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11-0118_STROSCHER G3 LLC_E1_Agenda Report
1/18/2011 AGENDA REPORT El TO: Joe Tait, City Manage FROM: Grant Taylor, Development Services Director SUBJECT: Consideration of a Development Agreement for the Plaza Banderas Hotel Project; Stroscher G3, LLC has Requested Approval of a Development Agreement for a Previously Approved Project Consisting of a 124-Room Hotel, 14,500 Square Feet of Commercial Floor Area, a 5,747 Square Foot Restaurant, and a 1,971 Square Foot Private Office on an Existing 3.18 Acre Property Located at 26871 &26891 Ortega Highway and Generally Located at the Northeast Corner of Ortega Highway and EI Camino Real (Assessor Parcel Numbers 124-170-12, 14, 15 & 16) (Stroscher.G3, LLC) RECOMMENDATION: Open the public hearing, receive public testimony, and close the public hearing; and by motion: 1. Provide comments and direction to staff on the proposed DRAFT Development Agreement (See Attachment 1, Draft Development Agreement for the Plaza Banderas Hotel); and, 2. Direct staff to prepare the appropriate ordinance incorporating Council's direction and to return at the next Council meeting to introduce the ordinance. APPLICANT/PROPERTY APPLICANT AGENT OWNER Civic Solutions Stroscher G3 LLC, Tom Merrell Gretchen Stroscher Thomson 27362 Calle Arroyo PO Box 129 San Juan Capistrano, CA San Juan Capistrano, CA 92675 92693 A. BACKGROUND On October 5, 2010, the City Council approved the first reading and introduction of an ordinance certifying the Environmental Impact Report (EIR) and approving Rezone (RZ) 10-001 for the proposed Plaza Banderas Hotel project; and, adopted a resolution certifying the Environmental Impact Report (EIR), and approving General Plan Amendment (GPA) 10-001, Architectural Control (AC) 10-002, Grading Plan Modification (GPM) 10-001, Tree Removal Permit (TRP) 10-003, Floodplain Land Use Permit (FP) 10-001, and Tentative Parcel Map (TPM) 10001. Agenda Report January 18, 2011 Page 2 On October 19, 2010, the City Council approved the second reading and adoption of the ordinance for the Plaza Banderas Hotel project. While all the necessary legislative and discretionary planning applications have been previously approved by the City Council,the applicant's proposed Development Agreement remains for consideration. Also, last July (2010), the City Council adopted an amendment to the City's fee resolution reducing certain "development impact fees" including water, sewer and traffic, for hotel and auto dealership uses by 75% to encourage the development of such uses. The retail, restaurant and office components are not included in the impact fee reduction. On December 14, 2010, the Planning Commission reviewed and provided comments on the proposed DRAFT Development Agreement (see Attachment 2, Draft Planning Commission Minutes T December 14, 2010). The Commission expressed concerns with the entire draft Development Agreement and felt that the proposed language was at odds with the discretionary approvals and that it should be denied by the City Council. On January 11, 2011, the Planning Commission reviewed and provided comments on the proposed DRAFT Development Agreement (see Attachment 4, Planning Commission Comments- January 11, 2011). B. Development Agreement The applicant has prepared and submitted a draft Development Agreement that would establish specific assurances and responsibilities on the part of both the applicant and the City. On September 7, 2010, The City Council formed an Ad-Hoc Subcommittee to focus on the specific provisions pertaining to Fiscal & Economic Impacts on the City as proposed in the draft Development Agreement. The Ad-Hoc Subcommittee consisted of Councilmen Hribar and Nielsen. The Subcommittee along with staff and the City Attorney have met with the applicant and their attorney (John Condas) on several occasions to negotiate the proposed draft agreement. Staff presents the following main issues for City Council consideration: Section 2.3 Term. The Agreement is proposed to commence on the effective date of the ordinance approving it and will terminate at the end of the day immediately preceding the seventh (7th) anniversary of that effective date of the ordinance. It is subject to specific termination provisions set forth in the agreement. However, so long as the developer is not in Default of the agreement and the agreement has not been otherwise terminated, the developer may request the City to extend the Term for up to three (3) one-year extensions. The City retains the discretion as to whether to approve or deny any such extension request(s) made by the developer. The developer's request(s)to extend the term shall be submitted not more than one hundred eighty (180) days and no less than sixty (60) days before the end of the term. Agenda Report January 18, 2011 Page 3 Section 2.5.1 Transfers and Assignments. This section provides that the developer shall not assign all or any park of this Agreement without the prior written approval of the City, which approval will not be unreasonably denied. Section 3.1 Vesting. This section provides that the developer has and shall have the right to develop the Project on the Property consistent with the Development Plan 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"). Section 3.7.1 Applicability of Temporaa Reductions in Development Impact Fees. On July 20, 2010, the City Council adopted Resolution No. 10-7-20-01, mandating a seventy-five percent (75%) reduction in sewer, traffic, and water Development Impact Fees 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 second (2"d) anniversary of the effective date of the agreement. If the first building permit for development of the project is issued after the second (2") anniversary of the effective date and before the fifth (5t") anniversary of the effective date, then the project shall qualify for a fifty percent (50%) reduction in sewer, traffic and water Development Impact Fees. If the project qualifies, the Decreased Impact Fees shall be applicable to issuance of all building permits related to development of the project, as long as all building permits are issued before this Agreement expires. Section 4.2.1 Undergrou.nding. of Power Lines. This section provides that subject to exercising its legislative discretion, the City will consider the creation of a utility district ("Utility District") to fund the undergrounding of power lines. Regardless of when the Utility District is formed, the Utility District shall be responsible for funding, designing, and constructing the undergrounding of power lines. The developer agrees to support creation of the Utility District, and agrees to have the property subject to assessment, if such a district is formed by the City. In such a situation, the developer shall be deemed to have satisfied Condition of Approval No. 118. If formed, the Utility District shall consist of additional benefitted properties, in addition to the property. If the City has not created the Utility District, and not imposed the assessment on relevant properties in the area, including the property, before issuance of the first (1s) certificate of occupancy for the project, the City agrees that the developer shall have no obligation to Underground the Power Lines, and the developer shall not be required to comply with Project Condition of Approval No. 118. If the City forms and funds the Utility District after the issuance of the first (15) certificate of occupancy, the developer shall support creation of the Utility District and agrees to have the property subject to assessment, if such district is formed by the City. If the City or the Utility District elects to Underground the Power Lines, the developer agrees to provide the City or Utility District with a temporary construction easement, with the terms of such easement to be mutually agreed upon by the parties, to allow the undergrounding of the lines to occur. Agenda Report January 18, 2011 Page 4 For clarification of the foregoing provisions pertaining to the Undergrounding District, the Council might recall that when the Council approved the project, it revised Project Condition 118 to be addressed in the development agreement. Section 4.2.2 Reconstruction of Project Ent a . This section provides that the City agree to assist the developer in its attempts to have Caltrans reconstruct the project entryway, due to the future relocation and expansion of Ortega Highway. The City's assistance to the developer shall not include any financial assistance unless the City, in its sole discretion, determines to provide financial assistance. Section 4.2.3 Reversion of Portions of the Ortega Hi hwa Ri hts-of-Wa . Subject to exercising of its legislative discretion, the City agrees to undertake all reasonable good faith efforts to re-convey to the developer the excess Ortega rights-of-way adjoining the property. Section 4.2.3 Alternate Water System Upgrade. This section is currently written as proposed by the developer and was not fully reviewed or agreed to by the Ad-Hoc Committee or staff. It is also under review by the City Attorney. The developer would have the City agree that the developer has no responsibility for designing, constructing or funding the water line extension between two separate loop systems across Interstate 5 along Ortega Highway. When Caltrans expands the Ortega bridge over Interstate 5, it will require the replacement of the existing water line along the bridge, which is currently in place but not in service because it is not currently required. The City was planning to upgrade the line at the time that the bridge is improved by Caltrans. Thus, the Ad-Hoc committee had agreed that this part of the system would not be a condition of the project construction. The Ortega line is only one of the two connections necessary to connect the project to a higher elevation zone, which is required to provide sufficient water pressure for the higher elevation of the proposed hotel. The project will have to wait for the interchange project to benefit from the water line upgrade on Ortega. Additionally, a second line will be required to connect the system serving the property to provide a loop system between pressure zones and ensure the constant water pressure necessary to satisfy Orange County Fire Authority OCFA) requirements. This second line, which could be the primary water supply line for the project is proposed to be located at EI Horno St. The developer suggests that any water system upgrade to its water pressure zone will benefit other properties such that it would be unfair to require the developer to fund the full cost of the upgrade. However, the City's system currently is adequate to serve existing properties except for a two-story or higher at the developer's property. The issue currently under review is whether a fair share allocation is appropriate, and what would be the project's share. Agenda Report January 18, 2011 Page 5 FINANCIAL CONSIDERATIONS The EIR deposit submitted by the applicant for the development of the EIR is currently overdrawn by $5,102.19, respectively. The developer deposit submitted by the applicant to recover staff costs of processing the General Plan Amendment and associated entitlements is currently overdrawn by $5,800.89, respectively. Further charges for staff time will be necessary to complete application processing with the Design Review Committee and Planning Commission. Staff requests paying deficits and providing additional $15,000 developer deposit. Staff has generated a summary of the estimated development fees for the project: FEE i Before 75% Fee After 75% Fee _ Reduction (#2) Reduction (#2) Water Fees (With Ortega Section and € $297,977.27 $185,495.96 EI Horno Section) _ [ Engineering Fees _ �) $771,329.16 $284,835.00 Total (#1) $1,069,306.43 $470,330.96 FEE Before 75% Fee After 75% Fee Reduction (#2) Reduction (#2) WaterFees (Without Ortega Section $257,136.29 $164,444.50 ,with EI Horno Section Engineering Fees - $771,329.16 $284,83_5.00 Total (#1) $1,028,465.4_5 $449,279.50 _ NOTE (#1): This estimate excludes but not limited to: Grading Permit fees, Inspection fees, Frontage Improvement review fees, Soils Report review fees, Hydrology Review fees, Sewer/Stromdrain & Recycled Water plan review fees, Landscape & irrigation plan review fees, Final WQMP Report review fees, etc. NOTE (#2): The 75% fee reduction is per City Council Resolution#10-07-20-01 Underground Utility Poles: The estimated cost to underground three (3) utility poles is $240,000. Building Permit Fees: The estimated cost of the Building Permit Fees is $803,368. PUBLIC NOTIFICATION Pursuant to Title 9, sand Use Code, Section 9-2.302(f), Notification Procedures, a public hearing notice has been mailed to all property owners (as listed on the Orange County Real Property Tax Assessment rolls)within five-hundred (500)feet of the project, has been published in the Capistrano Valley News at least ten (10)days prior to the hearing, and has been posted at three public locations. Copies of this agenda item have been provided to the applicant and their representative through posting of the agenda packet on the City's website (See Attachment 3, Public Hearing Notice). Agenda Report January 18, 2011 Page 6 RECOMMENDATION: Open the public hearing, receive public testimony, and close the public hearing; and by motion: 1. Provide Comments and direction to staff on the proposed DRAFT Development Agreement (See Attachment 1, Draft Development Agreement for the Plaza Banderas Hotel); and, 2. Direct staff to prepare the appropriate ordinance incorporating Council's direction and to return at the next Council meeting to introduce the ordinance. Respectfully submitted, Prepared by: Grant Taylor David Contreras Development Services Director Senior Planner Attachments: 1. Draft Development Agreement for the Plaza Banderas Hotel. 2. Draft Planning Commission Minutes - December 14, 2010, 3. Public Hearing Notice. 4. Planning Commission Comments- .January 11, 2011 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City Clerk City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 (Space Above This Line for Recorder's Office.Use Only) (Exempt from Recording Fee per Gov.Code§§6 1133 and 27383) DEVELOPMENT AGREEMENT (PLAZA BANDER.AS HOTEL AND MIXED USE PROJECT) by and between CITY GE SAID JUAN CAPISTRANO and STROSCHER G3, LLC Effective (Ordinance No. .--_ adopted , 2010) :ATTACHMENT 1 DEVELOPMENT AGREEMENT (PLAZA BANDERAS MOTEL AND MIXED USE PROJECT) This DEVELOPMENT AGREEMENT (PLANA BANDERAS HOTEL AND MIXED USE PROJECT) (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 CAP ISTRANO, 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 Code (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 quality development in accordance with comprehensive dans; 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 3.18 acres of land located at the conger of Ortega Highway and El Camino Real in the City of San Juan 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 ("Office/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, General 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 -1- 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 1.24 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.confori-n 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. 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 .Tuan 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. 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 3-3.501 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: 1. On or about October 5, 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 e.t 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 September 14, 2.010, following three duly noticed and conducted public hearings, the Planning Commission of CITY took action on the Project; 2- 3. On- or about October 5, 2010, the City Council of CITY approved the Development Plan Approvals; 4. On or about , 2011, 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; 5. On or about , 2011, pursuant to CEQA, the CITY Council of CITY found and determined that the previously certified Environmental Impact Report for the Project adequately describes the Agreement's environmental setting, impacts and alternatives and mitigation measures related to each significant impact; and 5. On or about , 2011, 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 Cleric'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 Tenn 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. 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 inforination 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. -3- K. Project Mitigation Measure MM 4.11.201b and Project Condition of Approval No. 48 (collectively, "Water System Requirements") require STROSCHER to construct a loop system to run from a POC in the 350C system at the intersection of El Homo and the I-5 Freeway ("El Homo Section") to a connection to the 350C system at the intersection of Ortega Highway and Avenida Los Cerritos ("Ortega Section"). CITY has determined that STROSCHER is not responsible for designing, constructing or funding the Ortega Section because the Ortega System is a budgeted improvement, will benefit numerous properties in the CITY, and is not needed to service the Project. CITY agrees, subject to exercising its legislative discretion, to design and install the El Homo Section, and STROSCHER shall pay its fair share of the El Homo Section.). [OPEN ISSUE]. The El Homo Section shall benefit the residents of the CITY, and enhance operation of various public facilities such as the City Library, and private facilities with high volume public use, such as the Mission San .Tuan Capistrano, San Juan Elementary School, and the Basilica Parish School, and other presently undeveloped properties. Subject to exercising its legislative discretion, the CITY shall consider the creation of a utility district to fund the undergroun ding of power lines along El Camino Real ("Undergrounding of Power Lines"). CITY agrees, subject to exercising its legislative discretion, to assist STROSCHER in its attempts to have Caltrans reconstruct the entryway to the Project, which may be required due to the future relocation and expansion of Ortega Highway by Caltrans. CITY's assistance to STROSCHER shall not include the provision of any financial assistance, unless CITY, in its sole discretion, determines to provide financial assistance. L. The Stroscher Family previously conveyed to the County of Orange rights-of-way which were 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 rights-of=way, which no longer are needed for future improvement of the Ortega Highway ("Excess Ortega Rights-of-Way"), The Excess Ortega Rights-of-Way are depicted on Exhibit "C" 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 X1, 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: I. 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 CEOA. "CEQA" :has the meaning ascribed to that terra in Recital FA of this Agreement. 1.3 CITY. "CITY" mcans 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. -4- 1.4 City Council. "City Council" means the duly elected and constituted city council of CITY. 1.5 Default. "Default" has the meaning ascribed in Section 9.1 or 9.2 of this Agreement, as applicable. 1.6 Develop, Develojncnt or Develaping. "Develop," "Development" or "Developing" meads the improvement and use of the Property, as the tenn "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 atter 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. "Developlment 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 confection Wwith 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 casement 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 'Impact 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. 1.11 Dey�jopiment Plan. "Development Plan" means the plan for Developing the Project on the Property in accordance with this Agreement, the Development Plan Approval{s), 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 flan Amendment referred to in Recital E) applicable to the Property, the narrative description of the Project set forth in Exhibit "D" to this Agreement, the Development Plan Approvals set forth in Exhibit "E" 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 the Development Plan and included -5- 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_A roval s . "Development Plan Approval(s)" ineans the approvals of the City Council described in Exhibit "E" hereto insofar as the same relate to the Property and the Development Plan, including those amendments to this Agreement made in accordance with Section 3.8 hereof, those amendments to the Development Plan Approval(s) made in accordance with Section 3.9 hereof, and those Future Development Approvals made in accordance with Section 3.6 hereof 1.13 Development Transferee. "Development Transferee" means a person or entity that expressly assumes obligations under this Agreement pursuant to Section 2.5 hereof. 1:14 Discretionary Action(s) or Discretionary Approvals , "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 Re lations. "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 tennis 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 3.6 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 pen-nits, 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 intention to include any approvals that are beyond the implementation of the specific development listed on Exhibit "D -6- 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 penmits, lot line adjustments, encroachment permits, temporary use permits, certificates of use and occupancy, 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 On-Site Imnr©via ents. "On-Site Improvements" paeans physical infrastructure improvements or facilities that are or will be located on the Property consistent with the Development Plan Approvals. 1.20 Owner. "Owner" means STROSCHER. 1.21 Partyor Parties. "Party" means either CITY or STROSCHER, as the context dictates, and "Parties" means CITY and STROSCHER. 1.22 Planning Commission. "Planning Commission" means the duly appointed and constituted planning commission of CITY. 1.23 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. 1.24 Project. "Project" means the Development and Approvals summarized in Recital E, the planning elements of which are more specifically described in Exhibit "E"hereto. 1.25 Property. "Property" means the Property referred to in Recital C and more particularly described in Exhibit "A"to this Agreement. 1.26 Tenn. "Tenn" means the period of time that this Agreement remains in effect with . respect to the Property or any portion thereof, as provided in Section 2.3.' 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 3.18 acres of land located at the northwest corner of Ortega Highway and El. Camino Real in the City of San Juan 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„) -7- 2.3 . Term. In addition to the provisions of Section 10.4 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 Agreen-ient has not been otherwise terminated, STROSCHER may request CITY to extend the Tenn for up to three (3) one-year extensions of the Term. City shall have the discretion as to whether to approve or deny any such extension request(s) made by STROSCHER. STROSCHER's request(s) to extend the Term shall be submitted not more than one hundred eighty (180) days and no less than sixty (60) days before the end of the Term. Pursuant to California Government Code Sections 65863.0 and 66452.6(a), the expiration date of all Development Plan Approvals shall be extended for the greater of the Term of this Agreement, in which case no such extension application need be tiled, or such time approved in accordance with state law or the Existing Land Use Regulations. The Parties agree that phased final subdivision snaps may be processed and recorded. 