exist to approve the agreement: 1. The proposed Disposition and Development Agreement is consistent with the goals of providing affordable senior citizen housing as described in the City of Palm Desert Housing Element, the Palma Village Specific Plan and the Senior Housing Overlay; 2. The proposed project is an appropriate use of the senior housing in lieu fee fund; 3. The proposed agreement provides the City with sufficient security to protect the City's financial interest in the project; 4. There exists critical need for affordable senior housing in the City of Palm Desert; 5. The previously approved affordable seventy-two unit senior housing apartment project (PP/CUP 89-18) was and is intended to address this need; 6. The City spent $570,000 of affordable housing funds in January of 1989 to purchase the real property for this project, which funds were collected for the express purpose of providing affordable senior housing, which goal cannot be accomplished if the completion of this project is delayed; 7. It is absolutely critical that the developer obtain construction financing for this project and that this project be completed not later than March, 1993; 8. That the developer cannot obtain construction financing for the construction of this project unless the Disposition and Development Agreement is immediately approved by the City of Palm Desert; 9. That it is critical to this project that the Riverside County Housing Authority provide financing for -the project, which housing authority financing will be lost unless this project is approved by the City on or before June 30, 1992; 10. That the prior proposed developer of this project, Cable & Rylee, Inc. failed to obtain financing for, this project. It appears that the present developer, Williams Development - Corporation, will be able to obtain construction financing in order to construct this project and thereby meet a critical need within the City for affordable senior housing, so long as the City approves the Disposition and Development Agreement attached hereto as Exhibit "All -on or before June 30, 1992; NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Palm Desert, California as follows: 1. That the above recitations are true and correct and constitute the findings of the Council in this case; 2. That the Disposition and Development Agreement, attached hereto as Exhibit "A" is hereby approved. PASSED, APPROVED, and ADOPTED at the regular meeting of the Palm Desert City Council held this 25th day of June, 1992 by the following vote, to wit: AYES: Benson, Crites, Snyder, Wilson, Kelly NOES: None ABSENT: None ABSTAIN: None a-z,la - V-a-4, RICHARD S. KELLY, Mayo vel of the City of Palm Desert, California ATTEST: Sheila Gilligan, ty Cle k of the Cit o Palm Desert, Califor -2- 13 DISPOSITION AND DEVELOPMENT AGREEMENT This Disposition and Development Agreement ("Agreement"), dated as of J , 1992, is entered into by and between the City of Palm Desert, a municipal corporation ("the City"), and E. G. Williams Development Corporation, a California corporation, (the "Developer"). RECITALS This Agreement is entered into with reference to the following facts: A. City is a municipal corporation, exercising governmental functions and powers, and organized and existing under the Law of the State of California. B. The Developer intends to develop an apartment complex of 72 units on certain real property defined herein as the Property. The Property is currently owned by the City. It is the intent of the Parties that the City shall sell the Property to the Developer as provided in this Agreement upon satisfaction of certain conditions precedent. C. The principal objective hereof is to create an affordable housing inventory available to be leased to senior citizens of very low or low income who but for this program might not be able to obtain housing at affordable cost, and to reach that objective the parties hereto will require an extraordinary level of cooperation with each other, which level of effort the parties hereto covenant to provide. D. Construction of the Improvements (as hereinafter defined) constituting the Project pursuant to this Agreement is in the best interests of the City, and the health, safety and welfare of the residents and taxpayers of the City, and is in accord with the public purposes and provisions of applicable state and local laws. E. A material inducement to the City to enter into this Agreement is the agreement by the Developer to construct the Improvements within a limited period of time, and the City would be unwilling to enter into this Agreement in the absence of an enforceable commitment by the Developer to construct the Improvements within such period of time. KAC23771 Rev. 1 NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1. DEFINITIONS. Section 1.1. Definitions. The following terms as used in this Agreement shall have the meanings given unless expressly provided to the contrary: 1.1.1. Agreement means this Disposition and Development Agreement. 1.1.2. Certificate of Completion means a certificate in the form attached hereto as Exhibit "D", to be provided by the City to the Developer upon satisfactory completion of the Improvements as provided in Section 3.14. 1.1.3. City means the City of Palm Desert, a municipal corporation. 1.1.4. Closing has the meaning defined in Section 2.3.2. 1.1.5. Closing Date means the date upon which the City by grant deed shall convey title to the Property to the Developer and such grant deed or deeds are recorded in the Official Records of the County of Riverside. 1.1.6. Construction Contract has the meaning defined in Section 3.9. 1.1.7 Conventional Senior Housing means rental or ownership units designed and restricted to healthy, ambulatory senior citizens who remain capable of performing most activities associated with independent daily life. Other than having smaller units and possessing design features and recreational amenities more compatible with a less active lifestyle, conventional senior housing shall resemble standard housing. 1.1.8. Default has the meaning defined in Section 6.1. 1.1.9. Developer means E. G. Williams Development Corporation, a California corporation controlled by Elizabeth G. Williams. The principal office of the Developer for purposes of this Agreement is 42-600 Cook Street, Suite 135, Palm Desert, Ca. 92260. 1.1.10. Escrow has the meaning defined in Section 2.3. 1.1.11. Escrow Holder means First American Title Insurance Company. The office of the Escrow Holder for purposes of this Agreement is 3625 14th Street, Riverside, California 92502. MAC23771 Rev. 1 -2 - • • 1.1.12. General contractor has the meaning defined in Section 3.9.1. 1.1.13. Hazardous Materials shall include, but not be limited to, substances defined as "hazardous substances," "hazardous materials," "pollutant or contaminant," "imminently hazardous chemical substance or mixture," "hazardous air pollutant," "toxic pollutant," "hazardous waste," "extremely hazardous waste" or "toxic substances" in any of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. S9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. S1801, et seq.; The Resource Conservation and Recovery Act, 42 U.S.0 S6901, et seq.; and those substances defined as "hazardous substances" in S25316 of the California Health & Safety Code; and in the regulations adopted and publications promulgated pursuant to said laws ("Hazardous Materials Laws"). 1.1.14. Improvements means the apartment complex of 72 dwelling units, all ancillary improvements, and all infrastructure necessary for the utilization of such dwelling units as an apartment complex, including, streets, curbs, gutters, storm drains, utilities, and parking, and all parks, ancillary improvements, apparatus and equipment, as generally depicted" bii the Precise Plan (as defined below). 1.1.15 Very Low Income Senior Citizen Ho_usehQld means senior citizen households whose gross income'does not exceed 45% of the median income for one and two person households for Riverside County based upon financial and demographic data received from the United States Department of Housing and Urban Development (HUD) or its successor agency ("median income"). This information is included in Exhibit E and shall be updated automatically as current data is obtained from HUD. If in the future more relevant data is made available specifically applicable to senior citizens by (HUD) or other officially recognized agencies, such data shall become the basis of this Agreement. 1.1.16 Low Income Senior Citizen Household means senior citizen households whose income does not exceed 60$ of the median income. 1.1.17. Party means any party to this Agreement. The "Parties" shall be all parties to this Agreement. 1.1.18. Plans and Specifications means the latest dated Final Construction Drawings (as defined in Section 3.3), final certified soil compaction report from the soils engineer, and final elevations per approved grading plan for construction of the Improvements, as approved by the City. 1.1.19. Precise Plan means Precise Plan/Conditional Use Permit 89-18, approved by the Planning Commission of the City of MAC23771 Rev. 1 -3- Palm Desert on July 5, 1989, by Resolution No. 89-18, as amended, which plan is incorporated herein by this reference. 1.1.20. Proiect means the construction of the Improvements on the Property in accordance with the Precise Plan and the Plans and Specifications. 1.1.21. Property is that certain real property described in Exhibit "A-1" attached hereto and incorporated herein by this reference, and depicted on the Site Plan attached hereto as Exhibit "A-2", attached hereto and incorporated herein by this reference. 1.1.22. Purchase Price has the meaning defined in Section 2.1. 1.1.23. Schedule of Performance means the schedule attached hereto as Exhibit "C" to this Agreement, which is incorporated herein by this reference. 1.1.24. ''Senior Citizen Household means a maximum two (2) person household of which all members are sixty-two (62) years of age or older. 1.1.25. Transfer has the meaning defined in Section 4.1. 1.1.26 Useful Life of the Project means the greater of thirty (30) years or the period of time which the Project remains habitable, with reasonable care and maintenance. ARTICLE 2. SALE OF THE PROPERTY Section 2.1. Sale to the Developer. Upon satisfaction (or waiver by the City) of the conditions described in Section 2.7, the City agrees to sell the Property to the Developer, and the Developer agrees to purchase the Property from the City, for the sum of $1.00 (the "Purchase Price"), on the terms and conditions hereinafter set forth. The Purchase Price shall be paid in cash on the Closing Date. Section 2.2. Evidence of Financing. 2.2.1. On or before the date set forth therefor in the Schedule of Performance, the Developer shall submit to the City, for approval by the City Manager and/or the City Manager's designee, evidence of construction and take-out financing for the Project. Evidence of construction financing shall include, at a minimum, the Developer's proforma and line -item budget showing that estimated acquisition and development costs match adequate financing (including the source of financing), a copy of a commitment obtained by the Developer for a mortgage loan or loans W23T71 Rev. 1 -4- to assist in financing the hard and soft costs of constructing the Improvements, financial statements, and other evidence satisfactory to the City of sources of loans or capital, sufficient to demonstrate that the Developer has adequate funds to cover development and construction costs of the entire Project (including hard and soft costs), or to cover the difference, if any, between the amount of the development and construction costs and the amount of construction loan financing authorized by a mortgage loan. For purposes of this Agreement, a "take-out financing„ commitment may include an agreement by a financially capable third party to purchase the entire Project upon its completion at a price equal at least to the hard and soft costs of developing the Project. The terms -and conditions of such commitments, and the identity of the construction lender itself, shall be subject to approval by the City Manager and/or the City Manager's designee, which approval may be granted or withheld in the City Manager's and/or the City Manager's designee's reasonable discretion. In particular, the construction loan commitment shall provide for a sufficient term of the loan necessary for construction of all Improvements consistent with the Schedule 'of 'Performance, plus additional time for reasonable delays, and shall not have discretionary contingencies, nor shall it contain`aiCappraisal contingency, but it may include customary contingencies outside the lender's or Developer's control (such as a contingency' of the provision of the funds for the take-out loan or purchase commitment). The Developer's failure to deliver such commitments' by the dates set forth therefor in the Schedule of Performance' -shall be a default hereunder. 2.2.2. The'City shall reasonably cooperate with the Developer and its construction lender in connection with the construction loan to be obtained by the Developer to finance development of the Project. The City shall provide such reasonable information and execute such reasonable documents and instruments as may be required by such construction lender, provided such documents or instruments do not increase the duties and obligations of the City under this Agreement, or otherwise prejudice the'City. Section 2.3. Esdt6w. 2.3.1. guening of Escrow. Within five (5) business days after the City's execution of this Agreement, the Developer and the City shall cause an escrow ("the Escrow") to be opened with Escrow Holder for the sale of the Property by the City to the Developer. The Parties shall deposit with the Escrow Holder a fully executed duplicate original of this Agreement, which shall serve as the escrow instructions for the Escrow. The City and the Developer shall provide such additional escrow instructions as shall be necessary and consistent with this Agreement. The Escrow Holder is authorized to act under this Agreement, and to carry out its duties as the Escrow Holder hereunder. 2.3.2. -Close of Escrow. "Close of Escrow" or "Closing" means the date -Escrow Holder causes the deed in favor MAC23n1 Rev. 1 - 5 - of the Developer to be recorded in the Official Records of the County of Riverside and delivers the Purchase Price to the Developer. Escrow shall close upon satisfaction of all conditions precedent set forth in Section 2.7, below. Section 2.4. Condition of Title; Title Insurance. 2.4.1. At the Closing the City shall convey title to the Property to the Developer by grant deed substantially in the form attached hereto as Exhibit B and incorporated herein by this reference. The City shall convey title to the Developer subject to all title exceptions affecting the Property at the time Property is conveyed to the Developer and any other matters consented to by the Developer or which arise out of the actions of the Developer or the Developer's agents. 2.4.2. At the Closing, City shall, at the Developer's sole cost and expense, deliver to the Developer an ALTA Joint Protection Policy of Title Insurance, issued by First American Title Insurance Co., in the minimum amount of the construction loan, insuring that title is free and clear of all liens, easements, covenants, conditions, restrictions, and other encumbrances of record, except as permitted hereunder. Section 2.5. Escrow and Title Charges. The Developer shall be solely responsible for all title insurance premiums, recording fees, documentary and local transfer taxes, and escrow fees and charges arising hereunder. Section 2.6. gondition of the Property. The Property shall be conveyed from the City to the Developer in "as is" condition, and the Developer hereby releases City the from any and all liability or responsibility for the physical condition of the Property or any portion thereof, including without limitation any liability or costs that might be incurred by the Developer by reason of the presence of Hazardous Materials on the Property. If the Property is not in a condition suitable for the intended use or uses, then it is the sole responsibility and obligation of the Developer to take such action as may be necessary to place the Property in a condition suitable for development of the Project thereon. Section 2.7. Conditions to Conveyance. The obligation of the City to convey the Property to the Developer under this Article 2 shall be subject to the satisfaction or waiver of each of the following conditions. 2.7.1. The concurrent recordation and closing of the Developer's construction loan. 2.7.2. The issuance of the binding and enforceable take-out financing commitment, which may include a commitment of a financially capable third party to purchase the Property at a XAC23771 Rev. 1 - 6 - 0 0 price equal to all hard and soft costs to be incurred in the development and construction of the Property. 2.7.3. Issuance of a commitment for delivery of the bonds described in Section 3.9. The Parties agree that if the foregoing conditions are not waived or satisfied within six (6) months of the date of this Agreement, then the Developer shall be in default hereunder. Section 2.8. Escrow Holder 2.8.1. Escrow Holder is authorized to: 2.8.1.1. Pay and charge the Developer for any fees, charges and costs payable under this Article. Before such payments are made, the Escrow Holder shall notify the City and the Developer of the fees, charges, and costs necessary to close under the Escrow; 2.8.1.2. Disburse funds and deliver the deeds and other documents to the parties entitled thereto when the conditions of the Escrow have been fulfilled by the City and the Developer; and 2.8.1.3. Record any instruments delivered through the Escrow, if necessary or proper, to vest title in the Developer in accordance with the terms and provisions of this Agreement. 2.8.2. If the Escrow is not in condition to close before the time for conveyance established in Section 2.7, either party who then shall have fully performed the acts to be performed before the conveyance of title may, in addition to all other legal or equitable remedies, in writing, terminate this Agreement in the manner hereinafter set forth, and demand the return of its money, papers or documents. Thereupon all obligations and liabilities of the parties under this Agreement shall cease and terminate in the manner hereinafter set forth. If neither the City nor the Developer shall have fully performed the acts to be performed before the time for conveyance established in the Schedule of Performance, no termination or demand for return shall be recognized until ten (10) days after Escrow Holder shall have mailed copies of such demand to the other Party at the address of its or their principal place or places of business. If any objections are raised within the ten-day period, Escrow Holder is authorized to hold all money, papers and documents with respect to the Property until instructed in writing by both the City and the Developer or upon failure thereof by a court of competent jurisdiction. If no such demands are made, the Escrow shall be closed as soon as possible. 2.8.3. Any amendment of these escrow instructions shall be in writing and signed by both the City and the Developer. At the MAC23771 Rev. 1 -7 - time of any amendment, Escrow Holder shall agree to carry out its duties as escrow holder under such amendment. 2.8.4. All communications from the Escrow Holder to the City or the Developer shall be directed to the addresses and in the manner established in Section 7.3 of this Agreement for notices, demands and communications between the City and the Developer. 2.8.5. The liability of the Escrow Holder under this Agreement is limited to performance of the obligations imposed upon it under this Article 2, and any amendments hereto agreed upon by Escrow Holder. ARTICLE 3. DEVELOPMENT OF THE PROPERTY Section 3.1. Development of the Property. The Developer shall construct the Improvements on the Property in accordance with the Precise Plan for development approved by City and any other conditions of approval 'of the Plans and Specifications, and all terms, conditions and requirements of this Agreement, including the Schedule of Performance, it being agreed that construction, improvements in accordance with the Precise Plan and all conditions of approval, and all terms hereof, is of the essence of this Agreement in view of`the need for the Improvements within the City. In connection with such construction, the Developer shall comply with all requirements of the City's Municipal Code. The Project shall be completed in accordance with the Schedule of Performance. Section 3.2. city 's Right to Review Plans and Spec, ifications. In connection with construction of the Project, the Developer shall comply in all respects with plans and specifications approved by the City in accordance with this Agreement. The Developer shall also prepare plans and specifications that shall comply with the requirements of the City's Municipal Code, and any and all applicable federal, state and local laws, rules and regulations. The City shall have the right to review and approve all plans and specifications for the Project, as hereinafter provided, so as to ensure that the Improvements are, in the City's sole discretion, being constructed to the quality described in the Precise Plan. Section 3.3. Final Construction Drawings and Related Documents. Developer shall prepare and submit to the City, for review and written approval by the City, Final Construction Drawings, which shall include complete construction documents, site development elevations, final landscaping and finish grading plans, and related documents. Final Construction Drawings are hereby defined as those in sufficient detail necessary to obtain building permits. Section 3.5. Approval of Plans. The City shall approve or disapprove the Final Construction Drawings, in a timely fashion. Any MAC23771 Rev. 1 _ 8 - 0 • disapproval shall state in writing, the reasons for disapproval. The Developer upon receipt of a disapproval, shall revise such portion of the plans, drawings or related documents in a manner that satisfies the reasons for disapproval and shall resubmit such revised portions to the City as soon as possible after receipt of the notice of disapproval. The City shall approve or disapprove such revised portions in the same manner as provided in this Agreement for approval or disapproval of plans, drawings, and related documents initially submitted to the City. Any items submitted to and approved by the City shall not be subject to subsequent disapproval. Section 3.6. Changes in Construction Drawings. If the Developer desires to make any changes in the Final Construction Drawings and related documents (other than minor changes required by field conditions) after their approval by the City, the Developer shall submit the proposed changes to the City for approval. If approved, the City shall notify the Developer of such approval in writing within 14 days after submission to the City. Any proposed change in the Final Construction Drawings shall, in any event, be deemed disapproved by the City unless approved, in whole or in part, by written notice thereof by the City to the Developer within such 14 day period. The Developer, upon disapproval, shall revise such portions as are rejected and resubmit them to the City. Section 3.7. Cost of Construction. The cost of the Project, including the Costs for developing and constructing the Improvements, shall be borne by the Developer. Section 3.8. Construction Schedule 3.8.1. The Developer shall begin and complete all construction of the Project, within the times specified in the Schedule of Performance or such reasonable extension of said dates as may be granted by this Agreement or by the City. After commencement of construction, the Developer shall diligently pursue completion of the Project. In any event, the Improvements constituting the Project shall be completed no later than the date set forth in the Schedule of Performance. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Developer and the City. 3.8.2. The Developer shall give written notification to the City prior to the start of construction. During the period of construction, but in no event less often than once per month, the Developer shall submit to the City written reports of the progress of the construction. The report shall be in such form and detail as to inform the City fully of the status of construction, and shall include a reasonable number of photographs (if so requested by the City) taken since the last report by the Developer. The Developer shall report to the City on the construction progress and on the Developer's compliance with the plans and specifications, according MAC23771 Rev. 1 -9- to which the Developer agrees that all construction shall be performed. Section 3.9. Construction Contract(s) and Bond. 3.9.1. The construction of the Improvements shall be accomplished by a written contract or contract(s) ("Construction Contracts)"), which Construction Contract(s) shall obligate reputable and financially responsible contractors ("Contractor (s) ") , licensed in California, and experienced in completing the type of improvements contemplated by this Agreement, to commence and complete the construction of such Improvements in accordance with this Agreement and all applicable law. The Construction Contract(s) shall be guaranteed maximum cost contract(s) insuring construction of the Improvements for a fixed price, subject to such reasonable adjustments as are customarily allowed with respect to construction contracts. 3.9.2. Prior to commencing any work the Developer shall secure and deposit with the City a Performance Bond and a Labor and Material Payment Bond ( in the form of AIA form A311 or A312) , issued by a surety acceptable to the City in the City's reasonable discretion, securinq'the"faithful performance by the Contractor(s) of the completion of construction of the Improvements free of all liens and claims, within the time provided in the Schedule of Performance. Such bonds shall be in an amount equal to one hundred percent (100%) of the Construction Contract(s). Such construction bonds shall name the City as a co -obligee. Such construction bonds shall be issued by a company acceptable to the City and listed in the current United States Treasury Department circular 570 and otherwise within the underwriting limits specified for that company in such circular. Section 3.10. Local. State and Federal Laws. The Developer shall carry out the construction of the Improvements in conformity with all applicable laws, including all applicable federal and state occupation, safety and health standards. The Developer represents and warrants that all of the Improvements to be constructed by the Developer shall be constructed in compliance with the current City and State of California standards and laws, and in compliance with all laws or regulations with respect to the payment of prevailing wages, to the extent applicable to the Developer, if any. The foregoing does not necessarily require the payment of union wages or scale. In performing this Agreement, the Developer is an independent contractor and not the agent of the City. The City shall not have any responsibility whatsoever for payment to any contractor or supplier of the Developer. Notwithstanding the foregoing, the Developer understands that it may be subject to certain public contract requirements as provided by law, and to the extent that the Developer is subject to such requirements, the Developer shall comply with all such requirements. KAC23771 Rev. 1 —10— 0 • Section 3.11. City and Other Governmental City Permits and Approvals. Before commencement of construction or development of any work of improvement, the Developer shall (at the Developer's expense) secure, or cause to be secured, any and all permits which may be required by the City or any other governmental agency having jurisdiction over such construction or development. Section 3.12. Anti -discrimination During Construction, The Developer for itself and its successors and assigns agrees that it shall not discriminate against any employee or applicant for employment because of age, sex, marital status, race, handicap, color, religion, creed, ancestry, or national origin in the construction of the Improvements constituting the Project. Section 3.13. 'faxes, Assessments Encumbrances and Liens. The Developer shall pay when due all real property taxes and assessments assessed or levied on the Property and the Project. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, or to limit the remedies available to the Developer in respect thereto. Section 3.14. Certificate of Completion. 3.14.1. After completion of construction and development by the Developer of any units or ancillary improvements constituting the Project, the City shall, promptly following written request by the Developer therefor, furnish the Developer with a Certificate of Completion in the form attached hereto as Exhibit D for such completed Improvements. After issuance of a Certificate of Completion for such completed Improvements, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the portion of the Property described in the Certificate of completion shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement as to such portion of the Property, except that such party shall be bound by any covenants, conditions or restrictions contained in the grant deed by the City to the Developer or other instruments made in accordance with the provisions of this Agreement. Neither the City nor any other person, after recordation of a Certificate of Completion, shall have any rights, remedies or controls that it would otherwise have or be entitled to exercise under this Agreement as to such portion of the Property, as a result of a default in or breach of any provision of this Agreement; except that said Certificate of Completion shall have no effect on the Developer's obligations under any other separate instrument signed by the Developer in favor of the City, nor shall it have any effect on the Developer's obligations under the indemnities provided herein, nor shall it have any effect on portions of the property for which a Certificate of Completion has not been issued. 3.14.2. If the City refuses or fails to furnish a Certificate of Completion after written request from the Developer, the City PAC23771 Rev. 1 -11- shall, within fourteen (14) days after the written request, provide the Developer with a written statement of the reasons the City refused or failed to furnish such Certificate of Completion. The statement shall also contain the City's opinion of the action the Developer must take to obtain such Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items or material for landscaping, and the estimated cost of completion does not exceed $10,000.00, then the City will issue its Certificate of Completion upon the posting by the Developer with the City of a bond or other collateral in an amount representing the fair value of the work not yet completed, but posting such bond shall not excuse the Developer from obligation to complete the work. 3.14.3. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, trust deed or other security instrument. Such Certificate of Completion shall not be construed as a notice of completion as described in California Civil Code Section 3093. ARTICLE 4. LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS Section 4.1. Limitation As To Transfer of the Property and Assignment of Agreerngnt. Prior to recordation by the City of the Certificate of Completion, the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor sell, transfer, convey, lease, mortgage, encumber, or hypothecate ("Transfer") the whole or any part of the Property without the prior written approval of the City. The City may grant or withhold such consent in its sole and absolute discretion. The Developer acknowledges that the identity of the Developer is of particular concern to the City, and it is because of the Developer's identity that the City has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the 'Developer shall acquire any rights or powers under this Agreement except that the Developer may, with the prior approval of the City, which approval may be granted or withheld in the City's reasonable discretion, assign its rights and obligations hereunder to a successor partnership in which Elizabeth G. Williams, or a corporation formed and controlled by her and in which she controls at least 2/3rds of the voting stock thereof, is the Managing General Partner or Co -Managing General Partner with one other managing partner; with principal managerial control over the Project, and the other partner(s) is(are) non -managing general partner(s) or limited partner(s). No transfer or assignment hereunder shall be deemed to release E. G. Williams Development Corporation, from the obligations of the Developer hereunder. This prohibition shall not be deemed to prevent the (i) granting of easements or permits to facilitate the development of the Property, or (ii) any mortgage or deed of trust permitted by this Agreement. KaC23T71 Rev. 1 -12 - Section 4.2. Security Financing; Right of Holders. 4.2.1. No E cumbrance& Except Mortgages, Deeds of Trust or other Conveyance for Financing For Development. 4.2.1.1. Notwithstanding Section 4.1 or any other provision herein to the contrary, mortgages, deeds of trust or any other form of encumbrance or conveyance required for any reasonable method of financing are permitted, but only with the prior written approval of the City (which approval shall not unreasonably be withheld) , and only for the purpose of securing loans of funds to be used for financing the direct and indirect costs of the Project (including reasonable and customary developer fees, loan fees and costs, and other normal and customary project costs). 4.2.1.2. The words "mortgage" and "deed of trust" as used herein include all other appropriate modes of financing commonly used in real estate acquisition, construction and land development. 4.2.2. Notice of Default to Mortgage. Deed of Trust or Other Security Interest Holders; Right to Cure. Whenever the City shall deliver a notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Improvements, the city shall at the same time deliver a copy of such notice or demand to each holder of record of any first mortgage, deed of trust or other security interest authorized by this Agreement who has previously made a written request to the City for special notice hereunder. No notice of default to the Developer shall be effective against any such holder unless given to such holder as aforesaid. Such holder shall (insofar as the rights of the City are concerned) have the right, at its option, within 30 days after receipt of the notice, to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien of its security interest. If such default shall be a default which can only be remedied or cured by such holder upon obtaining possession, such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within a reasonable period of time as necessary to remedy or cure such default of the Developer. 4.2.3. Noninterference with Holders. The provisions of this Agreement do not limit the right of holders to foreclose"or otherwise enforce any mortgage, deed of trust, or other security instrument encumbering the Property and the improvements thereon, or the right of holders to pursue any remedies for the enforcement of any pledge or lien encumbering the Property; provided, however, that in the event of a foreclosure sale under any such mortgage, deed of trust or other lien or MAC23771 Rev. 1 -13- 0 • encumbrance, or sale pursuant to any power of sale contained in any such mortgage or deed of trust, the purchaser or purchasers and their successors and assigns, and the Property, shall be, and shall continue to be, subject to all of the conditions, restrictions and covenants of this Agreement and all documents and instruments recorded pursuant hereto. ARTICLE 5. USE OF THE PROPERTY Section 5.1. Uses. The Developer covenants and agrees for itself, and its successors and its assigns, that the Developer, such successors, and such assignees shall use the Property and every part thereof only for the construction and operation of the Project in accordance with the Precise Plan, and for no other purpose, said covenant to use the Property for this use shall run with the land for the benefit of the City for the purpose of protecting the interest of the community, and shall be binding on the Developer and all successors in interest of the Developer. The City shall have the right, if such covenants are breached, to exercise all rights and-kemedies and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of such covenants may be entitled, including, without limitation, specific performance', damages, and injunctive relief. specifically, Developer covenants and agrees that: 5.1.1. Conventional Senior Housing. All apartments in the Project shall be offered as Conventional Senior Housing. 5.1.2. Affordable Units. The Project shall contain affordable apartments as follows: 5.1.2.1. Developer shall reserve of the total apartments for rent 15% (12 apartments) for Very Low Income Senior Households and 15% (12 apartments) for Low Income Senior Households. Such units shall be referred to as "Affordable Units" for purposes of this Agreement. 5.1.2.2. The maximum initial rents charged, the maximum income levels'and the apartment mix for the Affordable Units, during the first twelve (12) months following completion of the Project, shall be as follows: Maximum of Annual Unit TvAe Units Income Monthly Rent Studio (Very Low Income) 8 $11,340 $233 Studio (Low Income) 8 $15,120 $328 1 Bdrm (Very Low Income) 4 $12,996 $304 1 Bdrm (Low Income) 4 $17,328 $383 NAMT71 Rev. 1 -14- 5.1.2.4. The Affordable Units shall be of a quality and design indistinguishable from the other apartment units in the Project, and shall be evenly distributed throughout the Project. The Affordable Units shall be periodically rotated as vacancies permit. 5.1.3. The Developer may provide, at the tenant's option, optional care services for an additional charge. This agreement does not restrict or limit optional care services or charges. 5.1.4. Developer or its assigned management agent shall be responsible for determining the eligibility of prospective tenants. Prior to opening the apartment project, Developer shall submit for approval a plan to City describing the procedure for determining and enforcing eligibility requirements. This plan shall include annual qualification by all eligible households and shall be subject to review and approval by City. The City or its assigned agent may request an audit to determine compliance with all affordable housing provisions of this Agreement. Audit shall be requested as the City deems necessary and shall be at the Developer's expense. 5.1.5. On each anniversary date of the date of completion of the Project, the rent for each unit shall be adjusted in accordance with the Affordable Housing Income and Rent Schedule percentage increase or decrease issued by the HUD relative to the initial rental term hereunder for each subsequent year hereof. 5.1.6. Affordable Units Reserved. Developer or its successors in interest shall reserve the Affordable Units as set forth in this Agreement for the Useful Life of the Project. 5.1.7. Age limits. The minimum age for all Project occupants shall be sixty-two (62) years. Section 5.2. Maintenance of the Property. After completion of the Project, the Developer, and the Developer's successors and assigns, shall maintain the Project (including landscaping) in the manner of first class residential developments. Section 5.3. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors and assigns, and for every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, handicap, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, and the Developer (itself or any person claiming under or through the Developer) shall not establish or'permit any such practice or practices of discrimination or segregation with reference to the selection, MAC23771 Rev. 1 -15- location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property or any portion thereof. Section 5.4. Form of Nondiscrimination and Nonseareaation Clauses. The Developer shall refrain from restricting the rental, sale or lease of the Property or any portion thereof, on the basis of sex, handicap, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 5.4.1. In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, handicaps color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nbr shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 5.4.2. In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: 'That there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, handicap, color, religion, creed, national origin or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the land herein leased."' 5.4.3. In contracts relating to the sale or transfer of the Property or any interest therein: "There shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, handicap, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees of the land." MAC23771 Rev. 1 -16- Section 5.5. Effect and Duration gf Covenants. Following development of the Project in accordance with this Agreement and after issuance of the Certificate of Completion for the Property, each of the rights, duties and obligations of the Developer and the City shall be deemed to have been satisfied under this Agreement, and the Developer and its successors in interest to the Property shall have no further obligations with respect to the matters provided for in this Agreement with the exception of the following, each of which shall be set forth in particularity in any document of transfer or conveyance by the Developer: 5.5.1. The use and maintenance requirements set forth in Section 5.1 and 5.2, which shall remain in effect until the greater of thirty (30) years or the period of time which the Project remains habitable, with reasonable care and maintenance; 5.5.2. The anti -discrimination and nonsegregation requirements set forth in Sections 5.3 and 5.4 which shall remain in effect in perpetuity; 5.5.3. Easement's'to the City, or other public agencies for utilities existing as of the execution of this Agreement, which shall remain in effect according to their terms; 5.5.4. The indemnities and warranties, which shall remain in effect in perpetuity. ARTICLE 6. EVENTS OF DEFAULT, REMEDIES AND TERMINATION Section 6.1. Defaults --Definition. Occurrence of any or all of the following shall constitute a default ("Default") under this Agreement: 6.1.1. The Developer's neglect, failure or refusal to keep in force and effect any permit or approval with respect to construction of the Improvements or any policy of insurance required hereunder, and the Developer's failure to cure such breach within ten (10) calendar days after written notice from the City of the Developer's breach; 6.1.2. Filing of a petition in bankruptcy by or against the Developer or appointment of a receiver or trustee of any property of the Developer, or an assignment by the Developer for the benefit of creditors, or adjudication that the Developer is insolvent by a court, and the failure of the Developer to cause such petition, appointment, or assignment to be removed or discharged within sixty (60) days; 6.1.3. The Developer's failure to perform any requirement or obligation of Developer set forth herein or in the KAC23771 Rev. 1 -17- Schedule of Performance on or prior to the date for such performance set forth herein or in the Schedule of Performance, and the failure of the Developer to cure or perform such obligation or requirement within thirty (30) days after written notice of such delinquency; or 6.1.4. The Developer's failure to commence construction of the Improvements prior to the last date therefor set forth in the Schedule of Performance, provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled., or due to causes beyond the Developer's control as provided in Section 7.12 hereof, and the Developer's failure to cure such breach within thirty (30) days after receipt of written notice from the City of the Developer's failure to so commence construction as required herein; or 6.1.5. The Developer's failure to diligently pursue construction of the Improvements for a period of thirty (30) days after written notice from the City provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled, or due to causes beyond the Developer's control as provided in Section 7.12 thereof; or 6.1.6. The Developer's failure to complete construction of the Improvements within the time period provided in the Schedule of Performance without having obtained an extension or postponement to which the Developer may be entitled, or due to causes beyond the Developer's control as provided in Section 7.12 hereof, and the Developer's failure to cure such breach within thirty (30) calendar days after receipt of written notice from the City of the Developer's failure to so complete construction as required herein; or 6.1.7. The Developer's Transfer (as defined in Section 4.1), or the occurrence of any involuntary Transfer, of the Property or any part thereof or interest therein in violation of this Agreement; or 6.1.8. Any other breach of this Agreement, and the continuance of such breach for a period of thirty (30) days after the City has given written notice, as specified in Section 7.3 requiring it to be remedied, and stating that such notice is a "Notice of Default" hereunder, unless such breach cannot reasonably be remedied in thirty (30) days, in which event the Developer shall not be in default if it commences to cure such breach within such thirty (30) day period and diligently pursues the cure to completion. Section 6.2. 'Remedies in the Event of Default. 6.2.1. Remedies Prior to Closing Date. In the event of a Default under this Agreement by either the Developer or the City prior to the Closing Date, the non -defaulting Party shall, RAC23771 Rev. 1 -18- have the right to terminate this Agreement by delivering written notice thereof to the defaulting Party and to Escrow Holder, and the non -defaulting Party may seek against the defaulting Party any available remedies at law or equity, including but not limited to the right to receive compensatory damages or to pursue an action for specific performance. Notwithstanding anything to the contrary contained in this Section 6.2.1, however, if this Agreement is terminated based on failure of the conditions set forth in Section 3.7, the environmental warranties and other indemnities shall survive such termination. 6.2.2. Remedies of the Parties for Default After the closing Date and prior to Issuance of the Certificate of Completion. In the event of a Default under this Agreement by a Party after the Closing Date and prior to the recordation of a Certificate of Completion, the defaulting Party shall be liable to the non -defaulting party for all damages and liabilities incurred by the non -defaulting Party and the non -defaulting Party may seek against the defaulting Party any available remedies at law or equity, including but not limited to the right to receive compensatory damages or to pursue an action for specific performance. 6.2.3. Liberal Constructign. The rights established in this Article are to be interpreted in light of the fact that the City will convey the Property to the Developer for development and operation of the Project thereon and not for speculation in undeveloped land or for construction of different improvements. The Developer acknowledges that it is of the essence of this Agreement that the Developer is obligated to complete all Improvements comprising the Project. Section 6.3. No Personal Liability. Except as specifically provided herein to the contrary, no representative of the City shall personally be liable to the Developer, or any successor in interest of the Developer, in the event of any Default or breach by the City, or for any amount which may become due to the Developer, or any successor in interest, on any obligation under the terms of this Agreement. Section 6.4. Legal Actions. 6.4.1. Institgtion of Legal Actions. Any legal actions brought pursuant to this Agreement must be instituted in either the Superior Court of the County of Riverside, State of California, or in an appropriate municipal court in that County. 6.4.2. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 1b1C23771 Rev. 1 -19- 6.4.3. Ac eAtance of Servi a of Process. If any legal action is commenced by the Developer against the City, service of process on the City shall be made by personal service upon the executive director or secretary of the City, or in such other manner as may be provided by law. If any legal action is commenced by the City against the Developer, service of process on the Developer shall be made by personal service upon the Developer, or in such other manner as may be provided by law, whether made within or without the State of California. Section 6.5. Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by the other party. Section 6.6. Inaction Not a Waiver of Default. Except as expressly provided in this Agreement to the contrary, any failures or delays by either Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. ARTICLE 7. GENERAL PROVISIONS Section 7.1. Insurance. 7.1.1. Throughout construction of the Improvements, the Developer shall take out and maintain, at no cost or expense to the City, with a reputable and financially responsible insurance company reasonably acceptable to the City, comprehensive broad form general public liability insurance, insuring the Developer and the City against claims and liability for bodily injury, death, or property damage arising from the use, occupancy, condition, or operation of the Property and the Improvements thereon, which insurance shall provide combined single limit protection of at least $2,000,000, and include contractual liability endorsement. Such insurance shall name the City and their members, officers, employees, and servants, as additional insureds. 7.1.2. Before commencement of any demolition or construction work on the Property, or any portion thereof, the Developer shall also procure or cause to be procured, and shall maintain in force until completion of said work (i) "all risk" builder's risk insurance, including coverage for vandalism and malicious mischief, in a form and amount and with a company reasonably acceptable to the City, and (ii) workers' compensation insurance covering all persons employed in connection with work on MACZ3771 Rev. 1 —2 0— the Property, or any portion thereof. Said builder's risk insurance shall cover improvements in place and all material and equipment at the job site furnished under contract, but shall exclude contractors', subcontractors', and construction managers' tools and equipment and property owned by contractors' and subcontractors' employees. 7.1.3. The Developer shall also furnish or cause to be furnished to the City evidence satisfactory to the City that any contractor with whom it has contracted for the performance of work on Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. 7.1.4. With respect to each policy of insurance required above, the Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on the insurance carrier's form setting forth the general provisions of the insurance coverage. The required certificate shall be furnished by the Developer prior to commencement of construction of the Improvements. 7.1.5. All such policies required by this Section shall be nonassessable and shall contain language to the effect that (i) the policies cannot be canceled or materially changed except after thirty (30) days' written notice by the insurer to the City, and (ii) the City shall not be liable for any premiums or assessments. All such insurance shall have deductibility limits reasonably satisfactory to the City. Section 7.2. Indemnity. From and after the execution of this Agreement, the Developer hereby agrees to indemnify, defend, protect, and hold harmless the City and any and all agents, employees and representatives of the City, from and against all losses, liabilities, claims, damages (including consequential damages), penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket litigation costs and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to, or arising out of or in connection with: (i) the Project or the use, ownership, management, occupancy, or possession of the Project or any part thereof (provided, however, this clause shall apply to the Developer only so long as the Developer holds an interest in the Property), (ii) any breach or Default of the Developer hereunder, (iii) any of the Developer's activities on the Property (or the activities of the Developer's agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on the Property), MAC23771 Rev. 1 —21— including without limitation the construction of any Improvements on the Property, or (iv) any other fact, circumstance or event related to the Developer's performance hereunder, or which may otherwise arise from the Developer's ownership, use, possession, improvement, operation or disposition of the Property, regardless of whether such losses and liabilities shall accrue or are discovered before or after termination or expiration of this Agreement, except to the extent such losses or liabilities are caused by or contributed by the negligent or intentionally wrongful act of the City. Section 7.3. Notices. All notices and demands shall be given in writing by certified mail, postage prepaid, and return receipt requested, or by personal delivery. Notices shall be considered given upon the earlier of (a) personal delivery or (b) two (2) business days following deposit in the United States mail, postage prepaid, certified or registered, return receipt requested. A copy of all notices shall be sent to Escrow Holder. Notices shall be addressed as provided below for the respective party; provided that if any party gives notice in writing of a change of name or address, notices to such party shall thereafter be given as demanded in that notice: City: Mr. Bruce Altman City Manager City of Palm Desert 73-510 Fred Waring Drive Palm Desert, California 92260 (Telephone: 619-346-0611) (Fax: 619-340-0574) with a copy to: Best, Best & Krieger A Partnership including professional corporations 39-700 Bob Hope Drive, Suite 312 P.O. Box 1555 Rancho Mirage, California 92270 Attention: Douglas S. Phillips and Michael A. Criste (Telephone: 619-568-2611) (Fax: 619-340-6698) Developer: E. G. Williams Development Corporation 42-600 Cook Street, Suite 135 Palm Desert, California 92260 (Telephone: 619-345-7541) (Fax: 619-345-7683) MAC23771 Rev. 1 -22- 0 with a copy to: Best, Best & Krieger A Partnership including professional corporations 600 Tahquitz Way Palm Springs, California 92262 Attention: W. Curt Ealy (Telephone: 619-325-7264) (Fax: 619-325-0365) Escrow Holder: First American Title Insurance Company 3625 14th Street Riverside, California 92502 (Fax: 714-784-7956) Section 7.4. Broker's Commissions. The Developer represents and warrants to the City that the Developer has used no broker, agent, finder or other person in connection with the transaction contemplated hereby to whom a brokerage or other commission or fee may be payable. The City represents and warrants to the Developer that the City has used no broker, agent, finder or other person in connection with the transaction contemplated hereby to whom a brokerage or other commission or fee may be payable. Each party indemnifies and agrees to defend and hold the other harmless from any claims resulting from any breach by the indemnifying party of the warranties, representations and covenants in this section. The Developer hereby freely and voluntarily waives the requirements of Government Code Sections 7267.2(b) (1) and (2) and 7267.2(c). Section 7.5. Constrict tion. The Parties agree that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. Section 7.6. Interpretation. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words "person" and "party" include corporation, partnership, firm, trust, or association where ever the context so requires. Section 7.7. Time of the Essence. Time is of the essence of this Agreement. Section 7.8. Conflicts of Interest. No member, official or employee of the City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to this Agreement which is in violation of applicable law. Section 7.9. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, to any third person, any money or other KAC23771 Rev. 1 -2 3 - consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, engineers and attorneys. Section 7.10. Attorneys' Fees. If either Party brings an action to enforce the terms hereof or declare its rights hereunder, the prevailing Party in any such action shall be entitled to its reasonable attorneys' fees to be paid by the losing Party as fixed by the court. If either the City or the Developer, without fault, is made a Party to any litigation instituted by or against the other Party, such other Party shall defend it against and save it harmless from all costs and expenses including reasonable attorney's fees incurred in connection with such litigation. Section 7.11. Enforced Delay: Extension of Times of Performance. In addition to specific provisions of this Agreement, delay in performance by either party hereunder shall not be a Default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; unusually severe weather; or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall only be for'the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause, if the party claiming such extension gives notice of the delay within 45 days after the commencement of the cause. If, however, the party claiming such extension fails to give such notice within 45 days after the commencement of the cause, the period shall commence to run only 1.0 days prior to the giving of such notice. Times of performance under this Agreement may be extended in writing by the City and the Developer. Section 7.12. Approvals by City and the Developer. Unless otherwise specifically provided herein, wherever this Agreement requires the City or the Developer to approve any contract, document, plan, proposal, specification, drawing or other matter, such approval shall not unreasonably be withheld. Section 7.13. Inspection of Books and Records. The City shall have the right at all reasonable times to inspect the books and records of the Developer pertaining to the Property as pertinent to the purposes of this Agreement. Section 7.14. Plans and Data. If the Developer does not proceed with the purchase or development of the Property or if this Agreement is terminated for any reason, the Developer shall, subject to any rights provided by the Developer to its construction lender, deliver to the City, without cost or expense to the City, copies of any and all maps, architecture, engineering, subdivision approvals, permits, entitlements, rights, MAC23771 Rev. 1 - 2 4 - contracts, plans, drawings, studies, designs, reports, surveys, and data pertaining to the Project and its development (collectively, "Site Designs") which are in the possession of the Developer, together with a Bill of Sale therefor, which Site Designs shall, subject to any rights thereto provided by the Developer to its construction lender, thereupon be the sole property of the City and may be used by the City, free of all claims or interests of Developer or any other person, other than the interest therein held by Developer's construction lender, whose interest shall be superior to that of City in the Site Designs; and which city may use, grant, license or otherwise dispose of to any person for development of the Site or any other purpose. Section 7.15. Developer's Private Undertaking. The development covered by this Agreement is a private undertaking, and the Developer shall have full power over and exclusive control of the Property while the Developer holds title to the Property; subject only to the limitations and obligations of the Developer under this Agreement. Section 7.16. Entire Agreement Waivers and Amendments. The Agreement is executed in duplicate originals, each of which is deemed to be an original. This Agreement, together with all attachments and exhibits hereto, constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. No subsequent agreement, representation or promise made by either Party hereto, or by or to any employee, officer, agent or representative of either Party, shall be of any effect unless it is in writing and executed by the Party to be bound thereby. No person is authorized to make, and by execution hereof the Developer and the City acknowledge that no person has made, any representation, warranty, guaranty or promise except as set forth herein; and no agreement, statement, representation or promise made by any such person which is not contained herein shall be valid or binding on the Developer or the city. Section 7.17. Severability. Each and every provision of this Agreement is, and shall be construed to be, a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall to any extent be held to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected hereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. M:CZ3771 a.. 1 -25- Section 7.18. Survival. The provisions hereof shall not terminate but rather shall survive any conveyance hereunder and the delivery of all consideration. IN WITNESS WHEREOF, the parties hereto have entered into this agreement as of the day and year first above written. E. G. Williams Development Corporation, a Califo corporation By: E. G. Williams, resident city of Palm Desert, a municipal corporation r By: ATTEST: °mot -Se etary STATE OF CALIFORNIA }ss. COUNTY OF Riverside } on July 7. 1992 before me, _ nQbh f P T. _ WnnR ' 'I z peisonatlyappeared E. G. Williams, President r= personaily known to me (or proved >a to me on the basis of satisfactory evidence) to be the persons) whose name(s) istare subscribed to the within LL instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies). 2 and that by his/her/their signature(s) on the instrument the persoa(sjobQ�{t1i)yj�Qfb "Dug raQao person(s) acted, executed the instrument, g OFFICIAL. SEAR' I $ ©EBBIE IL WOOD NOTARY PUBLIC--CALIFORNW; 3 NOTARY BOND FILED 1 -- WITNESS my hand and official seal. NOTl�YH�DE y ld Signatu-11 14 ��s3%n Exi*= FEBRUARY 28. 1994 0�000004i00000pO�Q1**a** goo e0000o0�0 1 frhis area for official noLvWi seal) KACZ3771 -2 6 - Rev, 1 • EXHIBITS Exhibit A: A-1 - Legal Description of the Property A-2 - Site Plan of the Property Exhibit B - Form of Grant Deed Exhibit C - Schedule of Performance Exhibit D - Form of Certificate of Completion Exhibit E - Housing and Urban Development Income Statistics KAC23771 Rev. 1 -27- Ll GRANT DEED RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: E. G. Williams Development Corporation 42-600 Cook Street, Suite 135 Palm Desert, California 92260 GRANT DEED The undersigned Grantor Declares: • Documentary Transfer Tax is $ computed upon full valued of property conveyed. FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the City of Palm Desert, a municipal corporation ("Grantor"), hereby grants to E. G. Williams Development Corporation, a California corporation ("Grantee"), the real property (the "Property") described in Exhibit "A" attached hereto and incorporated herein by this reference. 1. This Grant of the Property is subject to a Disposition and Development Agreement (the "Agreement") entered into by and between Grantor and Grantee dated , 1992, the terms of which are incorporated herein by reference. A copy of the Agreement is available for public inspection at the offices of the Grantor, 73-510 Fred Waring Drive, Palm Desert, California 92260. The Property is conveyed further subject to all easements, rights of way, covenants, conditions, restrictions, reservations and all other matters of record. Upon recordation by the Grantor of a Certificate of Completion for all or a portion of the Property, such Certificate of Completion shall constitute evidence that Grantee has satisfied Grantee's construction obligations under the Agreement as to the portion of the Property described in the Certificate of Completion. 2. The Grantee covenants and agrees for itself, and its successors and its assigns, that the Grantee, such successors, and such assignees shall use the Property and every part thereof only for the construction and operation of a senior housing development, and that at least 24 units on the Property shall be sold or rented only to very low and low income households in accordance with the Precise Plan, the Site Plan, and plans approved by the Grantor pursuant to the Agreement. The Grantee MAC23771 Rev. 1 -28- • U further covenants and agrees that upon completion of the Project as described in the Agreement, the Grantee shall maintain the Property (including landscaping) in the manner of first class residential planned developments. 3. By acceptance hereof, Grantee agrees, for itself, its successors and assigns, to refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion, ancestry, sex, marital status, or national origin of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself or any persons claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. The foregoing covenants shall run with the land. All deeds, leases or contracts entered into with respect to the Property shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, national origin, sex, marital status, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use or occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." MAC23771 Rev. 1 -2 9- (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, national origin, sex, marital status or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the property described herein. 4. All covenants contained in this Grant Deed shall run with the land and shall be binding for the benefit of Grantor and its successors and assigns and such covenants shall run in favor of the Grantor and for the entire period during which the covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies provided herein or otherwise available, and to maintain any actions at law or suits in equity or other property proceedings to'enforce the curing of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors and assigns. 5. The covenants contained in Paragraph 2 of this Grant Deed shall remain in effect until the greater of thirty (30) years or the period of time which the Project remains habitable, with reasonable care and maintenance. The covenants contained in Paragraph 3 of this Grant Deed shall remain in effect in perpetuity. City of Palm Desert, a municipal corporation By: Attest: Secretary MAC23771 Rev. 1 -30- Accepted and Agreed: E. G. Williams Development Corp ati n , California cor t' n By: E. G. Williams, Pres. STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instrument as , the municipal corporation that executed the within nstrument, and acknowledged to me that such municipal corporation executed the within instrument. WITNESS my hand and official seal. signature MAC23771 Rev. 1 —31- EXHIBIT "C" Schedule of Performance 1. Execution of Agreement by City and Developer 2. Submission of final grading plans, offsite improvements and final construction drawings sufficient to obtain permits including lot line adjustment required by Precise Plan/Conditional Use Permit 3. Construction lender completion of appraisal Process 4. City approval of final building and grading plans and issuance of permits 5. Construction lenders approval of construction loan and developers submission of take-out financing commitment 6. Close of escrow for City sale of property to developer June 29 July 10 July 15 Within 30 days of acceptance by City as complete July 30 Upon satisfaction of all conditions precedent but no later than 60 days after execution of this agreement or City may terminate obligations hereunder 7. Recordation of the construction lender's deed Concurrent with close of of trust and the construction lender's escrow for City sale of commitment to fund balance of construction property loan. Developers submission of performance bonds and recordation of lot line adjustment and dedications S. Commencement of grading Within 5 days of issuance of grading permit • Schedule of Performance 9. ComUlet'ion of grading and site work 10. Commence construction on 72 units 11. Completion of all construction FA Is forty-five days after issuance of grading permit but no later than October 1, 1992 Within 60 days of issuance of grading permit but not later than October I. 1992 March 1, 1993 0 EXHIBIT D CERTIFICATE OF COMPLETION RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CERTIFICATE OF COMPLETION This Certificate of Completion is given this day of , 199_, with reference to the following matters: A. City of Palm Desert, a municipal corporation ("City") and E. G. Williams Development Corporation, a California corporation ("Developer") entered into a certain Disposition and Development Agreement dated as of , 1992 (the "Agreement"), which Agreement provides, in Section 4.17 thereof,that the City shall furnish the Developer with a Certificate of Completion upon satisfactory completion of the construction and development required with respect to improvements on said Property, which certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Riverside County; and B. By Grant Deed dated 1992 and recorded on as Document Official Records of the County Recorder, County of Riverside, California, the City, pursuant to said Agreement, conveyed to the Developer certain real property (hereinafter referred to as the "Property") situated in the City of Palm Desert, County of Riverside, California, as described on Exhibit A, attached hereto and made a part hereof; and C. The City has determined that the construction and development on the portion of the Property described on Exhibit B, attached hereto, has been satisfactorily performed; and D. The Certificate of Completion shall be conclusive determination of satisfactory completion of the construction and KACZ3n1 Rev. 1 -34- development required with respect to the portion of the Property described in Exhibit B. NOW, THEREFORE, the Parties to this instrument hereby provide as follows: 1. As provided in said Agreement and Grant Deed, the City does hereby certify that the construction and development on the property described in Exhibit attached hereto has been satisfactorily performed and complete. 2. This certificate shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a mortgage, or deed of trust or any insurer of a mortgage, or deed of trust securing money loaned to finance the improvements or any part thereof. IN WITNESS WHEREOF, the City and the Developer have executed this Certificate as of the day and year first above written. City of Palm Desert, a municipal corporation By: Attest: Secretary RAC23771 Rev. 1 -35- Accepted and Agreed: E. G. Williams Development Corporation, a California corporat' n. By: E. G. W 11 ams, Pres.