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HomeMy WebLinkAboutRes 05-87 thru 05-89 CFD 2005-1 University ParkPALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVAL OF A RESOLUTION OF INTENTION OF THE CITY COUNCIL TO ESTABLISH CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN THE CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) APPROVAL OF A RESOLUTION OF INTENTION OF THE CITY COUNCIL TO INCUR BONDED INDEBTEDNESS WITHIN PROPOSED CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) APPROVAL OF A RESOLUTION OF THE CITY COUNCIL APPOINTING CERTAIN FINANCE PROFESSIONALS IN CONNECTION WITH THE PROPOSED FORMATION OF A COMMUNITY FACILITIES DISTRICT AND THE ISSUANCE OF BONDS THEREBY SUBMITTED BY: DAVE YRIGOYEN, DIRECTOR OF REDEVELOPMENT/HOUSING PAUL GIBSON, DIRECTOR OF FINANCE DATE: OCTOBER 13, 2005 CONTENTS: RESOLUTION NO. 05- 87 RESOLUTION NO. 05- 88 RESOLUTION NO. 05- 89 ROAD IMPROVEMENT AGREEMENT Recommendation: 1. That the City Council approve Resolution No. 05- 87 to establish City of Palm Desert Community Facilities District No. 2005-1 (University Park) and to authorize the levy of a special tax within the City of Palm Desert Community Facilities District No. 2005-1 (University Park). 2. That the City Council approve Resolution No. 05- 88 to incur bonded indebtedness within proposed City of Palm Desert Community Facilities District No. 2005-1 (University Park). 3. That the City Council approve Resolution No. 05 -89 appointing Finance Professionals in connection with the proposed formation of the Community Facilities District 4. That this issuance of bonds for said District be contingent upon the City's ability to secure performance bonds for the improvements to north side and south side of Gerald Ford Drive. Staff Report Approval of City Resolutions — Palm Desert Community Facilities District No. 2005-1 (University Park) Page 2 of 3 October 13, 2005 Executive Summary: The approval of the three resolutions will start the process to form the Mello -Roos Community Facilities District to fund public infrastructure improvements with the issuance of the bonds. Discussion: Last year, City Council approved deposit and reimbursement agreements for reimbursement of costs associated with the formation of an assessment district for the University Park project development. Approval of the attached resolutions will meet the requirements of the Mello - Roos Community Facilities Act, as amended, commencing with Section 53311 of the California Government Code and start the process for formulation of the district and the issuance of bonds. The proceeds of the bonds will be used for improvements to streets, sewers, water systems, traffic signals, parks (including acquisition), school facilities, utilities, Cook Street pedestrian bridge, and landscaping. Other uses are for various developer impact fees such as the Fringed - Toed Lizard fee, public works drainage, signals, sewer and water fees, CVAG transportation fees, school fees, and Art -in -Public Places fees. The maximum allocation of bonds to be issued for Community Facilities District No. 2005-1 is $70 million. The bonds will be issued in two series. The first series will fund most of the major infrastructure improvements. The second series of bonds will fund the remainder of improvements and the Developer Impact Fees. It is expected that the District will provide for improvements to both sides of Gerald Ford. For this purpose Mike Marix with Desert Wells 237, LLC, has entered into an agreement with Hover Development to provide for those improvements. Staff has been looking into the ability to procure performance bonds working with Agency and City Attorney to assure the project is completed. Several issues remain outstanding and must be resolved prior to the public hearing for the Community Facilities District: 1. Negative declaration for CFD improvements as per CEQA requirements. 2. Agreement with City of Palm Desert to be approved as a separate item indicating the timeline and security for completion of Gerald Ford improvements, including legal description of right-of-way, title report, and conveyance of right-of-way to the City of Palm Desert. 3. Agreement with Coachella Valley Water District (CVWD) for sewer and water improvements within the CFD. 4. Indication of timeline for procurement of performance bonds for street improvements. G:\RDA1Beth Longnan\Stafl Reports\Vngoyen\Resol of Intent -Bonds 101305 doc Staff Report Approval of City Resolutions — Palm Desert Community Facilities District No. 2005-1 (University Park) Page 3 of 3 October 13, 2005 Upon completion of the above items, staff will bring the necessary documents to City Council for Public Hearing. Submitted By: ��7ave Yrigo Director edevelopment/Housing bl Approval: a McC-sll' C►� 'ede ent Paul S. Gibson, Director of Finance Carlos L. Ort tor G \RDA\Beth LongmannStatt Re0orts\Yngoyen\Resol of Intent -Bonds 101305.doc RESOLUTION NO. 05-87 A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT TO ESTABLISH CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) RECITALS: WHEREAS, the City Council of the City of Palm Desert (the "City Council") has received a petition (the "Petition") signed by the owners of certain of the land which is proposed for inclusion in a proposed community facilities district which meets the requirements of Sections 53318 and 53319 of the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the "Act"); and WHEREAS, the Act authorizes the City Council to establish a community facilities district and to levy special taxes within that district; and WHEREAS, in accordance with the request set forth in the Petition, the City Council desires to undertake proceedings to establish a community facilities district pursuant to the Act, to finance the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of certain public facilities to serve the area of land hereinafter described; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: Section 1. Intention. In accordance with the request set forth in the Petition, the City Council hereby declares its intention to conduct proceedings for the formation of a community facilities district under the terms of the Act. Section 2. Name of District. The name of the proposed community facilities district is "City of Palm Desert Community Facilities District No. 2005-1 (University Park)" (the "District"). Section 3. Boundaries of District. The exterior boundaries of the District and the zones therein are shown on the map now on file in the office of the City Clerk entitled "Map of Proposed Boundaries, Community Facilities District No. 2005-1 (University Park)" (the "Map"). The Map indicates, by a boundary line, the extent of the territory included in the proposed District and the extent of the territory in each zone and shall govern for all details as to the extent of the District and the zones. On the original and one copy of the Map, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of the Map in her office and, within fifteen (15) days after the adoption of this Resolution, the City Clerk shall file a copy of the Map so endorsed in the records of the County Recorder, County of Riverside, State of California, and in any event the Map shall be filed no later than fifteen (15) days before the public hearing specified in Section 7 below. Section 4. Facilities. The types of public facilities proposed to be provided to serve the District and to be financed under the Act shall consist of those facilities set forth on Exhibit "A", attached hereto and incorporated herein by reference. The Facilities have a useful life of five years or longer and are public facilities as defined by the Act, which the City, the Coachella Valley Water District, and the Palm Springs Unified School District are authorized by law to construct, acquire, own, operate, or contribute revenue to. The City Council intends to execute a joint community facilities agreement with the Coachella Valley Water District and the Palm Springs Unified School District. The City Council hereby finds and determines that the