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 parcels) pursuant to the terns 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 con-iplete such On-Site Improvements; or (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 Iot(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 Assi mTkents. 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; -8- 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. 311.1 Project. CITY covenants STROSCHER has and shall have, the right to Develop the Project on the Property consistent with the Development Plan 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 Dev Iopment. 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 tuning 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 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 D'c-velopment 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 3.1 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 sarne have been initially approved). 3.1.3.2 Other Pen-nits. 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 -9- nothing in this Section 3.1.3.2 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 Property. CITY shall not postpone or refuse approval of any Future Development Approval because STROSC1ER or a Development Transferee has failed to acquire off-site 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 make 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 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 iniprovernent(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 Land 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) Although CITY reserves the authority to change its Existing Land Use Regulations, no such future changes in the Existing Land Use Regulations shall apply to the Project, if such future changes in the Existing Land Use Regulation would be inconsistent with the Development Plan, the Project Development Approvals, or any of the provisions of this Agreement, nor shall any such future changes applicable to the Project materially jeopardize or impair the rights of STROSCHER thereunder or materially increase the cost of Developing the Project; (ii) Upon request by STROSCHER, CITY shall provide written support to STROSCHER, if STROSCHER Tiles a request for waiver or reduction of a -10- Development Exaction imposed by any governmental or quasi-governmental agency, aside froze the CITY 3.2.2 Uniform Codes. This Agreement shall not prevent CI'T'Y 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 Uniforr n Fire Code, provided those same standards are applied to all other development within the City of San .Tuan 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 flan and/or any of the Development flan 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 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 detennine 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 flan and/or Development Plan 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 Suspension of_Develonment 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 stonn. 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 STROSC14ER agree to preserve the tern-zs of this Agreement and the rights of STROSCHER as derived from this Agreement to the maximum feasible extent while -11- resolving the conflict. CITY agrees to cooperate with STROSCHER in a good faith reasonable effort to resolve any such conflict in a inanner 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 Pian 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 :Further Assurances to STROSCHER Reag aging 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 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 3.1 ("Vesting") and 3.2 ("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 riles, 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 3.2 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 CI'T'Y 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 Conflictin Enactments. Except as provided in Section 3.2 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: -12- (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 3.2.1 of this Agreement. 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. 3.4.3 Initiative Measures. In accordance with state law, 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 SubsMt�ent 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 document 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 environnnental 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 fixture regional and cumulative environmental demands that will compete with the Project for available capacities and cumulatively add to potential adverse impacts. 3.5.2 Subse cent CEQA Review. In accordance with state law, 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 unposed 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-run potential 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 agrees that no subsequent or supplemental EIR shall be required by the CITY -13- 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 tern "new information" does not mean discovery that probabilities of adverse (or 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.EIR. 3.6 Subsequent Project Approvals. 3.6.1 Basis for Den 'n or Conditional Grandp Subsequept_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 pen-nits, 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 Sections 3.1 and 3A of this Agreement. 3.6.2 Dut to Grant and Implement. Subject to the requirements of state law and the CITY Municipal Code, 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 reasonable measures (1Measures to Correct") to correct each basis for rejection. If Developer resubmits its application incorporating all the Measures to Correct, the CITY shall not unreasonably deny Developer's application. 3.6.3 Processing_Obli ate ions. 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 laver, 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, -14- (b) The retention, upon the Developer's request, of outside plan check consultants, to be selected by CITY, in consultation with STROSCHER, to assist in processing of applications and plans (including infrastructure and storm drain plans),at the Developer's cost; (c) The holding of any required public hearings; and (d) CITY performance of all required inspections called for by Developer within fifteen (15)business days following the request for inspection by Developer, 3.6A Changes in the Proiect. In accordance with the City Municipal Code, 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 3.5.1, 3.5.2, 3.6.1, 3.6.2 and 3.6.3 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. 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. 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. 3.7.1 A licability of Temporary Reductions in Develc� meat Impact Fecs, On July 20, 2010, the City Council adopted Resolution No. 10-7-20-01, mandating a seventy-five percent (75%) reduction in sewer, traffic, and water Development Impact Fees for hotels and vehicle dealerships from the rate otherwise applicable for commercial/industrial uses (collectively, the "Decreased Impact lees"). 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 second (2nd) anniversary of the Effective Date. If the first building permit for Development of the Project is issued after the second (2nd) anniversary of the Effective Date and before the fifth (5'�) anniversary of the Effective Date, then the Project shall qualify for a fifty percent (50%) reduction in sewer, traffic and water Development Impact Fees. If the Project qualifies, the Decreased Impact Fees shall be applicable to issuance of all building permits related to Development of the Project, as long as all building permits are issued before this Agreement expires. 3.7.2 Deer's Right to Contest Increases in Develo-Dnnent Im-DactFees. Nothing 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 -15- Processing pees in effect as of the Entry Date of this Agreement, and the Developer hereby agrees to pay the sane 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 ment A reenZcnt. 3 X I 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 arr endment 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 3.8.4 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 shall be effective unless set forth in writing and signed by duly authorized representatives of each of the affected Parties. 3.8.4 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 teens under this Agreement. If and when the Parties mutually find that changes, adjustments, or clarifications are minor in nature and 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 further changed and amended from time to time. The City Manager shall have the authority, on behalf of CITY, to approve and execute such operating memoranda and STROSCIJER 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 Approvals), 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: -16- 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 Devel_o_ rept 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 Earth in this Agreement. 4. Miscellaneous Obligations of the Parties 4.1 STROSCHER's Obliggtions. 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, arnong 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. 4.1.2 Dedication of Easement Interest for Parkim4 Lot Air mace Parcel. As depicted in Exhibit "B", 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 air space shall not disrupt the Development or operation of the Project. 4.2 CITY's Oblig tions. 4.2.1 UnderUounding of Power Lines. Subject to exercising its legislative discretion, CITY shall consider the creation of a utility district ("Utility District") to fund the Undergrounding of Power Lines. Regardless of when the Utility District is formed, the Utility District shall be responsible for funding, designing, and constructing the Undergrounding of Power Lines. STROSCHER shall support creation of a Utility District, and agrees to have the Property subject to assessment, if such a district is formed by CITY. In such a situation, STROSCHER shall be deemed to have satisfied Project Condition of Approval No. 118. If formed, the Utility District shall consist of additional benefitted properties, in addition to the Property. If CITY has not created the Utility District, and not imposed the assessment on relevant properties in the area, including the Property, before issuance of the first (I't) certificate of occupancy for the Project, CITY agrees that STROSCHER shad have no obligation to Underground the Power Lines, and STROSCHER shall not be required to comply with Project Condition of.Approval No. 118, If CITY forms and funds the Utility District after the issuance of the first (1") certificate of occupancy, STROSCHER shall support creation of the Utility District and agrees to have the Property subject to assessment, if such district is formed by the CITY. If CITY or the Utility District elects to Underground the Power Lines, STROSCHER agrees to provide CITY or Utility District with a temporary construction -17- easement, with the terms of such easement to be mutually agreed upon by the Parties, to allow the undergrounding of the lines to occur. 4.2.2 Reconstruction of Pro'ect Entr a . Subject to exercising its legislative discretion, CITY agrees to assist STROSCHER in its attempts to have Caltrans reconstruct the Project entryway, due to the future relocation and expansion of Ortega Highway. CITY's assistance to STROSCHER shall not include any financial assistance unless CITY, in its sole discretion, determines to provide financial assistance. 4.23 Reversion.of Portions of the Ortega Hi hway Rights-of Way. Subject to exercising of its legislative discretion, CITY agrees to undertake all reasonable good faith efforts to reconvey to STROSCHER the Excess Ortega Rights-of-Way. 4.2.4 Alternate Water S stern Upgrade. CITY agrees that STROSCHER has no responsibility for designing, constructing or funding the Ortega Section, and herein modifies the Water System Requirements accordingly. CITY also has determined that the Ortega Section need not be constructed in order for the Project to satisfy CITY and Orange County Fire Authority ("OCFA") requirements, although construction of the El Horno Section or completion of an alternative solution shall be required before a certificate of occupancy can be issued for the Project. Subject to exercising its legislative discretion, CITY agrees to be responsible for financing, designing, and constructing the El Horno Section, and STROSCHER is responsible for paying its fair share of the El Horno design and construction costs. CITY hereby agrees that STROSCHER's payment of this fair share amount shall constitute full compliance with the Water System Requirements, If the CITY has not completed the El Horno Section 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 Systern. [OPEN ISSUE] 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"), STR.OSCIIER, 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, Iegal cost, damage, award or liability.of any nature 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 under 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. -18- b. 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 making 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 9. S. 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 Com In 'ance. During each periodic review, STROSCHER shall be required to demonstrate good faith compliance with the terms of this Agreement. 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 undertake the annual review process specified in Section 8.1 of this Agreement, STROSCHER shall be deemed to be in fall 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 tertninate any of the Parties' other rights and obligations hereunder. Aside from the provisions of Section 8.2 of this Agreement, STROSCHER shall .not be entitled to any remedy for a failure by CITY to conduct this 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 8.1 and 8.2 and the Development Agreement Legislation for the annual review. The City Council shall initiate its review pursuant to this Section 8.4 only its 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. -19- 8.5 Administration of Agreement. 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 STROSCHER, 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 days have elapsed from CITY's receipt of such request. 9. Events of 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 9.3, CITY's sole remedy for any breach of this Section 9.1 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. I , within sixty (60) days after the effective date of notice fiom 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 9.3. 9.3 specific PerformanceRemedy. 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 implernentation, STROSCHER may be foreclosed from other choices they may have had to utilize the Property and provide for other benefits. STROSCHER has invested significant time and resources and perforimed 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 -20- resources in implementing the Development Plan and Development flan 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 here-under. 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 of specific performance pursuant to Section 9.1, or else the remedy of terminating this Agreen-icnt as to the portion of the Property as to which a material breach of Section 9.1 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, ary shall be entitled to specific perfori-nance 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 agrecinents 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 holder or prospective holder of a mortgage or deed of trust secured by an interest in any portion of the Property (a "holder") may at any time during the Terra of this Agreement deliver written notice to the other Party requesting an estoppel certificate (the "Estoppel Certificate") statim: (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. -21- 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. I.O. Waivers and Dela s. 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 10.3. 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 perforrnanceof 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 STROSCHER's control, STROSCl-1ER's inability to obtainn 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 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 tunes for performance by STROSCHER or CITY of any of its obligations hereunder or pursuant to the Development Plan Approval(s) shall be extended by the period of time that any of the events described in Section 10.3 exist and/or prevent perforinance 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. -22- 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 10.3. 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 Agreenhent 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 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager with a copy to: Woodruff, Spradlin & Smart 555 Anton Boulevard, Suite 1.200 Costa Mesa, CA 92626 Attention: Omar Sandoval, City Attorney Notices to STROSCHER shall be addressed as follows: Gretchen Stroscher Thomson Stroscher G3, LLC P.O. Box 129 San Juan Capistrano, CA 92693 Tom Merrell Civic Solutions, Inc. 27362 Calle Arroyo San Juan Capistrano, CA 92675 with a copy to: Allen Matkins Leek Gamble Mallory & