Loading...
HomeMy WebLinkAboutRes 05-17 and 497 - R23430 Exchange Agreement - Desert Wells 237, LLCCITY OF PALM DESERT/PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: AUTHORIZE THE EXCHANGE AGREEMENT BETWEEN THE PALM DESERT REDEVELOPMENT AGENCY AND DESERT WELLS 237, LLC FOR THE EXCHANGE OF APPROXIMATELY .86 ACRES LOCATED AT THE NORTHEAST CORNER OF PORTOLA AND FRANK SINATRA SUBMITTED BY: DAVE YRIGOYEN, DIRECTOR OF REDEVELOPMENT/HOUSING DATE: FEBRUARY 10, 2005 CONTENTS: CITY RESOLUTION NO. 05-17 AGENCY RESOLUTION NO. 497 EXCHANGE AGREEMENT SECTION 33433 REPORT PROPERTY CONFIGURATIONS AND ROUTING PLANS Recommendation: By Minute Motion: 1 That the City Council approves Resolution No. 05-17 , a resolution of the City Council of the City of Palm Desert approving an Exchange Agreement with Desert Wells 237, LLC; and 2. That the Agency Board approves Resolution No. 497 , a resolution of the Palm Desert Redevelopment Agency approving an Exchange Agreement with Desert Wells 237, LLC. Executive Summary: Desert Wells 237, LLC has requested the exchange of .86 acres of land at the northeast corner of Portola and Frank Sinatra for the purpose of developing an aesthetic transition between two properties, Desert Well's residential development and the Agency's future golf course development. The proposed Desert Wells development lies adjacent to the170 acres owned by the Redevelopment Agency. By implementing this property line adjustment, the Agency will give up approximately .86 acres of the 170-acre property, but at the same time gain .86 acres of the Desert Wells 237, LLC land, resulting in no net Toss of Agency property. The developer would also provide an easement releasing the Agency from flight of ball issues or views. Staff Report Exchange Agreement - Palm Desert Redevelopment Agency/Desert Wells 237 LLC Page 2 of 3 February 10, 2005 Discussion: Desert Wells 237, LLC is requesting approval from the Palm Desert Redevelopment Agency to adjust the common line between properties located at the northeast corner of Portola Avenue and Frank Sinatra Drive, adjacent to the Redevelopment Agency's 170- acre site. It is the intention of Desert Wells 237, LLC to develop a residential community that will abut the 170-acre site to the northeast. The primary reason for this request is to create a more aesthetically pleasing boundary, allowing the golf course line to undulate between the two properties. In implementing the property line adjustment, the Agency will give up approximately .86 acres of the 170-acre site, shown in Exhibit A, and will gain back approximately .86 acres of the adjacent property. Therefore, there will be no net loss of Agency property. The City of Palm Desert's Planning Department has reviewed this request to adjust the standard boundary and endorses the exchange. Hurdzan and Fry, the original company who designed the Desert Willow Golf Resort, reviewed Desert Wells' request and its impacts on a possible third golf course on the 170-acre site. Hurdzan and Fry found that the existing triangular configuration is not the most efficient shape for the utilization of a golf course. Therefore, this modification to the boundary between the two properties could benefit the City's future development of the 170 acres. Michael Hurdzan was asked to construct a routing plan using the proposed delineation to determine any future impact to the City's 170-acre proposed golf course site. This routing plan is attached for your review. It was found that there would be no encroachment from the homes impacting the size or shape of any future golf course. Staff expressed a concern to the Developer regarding the issue of golf ball flight and views from the proposed homes adjacent to the golf course. A solution was that the Developer would provide the Agency with an easement releasing the Agency from any claims due to the flight of golf balls onto the adjacent homes. Additionally, that the owners of the adjacent properties would waive any view rights that they may have over or across the proposed golf course. The Developer would be required to inform the future homeowners about the easement and the Agency's rights. The Exchange Agreement holds Desert Wells 237, LLC responsible for all costs associated with title reports, environmental testing, closing costs, and recording fees. In any transfer of property, the Agency is required, pursuant to Section 33433 of the Health and Safety Code to analyze the transaction for a determination of fair reuse or fair market value. The 33433 report prepared for this transaction found that the conveyance of this property is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code, and that the exchange is a fair market value transaction. G:1RDA\Cathy Walker\Word Data STAFF REPORTSIsTAFF REPORT DESERT WELLS.doc Staff Report Exchange Agreement - Palm Desert Redevelopment Agency/Desert Wells 237 LLC Page 3 of 3 February 10, 2005 Staff recommends that the Agency Board authorize the Exchange Agreement between Desert Wells 237, LLC and the Palm Desert Redevelopment Agency, thereby allowing for both a functional and aesthetically pleasing boundary between the two properties. Submitted by: David Yri Director of ; 'development/Housing oye DY:CW:mh Approval: Carlos L. Orte Approval: McCarthy edevelopm ............. , Executive Director Paul Gibson, Director of Finance G:1RDA\Cathy Walker Word Data\STAFF REPORTS1sTAFF REPORT DESERT WELLS.doc CONSULTING May 11, 2004 Mr. Dave Yrigoyen CITY OF PALM DESERT 73-510 Fred Waring Drive Palm Desert, CA 92260 Subject: University Park — Request for Land Transfer Dear Dave: JN 20-100376 On behalf of the property owner, Desert Wells 237, LLC, RBF Consulting is requesting approval from the City of Palm Desert Redevelopment Agency to adjust the common property line between properties. The primary reason for this request is to ultimately create a more aesthetically pleasing boundary between the two properties versus a straight line. It is felt this adjustment will create better designs for both the proposed single family tract on University Park and the future City golf course. Attached for your review are exhibits depicting the existing and proposed property lines which reflect that the before and after net acreages are the same. Also included is an exhibit reflecting the additions and subtractions of acreage. As discussed with Mark Greenwood and yourself, if approved by the City, a separate parcel would be created and added to the Parcel Map for the entire University Village project. Future street right of ways would be dedicated in order to construct the backbone road system as approved in the City's General Plan which includes a right turn pocket on Portola Avenue. Upon your review please call me with any questions. Sincerely, Robert Ross, P.E. Vice President H:IPDATA12010037MA mi keprne$mir[rl Qartdb aferAlox>;o.346.7481 ■ Fax 760.346.8315 Offices located throughout California, Arizona & Nevada • www.RBF.com printed on recycled paper can w/01/9 rxvar nMarososo'aoadeL133avaW3atao\suenidvaNAOmO\oZIOOLO \vivad\ N co r sW g °CC ga �a O 0 W a o 0 EL • CC a 1332�1S N000 Lil 1- LL o F- CO CDQz LU - UOU QOQ O r O Mtn M O (/) Cr) I•-• W c0 J � 311N3AV Vi012:10d ,009=„ l :31t/OS Ld > Ids Q z ct Lj- j5S - STREET RIGHT OF WAY ACREAGE wd SO ♦o/II/0 WNW gACC1.0 0S0-3:0911BLl?JW4Ld30N00\SCI81Wf3\ONVADOVADMOLOAVIVGA:H 2w g4 o co aW O V aU 133211S A000 '' /1/'( W r i> ce / ° z - .. v ~ 0.22 AC. 0.27 AC. < O 0.07 AC. Q p O U Q O CO v I0.14 AC. U Q U Q 0.25 AC. U Q 0.24 AC. 0.86 AC. N O O CV C7 O O O J IQmUO W I�CD 2•-•7Y J0 I- 3f1N3AV V10180d z LL C41 S5 Z 7 Z 0 0 cs:v o/ot/s roar worrososa-pemoavaVa3oroo\saBaooi\@m\aawa\onoowtvvlvoa\ Nk�/// r 'rji 42 /7 1332i1S >1000 cc 1- W W 1- 0� w CD O Z C-)0 C) QQ 00 0 O ►r) 0 (/) I� W CO 311N3AV V10180d ,008=„ l Md0S gg Uc3 of E y_ W LL 0 IN ap r, Z • R 2 Z a J a 10_0 IN 7 ■ N • Z 0 0 - STREET RIGHT OF WAY ACREAGE A ►r l 29, OO4 FRANK S I ATRA DRIVE RESOLUTION NO. 05- 17 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING AN EXCHANGE AGREEMENT WITH DESERT WELLS 237, LLC THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. In order to effectuate the provisions of the Redevelopment Plan (the "Redevelopment Plan") for Project Area No. 2 (the "Project Area"), the Palm Desert Redevelopment Agency (the "Agency") proposes to enter into an Exchange Agreement (the "Agreement") with Desert Wells 237, LLC (the "Purchaser"), pursuant to which Agreement the Agency will convey to the Purchaser title to that certain real property described in Exhibit A to the Agreement (the "Agency Property") and located in the City of Palm Desert, California (the "City"), y ), in exchange for the conveyance by the Purchaser to the Agency of title to that certain real property described in Exhibit B to the Agreement (the "Purchaser Property") and located in the City. Section 2. On February 10, 2005, the City Council and the Agency Board held a duly noticed public hearing on the approval of the Agency's proposed conveyance of the Agency Property to the Purchaser pursuant to the Agreement, at which time all persons desiring to comment on, or ask questions concerning, the Agreement were given the opportunity to do so. Prior to the public hearing, information concerning the Agency's proposed conveyance of the Agency Property to the Purchaser was available for public inspection in office of the City Clerk in accordance with Health and Safety Code Section 33433. Section 3. Based upon the foregoing and other information presented to the City Council, the City Council hereby finds and determines that (i) the conveyance of the Agency Property to the Purchaser is consistent with the Agency's implementation plan adopted pursuant to Health and Safety Code Section 33490; (ii) the conveyance of the Agency Property to the Purchaser pursuant to the Agreement will assist in the elimination of one or more blighting conditions inside the Project Area, and (iii) the consideration for the Agency Property is not less than the fair market value of the Agency Property at its highest and best use in accordance with the Redevelopment Plan for the Project Area. P6402100011775117.2 RESOLUTION NO. 05- 17 Section 4. The City Council hereby approves the conveyance of the Property to the Purchaser. PASSED, APPROVED and ADOPTED this 10 day of February 2005, by the following vote to wit: AYES: NOES: ABSENTS: ABSTAINS: ATTEST: Rachelle D. Klassen, City Clerk P640210001\775117.2 By: 2 Buford A. Crites, Mayor RESOLUTION NO. 497 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING AN EXCHANGE AGREEMENT WITH DESERT WELLS 237, LLC THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. In order to effectuate the provisions of the Redevelopment Plan (the "Redevelopment Plan") for Project Area No. 2 (the "Project Area"), the Palm Desert Redevelopment Agency (the "Agency") proposes to enter into an Exchange Agreement (the "Agreement") with Desert Wells 237, LLC (the "Purchaser"), pursuant to which Agreement the Agency will convey to the Purchaser title to that certain real property described in Exhibit A to the Agreement (the "Agency Property") and located in the City of Palm Desert, California (the "City"), in exchange for the conveyance by the Purchaser to the Agency of title to that certain real property described in Exhibit B to the Agreement (the "Purchaser Property") and located in the City. Section 2. On February 2, 2005, the City Council and the Agency Board held a duly noticed public hearing on the approval of the Agency's proposed conveyance of the Agency Property to the Purchaser pursuant to the Agreement, at which time all persons desiring to comment on, or ask questions concerning, the Agreement were given the opportunity to do so. Prior to the public hearing, information concerning the Agency's proposed conveyance of the Agency Property to the Purchaser was available for public inspection in office of the City Clerk in accordance with Health and Safety Code Section 33433. Section 3. Based upon the foregoing and other information presented to the Agency, the Agency hereby finds and determines that (i) the conveyance of the Agency Property to the Purchaser is consistent with the Agency's implementation plan adopted pursuant to Health and Safety Code Section 33490; (ii) the conveyance of the Agency Property to the Purchaser pursuant to the Agreement will assist in the elimination of one or more blighting conditions inside the Project Area, and (iii) the consideration for the Agency Property is not less than the fair market value of the Agency Property at its highest and best use in accordance with the Redevelopment Plan for the Project Area. Section 4. The Agency hereby approves the conveyance of the Property to the Purchaser and hereby authorizes its Executive Director to execute and deliver the Agreement in substantially the form presented to the Agency at this meeting and now on file with the City Clerk, together with all other documents and agreements pertaining to the P6402\0001 \775105.2 RESOLUTION NO. 497 Agreement, with such changes therein as may be necessary and as the Executive Director may approve, in his discretion, as being in the best interests of the Agency, such approval to be conclusively evidenced by the execution and delivery thereof. PASSED, APPROVED and ADOPTED this 10th day of February 2005 by the following vote to wit: AYES: NOES: ABSENTS: ABSTAINS: ATTEST: Rachelle D. Klassen, Secretary P6402\0001 \775105.2 By: Buford A. Crites, Chairman 2 Contract No. R23430 EXCHANGE AGREEMENT This EXCHANGE AGREEMENT is made and entered into as of the day of January, 2005, by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency"), and DESERT WELLS 237, LLC, a California limited liability company (the "Company"). RECITALS A. Agency is the owner of certain real property located in the City of Palm Desert, County of Riverside, State of California, more fully described on Exhibit A hereto (the "Agency Parcel"). B. Company is the owner of certain real property located in the City of Palm Desert, County of Riverside, State of California, more fully described on Exhibit B hereto (the "Company Parcel"). The Company Parcel is adjacent to the Agency Parcel. C. Agency and Company wish to exchange the Agency Parcel and Company Parcel for their mutual benefit. NOW, THEREFORE, in consideration of the foregoing it is agreed as follows: 1. Agreement. a. At closing, Agency will convey the Agency Parcel to Company by a good and sufficient grant deed, free and clear of all liens and encumbrances other than covenants, conditions, restrictions, and easements of record as of the date hereof which have not been disapproved by Company pursuant to Paragraph 2 below. b. At closing, Company will convey the Company Parcel to Agency, by a good and sufficient grant deed, free and clear of all liens and encumbrances other than covenants, conditions, restrictions, and easements of record as of the date hereof which have not been disapproved by Agency pursuant to Paragraph 2 herein below. Agency shall execute and deliver to Company a Certificate of Acceptance to be attached to such grant deed prior to recordation. c. At closing, the Agency and Company shall execute and record that certain Release and Easement Agreement in the form attached hereto as Exhibit C. d. The transactions contemplated by Paragraphs la, lb, and lc above, shall constitute a single transaction and shall close concurrently. P6402\00011773952.5 DOCSLA-15430234.4-SNG UYEN Contract No. R23430 2. Condition of Title; Title Insurance. a. Stewart Title of California, Inc., or a mutually acceptable title insurance company (the "Title Company"), shall be the title insurance company for the consummation of the transaction contemplated hereby, and each of the parties shall deliver or cause to be delivered to the other party a preliminary title report issued by the selected Title Company (together with legible copies of all documents referred to therein) with respect to the parcel then owned by the delivering party. The Company shall be solely responsible for the payment of all reasonable costs associated with both such preliminary title reports. b. Within ten (10) business days after receipt of the preliminary title report and accompanying documents, the receiving party shall approve or disapprove the condition of title to the parcel in question by giving notice in writing thereof to the delivering party. In the event that the receiving party shall give notice of disapproval of one or more title exceptions, the delivering party shall have five (5) business days within which to either (i) agree to cure the exception or exceptions to which objection was taken, or (ii) to give notice in writing to the objecting party that it cannot (or cannot economically) cure the exception(s) to which objection was taken. In such circumstance, the objecting party shall have five (5) business days after receipt of such notice to either (x) waive the objection, or (y) terminate the transaction contemplated hereby. c. In the event that no notice of disapproval of title is given with respect to a particular parcel within the ten (10) business day period provided for in Paragraph 2b, the condition of title to such parcel, as reflected in the preliminary title report, shall be deemed approved. d. At closing, each of the parties shall cause Title Company to either (1) endorse each of the Prior Policies in the following manner: (a) with respect to the Agency Prior Policy, to delete the Agency Parcel and to include the Company Parcel; and (b) with respect to the Company prior policy, to delete the Company Parcel and to include the Agency Parcel, or (2) issue and deliver to the other party a CLTA Owners form of title insurance (a "Titl_ e Policy'°). The endorsement referenced in each of clause (a) and (b) or each Title Policy, as the case may be, shall provide coverage in the amount of Fifty Thousand Dollars ($50,000) guarantying title to the applicable parcel, which shall be in the condition set forth in the approved preliminary title report. The Company shall be solely responsible for the payment of all reasonable costs associated with both such title policies. 3 • Condition of Properties. Each of the parties shall have the right to enter into the property of the other for the purposes of conducting engineering, soils and seismic tests and environmental assessments. The Company and the Agency each hereby represent and acknowledge that Agency has previously received a phase 1 environmental assessment report applicable to the Company Parcel. There parties hereby agree if the Agency requires more extensive tests and/or assessments beyond such phase 1 report, then all costs associated therewith shall be borne solely by the Agency. Each of the parties shall indemnify, defend, and hold the other free and harmless against any and all loss, obligation or liability arising out of or in connection with such entry. The parties' indemnification obligations shall survive the termination of this Exchange Agreement and the closing. P6402\00011773952.5 DOCSLA-15430234.4-SNG UYE N 2 Contract NO. R23430 Such tests shall be completed within thirty (30) days after execution hereof, and the testing party shall thereupon either approve or disapprove all such matters by giving notice in writing thereof to the other party. In the event of any disapproval, this Exchange Agreement shall be deemed terminated and shall be of no further force or effect. Any such matter not disapproved as above provided shall be deemed approved. Except as provided herein, the parties agree that each is relying solely on its examination of the parcel in its decision to acquire such parcel and not on any representation or warranty of the transferring party. Except as provided hereinabove, each of the parties agrees that the parcels are being conveyed in an "as is, where is" condition without warranty express or implied. 4. Conditions Precedent. The parties hereto shall not be obligated to consummate the transactions contemplated by this Agreement unless and until the Company has caused, at its expense, the closing of such transactions to be in compliance with the California Subdivision Map Act, as amended. 5. Closing Costs and Expenses. The Company shall be solely responsible for the payment of all closing costs, recording fees, and escrow fees and expenses with respect to the transactions contemplated hereby. Company shall be solely responsible for the payment of all property taxes accrued on the Company Parcel to the date of closing. The parties shall consummate the transactions described in Paragraphs 1a and lb by means of an escrow with the title company selected by the parties pursuant to Paragraph 2a. 5. Assignments. The rights and duties hereunder may not be assigned or delegated by either party without the prior written consent of the other party. 6. Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 7. Amendments. No provision of this Agreement may be amended or changed except by an agreement in writing, signed by the parties. Each of the parties may waive any precondition to closing which is included herein for its sole benefit by delivering to the other a statement in writing to that effect signed by an authorized representative of such party. 8. Attorneys' Fees. In the event of any dispute or litigation regarding the enforcement or interpretation of any provision of this Agreement, the prevailing party shall be entitled to recover from the other party all reasonable expenses, including attorneys' fees and costs, whether or not suit is brought or judgment is rendered. 9. Future Documents and Acts. Each of the parties agree to execute, acknowledge when appropriate, and deliver such future documents and perform such other acts as may be reasonably necessary or appropriate to consummate and carry into effect the transactions contemplated under this Agreement. 10. Headings. Headings are provided for convenience only and are not to serve as basis for interpretation or construction of this Agreement, nor as evidence of the intention of the parties. P6402\0001\773952.5 3 DOCSLA-15430234.4-SNGUYEN Contract NO. R23430 11. Time of the Essence. Time is of the essence of each provision of this Agreement in which time is an element. 12. Severability. In the event any provision in this Agreement or any document contemplated by this Agreement shall be ruled invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Agreement and the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way. 13. No Presumption Re Drafter. The parties acknowledge and agree that the terms and provisions of this Agreement have been negotiated and discussed between the parties and that this Agreement reflects their mutual agreement regarding the subject matter of this Agreement. Because of the nature of such negotiations and discussions, it would be inappropriate to deem any party to be the drafter of this Agreement, and therefore no presumption for or against the drafter shall be applicable in interpreting or enforcing this Agreement. 14. Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and as a complete and final statement of the terms and conditions of that agreement, and shall supersede any and all prior agreements or understandings relating to the same subject matter. 15. Notices. Any notices required to be given hereunder may be personally served or may be placed in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed as follows: To Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: David L. Yrigoyen With Copy to: Richards, Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, California 90071-3101 Attention: Jim G. Grayson, Esq. To Company: Desert Wells 237, LLC 5005 Calle San Raphael, Suite B-1 Palm Springs, California 92264 Attention: Michael S. Marix With Copy to: Reed Smith LLP 355 South Grand Avenue, Suite 2900 Los Angeles, California 90071 Attention: Thomas L. Harnsberger 16. Closing/Termination. The closing shall occur at the time and on the date mutually agreed to by the parties; but in any event on or before March 31, 2005. If the closing P6402\0001\773952.5 4 OOCSLA-15430234.4-SNGUYEN Contract NO. R23430 shall fail to occur on or before March 31, 2005, this Exchange Agreement shall automaticall terminate and be of no further force or effect. Y Each of the parties reserves the right to change its address for service of notices by givin notice thereof, in writing, to the other party as provided herein. g [Remainder of page intentionally left blank — signature page follows] P6402\00011773952.5 DOCSLA-15430234.4-SNG UYEN Contract No. R23430 IN WITNESS WHEREOF, the parties set their hands as of the day and year first above Bove "Agency" APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation By: Agency Attorney P6402\00011773952.5 PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Name: Title: ATTEST: Secretary D O C S L A-154 3 023 4.4-S N G U YE N 6 Contract No. R23430 "Company" DESERT WELLS 237 LLC, a California limited liability company By: Palm Desert 237, LLC, a California limited liability company Title: Manager By: Marix Family Limited Partnership, a Delaware limited partnership Title: Manager By: Marix Family Trust Under Declaration of Trust dated as of October 12, 2000, as amended, by Michael S. Marix, Sole Trustee Title: General Partner By: Michael S. Marix Its: Sole Trustee P6402\0001 \773952.5 DOCSLA-15430234.4-SNGUYEN Contract NO. R23430 P6402\0001\773952.5 EXHIBIT A Agency Parcel A-1 DOCSLA-15430234.4-S NG UYEN Contract NO. R23430 we a., o/oV/s W LIMO'+oa000'x3u1133urd\1a33/10o oCAON I\aarr\oz+aowt\rlrCIA:N //• 1332i1S N000 7.1 �3f1N3Ab' b30180d ,009=„ L :31VOS 5 - STREET RIGHT OF WAY ACREAGE Contract NO. R23430 P6402\00011773952.5 EXHIBIT B Company Parcel B-1 Contract NO. R23430 tud LS:t ro/or/ VIM!' oM03,090na-x391 m 433\Sua14c\o \oz+aoweVriroA:N 133NIS N000 z�J , /// --'----- ..~v, ii 4 i 6 ¢ "�'�i • oRI (.) < / -4 % 46 1 • � jf "k • . 46 • • U Ilisjjt`� gab 4 • 40, /// W 0) 0�w C9 a z ah a oc r�i • owa) r.. r 3f1N3Ab' d101d0d ,008=„ l MVOS • V\��; la > • X a z 0) g z € . 5 z a a • U a a w 8 it. O • a 1 z z m z IN Li - STREET RIGHT OF WAY ACREAGE Contract NO. R23430 EXHIBIT C Form of Release and Easement Agreement RECORDING REQUESTED BY: PALM DESERT REDEVELOPMENT AGENCY AND WHEN RECORDED RETURN TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: David L. Yrigoyen [The undersigned Grantor declares that this document is exempt from Documentary Transfer Tax pursuant to Revenue and Taxation Code Section 11922] RELEASE AND EASEMENT AGREEMENT This RELEASE AND EASEMENT AGREEMENT (the "Agreement") is made and entered into as of the day of , 2005, by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency"), and DESERT WELLS 237, LLC, a California limited liability company (the "Company"). RECITALS A. Agency is the owner of certain real property located in the City of Palm Desert, County of Riverside, State of California, more fully described on Exhibit A hereto (the "Agency Parcel"). B. Company is the owner of certain real property located in the City of Palm Desert, County of Riverside, State of California, more fully described on Exhibit B hereto (the "Company Parcel"). The Company Parcel is adjacent to the Agency Parcel. C. Agency and Company have entered into that certain Exchange Agreement dated as of , 2005, and pertaining to the Agency Parcel and the Company Parcel (the "Exchange Agreement"). D. The Agency may cause all or a portion of the Agency Parcel to be developed as a golf course, and the Agency he be benefit of the Agencyd Company have reed that this and the Agency�Parcel o the eement shall be recorded against Company Parcel fo date of closing of the transaction contemplated by the Exchange Agreement. P6402\0001\773952.5 DOCSLA-15430234.4-SNGUYEN C-1 Contract NO. R23430 NOW, THEREFORE, in consideration of the foregoing it is agreed as follows: 1. Release. THE COMPANY FOR ITSELF, AND ON BEHALF OF EACH OF ITS SUCCESSORS AND ASSIGNS AND SUCCESSORS IN INTEREST TO ALL OR ANY PORTION OF THE COMPANY PARCEL, AND THEIR RESPECTIVE FAMILY, GUESTS, TENANTS, INVITEES AND LICENSEES(COLLECTIVELY, THE "OWNER PARTIES", AND INDIVIDUALLY AN "OWNER PARTY"), HEREBY AGREES THAT UPON DEVELOPMENT OF THE AGENCY PARCEL AS A GOLF COURSE FACILITY, THE OWNER PARTIES WILL RELEASE AND DISCHARGE AGENCY AND EACH OF ITS SUCCESSORS IN INTEREST TO THE AGENCY PARCEL, THE OPERATOR OF THE GOLF COURSE FACILITY, THE OWNER OF THE GOLF COURSE FACILITY, THE GOLF COURSE ARCHITECT, AND THEIR RESPECTIVE MEMBERS, PRINCIPALS, EMPLOYEES, PARTNERS, OFFICERS, DIRECTORS, SHAREHOLDERS, TRUSTEES, AGENTS, LESSEES, ASSIGNEES AND SUCCESSORS (COLLECTIVELY THE "RELEASED PARTIES"), FROM AND AGAINST ALL CLAIMS, DEMANDS, EXPENSES, DAMAGES, COSTS (INCLUDING ATTORNEY FEES), CAUSES OF ACTION, OBLIGATIONS, AND LIABILITIES INCLUDING, WITHOUT LIMITATION, DAMAGE TO THE COMPANY PARCEL, INJURY (INCLUDING DEATH) TO AN OWNER PARTY OR DAMAGE TO OR LOSS OF AN OWNER PARTY'S PERSONAL OR REAL PROPERTY, TO THE EXTENT ARISING FROM (1) THE ENTRY OF GOLF BALLS ONTO THE COMPANY PARCEL, (2) ANY OWNER PARTY'S PRESENCE OR ACTIVITIES ON THE AGENCY PARCEL, AND (3) THE PROXIMITY OF THE COMPANY PARCEL TO THE GOLF COURSE. 2. Easement. Living adjacent to or near a golf course carries with it the risk of damage caused to persons and property by golf balls coming onto adjacent property from the golf course. Agency has provided no assurances whatsoever concerning the frequency with which golf balls will enter the Company Parcel, including the yards and buildings that may be constructed on the Company Parcel, following development of the Agency Parcel as a golf course facility, and has provided no guaranties as to what, if any, action may be taken by the Agency to mitigate such entry. In light of such facts, the Company does hereby grant to the Agency in perpetuity nonexclusive easements, for the benefit of and appurtenant to the Agency Parcel, in, over and across the Company Parcel, and the airspace there above, for the following purposes: (a) the flight of golf balls through the air over the Company Parcel, and any buildings or other improvements that may be constructed thereon; and (b) the entry of golf balls onto the Company Parcel, and any buildings or other improvements that may be constructed thereon. 3. Waiver of View Rights. The Company for itself, and on behalf of the Owner Parties, hereby forever releases for the benefit of the Released Parties any and all right that the Company and Owner Parties may have to view over or across the Agency Parcel from the Company Parcel and any buildings that may be constructed thereon. The release contained in P6402\0001 \773952.5 DOCSLA-7 5430234.4-SNG UYEN C-2 Contract NO. R23430 this Section 3 shall become effective upon the development of the Agency Parcel as a golf course facility. 4. Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 5. Notice to Purchasers of Com an Parcel. The Company agrees for itself, and its successors and assigns and successors in interest to the Company Parcel, that it will provide written notice and a complete and accurate copy of this Agreement to each purchaser of the Company Parcel or any part thereof prior to the close of each such transaction. 6. Covenants Running With the Land. The covenants and agreements of the Company hereunder are made on its own behalf (as owner of the Company Parcel) and on behalf of the successive owners of the Company Parcel for the direct benefit of the Agency Parcel, the Agency and the successive owners of the Agency Parcel, it being the intent of the Company and the Agency that foregoing covenants and agreements of the Company shall be "covenants running with the land" as defined in California Civil Code 1468, the burdens of which shall be binding on the Company Parcel and its successive owners for the direct benefit of the Agency Parcel and its successive owners. 7. Amendments. No provision of this Agreement may be amended or changed except by an agreement in writing, signed by the parties. Each of the parties may waive any precondition to closing which is included herein for its sole benefit by delivering to the other a statement in writing to that effect signed by an authorized representative of such party. 8. AttorneyFsg§, In the event of any dispute or litigation regarding the enforcement or interpretation of any provision of this Agreement, the prevailing party shall be entitled to recover from the other party all reasonable expenses, including attorneys' fees and costs, whether or not suit is brought or judgment is rendered. 9. Future Documents and Acts. Each of the parties agree to execute, acknowledge when appropriate, and deliver such future documents and perform such other acts as may be reasonably necessary or appropriate to consummate and carry into effect the transactions contemplated under this Agreement. 10. Hea_ dims. Headings are provided for convenience only and are not to serve as basis for interpretation or construction of this Agreement, nor as evidence of the intention of the parties. 11. Time of the Essence. Time is of the essence of each provision of this Agreement in which time is an element. 12. Seve_ rability. In the event any provision in this Agreement or any document contemplated by this Agreement shall be ruled invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Agreement and the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way. P6402\00011773952.5 DOCSIA-15430234.4-SNG UYEN C-3 Contract NO. R23430 13. No Presumption Re Drafter. The parties acknowledge and agree that the terms and provisions of this Agreement have been negotiated and discussed between the parties and that this Agreement reflects their mutual agreement regarding the subject matter of this Agreement. Because of the nature of such negotiations and discussions, it would be inappropriate to deem any party to be the drafter of this Agreement, and therefore no presumption for or against the drafter shall be applicable in interpreting or enforcing this Agreement. 14. Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and as a complete and final statement of the terms and conditions of that agreement, and shall supersede any and all prior agreements or understandings relating to the same subject matter. 15. Counterparts. This Agreement may be executed in counterparts, all such counterparts shall constitute one and the same agreement, and the signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. 16. Notices. Any notices required to be given hereunder may be personally served or may be placed in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed as follows: To Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: David L. Yrigoyen With Copy to: Richards, Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, California 90071-3101 Attention: Jim G. Grayson, Esq. To Company: P6402\0001 \773952.5 Attention: DOCSLA-15430234.4-S NG UYEN C-4 Contract NO. R23430 above written. IN WITNESS WHEREOF, the parties set their hands as of the day and year first "Agency" PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Name: Title: ATTEST: Secretary APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation By: Agency Attorney "Company" DESERT WELLS 237, LLC, a California limited liability company P6402\0001\773952.5 By: Name: Title: D O CSLA-15430234.4-S NG UYE N C-5 Contract NO. R23430 State of California County of Riverside } } } On January , 2005, before me, Public, personally appeared , a Notary personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) State of California County of Los Angeles } } } On January , 2005, before me, Public, personally appeared , a Notary. personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) P6402\00011773952.5 DOCS LA-15430234.4-SNG UYEN C-6 Contract NO. R23430 State of California County of Riverside } } } On January , 2005, before me, , a Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) P6402\0001 \773952.5 C-7 DOCSLA-15430234.4-S NG UYEN Contract NO. R23430 EXHIBIT A Agency Parcel P6402\0001 \773952.5 C-8 DOCSLA-15430234.4-SNGUYEN Contract NO. R23430 EXHIBIT B Company Parcel P6402\0001\773952.5 C-9 DOCSLA-15430234.4-SNG UYEN REASCO REAL ESTATE ANALYSIS SERVICES CO. POST OFFICE BOX 2809, PALM DESERT, CALIFORNIA 92261 TEL: (760) 340-1429; FAX: (760) 340-2041 EMAIL: LRWREASCO@AOL.COM January 24, 2005 Mr. David Yrigoyen Director of Redevelopment PALM DESERT REDEVELOPMENT AGENCY CITY OF PALM DESERT 73-510 Fred Waring Drive Palm Desert, California 92260 Copy to: Justin McCarthy REFERENCE: Proposed Exchange Of Land With Desert Wells 237, LLC SUBJECT: Report Pursuant To Section 33433 Of The California Health And Safety Code NOTE 1: This report is based on the terms and conditions of the Exchange Agreement Dated January 2005 between the Palm Desert Redevelopment Agency (the "Agency") and Desert Wells 237, LLC Dear Mr. Yrigoyen, Section 33433 of the California Health and Safety Code stipulates that before any property of the Agency, acquired directly or indirectly with tax increment funds, is sold or leased (or otherwise conveyed) for development purposes pursuant to the redevelopment plan, the conveyance shall first be approved by the legislative body by resolution after public hearing. The property the Agency proposes to exchange with Desert Wells 237, LLC falls into the category covered by Section 33433. MY 33433 REPORTS/"33433 FOR RBF (2)" 25-Jan-05 11:23 AM REAL ESTATE ANALYSIS SERVICES COMPANY -PAGE2- January 24, 2005 LETTER TO: Mr. David Yrigoyen SUBJECT: Report Pursuant To Section 33433 Of The California Health And Safety Code We have prepared a comprehensive report, beginning on page three of this letter, which is required in order to comply with Section 33433. Pursuant to the report, we have concluded that the following findings can be included in the resolution approving the exchange: FINDING #1: The property is currently completely unimproved, and the conveyance of the property will assist in the elimination of blight in the Project Area. FINDING #2: Conveyance of the property is consistent with the implementation plan adopted pursuant to Section 33490 of the California Health and Safety Code. FINDING #3: The consideration is not less that the Fair Market Value, at its highest and best use in accordance with the Redevelopment Plan. The rationale for these findings can be found in the report. Sincerely, Leonard R. Walk/ Leonard R. Wolk, President Real Estate Analysis Services Company (REASCO) MY 33433 REPORTS/"33433 FOR RBF (2)" 25-Jan-05 11:23 AM REAL ESTATE ANALYSIS SERVICES COMPANY - PAGE 3- Following are the detailed Sections of the report: SECTION 1 - A summary of the major business points of the proposed Exchange Agreement (the "Agreement") between the Palm Desert Redevelopment Agency (the "Agency"), and Desert Wells 247, LLC (the"Company") concerning the proposed acquisition by the Company of certain real property owned by the Agency: Reference is made to the Agreement for full particulars of any provision described herein, and in the event of any inconsistency between the provisions herein and the Agreement, the Agreement shall control. A. The Subject Property: 1. The Agency owns fee title to certain unimproved real property (the "Property") in the City of Palm Desert (the "City"). The Property is legally described in Exhibit A of the Agreement and is comprised of approximately 170 gross acres and 169.3 net acres (with allowances for streets). B. Exchange Of a Portion Of The Subiect Property: 1. Subject to the terms and conditions of the Agreement, Agency proposes to adjust the common property line between the Property and an adjacent parcel owned by the Company so that the net acreage of the Property after the exchange will be the same as it was before the exchange. 2. In implementing the property line adjustment, the Property will give up approximately 0.86 acres (the "Agency Property"), and will gain back 0.86 acres (the "Company Property"), so there will be no net loss of property. C. The Release and Easement Agreement ("REA"): At closing of the Agreement, the Agency and the Company shall execute and record the REA in the form attached to the Agreement as Exhibit C. 1. The Release: Since the Agency's Parcel may be developed as a golf course, the REA stipulates that the Company and its successors, assigns and other designated parties (the "Owner Parties") will release and discharge the Agency and its designated parties (the "Release Parties") against all claims, expenses, costs, damages and other eventualities (as described in the REA) arising from the entry of golf balls onto the Company Parcel, and other occurrences. Further details may be found in Paragraph 1 of the REA. MY 33433 REPORTS/"33433 FOR RBF (2)" 25-Jan-05 11.23 AM REAL ESTATE ANALYSIS SERVICES COMPANY -PAGE4- SECTION 1 - A summary of the major business points of the proposed Agreement (continued): C. The Release and Easement Agreement ("REA") - continued: 2. The Easement: The Company grants to the Agency, in perpetuity, non-exclusive easements, for the benefit of and appurtenant to the Agency Parcel, in, over and across the Company Parcel and the airspace there above, for the following purposes: a. The flight of golfballs over the Company Parcel and any buildings or other improvements that may be constructed thereon. b. The entry of golfballs onto the Company Parcel and any buildings or other improvements that may be constructed thereon. Further details may be found in Paragraph 2 of the REA. 3. Waiver of view rights: The Company, for itself and on behalf of the Owner Parties, forever releases the Release Parties from any and all right that the Company and the Owner Parties may have to view over or across the Agency Parcel from the Company Parcel and any buildings that may be constructed thereon. This section shall become effective when the Agency Parcel is developed as a golf course. D. Significant events before closing: 1. The condition of title and the physical condition of the exchange parcels will be approved by each party. Further details may be found in Paragraphs 2 and 3 of the Agreement. E. Payment of costs associated with the transaction: 1. The Purchaser will pay all costs associated with all title reports. 2. The Parties acknowledge that the Agency has received a Phase 1 environmental assessment report applicable to the Company's parcel. If the Agency requires further tests and/or assessments beyond such Phase 1 report, the costs shall be borne solely by the Agency. 3. The Purchaser will pay all the closing costs, recording fees and escrow fees with respect to the proposed transaction. Further details may be found in Paragraphs 2, 3 and 4 of the Agreement. MY 33433 REPORTS/"33433 FOR RBF (2)" 25-Jan-05 11:23 AM REAL ESTATE ANALYSIS SERVICES COMPANY -PAGE5- SECTION 2 - The cost of the Agreement to the Agency: The Agency has determined that because of their respective locations and zoning, the Agency Property and the Company Property are of equivalent value. Therefore, the net cost of the Agreement to the Agency will be zero. SECTION 3 - The estimated value of the interest to be conveyed (the Agency Property), determined at the highest and best uses permitted under the Redevelopment Plan. A. Highest and best use for the interest to be conveyed: 1. Because of its location and zoning, we have determined that the highest and best use for the Agency Property is as a portion of a site for a single-family housing development. B. Estimated value at the highest and best use of the interest to be conveyed: 1. Agency has determined that the estimated value of the Agency Property, at $5.00 per square foot, is equivalent to the estimated value of the Company Property (the "Consideration"). Section 4 - The estimated value of the interest to be conveyed (the Agency Property), determined at the use and with the conditions, covenents and development costs required by the Agreement (the "reuse "value): A. As a result of the transaction and pursuant to the Agreement, the Agency Property will become part of the site for a University Park single-family housing development, which is the highest and best use for the Agency Property. Therefore, the fair reuse value is equal to the fair market value. SECTION 5 - Findings to be included in the resolution approving the exchange transaction: A. Elimination of blight: 1. The conveyance will assist in the elimination of blight in the Project Area. MY 33433 REPORTSr33433 FOR RBF (2)" 25-Jan-05 11:23 AM REAL ESTATE ANALYSIS SERVICES COMPANY -PAGE6- SECTION 5 - Findings to be included in the resolution approving the exchange transaction (continued): B. The implementation plan: 1. The conveyance is consistent with the implementation plan adopted pursuant to Section 33490 of the California Health and Safety Code. C. The consideration: 1 Either the consideration is not Tess than the fair market value at its highest and best use in accordance with the redevelopment plan, or the consideration is not less than the fair reuse value at the use and with the covenants, conditions and development costs authorized by the sale. Pursuant to this report, the following findings can be included in the resolution approving the sale: FINDING #1: The Agency Property is currently completely unimproved, and conveyance will assist in the elimination of blight in the Project Area. FINDING # 2: The conveyance is consistent with the implementation plan adopted pursuant to Section 33490 of the California Health and Safety Code. FINDING #3: The consideration is not less that the Fair Market Value at its highest and best use in accordance with the Redevelopment Plan.