description of the Facilities herein is sufficiently informative to allow taxpayers within the proposed District to understand what the funds of the District may be used to finance. The City Council hereby finds that the proposed Facilities are necessary to meet increased demands placed upon the City as a result of development occurring in the proposed District. Section 5. Special Tax. a. Except where funds are otherwise available, it is the intention of the City Council to levy annually in accordance with procedures contained in the Act a special tax (the "Special Tax") within the District sufficient to pay for (1) the Facilities, and (2) the principal and interest and other periodic costs on bonds or other indebtedness issued by the District to finance the Facilities, including without limitation, the establishment and replenishment of any reserve funds deemed necessary by the District, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), financing of the costs associated with the issuance of the bonds, and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the District and will be collected in the same manner as ordinary ad valorem property taxes are collected, or in such other manner as may be provided by the City Council including, without limitation, direct billing of the affected property owner, and shall be subject to the same penalties, procedure, sale and lien priority in case of delinquency as applicable for ad valorem property taxes. In the first year in which the Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if 2 G:\RDA\Beth Longman\Staff Reports\Ydgoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. b. The proposed rate and method of apportionment of the Special Tax among parcels of real property in the District (the "Rate and Method"), in sufficient detail to allow each resident or landowner within the proposed District to estimate the maximum amount such resident or owner will have to pay, is shown in Exhibit "B," attached hereto and incorporated herein by reference. The City Council hereby determines the Rate and Method set forth in Exhibit "B" to be reasonable. The obligation to pay the Special Tax may be prepaid as set forth in Exhibit "B„ C. In the case of any Special Tax to pay for the Facilities to be levied against any parcel used for private residential purposes: (i) the maximum Special Tax shall be specified as a dollar amount which shall be calculated and thereby established not later than the date on which the parcel is first subject to the tax because of its use for private residential purposes and which amount shall not be increased over time over two percent (2%) per year; (ii) the tax year after which no further Special Tax subject to this sentence shall be levied or collected shall be as set forth in Exhibit "B" hereto; and (iii) under no circumstances will the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel within the District by more than ten percent (10%). For the purposes hereof, a parcel is used for "private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. Section 6. Bonds. It is the intent of the City Council, acting as the legislative body of the District, to cause one or more series of bonds to be issued under the Act by the District to finance, in whole or in part, the Facilities. If so issued, bonds will be in the aggregate principal amount of not to exceed $70 million. All such bonds issued by the District shall bear interest payable semi-annually or in such other manner as the City Council shall determine at a maximum interest rate not in excess of twelve percent (12%) per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued, and the term of the bonds of each series shall not exceed forty (40) years from the date of issuance of such series thereof or such longer term as is then permitted by law. Section 7. Hearinq. A public hearing on the establishment of the District, the extent of the District, the furnishing of Facilities to serve the District, and the proposed Rate and Method (the "Hearing") shall be held on December 8, 2005, at 4:00 p.m., or as soon thereafter as practicable, at the chambers G:\RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc of the City Council of the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260. At the Hearing, any interested person or taxpayer, including all persons owning lands or registered to vote within the proposed District, may appear and be heard. Section 8. Revort. Each City officer who is or will be responsible for the Facilities to be financed by the District, if it is established, is hereby directed to study the proposed District and, at or before the time of the above -mentioned Hearing, file, or cause to be filed, a report with the City Council, which is to be made a part of the record of the Hearing, containing the following: a. a brief description of the Facilities which will, in the City officer's opinion, be required to adequately meet the needs of the District; and b. an estimate of the fair and reasonable cost of financing the Facilities. Section 9. Advances. In accordance with Section 53314.9 of the Act, the City and/or District may accept advances of funds or work in -kind from any source, including, but not limited to, private persons or private entities, and is authorized and directed to use such funds or that work in -kind for any authorized purpose, including, but not limited to, paying any cost incurred by the City in creating the District. The City and/or District may enter into an agreement with the person or entity advancing the funds or work -in - kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work -in - kind, as determined by the City Council, with or without interest. The District is hereby authorized to reimburse Palm Desert 124, Inc., as depositor for Desert Wells 237, LLC, for moneys advanced pursuant to the terms of that certain Deposit and Reimbursement Agreement dated as of May 13, 2004 and previously entered into by and between Palm Desert 124, Inc., as depositor for Desert Wells 237, LLC, and the City, a copy of which agreement is on file in the office of the City Clerk. The District is hereby authorized to reimburse American Realty Trust, Inc., for moneys advanced pursuant to the terms of that certain Deposit and Reimbursement Agreement dated as of May 13, 2004 and previously entered into by and between American Realty Trust, Inc., and the City, a copy of which agreement is on file in the office of the City Clerk. Section 10. Published Notice. The City Clerk is hereby directed to publish a notice of the Hearing ("Notice") pursuant to Section 6061 of the California Government Code in a newspaper of general circulation published in the area of the proposed District. Such Notice shall be substantially in the form specified in Section 53222 of the Act. Publication of the Notice shall be completed at least seven (7) days prior to the date of the Hearing. Section 11. Mailed Notice. The City Clerk is hereby directed to send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each 4 G:1RDA\Beth Longman\Staff Reports\Ydgoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least fifteen (15) days prior to the date of the Hearing. Section 12. Voting. Should the City Council determine to form the District, a special election will be held within the District to authorize the issuance of bonds and the levy of the Special Tax in accordance with the procedures contained in Section 53326 of the Act. If held, the proposed voting procedure at the election will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the District. Ballots for the special election may be distributed by mail with return postage prepaid or by personal service. Section 13. Tender of Bonds. Except to the extent limited in any bond resolution or trust indenture related to the issuance of bonds, the City Council hereby reserves to itself all rights and powers set forth in Section 53344.1 of the Act (relating to tenders of bonds in full or partial payment of any installment of the Special Tax or the interest or penalties thereon which may be due or delinquent). Section 14. Exemptions from Special Tax. Except as may otherwise be provided in Exhibit "B" hereto or by law, all lands owned by any public entity, including the United States, the State of California and/or the City, or any departments or political subdivisions thereof, shall be omitted from the levy of the Special Tax to be made to cover the costs and expenses of the Facilities. In addition, reference is hereby made to Exhibit "B" hereto for a description of other lands which shall be omitted from the levy of the Special Tax. Section 15. Election to Perform Work. Pursuant to 53329.5(c) of the Act, the City Council finds that, in its opinion, the public interest will not be served by allowing property owners in the District to enter into a contract pursuant to Section 53329.5(a). This Section is not intended to prevent the City from entering into an agreement with any property owner pursuant to which it agrees to acquire the Facilities or any portion thereof, from that property owner. 