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10-0907_STROSCHER G3 LLC_G3a_Agenda Report o .tr .36 91712010 AGENDA REPORT Gia TO: City Council FROM: Joe Tait, City Manage OR SUBJECT: Consideration of a Proposal by the Property Owner to enter into a Development Agreement with the City of San Juan Capistrano for the Plaza Banderas Hotel and Mixed Use Project RECOMMENDATION: Consider the attached Plaza Banderas Development Agreement deal points and provide direction to staff and the property owner. PROPOSAL The property owner, Gretchen Stroscher Thomson, has been in the process of seeking zoning entitlements for the Plaza Banderas project, a request to construct a 124-room hotel, with accessory uses to include a restaurant, retail, and office. The Planning Commission conducted a City wide noticed public hearing on August 24, 2010 that was continued to September 14, 2010. BACKGROUND On August 25, 2010 the property owner and project applicant met with City staff requesting the City enter into a Development Agreement consisting of seven (7) deal points identified on the attached document. The applicant requested the Development Agreement go to the Planning Commission on September 14, 2010 for the State mandated recommendation to be forwarded to the City Council as early as October 5, 2010. Due to previous City Council policy, public hearing noticing constraints, and the lack of time to review the first draft of the Development Agreement document submitted on August 30, 2010, staff cannot schedule for Planning Commission public hearing consideration at this time. On the past two Development Agreement requests that staff has brought to the City Council for direction, Council has created a subcommittee to address deal points; this was done, prior to the Development Agreement being forwarded to the Planning Commission for recommendation and ultimately the City Council for final consideration. ENVIRONMENTAL REVIEW Not required for discussion item. If a Development Agreement is pursued, the California Environmental Quality Act (CEQA) Guidelines would apply. City Council Report Page 2 September 7, 2010 COMMISSIONIBOARD REVIEW AND RECOMMENDATIONS: The Development Agreement would be subsequently reviewed by the Planning Commission prior to full Council action on the proposal: The project itself however has been reviewed by the Development Advisory Board, Cultural Heritage Commission, Transportation Commission, Design Review Committee, and Planning Commission. The Planning Commission must make a formal recommendation to the City Council on the proposed zoning entitlements that include General Plan Amendment, Rezone, Architectural Control, Tree Removal Permit, Grading Plan Modification, Site Plan Review, and certification of the Environmental Impact Report. FINANCIAL, CONSIDERATIONS: The applicant's initial Development Agreement deal points as attached requests several significant financial concessions. The City Council recently adopted a resolution that would reduce development impact fees for the hotel by approximately $850,000, The property owner is proposing deal points where the City would bear the cost of certain infrastructure improvements and fees that cannot be completely determined at this time. NOTIFICATION: Gretchen Storoscher Thomson Tom Merrell RECOMMENDATION: Consider the attached Plaza Banderas Development Agreement deal points and provide direction to staff and the property owner. Respectfully Submitted, Prepared by, Steven Apple, �P Grant Taylor, Deputy City Manager Development Services Director Attachments: 1. Plaza Banderas Development Agreement Deal Points — 8125/10 2. Plaza Banderas Draft Development Agreement — 8130110 I Y I c SOLUTIONS PLAZA BANDERAS DEVELOPMENT AGREEMENT DEAL POINTS August 25, 2010 1. CITY ATTORNEY TO PREPARE THE DOCUMENT? 2, CITY RULES TO BE VESTED FOR 10 YEARS, INCLUDING DEVELOPMENT IMPACT FEES 3. CITY (OR CRA) WILL UNDERTAKE ALL OFF-SITE IMPROVEMENTS AND INSTALLATION OF IMPROVEMENTS WILL NOT BE REQUIRED AS CONDITIONS OF APPROVAL a. WATER SYSTEM UPGRADE (ALTERNATIVE SYSTEM ALSO TO BE ADDRESSED) b. UNDERGROUNDING OF POWER LINES ON EL CAMINO REAL c. RECONSTRUCTION OF ORTEGA ENTRY UPON COMPLETION OF INTERCHANGE 4. VACATION OF ORTEGA EXCESS RIGHT-OF-WAY 5. CITY (OR CRA) TO PAY TCA FEES 6. PROPERTY OWNER WILL GRANT LICENSE TO CONSTRUCT A FUTURE PARKING STRUCTURE OVER THE EAST END OF THE SITE 7. PROPERTY OWNER WILL GIVE THE CITY FREE USE OF THE MEETING FACILITY 4 TIMES A YEAR 908532.01/oc 999903-4000018-25-10/jcc/pmc ATT /k C H M E p T I RECORDING REQUESTED BY AND RECEIVED WHEN RECORDED MAIL TO: AUG 3 0 2010 City Clerk City of San Juan Capistrano COMMUNITY DEVELOPMENT 32400 Paseo Adelanto San Juan Capistrano, CA 92675 (Space Above This Line for Recorder`s Office Use Only) (Exempt from Recording lee per Gov.Code§§6103 and 27383) DEVELOPMENT AGREEMENT (PLAZA BANDERAS HOTEL AND MIXED USE PROJECT) by and between CITE' OF SAN JUAN CAPISTRANO and STROSCHER G3, LLC Effective (Ordinance No. adopted , 2010) ATTACHMENT 2 DEVELOPMENT AGREEMENT (PLAZA BANDERAS HOTEL .AND MIXED USE PROJECT) This DEVELOPMENT AGREEMENT (PLAZA BANDERAS HOTEL AND MIXED USE PROTECT) (the "Agreement") is dated for reference purposes only as of the_day of , 2010, and is being entered into by and between the CITY OF SAN JUAN CAPISTRANO, a municipal corporation, organized and existing under the laws of the State of California ("CITY"), and STROSCHER G3, LLC, a California limited liability company ("STROSCHER"), pursuant to the authority of Sections 65864 through 65869.5 of the California Government Cade (the "Development Agreement Legislation") and Article XI, Section 2, of the California Constitution. CITY and STROSCHER are sometimes hereinafter referred to as the "Parties." RECITALS This Agreement is predicated upon the following facts: A. These Recitals refer to and utilize certain capitalized terms which are defined in this Agreement. The Parties intend to refer to those definitions in conjunction with the use thereof in these Recitals. B. The Development Agreement Legislation authorizes CITY to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property in order to, among other things: ensure high duality development in accordance with comprehensive plans; provide certainty in the approval of development projects so as to avoid the waste of resources and the escalation in the cost of housing and other development to the consumer; provide assurance to the applicants for development projects that they may proceed with their projects in accordance with existing policies, rules, and regulations, subject to the applicable conditions of approval, in order to strengthen the public planning process and encourage private participation in comprehensive planning and reduce the private and public economic costs of development; and encourage and provide for the development of public infrastructure and amenities to support the development of new housing and commercial projects. C. STROSCHER is the fee owner of that certain real property consisting of 3.10 acres of land located at the corner of Ortega Highway and El Camino Real in the City of San .Tuan Capistrano, County of Orange, State of California, that is more particularly described and depicted in Exhibit "A"attached hereto and made a part hereof(the "Property"). D. The Property consists of 3.18 acres, with 1.03 acres to be developed with a three- story, 124-room hotel, consisting of 74,973 .square feet ("Hotel"); 6,509 square feet of office/retail on two stories ("Off ce/Retail Component"); 1,971 square feet of private office space (the "Private Office Space"); 5,741 square feet for a restaurant ("Restaurant") and 185 parking spaces (the Hotel, Office/Retail Component, the Private Office Space, Restaurant and parking spaces are collectively, the "Project"). E. In connection with approval of the Project, STROSCHER applied for, and CITY approved, G eneral Plan Amendment 10-001; Rezone 10-001; Architectural Control 10-002; Grading Plan Modification 10-001; Tree Removal Permit 10-003; Floodplain Land Use Permit 10-001; and Tentative Parcel Map 10-001 (collectively, the "Development Plan Approvals"), in accordance with the provisions of this Agreement, and other applicable regulations of the CITY and other governmental agencies having jurisdiction over the Property and the "Project" as defined in Section 121, below. F. STROSCHER has applied for, and CITY has approved, this Agreement in order to create a beneficial development project and a physical environment that will conform to and complement the goals of CITY, be sensitive to human needs and values, and facilitate efficient traffic circulation. By its approval and execution of this Agreement CITY has determined that CITY (including, without limitation the existing and future residents of CITY) will receive the following direct and indirect benefits from the implementation of this Agreement: 1. The Project will conform to Cars goal to manage growth through the use of, among other things, comprehensive planning and design, project-wide continuity of landscaping and architectural design, state-of the-art development standards, and planning concepts. 2. The traffic and circulation elements of the Development Plan will conform to CITY'S General Plan by reducing the impact of the average daily trips generated by the Development of the Project on arterial roads and thoroughfares adjacent to the Expansion Parcels consistent with Transportation and Traffic Mitigation Measures set forth in the Mitigation Monitoring and Reporting Program ("MMRP") for the Project. 3. Dedication to CITY of an easement interest in the air space over a portion of the Property, to be used by the City as a parking lot or parking facility ("Parking Lot Air Space Parcel"), to increase the number of parking spaces available for visitors to the Mission San Juan Capistrano. The Parking Lot Air Space Parcel shall not eliminate any of the Project's parking spaces and improvements to this air space shall not disrupt Development or operation of the Project. A depiction of the Parking Lot Air Space Parcel is attached hereto at Exhibit "B"and made a part hereof. 4. Provision at no cost to the CITY exclusive use of a 2,047 square foot multi-function room in the Hotel ("Multi-Purpose Room"), for public uses four (4) days per year. A depiction of the Multi-Purpose Room is attached as Exhibit "C" hereto and made a part hereof. 5. Development of the Project will generate significant increases in revenue to the City, through Project generation of Transit Occupancy Tax revenues (San Juan Municipal Code ("SJMC") Section 33.601 et seq.), sales tax revenues and increased property tax revenues. G. The following actions have been taken with respect to this Agreement and the Project: _2.. I. On or about , 2010, pursuant to the applicable provisions of the California Environmental Quality Act, Public Resources Code Section 21000 et seq., and the regulations promulgated by the Secretary of Resources pursuant thereto (Title 14 of the California Code of Regulations, Section 15000 et seq,) (collectively, "CEQA"), the City Council of CITY found and determined that all of the significant environmental impacts of the Project, including this Agreement, were adequately mitigated and adopted an Environmental Impact Report; 2. On or about 2010, following three duly noticed and conducted public hearings, the Planning Commission of CITY took action on the Project; 3. On or about , 2010, the City Council of CITY approved the Development Plan Approvals; 4. On or about , 2010, after a duly noticed and conducted public hearing, the City Council of CITY determined that the provisions of this Agreement were consistent with the General Plan of CITY; and 5. On or about , 2010, after a duly noticed and conducted public hearing, the City Council of CITY introduced Ordinance No. approving and authorizing the execution of this Agreement and on , 2010, the City Council of CITY adopted said Ordinance (hereinafter the "Authorizing Ordinance"), a copy of which Authorizing Ordinance is on file in the City Clerk's office at City Hall. H. In consideration of the substantial public improvements and benefits to be provided by STROSCHER and the Project, and in order to strengthen the public planning process and provide significant educational and economic benefits to the City of San Juan community, by this Agreement CITY intends to provide to STROSCHER the assurance that it can proceed with Development of the Project for the Term of this Agreement pursuant to the terms and conditions of this Agreement and in accordance with the CITY's General Plan, ordinances, policies, rules, and regulations existing as of the Effective Date. In reliance on CITY's covenants in this Agreement concerning Development of the Property, STROSCHER has and will in the future incur substantial costs in site preparation and the construction and installation of major infrastructure and facilities in order to make the Master Plan feasible. I. Pursuant to Section 65867.5 of the Development Agreement Legislation, the City Council has found and determined that: (i) this Agreement and the Development Plan for the Project implement the goals and policies of CITY's General Plan, provide balanced and diversified land uses and impose appropriate standards and requirements with respect to land development and usage in order to maintain the overall quality of life and the environment within the City of San Juan Capistrano, (ii) this Agreement is in the best interests of and not detrimental to the public health safety, and general welfare of CITY and its residents; (iii) adopting this Agreement is consistent with CITY's General Plan and constitutes a present exercise of CITY's police power; and (iv) this Agreement is being entered into pursuant to and in compliance with the requirements of Section 65867 of the Development Agreement Legislation. -3- J. CITY and STROSCHER agree that it may be beneficial to enter into additional agreements and operating memoranda, or to modify this Agreement with respect to the implementation of the separate components of the Development Plan when more information concerning the details of each component is available, and that this Agreement should expressly allow for such contemplated additional agreements, operating memoranda, and modifications to this Agreement. K. CITY agrees, subject to exercising its legislative discretion, to design and install the upgrading of various public facilities. These possible upgraded facilities include a water system upgrade consisting of ("Water System Upgrade"); the undergrounding of power lines along ; and the reconstruction of the entryway to the Project due to the future expansion of Ortega Highway by Caltrans (collectively, the "Upgraded Public Facilities"). The Upgraded Public Facilities will benefit the residents of the CITY, and enhance operation of various public facilities, such as the Mission San Juan Capistrano, the City Library, San Juan Elementary School, and the Basilica Parish School. L. In approximately , the STROSCHER Family conveyed to the County of Orange right-of-way which was to be used in the construction of the Ortega Highway. Ultimately, the City succeeded to the interest of the County of Orange, and presently owns the this right-of-way, which no longer is needed for future improvement of the Ortega Highway ("Excess Ortega Right-of-Way") . The Excess Ortega Right-of-Way is depicted on Exhibit "D" attached hereto and made a part hereof. AGREEMENT NOW, THEREFORE, pursuant to the authority contained in the Development Agreement Legislation, as it applies to CITY, pursuant to Article XI, Section 2 of the California Constitution, and in consideration of the foregoing recitals of fact, all of which are expressly incorporated into this Agreement, the mutual covenants set forth in this Agreement, and for the further consideration described in this Agreement, the Parties agree as follows: 1. Definitions. The following words and phrases are used as defined terms throughout this Agreement and each defined term shall have the meaning set forth below: 1.1 Authorizing Ordinance. "Authorizing Ordinance" means Ordinance No. approving this Agreement. 1.2 CE A. "CEQA" has the meaning ascribed to that term in Recital F.I of this Agreement. 1.3 CITY, "CITY" means the City of San Juan Capistrano, a California municipal corporation, duly organized and existing under the Constitution and laws of the State of California, and all of its officials, employees, agencies, and departments. 1.4 City Council. "City Council" means the duly elected and constituted city council of CITY, -4- 1.5 Default. "Default" has the meaning ascribed in Section or of this Agreement, as applicable. 1.6 Develop, Development or Developing. "Develop," "Development" or "Developing" means the improvement and use of the Property, as the term "Development" is defined in California Government Code Section 65927, for purposes consistent with the Project and this Agreement, all in accordance with the provisions of this Agreement, but does not include the maintenance, repair, reconstruction, or redevelopment of any building, structure, improvement, or facility after the initial construction and,completion thereof. 1.7 Developer. Developer means Stroscher G3, LLC, all successors in interest, in whole or part, to the right, title, and interest of any of such entity in and to this Agreement with respect to all or any portion of the Property. 1.8 Development Agreement Legislation. "Development Agreement Legislation" means Sections 65864 through 65869.5 of the California Government Code as it exists on the Effective Date. 1.9 Development Exactions. "Development Exactions" means any requirement of CITY in connection with the Existing or Subsequent Land Use Regulations or Development Plan Approvals, for the dedication of land (including without limitation through the encumbrance of land with an easement or use restriction), the construction or improvement of public improvements or facilities (including without limitation improvements or facilities located on land that is encumbered with an easement or use restriction in favor of a public agency, the public, or a private non-profit entity), or the formation of any Financing District and/or payment of any special taxes, assessments, or fees, in order to provide any such public improvements or facilities in conjunction with Development or to lessen, offset, mitigate, or compensate for the impacts of development on the environment or other public interests consistent with the Project and this Agreement. 1.10 Development Im act Fees. "Development Impact Fees" shall mean those fees established and adopted by CITY with respect to development and its impacts pursuant to applicable governmental requirements, including Section 66000 et seq., of the California Government Code, including impacts fees, linkage fees, exactions, assessments or fair share charges or other similar impact fees or charges imposed on or in connection with new development by the CITY. Development Impact Fees do not mean or include Processing Fees. The Development Impact Fees are the only Development Impact Fees that the City may impose or levy on the Project. LII Development Plan. "Development Plan" means the plan. for Developing the Project on the Property in accordance with this Agreement, the Development Plan Approvals), and the Future Approvals. As of the Effective Date, the Development Plan consists of the Master Plan, provisions of CITY's General Plan (as amended through the General Plan Amendment referred to in Recital E) applicable to the Property, the narrative description of the Project set forth in Exhibit "E"to this Agreement, the Development Plan Approvals set forth in Exhibit "F"to this Agreement, and the express provisions set forth in this Agreement that define or describe the Project. The Future Development Approvals automatically shall become a part of -5- the Development Plan and included within the scope of STROSCHER's vested rights provided for in this Agreement without the need for any amendment of this Agreement when the same are issued or approved by CITY and become effective, Each of the documents memorializing the Development Plan is (or will be) maintained in the official records of CITY and shall be utilized whenever required to interpret or apply this Agreement. 1.12 Development Plan Approval(s). "Development Plan Approval(s)" means the approvals of the City Council described in Exhibit "F" hereto insofar as the same relate to the Property and the Development Plan, including those amendments to this Agreement made in accordance with Section 3 5hereof, those amendments to the Development Plan Approval(s) made in accordance with Section hereof, and those Future Development Approvals made in accordance with Section 3 3 hereof. 1.13 Development Transferee. "Development Transferee" means."a person or entity that expressly assumes obligations under this Agreement pursuant to Section ,, hereof 1.14 Discretion Actions or Discretionar Approval(s), "Discretionary Action(s)" or "Discretionary Approval(s)" means an action which requires the exercise of judgment, deliberation or discretion on the part of the CITY including any board, agency, commission or department and any officer of employee thereof, in the process of approving or disapproving a particular activity, as distinguished from an activity which is defined herein as a Ministerial Permit or Ministerial Approval. 1.15 Effective Date. "Effective Date" means the date the Authorizing Ordinance becomes effective. 1.16 Existing Land Use Regulations. "Existing Land Use Regulations" means all ordinances, laws, resolutions, codes, rules, regulations, policies, requirements, guidelines or other action of CITY, including but not limited to the CITY's General Plan Municipal Code and Zoning Code and including all Development Impact Fees, which affect, govern or apply to the Development and use of the Property, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the Development of the Property, subject to the terms of this Agreement, whether adopted by the City Council or the voters in an initiative, which are in effect on the Effective Date, pursuant to California Government Code Section 65866. 1.17 future Development Approvals, "Future Development Approvals" means those entitlements and approvals that are: (a) made in accordance with Section S hereof; and (b) requested by STROSCHER in order to authorize the Development to occur upon the Property in a manner consistent with the Development Plan Approval(s). By way of enumeration, and not limitation of the foregoing, the Future Development Approvals include such development permits, development plan reviews, use permits, variances, grading permits, building permits, and occupancy permits that are required as a condition to STROSCHER's right to Develop pursuant to the Development Approvals for all or any portion of the Project. There is no -6- intention to include any approvals that are beyond the implementation of the specific development listed on Exhibit "E" 1.18 Ministerial Approval(s) or Ministerial Act (s). "Ministerial Approval(s)" or "Ministerial Act(s)" means a permit approval or clearance, conformance with the Existing Land Use Regulations, including, without limitation, conformance maps for tentative tract maps, determinations of compliance with the Project Conditions of Approval of the Existing Project Approvals, site plans, grading plans, improvement plans, building plans and specifications, and ministerial issuance of one or more final maps, zoning clearances, grading permits, improvement permits, wall permits, building permits, lot line adjustments, encroachment permits, temporary use permits, certificates of use and occupancy MSHCP clearance, and approvals and entitlements and related matters as necessary for the completion of the Development of the Property as distinguished from an activity which is included in the definition of Discretionary Action or Discretionary Approval. 1.19 Minor Modification. "Minor Modification" means any minor modification of the Project, when Developer seeks no more than a 5% increase in the square footage of any Project building. A "Minor Modification" does not include Developer's right to reduce the densities and intensities of uses, a reduction in the size of the Project or its heights and sizes of the improvements below the maximum that is permitted in the Existing Project Approvals and Existing Land Use Regulations, as provided in Section ' of this Agreement. 1.20 On-Site Improvements. "On-Site Improvements" means physical infrastructure improvements or facilities that are or will be located on the Property consistent with the Development Plan Approvals. 1.21 Owner. "Owner" means STROSCHER. 1.22 Party or Parties. "Party" means either CITY or STROSCHER, as the context dictates, and "Parties" means CITY and STROSCHER. 1.23 Prosy. "Property" means the Property referred to in Recital C and more particularly described in Exhibit "A"to this Agreement. 1.24 Planning Commission. "Planning Commission" means the duly appointed and constituted planning commission.of CITY. 1.25 Processing Fees. "Processing Fees" means all fees and. charges of every kind and nature imposed by City to cover the estimated actual costs to City of processing applications for Future Development Approvals. 1.26 Project. "Project" means the Development and Approvals summarized in Recital E, the planning elements of which are more specifically described in Exhibit "E"hereto. 1.27 Property. "Property" means the Property referred to in Recital C and more particularly described in Exhibit "A"to this Agreement. -7- 1.28 Term. "Term" means the period of time that this Agreement remains in effect with respect to the Property or any portion thereof, as provided in Section 3. 2. General Provisions. 2.1 Binding Covenants. The provisions of this Agreement to the extent permitted by law shall constitute covenants which shall run with the Property for the benefit thereof, and the benefits and burdens of this Agreement shall bind and inure to the benefit of the Parties and all successors in interest to the Parties hereto. 2.2 Interest of STROSCHER. As of the date this Agreement is being executed by the Parties, STROSCHER represents that STROSCHER is the fee owner of that certain real property consisting of 3.10 acres of land located at the northwest corner of Ortega Highway and El Camino Real in the City of San .yuan Capistrano, County of Orange, State of California, that is more particularly described and depicted in Exhibit "A'r attached hereto and made a part hereof(the "Property") 2.3 Term. In addition to the provisions of Section t,0 4 of this Agreement, the initial term (hereinafter called "Term") of this Agreement shall commence on the Effective Date and shall terminate at the end of the day immediately preceding the seventh (7th) anniversary of the Effective Date, subject to the termination provisions set forth herein; provided, however, that so long as STROSCHER is not in Default of this Agreement and the Agreement has not been otherwise terminated, STROSCHER may, without the prior written consent of CITY, extend the Term for one (1) additional period of three (3) years, if(i) the CITY issues a building permit for Development of the Project before the expiration date of this Agreement; and (ii) STROSCHER gives CITY written notice of its intent to extend the Term not more than one hundred eighty (180) days and not less than sixty (60) days before the end of the initial Term. Pursuant to California Government Code Sections 65863.9 and 66452.6(a), the expiration date of all Development flan Approvals shall be extended for the greater of the Term of this Agreement, in which case no such extension application need be filed, or such time approved in accordance with state law or the Existing Land Use Regulations. The Parties agree that phased final subdivision maps may be processed and recorded. Notwithstanding any other provision of this Agreement, the provisions of Section 4 . . � shall survive termination of this Agreement as long as the Hotel is used and operated as a hotel, as defined in Appendix A to the SJMC. 2.4 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events: (i) If termination occurs pursuant to any specific provision of this Agreement; or (ii) As to provisions of this Agreement governing On-Site Improvements on any separate legal lot(s) or parcel(s) within the Property, upon the completion of On-Site Improvements on and with respect to said lot(s) or parcel(s) pursuant to the terms of this Agreement and CITY's issuance of all required occupancy permits or final inspections, as applicable, and acceptance of all dedications and improvements required to complete such On-Site Improvements; or -8- (iii) Entry after all appeals have been exhausted of a final judgment or issuance of a final order directed to CITY invalidating this Agreement. The termination of this Agreement in its entirety or with respect to a particular lot(s) or parcel(s) shall not affect any right or duty of STROSCHER arising from any provisions of this Agreement that remain effective or from a source other than this Agreement. In the event this Agreement terminates in its entirety or with respect to a particular lot(s) or parcel(s), and notwithstanding any other provision set forth herein, upon request by STROSCHER, or any other successor or assignee of either of them, CITY shall cooperate, at no cost to CITY, in executing in recordable form a document prepared by the requesting party that confirms the termination of this Agreement with respect to the Property or applicable portion thereof. 2.5 Transfers and Assignments. 2,5.1 STROSCHER ("Owner") shall not assign all or any part of this Agreement without the prior written approval of the CITY. Such written approval by the CITY shall not be unreasonably withheld, provided that: (a) if Owner's proposed assignee is an entity, such entity shall be legally formed and qualified to conduct business in the State of California; (b) Owner shall have delivered evidence to CITY that Owner's proposed assignee has the ability to comply with the Agreement; (c) Owner and its/their assignee execute an assignment and assumption agreement pursuant to which the assignee expressly assumes all of Owner's obligations under the Agreement; and (d) CITY shall bear no expenses in connection with such. assignment, Notwithstanding any other provision of this Agreement, Owner need not obtain the prior written approval of CITY for the assignment of this Agreement to a limited liability company, limited partnership or corporation wholly-owned by, or under common control with, Owner. 3. Development Provisions. 3.1 Vesting. 3.1.1 Project. CITY covenants STROSCHER has and shall have the right to Develop the Project on the Property consistent with the Development flan and the Development Plan Approval(s), including, without limitation, the Future Development Approvals after the same have been issued or approved by CITY and become effective ("vested right") 3.1.2 Limits on Development. The California Supreme Court held in Pardee Construction Company v. City of Camarillo, 37 Cal.3d 465 (1984), that the failure of the parties to address certain limits on a city's ability to condition, restrict, or regulate a development allowed a later adopted initiative to restrict the development. This Agreement is intended to cure that deficiency by expressly addressing the timing for the Development, the vested rights afforded by this Agreement, and the scope of CITY's reserved authority described in Section 3:2 hereof. Except as expressly set forth in the Development Plan and Development Plan Approval(s), regardless of any future enactment, whether by initiative or otherwise, STROSCHER shall have the vested right to Develop the various components of the Project in such order, at such rate, in one phase or in multiple phases, and at such times as STROSCHER -9- deems appropriate within the exercise of its subjective business judgment. Specifically, CITY agrees that STROSCHER shall be entitled to apply for and receive the Future Development Approvals and to Develop and use the Property at any time, provided that such application is made and such Development occurs in accordance with this Agreement and the other Development Plan Approval(s). No future amendment of any CITY law and no future adoption of any CITY law or other action that purports to limit the scope, rate, or timing of Development on the Property or to alter the sequencing of the Development in a manner inconsistent with the Development Plan or the Development Plan Approval(s) (including without limitation the Future Development Approvals when issued by CITY), whether the same are adopted or imposed by the City Council or through the initiative or referendum process, shall apply to the Property. Notwithstanding the foregoing, nothing in this Section 3, shall limit or restrict CITY's reserved authority as described in Section 3 2. 3.1.3 Entitlements, Permits, and Approvals_.Cooperation. 3.1.3.1 Processing. CITY agrees that it shall accept and expeditiously process, pursuant to CITY's regular procedures, complete applications for the Future Development Approvals and, if applicable, STROSCHER's complete applications for amendments to this Agreement, to the Development Plan Approval(s), and to any of the Future Development Approvals (after the same have been initially approved). 3.1.3.2 Other Permits. CITY :further agrees to reasonably cooperate with STROSCHER, at no cost to CITY, in securing any County, State, and Federal permits or authorizations which may be required in connection with Development of the Property that are consistent with the Development Plan and Development Plan Approval(s); provided, that nothing in this Section),,x..3.2 shall be deemed to require CITY's assumption of any obligations under any said permits or authorizations. 3.1.3.3 Acquisition of Off-Site PropertX. CITY shall not postpone or refuse approval of any Future Development Approval because STROSCHER or a Development Transferee has failed to acquire offsite property required for the construction or installation of offsite improvements. To the extent CITY, STROSCHER, or a Development Transferee does not have sufficient title or interest to permit any of such offsite improvements that are such entity's responsibility to be constructed or installed at the time the application for a Future Development Approval is processed or approved by CITY, STROSCHER or the Development Transferee shall male a good faith effort to acquire the required property. If STROSCHER or the Development Transferee is unable to acquire the required property, CITY shall consider in good faith the acquisition of the required property. If CITY is unable to acquire the required property by negotiation or condemnation within the time frame provided for in Government Code Section 66462.5, CITY shall continue to issue the Future Development Approval(s) for the Property despite the fact that the offsite improvement has not been completed. Notwithstanding the foregoing, CITY's obligation to continue to issue the Future Development Approvals as provided for in this Section is contingent upon: (i) STROSCHER or the Development Transferee submitting the improvement plans required for the improvement to CITY; and (ii)consistent with Government Code Section 66462.5, STROSCHER or the Development Transferee entering into a mutually -10- acceptable agreement with CITY that requires STROSCHER or the Development Transferee to pay or reimburse or secure the future payment or reimbursement of CITY for STROSCHER's fair share of the costs incurred in acquiring the land and constructing the applicable offsite improvement(s) at such time as CITY acquires the required land. 3.2 Reserved Authority. 3.2.1 Reservation of Authority With Respect to Future Development Approvals, Future Changes in Development Exactions. Notwithstanding any other provision set forth in this Agreement to the contrary, CITY reserves the right after the Effective Date of this Agreement to change the Existing band Use Regulations applicable to the Property and the Project and to exercise the same degree of discretion and control in its consideration of Future Development Approvals that it would have in the absence of this Agreement to impose conditions under CEQA and other applicable laws and regulations that apply to all similar development throughout the CITY in order to mitigate the Project's impact on the environment, subject to the following limitations: (i) No such future changes in CITY'S Existing Land Use Regulations shall be inconsistent with the Development Plan, the Project Development Approvals, or any of the provisions set forth in Sections t; or 4 4 , ofthis Agreement, nor shall any such future changes materially jeopardize or impair the rights of STROSCHER thereunder or materially increase the cost of Developing the Project; (ii) CITY shall not require the Project or the Property to participate in regional programs (i.e., programs that are not initiated by CITY and that include properties located in whole or in part outside the City of San Juan Capistrano) nor shall CITY require the Project or the Property to pay or contribute to regional Development Exactions to the extent that such programs or Development Exactions are not in effect as of the Effective Date with respect to the affected portion of the Property, including without limitation any such programs or Development Exactions initiated by the County of Orange. 3.2.2 Uniform Codes. This Agreement shall not prevent CITY from applying to the Project new uniform construction standards adopted by the State of California as State Codes, such as the Uniform Building Code, National Electrical Code, Uniform Mechanical Code, and Uniform Fire Code, provided those same standards are applied to all other development within the City of San Juan Capistrano. 3.2.3 State and Federal Laws and Regulations. STROSCHER shall comply with all applicable state and federal laws and regulations, provided that nothing in this Agreement shall be deemed to limit or restrict the right of STROSCHER to contest or challenge the validity of any such laws or regulations or their applicability to the Property or the Project. In the event that either CITY or STROSCHER determines that a state or federal law or regulation prevents the full implementation of the Development Plan and/or any of the Development Plan Approval(s), that Party shall provide the other Party with written notice of the state or federal law or regulation, a copy of the law or regulation, and a written statement of the -11- conflicts between such state or federal law or regulation and this Agreement. Promptly thereafter CITY and STROSCHER shall meet and confer in good faith in a reasonable attempt to determine whether a modification or suspension of this Agreement is required, provided that each Party reserves its discretion with respect thereto. CITY agrees to cooperate with STROSCHER in resolving the conflict in a manner which minimizes any adverse fiscal or other impact of the conflict upon STROSCHER, provided only that in no event does CITY agree that in such event it will materially increase its financial obligations set forth in this Agreement or otherwise materially increase its obligations. CITY also agrees to process in a prompt manner STROSCHER's proposed changes to the Development Plan and/or Development Pian Approval(s) as may be necessary to comply with such federal or state law or regulation; provided, however, that the approval of such changes by CITY shall be subject to the discretion of CITY, consistent with this Agreement. 3.2.4 Sus ension of Development in Order to Protect Health and Safety. Nothing in this Agreement shall be construed to be in derogation of CITY's police power to suspend the right of STROSCHER to develop all or any portion of the Project in order to protect the public health and safety (e.g., in the event of the unavailability of adequate water, wastewater treatment, or storm drainage facilities). In the event that CITY determines that the public health or safety require a suspension of STROSCHER's right to develop all or any portion of the Project, the scope of the suspension shall be limited to the extent determined by CITY to be reasonably necessary to protect the public health or safety, the term of the suspension shall be limited to the period of time during which the public health or safety concern continues, and CITY shall exercise reasonable good faith efforts to minimize the period of such suspension to the extent that the cause thereof is within CITY's control. As soon as is reasonably practicable after the commencement of an event that results in a suspension of the rights of STROSCHER to develop hereunder due to public health or safety concerns, CITY shall provide STROSCHER with written notice of the existence of such event, a detailed explanation of CITY's proposed action, and a written statement of any conflicts with the provisions of this Agreement that require a suspension of any of the terms hereof. Promptly thereafter CITY and STROSCHER shall meet and confer in good faith in a reasonable attempt to determine whether a modification or suspension of this Agreement in whole or in part, is necessary. In such negotiations, CITY and STROSCHER agree to preserve the terms of this Agreement and the rights of STROSCHER as derived from this Agreement to the maximum feasible extent while resolving the conflict. CITY agrees to cooperate with STROSCHER in a good faith reasonable effort to resolve any such conflict in a manner which minimizes any adverse financial or other impact of the conflict upon STROSCHER without materially increasing the obligations of CITY under this Agreement. CITY also agrees in such event to process in an expedited manner STROSCHER's proposed changes to the Development Plan and any previously issued Development Plan Approval(s) as may be necessary to appropriately respond to the public health and safety concern with respect to the portion of the Property owned by STROSCHER; provided, however, that the approval of any such changes by CITY shall be subject to the discretion of CITY, consistent with this Agreement, and no such change shall apply to any other portion of the Property without the prior written consent of the owner(s) thereof. 3.3 Farther Assurances to STROSCHER Reparding Exercise of Reserved Authority. The Parties further acknowledge that the public benefits to be provided by STROSCHER to CITY pursuant to this Agreement are in consideration for and reliance upon assurances that the -12- Property may be developed and used in accordance with the Development Plan and the Development Plan Approval(s). Accordingly, while recognizing that the Development of the Property may be affected by the exercise of the authority and rights reserved and excepted as provided in Sections 3,J, ("Vesting") and 32 ("Reserved Authority"), STROSCHER is concerned that normally the.judiciary extends to local agencies significant deference in the adoption of rules, regulations, and policies and that in the absence of an express provision set forth in this Agreement such judicial deference might be construed to permit CITY, in.violation of the limitations on its reserved authority, to attempt to apply rules, regulations, and policies that are inconsistent with the Development Plan and the Development Plan Approval(s). Accordingly, STROSCHER desires assurances that CITY shall not, and CITY agrees that it shall not, further restrict or limit the Development of the Property in violation of this Agreement except in strict accordance with the reserved authority described in Section 3 hereof, which exercising of CITY's reserved authority shall not be considered to be a violation of this Agreement. In this regard, from and after the date that CITY approves the Project, if STROSCHER judicially (including by way of a reference proceeding) challenges CITY's purported exercise of its reserved authority as being in violation of this Agreement, STROSCHER shall bear the burden of alleging that such purported exercise by CITY of its Reserved. Authority is inconsistent with the Development Plan or the Development Plan Approval(s) and CITY thereafter shall bear the burden of proof in establishing by a preponderance of the evidence that such exercise of its Reserved Authority is in accordance with and not a violation of this Agreement. 3.4 Vested Right, By entering into this Agreement and relying thereupon, STROSCHER is obtaining certain vested rights to proceed with the Development anticipated by the Development Plan and the Development Approvals and in accordance with the terms and conditions of this Agreement (as the same may be amended and supplemented from time to time as expressly set forth herein) and the Existing Land Use Regulations. By entering into this Agreement and relying thereupon, CITY is securing certain public benefits which enhance the public health, safety, and welfare. CITY therefore agrees to the following: 3.4.1 No Conflicting Enactments. Except as provided in Section 3 of this Agreement, after the Effective Date neither the City Council nor any other agency of CITY shall enact a rule, regulation, ordinance, or other measure (collectively, "law") applicable to the Property which is inconsistent or in conflict with this Agreement. Not by way of limitation of the foregoing, any law, whether by specific reference to this Agreement or otherwise, shall be considered to be inconsistent and in conflict with this Agreement if it has any of the following effects: (i) It limits or reduces the occupancy, density or intensity of the Project as provided for in the Development Plan or the Development Plan Approval(s); or (ii) It imposes Development Exactions on the Property other than those in effect on the Effective Date or as otherwise expressly permitted by Section 32.1 of this Agreement. -13- 3.4.2 Consistent Enactments. By way of enumeration and not limitation, the following types of laws shall be considered consistent and not in conflict with this Agreement: (i) Laws that provide for the relocation of structures within the Property pursuant to an application from STROSCHER; and (ii) Any law that is expressly authorized by this Agreement. 3.43 Initiative Measures. In addition to and not in limitation of the foregoing, it is the intent of STROSCHER and CITY that no moratorium or other limitation (whether relating to the Development of all or any part of the Property and whether enacted by initiative or otherwise) affecting site development permits, precise plans, site development plans, building permits, occupancy certificates, or other entitlements to use approved, issued, or granted within CITY, or portions of CITY, shall apply to the Property to the extent such moratorium or other limitation would restrict STROSCHER's right to Develop the various elements of the Project on the Property in such order and at such rate as STROSCHER deems appropriate. 3.5 Subsequent CEQA..Review. 3.5.1 The EIR. The CITY certifies that the EIR prepared on behalf of the CITY in conjunction with the Project is a complete and accurate docw- ent which satisfies all the requirements of the California Environmental Quality Act ("CEQA," California Public Resources Code Section 21000 et seq.) and the State CEQA Guidelines (14 California Code of Regulations 15000 et seq.) with respect to the Project and this Agreement. CITY agrees that no mitigation measures arising out of environmental concerns that are not included in the MMRP .for the EIR or this Agreement shall be imposed on the Project except as otherwise provided in this Section. In exercising its legislative discretion to enter into this Agreement and to commit CITY to the completion of the Project, CITY has further reviewed and considered from a variety of perspectives, and has analyzed pursuant to a variety of assumptions, the projected future regional and cumulative environmental demands that will compete with the Project for available capacities and cumulatively add to potential adverse impacts. 3.5.2 Subsequent CE A Review. The Parties to this Agreement intend that the EIR fully and adequately addresses all potential adverse environmental impacts from full development of the Project. After consideration of the potential adverse environmental impacts associated with the Project, the CITY has imposed mitigation measures in accordance with CEQA, as specified in the MMRP to the fullest extent the CITY considers feasible and necessary. The CITY has determined that the Development of the Project in the manner contemplated by the Project Approvals and this Agreement will provide the mitigation measures needed to alleviate short-run and long-runpotential adverse environmental impacts created by the Project, and that the public benefits to be derived from the Development of the Project override any potential adverse environmental impacts which may arise from the Development of the Project. Therefore, the CITY a green that no subsequent or supplemental EIR shall be required by the CITY for any Subsequent Discretionary Project Approvals implementing the Development of the Project unless required pursuant to California Public Resources Code Section 21166 and Title 14 California Code of Regulations, Section 15162. For purposes of this analysis, the term "new information" does not mean discovery that probabilities of adverse (or -14- beneficial) results considered in the approval of this Agreement, the Existing Project Approvals or the EIR may prove incorrect, or that such probabilities are or are not becoming, or have or have not become, realities; but instead, "new information" requires that the actual quantitative or qualitative extent of the underlying issues were not considered and could not have been considered in the environmental analysis associated with the approval of the Existing Project Approvals, this Agreement and the ETR. 3.6 Subsequent Project Approvals. 3.6.1 Basis for Denying.. or Conditional Granting Subsequent Project Approvals. The CITY is bound to permit the uses on the Property that are permitted by the Existing Land Use Regulations and the Development Plan Approvals. The CITY agrees to grant and implement all Ministerial Approvals, as long as the Ministerial Approvals comply with the Existing Land Use Regulations, the Agreement, and are consistent with the Development Plan Approvals, including but not limited to, building plans and permits, specifications, reclamation plans, landscape plans, grading plans and permits, and use permits reasonably necessary or desirable to accomplish the goals, objectives, policies and plans described in this Agreement. This Agreement shall not prevent the CITY from denying or conditionally approving any Discretionary Approval on the basis of the Existing Land Use Regulations, subject, however, to the provisions of Section 1...5.2 of this Agreement. 3.6.2 Duty to Grant and Implement. The CITY's obligation to grant and implement any Ministerial or Discretionary Approvals shall not infringe upon the CITY's right to withhold such Future Development Approvals for failure of the applicable Application to conform to the Existing Land Use Regulations. If the CITY rejects an application for a Ministerial or Discretionary Approval, it shall provide, in good faith, a specific list of reasons why the application was rejected, along with a description of specific and reasonable legal measures ("Measures to Correct") to correct each basis for rejection. Such Measure to Correct shall take into account the economic ability of Developer to implement such Measures to Correct. If Developer resubmits its application incorporating all the Measures to Correct, the CITY shall approve Developer's application. 3.6.3 Processing Obligations. The CITY hereby agrees that it will accept from the Developer for processing and review all applications for Future Development Approvals, in accordance with the Existing Land Use Regulations. To the fullest extent allowed by law, the CITY shall process all applications filed in connection with the Development of the Project as expeditiously as possible and shall complete at the earliest possible time all steps necessary for the implementation of this Development Agreement and the Development of the Project, including, but not limited to, the following: (a) The processing of applications for and the issuance of all Project Approvals requiring the exercise of judgment and deliberation by the CITY, including without limitation, the Subsequent Project Approvals; (b) The retention, upon the Developer's request, of outside plan check consultants to assist in processing of applications and plans (including infrastructure and storm drain plans), at the Developer's cost; -15- (c) The holding of any required public hearings; (d) The processing of applications for and the issuance of all Ministerial Approvals shall be completed within thirty (30) days after application is made therefore or the CI'T'Y shall deliver written notice within said thirty (30)-day period specifically identifying why the requested Ministerial Approval is not consistent with this Agreement, as specified in Section 3 992 of this Agreement; (e) City processing and approval of all building permit applications within forty-five (45) days of submission by Developer of complete plans. CITY shall notify Developer in writing within thirty (30) days whether any such application is incomplete. If the CITY fails to notify Developer in writing that the application is incomplete, the application shall be deemed complete. CITY shall inform Developer, upon Developer's request, of the necessary submission requirements for each application for a building permit or other entitlement for use in advance and review of said application and scheduling the application for review by the appropriate authority within the times set forth in this Section; and (f) CITY performance of all required inspections called for by Developer within fifteen (15) days following the request for inspection by Developer. 3.6.4 Chan es in the Pro'ect. CITY acknowledges that the Developer may in the future desire to change or modify the Project based on precise planning, changes in market demand for aggregate products, changes in development occurring in the vicinity of the Property, or other factors. All such Project revisions shall be subject to the provisions of Subsections and .3 of this Agreement. In such event, CITY shall cooperate with Developer to expeditiously review and take final action on such requested changes in accordance with the Existing Land Use Regulations. Developer reserves the right to reduce the densities and intensities of uses and the heights and sizes of the improvements below the maximums permitted in the Existing Land Use Regulations. For such changes, CITY shall process these changes as a Ministerial Approval, to be issued by the City Planning Director, in accordance with the Existing Land Use Regulations. In addition, Developer shall have the right to seek a Minor Modification of the Project, which shall be promptly considered by the City Planning Director based upon the Existing Land Use Regulations. Such Minor Modification shall be treated as a Discretionary Approval, subject to this Agreement. Developer also reserves the right to relocate the various components of the Project, within the Project site, as long as such relocation is consistent with the Existing Land Use Regulations. No change to the Project which is consistent with the Existing Land Use Regulations shall require an amendment to this Agreement and, in the event any change to the Project proposed by Developer is approved by the CITY, the references in this Agreement to the Project of applicable portion thereof shall be deemed to refer to the Project as so changed. 3.7 Development Impact Fees. Notwithstanding anything to the contrary in this Agreement, and subject to the provisions of Section 3.7.1, the only Development Impact Fees that may be applied to the Project, Developer or Property in connection with the Project shall be those existing on the Entry Date. Development Impact Fees shall be paid at the fee rate in effect at the time when payment for such fees is due and payable, for the portion of the Property to which such fees apply. Developer may also pursue the formation of a Community Facilities -16- District or other assessment district for the purpose of financing the Development Impact Fees or other Public Improvements. Developer shall pay all costs of formation and CITY would act as lead agency. 3.7.1 Applicability of Temporary Reductions in Development Impact Fees. On July 20, 2010, the City Council adopted Resolution No. 10-7-20-01, mandating a 75% reduction in sewer, traffic, and water Development Impact bees `for hotels and vehicle dealerships from the rate otherwise applicable for commercial/industrial uses (collectively, the "Decreased Impact Fees"). Notwithstanding the July 31., 2011 expiration date of Resolution No. 10-07-20-01, the Project shall be subject to the Decreased Impact Fees, as long as the first building permit for Development of the Project is issued on or before the seventh (7`h) anniversary of the Effective Date. The Decreased Impact Fees shall be applicable to issuance of all building permits related to Development of the Project, regardless of whether the building permits are issued for the Hotel, as long as all building permits are issued before this Agreement expires. 3.7.2 Developer's Right.to Contest Increases in Development Impact..- Nothing m actNothing in this Agreement shall prevent Developer from contesting, in any appropriate forum, the imposition or the amount of any new Processing Fees or any increase in the Development Impact Fees. Such right of protest shall not extend to the current amount of any Development Impact Fees or Processing Fees in effect as of the Entry Date of this Agreement, and the Developer hereby agrees to pay the same pursuant to the terms of this Agreement and the CITY'S normal fee payment schedule. Notwithstanding any pending contest of such fees, CITY shall proceed with issuance of all required Project Approvals and shall not withhold or delay issuance of those Project Approvals based upon any pending protest or appeal with respect to such fee. 3.8 Amendment of Development Agreement. 3.8.1 Initiation of Amendment. Any Party may propose an amendment to this Agreement, and all Parties agree that it may be beneficial to enter into additional written .agreements or modifications of this Agreement in connection with the Development of the separate components of the Development Plan. Notwithstanding any provision of this Agreement to the contrary, no amendment to the Development Plan or to any conditions of approval contained therein shall require an amendment of this Agreement. 3,8.2 Procedure. Except as set forth in Section .'81.4 below, the procedure for proposing and adopting an amendment to this Agreement shall be the same as the procedure required for entering into this Agreement in the first instance. 3.8.3 Consent. Except as expressly provided in this Agreement, any amendment to this Agreement shall require the written consent of all affected Parties. An amendment to this Agreement shall not be deemed to affect a portion of the Property if it does not alter,jeopardize, or impair the rights and does not increase the obligations of STROSCHER that owns said portion of the Property. No amendment to all or any provision of this Agreement -17- shall be effective unless set forth in writing and signed by duly authorized representatives of . each of the affected Parties. 3.8.4 [RESERVED] 3.8.5 Operating_Memoranda. The Parties acknowledge that refinements and further development of the Development Plan may demonstrate that changes are appropriate with respect to the details and performance of the Parties under this Agreement. The Parties desire to retain a certain degree of flexibility with respect to the details of the Development Plan and with respect to those items covered in general terms under this Agreement. If and when the Parties mutually find that changes, adjustments, or clarifications are appropriate to further the intended purposes of this Agreement, they may, unless otherwise required by law, effectuate such changes, adjustments, or clarifications without amendment to this Agreement through operating memoranda mutually approved by the Parties, which, after execution, shall be attached hereto as addenda and become a part hereof and which may be father changed and amended from time to time. To the maximum extent permitted by law, the City Manager shall have the authority, on behalf of CITY, to approve and execute such operating memoranda and STROSCHER shall have the authority, on behalf of STROSCHER, to approve and enter into such operating memoranda. Unless otherwise required by law or by the Development Plan Approval(s), no such changes, adjustments, or clarifications shall require prior notice or hearing. 3.9 Future Amendments to Development Plan. Subject to the provisions of Sections 3.5 and 3.6 of this Agreement. The following rules apply to future amendments to the Development Plan: 3.9.1 STROSCHER's Written Consent. Any Development Plan amendment to which STROSCHER does not agree in writing shall not apply to the Property while this Agreement is in effect. 3.9.2 Concurrent Development Agreement Amendment. Any Development Plan amendment requiring amendment of this Agreement shall be processed concurrently with an amendment to this Agreement. 3.9.3 Effect of Amendment. Except as expressly set forth in the Development Plan amendment itself or this Agreement, a Development Plan amendment shall not alter, affect, impair, or otherwise impact the rights, duties, and obligations of the Parties set forth in this Agreement. 4. Miscellaneous Oblil4ations of the Parties. 4.1 STROSCHER's Obligations. 4.1.1 Project Conformance with CITY Policies and Its General Plan. The Project shall conform to CITY's goal to manage growth through the use of, among other things, comprehensive planning and design, project-wide continuity of landscaping and architectural design, state-of-the-art development standards, and planning concepts. The traffic and circulation elements of the Development Plan will conform to CITY's General Plan. -18- 4.1.2 _Dedication of Easement Interest for Parking Lot Air Space Parcel. Prior to approval of a final map for the Property, STROSCHER shall dedicate to the CITY, an easement interest in the Parking Lot Air Space Parcel. If the CITY does not accept this dedication before this Agreement expires, then the CITY agrees that the Parking Lot Air Space Parcel will revert to STROSCHER. In no event shall dedication of the easement interest of the Parking Lot Air Space . Parcel eliminate any of the Project's parking spaces, and future improvements in this airspace shall not disrupt the Development or operation of the Project. 4.1.3 Granting of Exclusive Use of Multi-Purpcise Room. Upon final occupancy permit(s) issued by the CITY for the Hotel, STROSCHER shall grant the CITY the right to use the Multi-Purpose Room up to four (4) times per year. CITY shall submit written request to STROSCHER for such use fifteen (15) days before the day CITY wishes to use the Multi-Purpose Room. STROSCHER shall use reasonable good faith efforts to insure that the Multi-Purpose Room is available for use by CITY when CITY issues its written request. Notwithstanding the foregoing, STROSCHER shall have first priority to use the Multi-Purpose Room. 4.2 CITY's Obligations. 4.2.1 Possible Upgrading of Public Facilities. Subject to exercising its legislative discretion, CITY agrees to use all reasonable good faith efforts to design and construct the Upgraded Public Facilities. CITY agrees that it will not impose any requirement on the Project to design, install, or fund the Upgraded Public Facilities. 4.2.2 Reversion of a Portion of the Ortega Highway Ri ht-of Wa . Subject to exercising of its legislative discretion, CITY agrees to undertake all reasonable good faith efforts to reconvey to STROSCHER the Excess Ortega Right-of-Way. 4.2.3 Alternate Water System Upgrade. If the CITY has not completed the Water System Upgrade to provide the Project with adequate water pressure to allow full occupancy of all components of the Project (as described in Recital D of this Agreement) ("Adequate Water Pressure"), six (6) months after issuance of the first (1") building permit for Development of the Project, then the Parties shall meet and confer to determine how to insure the Project has Adequate Water Pressure. After this meet and confer process, CITY shall insure that an alternative to generate Adequate Water Pressure for the Project is employed in order for certificates of occupancy for the Project to be issued without any delay and without increasing any of the Project's costs of Development or operation ("Alternate Water System Upgrade"). CITY shall be responsible for the payment of all improvements for facilities, if any, required for the Alternate Water System. 5. Indemnification. Except to the extent of the gross negligence or willful .misconduct of CITY and its agents, officers, contractors, attorneys, and employees (the "Indemnified Parties"), STROSCHER, and with respect to the portion of the Property transferred to them, the Development Transferee agree: to indemnify, defend, and hold harmless the Indemnified Parties from and against each and every claim, action, proceeding, cost, fee, legal cost, damage,award or liability of any nature -19- arising from alleged damages caused to third parties and alleging that CITY is liable therefor as a direct or indirect result of CITY's approval of or performance under this Agreement. The duties of STROSCHER ander this Section 5 are solely subject to and conditioned upon the Indemnified Parties' written request to STROSCHER to defend and/or indemnify CITY. Without in any way limiting the provisions of this Section 5, the Parties hereto agree that this Section 5 shall be interpreted in accordance with the provisions of California Civil Code Section 2778 in effect as of the Effective Date. 6. Relationship of Parties. The contractual relationship between CITY and STROSCHER is such that STROSCHER is an independent contractor and not an agent or employee of CITY. CITY and STROSCHER hereby renounce the existence of any form of joint venture or partnership between them, and agree that nothing contained in this Agreement or in any document executed in connection with the Property shall be construed as malting CITY and STROSCHER joint venturers or partners. 7. Amendment or Cancellation of Agreement. This Agreement may be amended or canceled in whole or in part only by mutual consent of the Parties in the manner provided for in Government Code Section 65868. No amendment or modification of this Agreement or any provision hereof shall be effective unless -set forth in writing and signed by duly authorized representatives of each Party hereto. This provision shall not limit any Party's remedies as provided by Section . 8. Periodic Review of Compliance with Agreement. 8.1 Periodic Review. CITY and STROSCHER shall review this Agreement at least once every 12-month period from the date this Agreement is executed, in September or such other month as the CITY may notify STROSCHER. CITY shall notify STROSCHER in writing of the date for review at least thirty (30) days prior thereto. Such periodic review shall be conducted in accordance with Government Code Section 65865.1. 8.2 Good faith Compliance. During each periodic review, STROSCHER shall be required to demonstrate good faith compliance with the terms of this Agreement, including, but not limited to: its compliance with STROSCHEWs enrollment Cap, calculated in accordance with Section 4.1. above; and the annual payment required by Section 4,3:3 above. STROSCHER agrees to furnish such reasonable evidence of good faith compliance as CITY, in the exercise of its reasonable discretion, may require. If requested by STROSCHER, CITY agrees to provide to STROSCHER a certificate that STROSCHER or its Development Transferee is in compliance with the terms of this Agreement, provided STROSCHER reimburses CITY for all actual and direct costs and fees incurred by CITY with respect thereto. If CITY fails to comply with the annual review process specified in Section .J of this Agreement, STROSCHER shall be deemed to be in full compliance with the Agreement, and the Agreement shall be deemed to be in full force and effect. 8.3 Failure to Conduct Annual Review. The failure of CITY to conduct the annual review shall not be a Default by STROSCHER, nor,shall any such failure alter, suspend, or terminate any of the Parties' other rights and obligations hereunder. Aside from the provisions -20 of Section of this Agreement, STROSCHER shall not be entitled to any remedy for a failure by CITY toconductthis annual review. 8.4 Initiation of Review by City Council. In addition to the annual review, the City Council may at any time initiate a review of this Agreement by giving written notice to STROSCHER. Within thirty (30) days following receipt of such notice, STROSCHER shall submit evidence to the City Council of STROSCHER's good faith compliance with this Agreement and such review and determination shall proceed in the same manner as is provided in Sections . �� and 2 and the Development Agreement Legislation for the annual review. The City Council shall initiate its review pursuant to this Section 8.4 only if it has probable cause to believe CITY's general health, safety, or welfare is at risk as a result of specific acts or failures to act by STROSCHER. 8.5 Administration of A reement. Any final decision by the CITY's staff concerning the interpretation and administration of this Agreement and Development of the Property in -accordance herewith may be appealed by STROSCHER to the City Council, provided that any such appeal shall be filed with the City Clerk within ten (10) days after STROSCHER receives written notice that the staff decision is final. The City Council shall render, at a noticed public hearing, its decision to affirm, reverse, or modify the staff decision within thirty (30) days after the appeal is so filed. 8.6 Availability of Documents. If requested by S TROSCHER, CITY agrees to provide to STROSCHER copies of any documents, reports, or other items reviewed, accumulated, or prepared by or for CITY in connection with any periodic compliance review by CITY, provided STROSCHER reimburses CITY for all reasonable and direct costs and fees incurred by CITY with respect thereto. CITY shall respond to STROSCHER's request on or before ten (10) business clays have elapsed from CITY's receipt of such request. 9. Events ©f Default: Remedies and Termination. 9.1 Defaults by STROSCHER. If CITY determines on the basis of a preponderance of the evidence that STROSCHER has not complied in good faith with the terms and conditions of this Agreement, CITY may, by written notice to STROSCHER, specify the manner in which STROSCHER has failed to so comply and state the steps STROSCHER must take to bring itself into compliance. If, within sixty (60) days after the effective date of notice from CITY specifying the manner in which STROSCHER has failed to so comply, STROSCHER does not commence all steps reasonably necessary to bring itself into compliance as required and thereafter diligently pursue such steps to completion, then STROSCHER shall be deemed to be in default under the terms of this Agreement (a "Default"). In such event, CITY may terminate this Agreement pursuant to Government Code Section 65865.1 with respect to the Property. In material event of Default by STROSCHER, except as provided in Section , CITY's sole remedy for any breach of this Section 9 shall be CITY's right to terminate this Agreement. 9.2 Defaults by CITY. If STROSCHER determines on the basis of a preponderance of the evidence that CITY has not complied in good faith with the terms and conditions of this Agreement, STROSCHER may, by written notice to CITY, specify the manner in which CITY has failed to so comply and state the steps CITY must take to bring itself into compliance. If, -21- within sixty (60) days after the effective date of notice from STROSCHER. specifying the manner in which CITY has failed to so comply, CITY does not commence all steps reasonably necessary to bring itself into compliance as required and thereafter diligently pursue such steps to completion, then CITY shall be deemed to be in default under the terms of this Agreement (a "Default"). In such event, STROSCHER may terminate this Agreement with respect to the Property and, in addition, may pursue any other remedy available at law or equity, including specific performance as set forth in Section' 3 9.3 Specific Performance Remedy. . Due to the size, nature, and scope of the Development Plan, it will not be practical or possible to restore the Property to its pre- development condition once implementation of this Agreement has begun. After such implementation, STROSCHER may be foreclosed from other choices they may have had to utilize the Property and provide for ether benefits. STROSCHER has invested significant time and resources and performed extensive planning and processing of the Development Plan and Development Plan Approval(s) in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Development Plan and Development Plan Approval(s) in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate STROSCHER for such efforts. For the above reasons, CITY and STROSCHER agree that damages would not be an adequate remedy if CITY fails to carry out its obligations under this Agreement and that STROSCHER shall have the right to seek and obtain injunctive relief and specific performance as a remedy for any Default by CITY hereunder. CITY and STROSCHER further acknowledge that, if STROSCHER fails to carry out its obligations under this Agreement, CITY shall have the right to refuse to issue any permits or other approvals which STROSCHER otherwise would have been entitled to pursuant to this Agreement that are related to and depend upon STROSCHER's performance hereunder. Therefore, CITY's remedy specific performance pursuant to Section 9, ', or else the remedy of terminating this Agreement as to the portion of the Property as to which a material breach of Section 9,J.: exists shall be sufficient in most circumstances if STROSCHER fails to carry out its obligations hereunder. Notwithstanding the foregoing, if CITY issues a permit or other approval pursuant to this Agreement in reliance (explicitly stated in writing) upon a specified condition being satisfied in the future, and if STROSCHER then fails to satisfy such condition, CITY shall be entitled to specific performance for the sole purpose of causing STROSCHER to satisfy such condition. CITY's right to specific performance shall be limited to those circumstances set forth above, and CITY shall have no right to seek specific performance to cause STROSCHER to otherwise proceed with the Development of the Property in any manner. 9.4 Institution of Legal Action. Except to the extent a non-Defaulting Party's rights or remedies are limited by the express provisions set forth herein, STROSCHER or CITY may institute legal action to cure, correct,. or remedy any Default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, to recover damages for any Default, or to obtain any other remedies consistent with the purpose of this Agreement. Such legal action shall be heard by a reference from the Orange County Superior Court. 9.5 Estoppel Certificates. Any Party or the bolder or prospective holder of a mortgage or deed of trust secured by an interest in any portion of the Property (a "holder") may -22- at any time during the Term of this Agreement deliver written notice to the other Party requesting an estoppel certificate (the "Estoppel Certificate") stating. (i) The Agreement is in full force and effect and is a binding obligation of the Parties; (ii) This Agreement has not been amended or modified either orally or in writing or, if so amended, identifying the amendments; (iii) No Default exists hereunder, nor would any Default exist with the passage of time or the giving of notice, or both, or, if a Default or failure does exist, the nature thereof and the actions required to be taken by the non-performing Party to cure the Default or prevent the same from occurring; and . (iv) Any other matter affecting the status of the rights and obligations of the Parties hereunder as to which the requesting Party or the holder may inquire. A Party receiving a request for an Estoppel Certificate shall provide a signed certificate to the requesting Party or holder within thirty (30) days after receipt of the request. The City Manager or any person designated by the City Manager may sign Estoppel Certificates on behalf of CITY. An Estoppel Certificate may be relied on by the holder and by Development Transferees. In the event that one Party requests an Estoppel Certificate from another Party of Parties, the requesting Party shall reimburse the other Party or Parties for all actual and direct costs and fees incurred by such Party or Parties with respect thereto. 1.0. Waivers and Delays. 10.1 No Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by another Party, and failure by a Party to exercise its rights upon a Default by another Party hereto, shall not constitute a waiver of such Party's right to demand strict compliance by such other Party or Parties in the future for the same, similar, or any different Default. 10.2 Third Parties. The Parties` respective performance obligations hereunder shall not be delayed or excused because of any act or failure to act by a third person, except as provided in Section 1 .3. 10.3 Force Majeure. Notwithstanding any other provision set forth in this Agreement to the contrary, STROSCHER shall not be deemed to be in Default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond STROSCIIER's control, STROSCHER's inability to obtain required permits or approvals from governmental agencies with jurisdiction over the applicable portions of the Property and the Project, government regulations (including, without limitation, local, state, and federal environmental and natural resource regulations), voter initiative or referenda, moratoria (including, without limitation, any "development moratorium" as that term is applied in -23- Government Code Section 66452.6), litigation, or any other causes that are without the fault and beyond the reasonable control of STROSCHER. 10.4 Extensions. In addition to qualifying for a possible extension of the Term of this Agreement, as provided in Section 2.3, the Term of this Agreement and the times for performance by STROSCHER or CITY of any of its obligations hereunder or pursuant to the Development flan Approval(s) shall be extended by the period of time that any of the events described in Section fl 3 exist and/or prevent performance of such obligations. In addition, the Term shall be extended for delays arising from the following events for a time equal to the duration of each delay which occurs during the Term: (i) The period of time after the Effective Date during which litigation challenging the validity or enforceability of this Agreement or related to the Development Plan Approval(s) or having the actual effect of delaying implementation of the Development Plan is pending, including litigation pending on the Effective Date. This period shall include any time during which appeals may be filed or are pending,; and (ii) Any delay resulting from the acts or omissions of CITY or any other governmental agency or public utility and beyond the reasonable control of STROSCHER. 10.5 Notice of Delay. STROSCHER shall give notice to CITY of any delay which STROSCHER believes to have occurred as a result of the occurrence of any of the events described in Section l For delays of six months or longer, this notice shall be given within a reasonable time after STROSCHER becomes aware that the delay has lasted six months or more. In no event, however, shall notice of a delay of any length be given later than thirty days after the end of the delay or thirty days before the end of the Term, whichever comes first. 11. Notices. All notices required or provided for under this Agreement shall be in writing and delivered in person or sent by certified mail, postage prepaid, return receipt requested. Notices to CITY shall be addressed as follows: City of San Juan Capistrano 32400 Pasco Adelanto San Juan. Capistrano, CA 92675 Attention: City Manager with a copy to: Woodruff, Spradlin& Smart 555 Anton Boulevard, Suite 1200 Costa Mesa, CA 92526 Attention: Omar Sandoval, City Attorney -24- Notices to STROSCHER shall be addressed as follows: Gretchen Stroscher Thomson 3 Monarch Bay Drive Monarch Beach, CA 92629-3445 Tom Merrell Civic Solutions, Inc. 27362 Calle Arroyo San Juan Capistrano, CA 92675 with a copes: Allen Matkins Lech Gamble Mallory &Natsis LLP 1900 Main Street, 5'h Floor Irvine, CA 92614 Attention: John Condas, Esq. Any notice given as required herein shall be deemed given only if in writing and upon delivery personally or by independent courier service. A Party may change its address for notices by giving notice in writing to the other Parties as required herein and thereafter notices shall be addressed and transmitted to the new address. CITY shall additionally provide written notice of any Default by STROSCHER (including, as applicable, any Development Transferee) and any act or omission by STROSCHER (or such Development Transferee) that would constitute a Default with the passage of time or giving of notice or both, to the holder of any mortgage or deed of trust secured by all or any interest in the Property which (i) delivers a written notice to CITY requesting such notices and (ii) provides CITY with such holder's address(es) for notice purposes. 12. Attorneys' Fees. If legal action is brought by one Party against another Party for breach of this Agreement, including actions derivative from the performance of this Agreement, or to compel performance under this Agreement, the prevailing Party shall be entitled to an award of its costs, including reasonable attorneys' fees, and shall also be entitled to recover its contribution to the costs of the referee referred to in Section 9 above as an item of damage and/or recoverable costs. 13. recording. This Agreement and any amendment or cancellation hereto shall be recorded against the Property at no cost to CITY, in the Official Records of Orange County by the City Clerk within the period required by Section 65868.5 of the Government Code. In addition, at such time that STROSCHER acquires fee title to any of the Expansion Parcels and such parcels) is (are) added to this Agreement as provided in Section 35 4 this Agreement, this Agreement and any amendment or cancellation hereto shall be recorded, at no cost to CITY, with respect to any such Expansion, Parcel(s). Notwithstanding the foregoing, in no event shall any failure or delay in -25- recording this Agreement and any amendment to this Agreement limit or restrict the validity or enforceability of this Agreement. 14. Effect of Agreement on Title. 14.1 Effect on Title. The Parties agree that this Agreement shall not continue as an encumbrance against the Property once the Agreement has terminated. Notwithstanding the foregoing, the provisions of Sections 4.x.3. and 4Jshall remain effective coterminous with Conditional Use Permit 02-14. 14.2 Encumbrances and _Lenders' Rights. The Parties hereby agree that this Agreement shall not prevent or limit STROSCHER (including without limitation any Development Transferee hereunder), at any time or from time to time in any manner, at its or their sole discretion, from encumbering the Property, the improvements thereon, or any portion thereof with any mortgage, deed of trust, sale and leaseback arrangement, or other security device. CITY acknowledges that the holder of any such security interest in all or any portion of the Property may require certain clarifications, interpretations, or modifications to this Agreement or the Development Plan and CITY agrees, upon request, from time to time, to meet with the applicable Party and/or representatives of any such holder to negotiate in good faith any such request for clarification, interpretation, or modification. CITY further agrees that it will not unreasonably withhold its consent to any such requested clarification or interpretation to the extent such clarification or interpretation is consistent with the intent and purpose of this Agreement. A Default wilder this Agreement shall not defeat, render invalid, diminish, or impair the lien of any such holder. The mortgagee of a mortgage or beneficiary of a deed of trust or holder of any other security interest in the Property or any portion thereof and its or their successors and assigns, including without limitation the purchaser at a judicial or non judicial foreclosure sale or a person or entity which obtains title by deed-in-lieu of foreclosure (collectively, a "holder") shall be entitled to receive a copy of any notice of Default (as defined in Section :`r hereof) delivered to STROSCHER as to whose portion of the Property such a Default exists and, as a pre- condition to the institution of legal proceedings or termination proceedings, CITY shall deliver to all such holders written notification of any Default by STROSCHER in the performance of its obligations under this Agreement which is not cured within sixty (60) days (the "Second Default Notice") and shall allow the holder(s) an opportunity to cure such Defaults as set forth herein. The Second Notice of Default shall specify in detail the alleged Default and the suggested means to cure it. After receipt of the Second Default Notice, each such holder shall have the right, at its sole option, within ninety (90) days to cure such Default or, if such Default cannot reasonably be cured within that ninety (90) day .period, to commence to cure such. Default, in which case no Default shall exist and CITY shall take no further action. Notwithstanding the foregoing, if such Default shall be a Default which can only be remedied by such holder obtaining possession of the applicable portion of the Property, and such holder seeks to obtain possession, such holder shall have until ninety (90) days after the date obtaining such possession to cure or, if such Default cannot reasonably be cured within such period, then to commence to cure such Default. Further, a holder shall not be required to cure any non-curable Default of STROSCHER, and any such Default shall be deemed cured if any lender obtains possession. -26- 15. Severability of Terms. If any term, provision, covenant, or condition of this Agreement shall be determined invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby if the tribunal finds that the invalidity was not a material part of consideration for the affected Party or Parties. The covenants contained herein are mutual covenants. The covenants contained herein constitute conditions to the concurrent or subsequent performance by each Party benefited thereby of the covenants to be performed hereunder by such benefited Party. 16. Subsequent Amendment to Authorizing Statute. This Agreement has been entered into in reliance upon the provisions of the Development Agreement Legislation in effect as of the Effective Date. Accordingly, to the extent that subsequent amendments to the Development Agreement Legislation would affect the provisions of this Agreement, such amendments shall not be applicable to this Agreement unless necessary for this Agreement to be enforceable or required by law or unless this Agreement is modified pursuant to the provisions set forth in this Agreement and Government Code Section 65868 as in effect on the Effective Date. 17. Rules of Construction and Miscellaneous Terms. 17.1 Interpretation and Governing Law. The language in all parts of this Agreement shall, in all cases, be construed as a whole and in accordance with its fair meaning. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the internal laws of the State of California, with regard to conflict of laws rules. The Parties understand and agree that this Agreement is not intended to constitute, nor shall be construed to constitute, an impermissible attempt to contract away the legislative and governmental functions of CITY, and in particular, CITY's police powers. In this regard, the Parties understand and agree that this Agreement is a current exercise of CITY's police powers and except as expressly provided for herein this Agreement shall not be deemed to prevent the future exercise by CITY of its lawful governmental powers over the Property. 17.2 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 17.3 Gender. The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory, "may" is permissive. 17.4 Time of Essence. Time is of the essence regarding each provision of this Agreement as to which time is an element. 17.5 Recitals. All Recitals set forth herein are incorporated in this Agreement as though fully set forth herein. 17.6 Entire Agreement. This Agreement constitutes the entire agreement between and among the Parties with respect to the subject matter hereof, and this Agreement supersedes all previous negotiations, discussions, and agreements between and among the Parties with respect thereto. -27- 18. Not for Benefit of Third Parties. This Agreement and all provisions hereof are :for the exclusive benefit of CITY and STROSCHER and their respective Development Transferees and shall not be construed to benefit or be enforceable by any third party, excepting only to the extent of the limited rights provided to the holders of security interests in all or a portion of the Property. 19. Cooperation in Event of Legal Challenge. CITY agrees to cooperate with STROSCHER as may be needed in order to keep this Agreement in full force and effect during the entire Term. In the event of any legal action instituted by a third paxty or other governmental entity or official challenging the validity or enforceability of any provision of this Agreement or any of the Development Plan Approval(s) (including without limitation any Future Development Approvals after the same have been issued by CITY), the Parties hereby agree to cooperate in defending such action and, in this regard, CITY shall not allow its default to be taken in such legal action or otherwise compromise the legal action without STROSCHER's prior written consent. In the event of any such litigation, to the maximum extent permitted by law this Agreement shall remain in full force and effect while such litigation, including any appellate review, is pending. Notwithstanding the foregoing, STROSCHER shall be responsible for all costs, including but not limited to attorney's fees, costs, expert witness fees, and the like, incurred with respect to any such litigation. [Remainder of Page Intentionally Left Blank] -28- IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year dated below. Dated: , 2010 "CITY" CITY OF SAN JUAN CAPISTRANO, a municipal corporation By: Name: Dr, Londres Uso Title: Mayor ATTEST: City Cleric APPROVED AS TO FORM: City Attorney Dated: , 2010 "STROSCHER" STROSCHER G3, LLC, a California limited liability company By: Stroscher Capistrano, LLC, a Delaware limited liability company Its: Sole Member By: Gretchen Stroscher Thomson, as Trustee of the Thomson Family Trust a/d/t dated October 8, 1990 Its: Authorized Person -29- STATE OF CALIFORNIA j j ss COUNTY OF ORANGE ) On , before me, , a Notary Public, personally appeared proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed-the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss COUNTY OF ORANGE j On , 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(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] EXHIBIT "A" LEGAL DESCRIPTION OF THE STROSCHER PROPERTY Exhibit "A" EXHIBIT "B" DEPICTION AND LEGAL DESCRIPTION OF PARKING LOT AIR SPACE PARCEL Exhibit "B" EXHIBIT "C" DEPICTION OF LOCATION OF MULTI-PURPOSE ROOM Exhibit "C" EXHIBIT "D" DEPICTION AND LEGAL DESCRIPTION OF EXCESS ORTEGA RIGHT-OF-WAY Exhibit "D" EXHIBIT "E" NARRATIVE DESCRIPTION OF THE PROJECT Exhibit "E" EXHIBIT "F" DEVELOPMENT PLAN APPROVALS Exhibit"F" TABLE OF CONTENTS Pale 1. Definitions.........................................................................................................................4 1.1 Authorizing Ordinance..........................................................................................4 1.2 CEQA............................................................................................................... .4 1.3 CITY.....................................................................................................................4 1.4 City Council..........................................................................................................4 1.5 Default...................................................................................................................5 1.6 Develop, Development or Developing .................................................................5 1.7 Developer..............................................................................................................5 1.8 Development Agreement Legislation...................................................................5 1.9 Development Exactions ........................................................................................5 1.10 Development Impact Fees.....................................................................................5 1.11 Development Plan.................................................................................................5 1.12 Development Plan Approval(s),..................................................... ......................6 1.13 Development Transferee.......................................................................................6 1.14 Discretionary Action(s) or Discretionary Approval(s).........................................6 1.15 Effective Date .......................................................................................................6 1.16 Existing Land Use Regulations.............................................................................6 1.17 Future Development Approvals............................................................................6 1.18 Ministerial Approval(s) or Ministerial Act(s).......................................................7 1.19 Minor Modification...............................................................................................7 1.20 On-Site Improvements..........................................................................................7 1.21 Owner....................................................................................................................7 1.22 Party or Parties......................................................................................................7 1.23 Property.................................................................................................................7 1.24 Planning Commission...........................................................................................7 1.25 Processing Fees.....................................................................................................7 1.26 Project...................................................................................................................7 1.27 Property.................................................................................................................7 1.28 Term......................................................................................................................8 2. General Provisions....................................................................................................... 2.1 Binding Covenants................................................................................................8 2.2 Interest of STROSCHER......................................................................................8 2.3 Term......................................................................................................................8 2.4 Termination...........................................................................................................8 2.5 Transfers and Assignments...................................................................................9 3. Development Provisions 3.1 Vesting..................................................................................................................9 3.2 Reserved Authority.............................................................................................1.1 3.3 Further Assurances to STROSCHER Regarding Exercise of Reserved Authority.............. ...... ............................................................................. .........12 3.4 Vested Right........................................................................................................13 (i) Pau 3.5 Subsequent CEQA Review.................................................................... ............14 3.6 Subsequent Project Approvals............................................................................15 3.7 Development Impact Fees...................................................................................16 3.8 Amendment of Development Agreement...........................................................17 3.9 Future Amendments to Development Plan......................................................... 18 4. Miscellaneous Obligations of the Parties........................................ ......... ..................... 18 4.1 STROSCHER's Obligations ............................................................................... 18 4.2 CITY's Obligations............................................................ . ..............................19 5. Indemnification...............................................................................................................19 6. Relationship of Parties....................................................................................................20 7. Amendment or Cancellation of Agreement....................................................................20 8. Periodic Review of Compliance with Agreement ..........................................................20 8.1 Periodic Review..................................................................................................20 8.2 Good Faith Compliance......................................................................................20 8.3 Failure to Conduct Annual Review.....................................................................20 8.4 Initiation of Review by City Council..................................................................21 8.5 Administration of Agreement..............................................................................21 8.6 Availability of Documents.,.........................................................--...................21 9. Events of Default: Remedies and Termination...............................................................21. 9.1 Defaults by STROSCHER..................................................................................21 9.2 Defaults by CITY........................................................................:.............:.........21 9.3 Specific Performance Remedy............................................................................22 9.4 Institution of Legal Action......... .................................................................22 9.5 Estoppel Certificates......... .................................................................................22 10. Waivers and Delays ........................................................................................................23 10.1 No Waiver................................... ........................ 23 10.2 Third Parties........................................................................................................23 10.3 Force Majeure.....................................................................................................23 10.4 Extensions...........................................................................................................24 10.5 Notice of Delay...................................................................................................24 11. Notices ............................................................................................................................24 12. Attorneys' Fees........................................................ .......25 13. Recording........................................................................................................................25 14. Effect of Agreement on Title..........--..... ................................................... ....26 .............. 14.1 Effect on Title.....................................................................................................26 14.2 Encumbrances and Lenders' Rights....................................................................26 (ii) Paize 15. Severability of Terms.......................................................................................................27 15. Subsequent Amendment to Authorizing Statute.............................................................27 17. Rules of Construction and Miscellaneous Terms ...........................................................27 17.1 Interpretation and Governing Law......................................................................27 17.2 Section Headings ................................................................................................27 17.3 Gender.................................................................................................................27 17.4 Time of Essence..................................................................................................27 17.5 Recitals................................................................................................................27 17.5 Entire Agreement.................................................................................................27 18. Not for Benefit of Third Parties......................................................................................28 19. Cooperation in Event of Legal Challenge................................:......................................28 (iii)