5 G:\RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc PASSED, APPROVED, and ADOPTED this 13th day of October, 2005 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Buford A. Crites, Mayor ATTEST: Rachelle D. Klassen, City Clerk 6 G:1RDA\Beth LongmanlStaff Reports\Ydgoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc EXHIBIT "A" DESCRIPTION OF FACILITIES The public facilities (the "Facilities") described below are proposed to be financed by City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District') and include a pedestrian bridge, traffic signals, landscaping, street improvements, water improvements, sewer improvements, storm drain improvements, utility improvements, public art improvements, school facility improvements, park improvements, and park site land acquisition, together with all appurtenances and appurtenant work, such as related clearing and grubbing, grading, and any removal or temporary signage or markings related thereto. The cost of the Facilities shall include incidental expenses, including costs associated with forming the District, issuance of bonds, determination of the amount of the Special Tax, collection of the Special Tax, payment of the Special Tax, costs incurred in order to carry out the authorized purposes of the District, and the costs of engineering, inspecting, coordinating, completing, planning and designing the Facilities, including the costs of environmental evaluations. The Facilities include, but shall not be limited to, the facilities listed below, and other facilities of the same type or types may be substituted in the place of one or more of the specific facilities listed below. Any of the Facilities to be constructed shall be constructed, whether or not acquired in their completed states, pursuant to plans and specifications approved by the City of Palm Desert (or the Coachella Valley Water District, or Palm Springs Unified School District, as applicable) and the officials thereof, including the City Engineer. The final nature and location of the Facilities will be determined upon the preparation of final plans and specifications for such Facilities. The Facilities may include facilities financed pursuant to public agency development impact fees. I. Cook Street Pedestrian Bridge (including, but not limited to bridge, ADA access ramps, elevator, retaining walls, hand railing, pedestrian lighting, revised sidewalks and minor grading) Il. Street Improvements (including, but not limited to, street widening, excavation, signing and striping, access ramps, grading, median and parkway landscaping, curbs and gutters, sidewalks, street lights, dry utility infrastructure, bus stops, fringe toed lizard fee and City fees) A. Frank Sinatra Drive: from West of Cook Street to College Drive B. Cook Street: from Frank Sinatra Drive to Gerald Ford Drive C. Portola Avenue: from College Drive to Gerald Ford Drive D. Southern half of Gerald Ford Drive: from Portola Avenue to Cook Street E. University Park Drive: from College Drive to Cook Street F. Technology Drive: from College Drive to Gerald Ford Drive 7 G:1RDA\Beth Longman\Staff Reports\YrigoyenlReso of Intent to Establish CFD (Univ Vill) (3).doc G. Pacific Avenue: from College Drive to Gerald Ford Drive H. College Drive: from Portola Avenue to Frank Sinatra Drive III. Water Improvements A. University Park Drive: from West intersection College Drive to East intersection College Drive B. Technology Drive: from College Drive to Gerald Ford Drive C. Pacific Avenue: from College Drive to Gerald Ford Drive D. College Drive: from Portola Avenue to Frank Sinatra Drive E. Well Sites (including land acquisition and improvements) to be located at four sites to be determined by the Coachella Valley Water District concurrently with land plan, final tentative map(s), or similar document(s) (as appropriate) to be approved by the City's Planning Commission and City Council. The tentatively approved locations of the well sites are as follows: 1. Adjacent to Gerald Ford Drive between Pacific Avenue and Technology Drive; 2. Northeast corner of College Drive and Portola Avenue; 3. Adjacent to University Park Drive close to the western intersection with College Drive; and 4. Adjacent to College Drive South of University Park Drive IV. Traffic Siqnals A. The intersection of Cook Street/Gerald Ford (modified) B. The intersection of Cook Street/University Park Drive (modified) C. The intersection of Frank Sinatra Drive/College Drive D. The intersection of Portola Avenue/College Drive E. Signals to be located on the south side of the intersection of Gerald Ford Drive/Pacific Avenue F. Signals to be located on the south side of the intersection of Gerald Ford Drive/Technology Drive G. Signals to be located on the south side of the intersection of Gerald Ford Drive/Portola Avenue (cost participation only) V. Sewer Improvements A. Technology Drive: from College Drive to Gerald Ford Drive B. Pacific Avenue: from College Drive to Gerald Ford Drive C. College Drive: from the West intersection University Park Drive to Technology Drive to North of Frank Sinatra Drive A-2 G:\RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc D. University Park Drive: from West intersection College Drive to Southwest of West intersection of College Drive and West of the East intersection College Drive to the East intersection College Drive VI. Storm Drain Improvements A. Pacific Avenue: Catch basins and interim -condition retention basins on the east and west sides of Pacific, adjacent to Gerald Ford Drive B. College Drive: Catch basins and interim -condition retention basin on the southwest corner of College Drive and University Park Drive (west intersection); catch basins on the east and west sides of the intersection with Technology Drive and a permanent retention basin along Technology Drive; and a catch basin and interim -condition retention basin on the east side of College Drive south of the east intersection with University Park Drive C. University Park Drive: Catch basins on the east and west sides of University Park Drive at the west intersection with College Drive and an interim -condition retention basin in the southwestern corner of the intersection; catch basins on the north and south sides of University Park Drive and an interim -condition retention basin in the northwest quadrant of the east intersection of College Drive and University Park Drive; and, as indicated above under VI.B., a catch basin and interim -condition retention basin on the south side of University Park Drive, west of Cook Street D. Technology Drive: Catch basins on the east and west sides of Technology Drive and an interim -condition retention basin west of Technology Drive and south of Gerald Ford Drive E. Gerald Ford Drive: Catch basin and interim -condition retention basin between Pacific and Technology Drive on the south side of Gerald Ford Drive; as indicated above under VI.A., catch basin and interim -condition retention basin on the south side of Gerald Ford Drive west of Pacific Avenue; and, as indicated above under VI.D., catch basin and interim - condition retention basin west of Technology Drive F. Cook Street: As indicated above under VI.B., catch basin and interim - condition retention basin south of University Park Drive, west side of Cook Street VII. Utilities Improvements A. Frank Sinatra Drive: from West of Cook Street to College Drive B. University Park Drive: from West intersection College Drive to Cook Street C. Technology Drive: from College Drive to Gerald Ford Drive D. Pacific Avenue: from College Drive to Gerald Ford Drive E. College Drive: from Portola Avenue to Frank Sinatra Drive F. Southern half of Gerald Ford Drive: from Technology Drive to Pacific Avenue A-3 G:\RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc VIII. Park Improvements and Park Site Land Acquisition, (including, but not limited to, site development, lighting and landscaping improvements, restroom facilities, age -appropriate tot lots, sand volleyball and basketball facilities, picnic pavilions, greenspace (including without limitation greenspace large enough for sports activities), shade structures, walking paths, water spray features, dog park improvements, and parking improvements) A. Park A (approximately 2 acres) — Generally surrounded by Portola Avenue, College Drive, Pacific Avenue and Gerald Ford Drive B. Park B (approximately 4.5 acres) — Generally surrounded by Gerald Ford Drive, Pacific Avenue, College Drive and to the west of the intersection of College Drive and University Park Drive C. Park C (approximately 2.3 acres)— Located in the southwest corner of the west intersection of University Park Drive and College Drive D. Park D (approximately 2.8 acres)— Generally surrounded by College Drive and University Park Drive E. Park E (approximately 0.7 acres) — Located in the southwest corner of Pacific Avenue and Gerald Ford Drive F. Park F(approximately 0.6 acres) — Located in the southeast corner of Pacific Avenue and Gerald Ford Drive IX. Landscaping (includes all planting, irrigation, trees, and necessary hard scape/rocki ng A. All street median areas as well as parkways areas (listed under Section II) between the back of curb and gutter and street right of way (excluding the sidewalk) will be landscaped. EXHIBIT "B" RATE AND METHOD OF APPORTIONMENT FOR CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) [see attached] A-4 G:\RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Establish CFD (Univ Vill) (3).doc RESOLUTION NO. 05-=8.8 A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT TO INCUR BONDED INDEBTEDNESS WITHIN PROPOSED CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) RECITALS: WHEREAS, the City Council (the "City Council") of the City of Palm Desert, (the "City"), upon receipt of a petition as provided in Government Code Section 53318, has heretofore adopted Resolution No. (the "Resolution of Intention"), stating the City Council's intention to form City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District"), pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the "Act"), to finance the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of certain public facilities (the "Facilities") to serve the District, including incidental expenses to be incurred in financing the Facilities and forming and administering the District, as further provided in the Resolution of Intention and in Exhibit A hereto and incorporated herein by reference; and WHEREAS, the City Council estimates that the amount required to finance the Facilities is $70 million; and WHEREAS, in order to finance the Facilities it is necessary to incur bonded indebtedness on behalf of the District in the amount not to exceed $70 million, the repayment of which is to be secured by special taxes levied in accordance with Section 53340 et seg. of the Act on all non-exempt property within the District; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: Section 1. Bonded Indebtedness. It is necessary to incur bonded indebtedness within the boundaries of the proposed District in an amount not to exceed $70 million to finance the costs of the Facilities, as permitted by the Act. Section 2. Purpose. The bonded indebtedness will be incurred for the purpose of financing the costs of the Facilities, including, but not limited to, the funding of reserve funds for the bonds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), financing of the costs associated with the issuance of the bonds, and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. Section 3. Terms. It is the intent of the City Council, acting as the legislative body of the District, to authorize the issuance and sale of one or more series of g:RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Incur Bonded Indebt (Univ Vill).doc bonds in the maximum aggregate principal amount of $70 million, bearing interest payable semi-annually or in such other manner as this City Council shall determine, at a maximum interest rate of twelve (12%) percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued. The term of the bonds of each series shall be determined pursuant to a resolution of the City Council authorizing the issuance of such series, but such term shall in no event exceed forty (40) years from the date of issuance of such series of bonds or such longer term as is then permitted by law. Section 4. Hearinq. A public hearing on the proposed debt issues (the "Hearing") shall be held on December 8, 2005, at 4:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Palm Desert, 73-510 Fred Waring Drive, California 92260. Any interested persons, including all persons owning land or registered to vote within the proposed District, may appear and be heard at the Hearing. Section 5. Voting. The proposition to incur bonded indebtedness in the maximum aggregate principal amount of $70 million shall be submitted to the qualified electors of the District at a special election. Ballots shall be distributed to the qualified electors by mail with return postage prepaid or by personal service. Section 6. Published Notice. The City Clerk is hereby directed to publish a notice of the Hearing and the special bond election ("Notice") pursuant to Section 6061 of the California Government Code in a newspaper of general circulation circulated within the proposed District. Such Notice shall be substantially in the form specified in Section 53346 of the Act. The publication of the Notice shall be completed at least seven (7) days before the date herein set for the Hearing. Section 7. Mailed Notice. The City Clerk is hereby directed to send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least fifteen (15) days prior to the date of the Hearing. 2 g:RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Incur Bonded Indebt (Univ Vill).doc PASSED, APPROVED, and ADOPTED this 13th day of October, 2005, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Buford A. Crites, Mayor ATTEST: Rachelle D. Klassen, City Clerk g:RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Incur Bonded Indebt (Univ ViII).doc EXHIBIT A DESCRIPTION OF FACILITIES The public facilities (the "Facilities") described below are proposed to be financed by City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District') and include a pedestrian bridge, traffic signals, landscaping, street improvements, water improvements, sewer improvements, storm drain improvements, utility improvements, public art improvements, school facility improvements, park improvements, and park site land acquisition, together with all appurtenances and appurtenant work, such as related clearing and grubbing, grading, and any removal or temporary signage or markings related thereto. The cost of the Facilities shall include incidental expenses, including costs associated with forming the District, issuance of bonds, determination of the amount of the Special Tax, collection of the Special Tax, payment of the Special Tax, costs incurred in order to carry out the authorized purposes of the District, and the costs of engineering, inspecting, coordinating, completing, planning and designing the Facilities, including the costs of environmental evaluations. The Facilities include, but shall not be limited to, the facilities listed below, and other facilities of the same type or types may be substituted in the place of one or more of the specific facilities listed below. Any of the Facilities to be constructed shall be constructed, whether or not acquired in their completed states, pursuant to plans and specifications approved by the City of Palm Desert (or the Coachella Valley Water District, or Palm Springs Unified School District, as applicable) and the officials thereof, including the City Engineer. The final nature and location of the Facilities will be determined upon the preparation of final plans and specifications for such Facilities. The Facilities may include facilities financed pursuant to public agency development impact fees. Cook Street Pedestrian Bridge (including, but not limited to bridge, ADA access ramps, elevator, retaining walls, hand railing, pedestrian lighting, revised sidewalks and minor grading) II. Street Improvements (including, but not limited to, street widening, excavation, signing and striping, access ramps, grading, median and parkway landscaping, curbs and gutters, sidewalks, street lights, dry utility infrastructure, bus stops, fringe toed lizard fee and City fees) A. Frank Sinatra Drive: from West of Cook Street to College Drive B. Cook Street: from Frank Sinatra Drive to Gerald Ford Drive C. Portola Avenue: from College Drive to Gerald Ford Drive D. Southern half of Gerald Ford Drive: from Portola Avenue to Cook Street E. University Park Drive: from College Drive to Cook Street F. Technology Drive: from College Drive to Gerald Ford Drive G. Pacific Avenue: from College Drive to Gerald Ford Drive H. College Drive: from Portola Avenue to Frank Sinatra Drive 4 g:ROA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Incur Bonded Indebt (Univ Vill).doc III. Water Improvements A. University Park Drive: from West intersection College Drive to East intersection College Drive B. Technology Drive: from College Drive to Gerald Ford Drive C. Pacific Avenue: from College Drive to Gerald Ford Drive D. College Drive: from Portola Avenue to Frank Sinatra Drive E. Well Sites (including land acquisition and improvements) to be located at four sites to be determined by the Coachella Valley Water District concurrently with land plan, final tentative map(s), or similar document(s) (as appropriate) to be approved by the City's Planning Commission and City Council. The tentatively approved locations of the well sites are as follows: 1. Adjacent to Gerald Ford Drive between Pacific Avenue and Technology Drive; 2. Northeast corner of College Drive and Portola Avenue; 3. Adjacent to University Park Drive close to the western intersection with College Drive; and 4. Adjacent to College Drive South of University Park Drive IV. Traffic Signals A. The intersection of Cook Street/Gerald Ford (modified) B. The intersection of Cook Street/University Park Drive (modified) C. The intersection of Frank Sinatra Drive/College Drive D. The intersection of Portola Avenue/College Drive E. Signals to be located on the south side of the intersection of Gerald Ford Drive/Pacific Avenue F. Signals to be located on the south side of the intersection of Gerald Ford Drive/Technology Drive G. Signals to be located on the south side of the intersection of Gerald Ford Drive/Portola Avenue (cost participation only) V. Sewer Improvements A. Technology Drive: from College Drive to Gerald Ford Drive B. Pacific Avenue: from College Drive to Gerald Ford Drive C. College Drive: from the West intersection University Park Drive to Technology Drive to North of Frank Sinatra Drive D. University Park Drive: from West intersection College Drive to Southwest of West intersection of College Drive and West of the East intersection College Drive to the East intersection College Drive A-2 g:RDA\Beth Longman\Staff ReportsWrigoyen\Reso of Intent to Incur Bonded Indebt (Univ Vill).doc VI. Storm Drain Improvements A. Pacific Avenue: Catch basins and interim -condition retention basins on the east and west sides of Pacific, adjacent to Gerald Ford Drive B. College Drive: Catch basins and interim -condition retention basin on the southwest corner of College Drive and University Park Drive (west intersection); catch basins on the east and west sides of the intersection with Technology Drive and a permanent retention basin along Technology Drive; and a catch basin and interim -condition retention basin on the east side of College Drive south of the east intersection with University Park Drive C. University Park Drive: Catch basins on the east and west sides of University Park Drive at the west intersection with College Drive and an interim -condition retention basin in the southwestern corner of the intersection; catch basins on the north and south sides of University Park Drive and an interim -condition retention basin in the northwest quadrant of the east intersection of College Drive and University Park Drive; and, as indicated above under V1.13., a catch basin and interim -condition retention basin on the south side of University Park Drive, west of Cook Street D. Technology Drive: Catch basins on the east and west sides of Technology Drive and an interim -condition retention basin west of Technology Drive and south of Gerald Ford Drive E. Gerald Ford Drive: Catch basin and interim -condition retention basin between Pacific and Technology Drive on the south side of Gerald Ford Drive; as indicated above under VI.A., catch basin and interim -condition retention basin on the south side of Gerald Ford Drive west of Pacific Avenue; and, as indicated above under VI.D., catch basin and interim - condition retention basin west of Technology Drive F. Cook Street: As indicated above under VI.B., catch basin and interim - condition retention basin south of University Park Drive, west side of Cook Street VII. Utilities Improvements A. Frank Sinatra Drive: from West of Cook Street to College Drive B. University Park Drive: from West intersection College Drive to Cook Street C. Technology Drive: from College Drive to Gerald Ford Drive D. Pacific Avenue: from College Drive to Gerald Ford Drive E. College Drive: from Portola Avenue to Frank Sinatra Drive F. Southern half of Gerald Ford Drive: from Technology Drive to Pacific Avenue VIII. Park Improvements and Park Site Land Acquisition (including, but not limited to, site development, lighting and landscaping improvements, restroom facilities, age -appropriate tot lots, sand volleyball and basketball facilities, picnic pavilions, greenspace (including without limitation greenspace large enough for sports A-3 g:RDA\Beth Longman\Staff Reports\Yrigoyen\Reso of Intent to Incur Bonded Indebt (Univ Vill).doc activities), shade structures, walking paths, water spray features, dog park improvements, and parking improvements) A. Park A (approximately 2 acres) — Generally surrounded by Portola Avenue, College Drive, Pacific Avenue and Gerald Ford Drive B. Park B (approximately 4.5 acres) — Generally surrounded by Gerald Ford Drive, Pacific Avenue, College Drive and to the west of the intersection of College Drive and University Park Drive C. Park C (approximately 2.3 acres)— Located in the southwest corner of the west intersection of University Park Drive and College Drive D. Park D (approximately 2.8 acres)— Generally surrounded by College Drive and University Park Drive E. Park E (approximately 0.7 acres) — Located in the southwest corner of Pacific Avenue and Gerald Ford Drive F. Park F(approximately 0.6 acres) — Located in the southeast corner of Pacific Avenue and Gerald Ford Drive IX. Landscaoinq (includes all planting, irrigation, trees, and necessary hardscape/rocking A. All street median areas as well as parkways areas (listed under Section II) between the back of curb and gutter and street right of way (excluding the sidewalk) will be landscaped. A-4 g:RDA\Beth Longman\Staff Reports\Ydgoyen\Reso of Intent to Incur Bonded Indebt (Univ Vill).doc RESOLUTION NO. 05-89 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPOINTING CERTAIN FINANCE PROFESSIONALS IN CONNECTION WITH THE PROPOSED FORMATION OF A COMMUNITY FACILITIES DISTRICT AND THE ISSUANCE OF BONDS THEREBY RECITALS: WHEREAS, in 2004, two owners of real property in the City of Palm Desert (the "City"), Desert Wells 237, LLC, and American Realty Trust, Inc., requested the City to form a financing district for the purpose of financing certain public improvements that will benefit their property within the City; and WHEREAS, each of (i) Palm Desert 124, Inc., an affiliate of Desert Wells 237, LLC, as depositor for Desert Wells 237, LLC, and (ii) American Realty Trust, Inc. (collectively, the "Participants") entered into a Deposit and Reimbursement Agreement, each dated as of May 13, 2004, with the City in order to provide for the Participants to deposit funds with the City in order to reimburse the City for all of its costs and expenses associated with the formation of the aforementioned financing district and the issuance of bonds in connection therewith; and WHEREAS, it has been determined that the aforementioned financing district is proposed to be established in the form of a community facilities district (the "District") under the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the "Act"); and WHEREAS, the Act authorizes the City Council of the City (the "City Council") to establish the District, to levy special taxes within the District, and to cause the District to issue bonds to finance public facilities (the "Bonds"); and WHEREAS, in accordance with the request of the Participants, the City Council desires to undertake proceedings to establish the District pursuant to the Act and, if established, to cause the District to issue Bonds to finance the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of certain public facilities to serve the area of land within the District; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2.Intention to Issue Bonds. The City intends to undertake proceedings to establish the District pursuant to the Act and to cause the District to issue the Bonds described in the fifth recital hereof. 1 Section 3.Appointment of Underwriters. Stinson Securities, LLC, and Kinsell, Newcomb & De Dios, Inc. are hereby appointed underwriters of the Bonds. Section 4.Appointment of Financial Advisor. Del Rio Advisors, LLC, is hereby appointed financial advisor in connection with the formation of the District and the issuance and sale of the Bonds. Section 5.Appointment of Bond Counsel. Richards, Watson & Gershon, A Professional Corporation, is hereby appointed bond counsel in connection with the formation of the District and the issuance and sale of the Bonds. Section 6.Appointment of Disclosure Counsel. Jones Hall is hereby appointed disclosure counsel in connection with the issuance and sale of the Bonds. Section 7.Special Tax Consultant. MuniFinancial is hereby appointed special tax consultant in connection with the formation of the District and the issuance and sale of the Bonds. Section 8.Appraiser. Capital Realty Analysts is hereby appointed appraiser in connection with the determination of the value of real property within the District pursuant to Section 53345.8 of the Act relating to the issuance and sale of the Bonds. Section 9.Aoproval of Actions. The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed. Section 10. Effective Date. This Resolution shall take effect immediately upon adoption. APPROVED AND ADOPTED this 13th day of October, 2005. AYES: NOES ABSENT: ABSTAIN: Buford A. Crites, Mayor ATTEST: Rachelle D. Klassen, City Clerk 2 g:\RDA\Beth Longman\Staff Reports\Yrigoyen\Resolution Appointing Financing Team (Palm Desert CFD 2005-1).doc DRAFT ROAD IMPROVEMENT AGREEMENT THIS ROAD IMPROVEMENT AGREEMENT ("Agreement's is made this _ day of October 2005, by and among PALM DESERT FUNDING COMPANY, LP, a Delaware limited partnership ("PDFC'�; PALM DESERT NORTH 80, LLC, a California limited liability company ( "PD North 80'D and the CITY OF PALM DESERT, a municipal corporation of the State of California (the "City'. WHEREAS, PDFC is the owner of certain real property in the City of Palm Desert County of Riverside, State of California, which property is zoned for residential development (the "Residential Development', and lies on the south side of Gerald Ford Drive, as depicted on F,xhihit "A" attached hereto and incorporated herein. WHEREAS, PD North 80 is the owner of certain real property located in the City of Palm Desert, County of Riverside, State of California, which lies on the north side of Gerald Ford Drive and across from the Residential Development, as further depicted on F.xhihit "A" attached hereto and incorporated herein (the "PD North 80 Property"). WHEREAS, the City is requiring that PD North 80 improve the north side of Gerald Ford Drive simultaneously with PDFC's improvements to the south side of Gerald Ford Drive. WHEREAS, PDFC, as part of the Residential Development, will be using Community Facilities District ("CFD'� funds to fund its improvements. WHEREAS, CFD funds cannot be used to make improvements to the PD North 80 Property since it is not part of the Residential Development; however, PD North 80 has agreed in consideration of PDFC constructing the improvements on the PD North 80 Property to the north side of Gerald Ford Drive, as set forth on F.xhihit "A" attached hereto and incorporated herein by this reference (the "Improvements', simultaneously with its construction of the improvements for the Residential Development on the south side of Gerald Ford Drive, PD North 80 will deposit $2,000,000 cash or a letter of credit in said amount into an account for PDFC to use to pay for the cost of constructing all of the Improvements on the PD North 80 Property, as said costs are specified in Exhibit "R" attached hereto. WHEREAS, PDFC and PD North 80 have agreed to cooperate with each other and to proceed pursuant to this Agreement AGRFFMFNT 1. InCnrparatinn of Recitals. The parties hereby incorporate into the terms of this Agreement each and every one of the foregoing Recitals, above, as though fully set forth herein. 2. Qbfigatians of PDFC. For and in consideration of this Agreement, PDFC shall: Palm Desert Road Improvement Agreement - FINAL (a) Construct the Improvements on the PD North 80 Property simultaneously with the construction of its Improvements on the Residential Development in accordance with the requirements of the City of Palm Desert; which Improvements shall be completed the later to occur of: (i) September 30, 2006 or (ii) nine (9) months after the sale of the CFD bonds for the PD North 80 Property ; (b) Provide PD North 80 the opportunity to review and approve in writing all bid documents and contracts with any contractors or subcontractors who will be constructing the Improvements prior to the issuance of and execution of said contracts; (c) Provide PD North 80 with copies of all invoices as received for all Improvements on the PD North 80 Property; (d) Complete the Improvements in a lien free condition in accordance with all applicable requirements and acceptable to the City and PD North 80; (e) Process, with PD North 80's cooperation all plans with any governmental entities through RBF Engineering ("RBF'�; (f) Obtain, with PD North 80's cooperation all necessary permits from the governmental entities for the Improvements; and (g) Post a performance bond to the City in the amount of $2,000,000 or lower, in the event the selected contract bid for the construction of the Improvements on the PD North 80 Property is lower than $2,000,000 after the resolution of the formation of the CFD but prior to the sale of the CFD bonds is scheduled. 3. QhHgafinns of PT) North 90. For and in consideration of this Agreement, PD North 80 agrees to: (a) After the resolution of the formation of the CFD but prior to the sale of the CFD bonds is scheduled and upon the City's approval of the Improvements PD North 80 shall deposit within ten (10) calendar days from the date of said notice, the sum of $2,000,000, (or said amount as may be adjusted as set forth in Section 4 below)in cash or a letter of credit, into a bank account at Rabobank, Palm Desert, California, as provided in Section 4 below, for the construction of the Improvements on the PD North 80 Property (the "North Side Improvement Account'D PDFC shall notify PD North 80 in writing of the foregoing; (b) Grant PDFC a temporary license to enter PD North 80's Property to complete the Improvements, as provided in Section 5 of this Agreement; (c) Pay for the work plan, geology plan and all plans from engineers necessary for the Improvements (collectively, the "Plans'D; (d) Cooperate with PDFC in the processing of the Plans with any governmental entities through RBF, as provided in Section 6 of this Agreement; -2- Palm Desert Road Improvement Agreement - FINAL (e) Pay for all costs of RBF for the Work Plan on the PD North Property as provided in Section 7 of this Agreement; (f) Cooperate with PDFC in obtaining all necessary permits from the governmental entities for the Improvements; (g) Pay for the cost of any permits for the Improvements on the PD North 80 Property; (h) Grant PDFC any temporary construction easements required by PDFC to construct the Improvements on the PD North 80 Property; and (i) Offer to the City the Improvements by an Irrevocable Offer to Dedicate and Right of Way with good and marketable title subject to obtaining any consents required of PD North 80 prior to the CFD bond sale. 4. Rank Acemint. As provided in Section 3(a) above, PD North 80 shall open the North Side Improvement Account with Rabobank in Palm Desert, California and shall deposit the sum of $2,000,000 cash or a letter of credit to be used by PDFC to pay the costs of the Improvements on the PD North 80 Property. Provided, however, in the event the selected contract bid for the construction of the Improvements on the PD North 80 Property is lower than $2,000,000, then PD North 80 may deposit a sum in cash or a letter of credit which is equivalent to the cost of the Improvements as determined by said selected contract bid . If no such bid selection has been made at the time of the opening of the North Side Improvement Account, then the sum of $2,000,000 shall be deposited. PD North 80 acknowledges and agrees that within ten (10) days after receipt of any invoice from PDFC, PD North 80 will either pay the invoice directly or PDFC shall have the right to pay the invoice from the North Side Improvement Account without the need of PD North 80's signature subject to the following requirements: (a) RBF signs off and approves the payment request, in writing, in accordance with the terms and conditions of any contracts approved by PD North; and (b) PDFC certifies, in writing to PD North 80 that the invoice and supporting documents are accurate and complete and the funds are being use solely for said requested purpose. 5. Permit M F.nter. As provided in Section 3(b) above, PD North 80 hereby grants to PDFC a nonexclusive revocable license and permission to enter upon the PD North 80 Property for the performance of the Work and for no other purpose (the "License'), subject to PDFC's strict compliance with all the terms of this Agreement; provided, that PDRC's use of the PD North 80 Property permitted hereunder shall not interfere with the use or enjoyment thereof by PD North 80 of its own property, or with the use of its own property by PD North 80's representatives, employees, agents, independent contractors or subcontractors, consultants, or joint venture partners (collectively, the "Representatives'). PDFC shall not permit any other party except its duly authorized Representative to enter or use the PD North 80 Property during the term of this Agreement. Any entry by PDFC or by a Representative shall be in strict -3- Palm Desert Road Improvement Agreement - FINAL accordance with the Work Plan (as defined below). The parties hereto acknowledge and agree that the License is intended to accommodate the improvements required in accordance with the requirements of the City, and for no other purpose. The License shall automatically terminate upon the final completion of all the Improvements, as evidenced by final a final sign -of from the all applicable governmental authorities. 6. Work Plan. As provided in Section 3(c) above, PD North 80 agrees to pay for the Plans prepared by RBF, which shall include the Work defined below. The Work is defined as the construction of all the Improvements on the PD North 80 Property including but not limited to all changes and modifications thereto. The parties agree that no later than fifteen (15) days prior to commencement of any portion of the Work, PDFC shall prepare and deliver to PD North 80, in writing, complete plans for the Work and time schedules for completion of the Work. Plans for the Work shall include, but not be limited to, the following: (i) Engineering plans and specifications; (ii) Grading plans; (iii) Drainage plans; (iv) Geology and soils reports; and (v) Environmental mitigation and remediation plans, if required by law, regulation or any Governmental authority (provided, however, that neither owner shall be required to use its property to mitigate or remediate environmental matters occurring on any other property). The time schedules of the Work shall include, but not be limited to, the following: (a) The anticipated date for obtaining all required Governmental Authority permits, consents, authorizations or approvals (including, without limitation, grading permits) required for the commencement and completion of the Work ('Approvals'); (b) The anticipated dates for completion and approval, respectively, of any environmental impact report, assessment or declaration required by law, regulation or any Governmental Authority; (c) The anticipated data for completion of each major item of construction in connection with the Work, including but not limited to, remediation (including re -seeding and re -vegetation) of the Property. As used herein, the term "Work Plan" shall mean the plans for the Work and the Work time schedules prepared by RBF, as approved in writing by both owners. 7. Cog. The cost and expense of the Work and any and all related costs including, without limitation, the cost of obtaining and complying with the Approvals required for -4- Palm Desert Road Improvement Agreement - FINAL performance of the Work on the PD North 80 Property, shall be the sole responsibility of PD North 80. Notwithstanding the amount of the $2,000,000 sum deposited into the North Side Improvement Account, PD North shall be responsible to pay for all of the Work, whatever the final amount is calculated to be. 8. insuranee. During the term of this Agreement, PDFC and PD NORTH 80 each agree to obtain and maintain, at their own cost and expense, insurance on their own respective property insuring against any and all liability or damage for injury to persons and damage to property incident to ownership thereof. 9. Indemnity. For and in consideration of the execution of this Agreement by PD North 80, PDFC hereby agrees, to the fullest extent permitted by law, to indemnify, defend (at PDFC's sole cost and expense and with legal counsel approved by PD North 80, which approval shall not be unreasonably withheld), protect and hold harmless PD North 80, its shareholders, trustees, employees, consultants, agents, lenders, successors and assigns (collectively the "PD North 80 Indemnified Parties"), from and against any and all conditions or occurrences on the Residential Development and/or the PD North 80 Property of any kind, including, but not limited to, damage or destruction of the Residential Development and/or the PD North 80 Property by third parties and Acts of God, including any and all Claims which may arise from or in any manner relate (directly or indirectly) to PDFC's obligations as provided under this Agreement or arising from PDFC's activities conducted on the Residential Development and/or the PD North 80 Property. 10. Miseellaneaus. 10.1 Leg Imo. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants or agreements or any inaccuracies in any of the representations and warranties on the party of the other party arising out of this Agreement, then in that event, the prevailing party in any such action or dispute, whether by final judgment, or out of court settlement shall be entitled to have and recover from the other party all costs and expenses of suit, including actual attorneys' fees (collectively "Costs'D incurred in enforcing, perfecting and executing such judgment. 10.2 Notoces. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, delivered by Federal Express or other reputable overnight carrier, delivered or sent by facsimile, and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if mailed, two (2) business days after the date of posting by the United States Post Office, (iii) if delivered by Federal Express or other reputable overnight carrier, the date of delivery to the address of the person to receive such notice or (iv) if given by facsimile, upon receipt (the transmittal confirmation receipt produced by the machine of the sending party shall be prima facie evidence of receipt of notice). -5- Palm Desert Road Improvement Agreement - FINAL To PD North 80, LLC 5005 Calle San Raphael, Suite B-1 Palm Springs, CA 92264 Tel: (760) 778-4337 Fax: (760) 778-4417 Attn: Michael Marix With Copy to Thomas L. Harnsberger, Esq. Reed Smith LLP 355 South Grand Avenue, Suite 2900 Los Angeles, CA 90071 Tel: (213) 457 8064 Fax: (213) 457-8080 To PDFC: Palm Desert Funding Company, LLC c/o Hover Development Company, Inc. 3 Civic Plaza, Suite 215 Newport Beach, CA 92660 Tel: (949) 644-7600 Fax: (949)644-7620 Attn: Tom Hover Copy to: Law Offices of Kent G. Snyder 2212 Dupont Drive, Suite B Irvine, California 92612 Tel: (949) 833-9078 Fax: (949)833-8209 Attn: Kent G. Snyder, Esq. 10.3 inter= retatinn; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. This Agreement shall be construed in accordance with the laws of the State of California. 10.4 Arhitratinn of fftuiu. ANY DISPUTE UNDER THIS AGREEMENT SHALL BE BROUGHT IN RIVERSIDE COUNTY, CALIFORNIA, AND SHALL BE DECIDED BY BINDING ARBITRATION IN ACCORDANCE WITH THE ARBITRATION RULES OF THE JUDICIAL ARBITRATION AND MEDIATION SERVICES ("JAMS' BEFORE AN ARBITRATOR SELECTED FROM THE RETIRED JUDGES PANEL OF THE ARBITRATORS OF JAMS. IN ADDITION TO THE JAMS RULES, THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE SUBJECT TO THE DISCOVERY PROVISIONS OF THE CALIFORNIA CODE OF CIVIL PROCEDURE ("CCP'), AND PARTICULARLY CCP SECTION 1283.05. THE FEE PAYABLE TO JAMS TO INITIATE THE ARBITRATION SHALL BE REMITTED BY THE REQUESTING PARTY, PROVIDED, HOWEVER, THAT THE COSTS OF ARBITRATION SHALL ULTIMATELY BE BORNE AS DETERMINED BY THE ARBITRATOR. THE PARTIES AGREE THAT THE DETERMINATION OF THE -6- Palm Desert Road Improvement Agreement - FINAL ARBITRATOR AND AWARD, IF ANY, MAY BE ENTERED WITH ANY COURT HAVING JURISDICTION AND THE DETERMINATION AND AWARD, IF ANY, MAY THEN BE ENFORCED AMONG THE PARTIES, WITHOUT FURTHER EVIDENTIARY PROCEEDINGS, AS IF ENTERED BY A COURT AT THE CONCLUSION OF A JUDICIAL PROCEEDING IN WHICH NO APPEAL WAS TAKEN. NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THIS AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THIS AGREEMENT. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THIS AGREEMENT TO NEUTRAL ARBITRATION. BY PLACING THEIR INITIALS HERE: PDFC PD NORTH 80 , THE PARTIES AGREE TO ARBITRATION AS SET FORTH ABOVE. 10.5 Further Acts. Each party hereby agrees that it shall, upon request of the other, execute and deliver such further documents and do such other acts and things as are reasonably necessary and appropriate to effectuate the terms and conditions of this Agreement. 10.6 Assignment. PDFC may assign its rights and interest in this Agreement without the consent of the PD North 80 to any entity, which purchases all of the Residential Development from PDFC. 10.7 Counter1arts Delive a by Facsimile TransmisAnn. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which when taken together shall constitute one and the same document. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. Any party may deliver its signed counterpart of this Agreement to the other party by facsimile transmission, and such delivery shall be deemed made and completed upon receipt of such facsimile transmission by the other party. Any party delivering a signed counterpart by facsimile transmission agrees to promptly send the counterpart bearing its original signature to -7- Palm Desert Road Improvement Agreement - FINAL the other party; provided that a delay or failure to do so shall not negate the effectiveness of the delivery made by the facsimile transmission. 10.8 Fnfareement_ By its signature hereto, the parties agree that the City is a third party beneficiary to this Agreement and the City may enforce all of PDFC's rights as set forth hereunder. 10.9 Reimhursements fir CFI) Expenditures. The City agrees and acknowledges that all expenditures made in connection with the Improvements on PD North 80 Property will be taken into account in the formulation and establishment of the CFD for the PD North 80 Property and shall be deemed reimbursable to the same extent as if such expenditures were incurred after the formation of such CFD. Such expenditures may include, but are not limited to, all bonds posted and deposits made in connection with the Improvements and any existing or future improvement undertaking covered by this Agreement. %Signatures on following pages) -8- Palm Desert Road Improvement Agreement - FINAL IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. "PDFC" PALM DESERT FUNDING COMPANY, L.P., a Delaware limited partnership By: Palm Desert Funding Company, LLC, a Delaware limited liability company Its: General Partner By: Palm Desert Funding Company, Inc. Its: Manager By. Name: Thomas I Hover Its: Authorized Agent "PD NORTH 80" PD NORTH 80 DEVELOPMENT COMPANY, a California limited liability company By: Marix Family Limited Partnership, a Delaware limited Partnership Its: Manager By: Marix Family Trust Under Declaration of Trust Dated as of October 12, 2002, as amended, by Michael S. Marix, its sole trustee Its: General Partner 13 Michael S. Marix Its: Sole Trustee (Signatures continued on following page) In Palm Desert Road Improvement Agreement - FINAL "CITY" CITY OF PALM DESERT, a municipal corporation of the State of California By: Its: Mayor -10- Palm Desert Road Improvement Agreement - FINAL EXHIBIT "A" DEPICTION OF RESIDENTIAL PROPERTY AND PD NORTH 80 PROPERTY POR TOLA lM PACIFIC AVENUE Palm Desert Road Improvement Agreement - FrNAL EXHIBIT ,`DB" LIST OF IMPROVEMENTS (Line Items) ESTIMATE FOR NORTH UNIVERSITY PARK -COST AREA^'B° � . PROJECT: TENTATIVE PARCEL #30042 � . � '---- --� ------� ---'--- -- '-- `{N: 20-100551 'PREPARED BY: / �� | DATE '09�8N5 T --' '-- - - - -��-- -- --' -'---`-------���'-----------'' �-' -'----l-'--------�---�--'-- ---------- '---� ---- -�----------'r-- --'--�----'--- ---- - --'--'-� North Side of Gerald Ford / � - -'---7 ----''-- ----'-�'------'�---'-------------'-----'- -------- - --- . DESCRIPTION' ' COST ��--'-- ---------- ------'--'---'------��-'�'r---- !UTILITIES, -- '-----''�------� s0| ' 5ADTRYV0RK so, ,STREET IMPROVEMENTS �h6O�80` � STORM DRAIN \ DV -�-- - -- - - - -- -- -- - -- --'-----r ,SEWER SYSTEM - -- - --- -- - ''-- - ---- - s0 '_ ----- --------- WATER SYSTEM SW i � � �»�D��p[N0 ��0� .0� � TRAFFIC SIGNALS i . D230�0V � CITY FEES. 847,519 ! CONSULTANTS ' 5142.557' � CONTINGENCIES (0) g0� � PREVAILING WAGE <\5%Q 9Y/D7 GENERAL CONTRACTOR FEE (\5%) 185/27 ' �MANAGEMENT FEE (0%) V! / � 'BOND FEE (i5%) 21,382 ' TOTAL DEVELOPMENT COST: � - ---- -____ _-----__-'_-_ $1,444,821 � , - -'r-- -- -'�--' - �� -' ------'-� - --'----'- NOTIE Nvcontingency )ndudad. -' '' - -- - - '� nvmanagement fee included Landscape iomedian only -' -- ''-- -'- ' - - ----- '----' -'- -� -'f''- -----� --' - + --- �� - - - - -- -'- - - -- --'-- - - '' - - - - - -- - - - - -- - - - - - Palm Desert Road Improvement Agreement 'rNm'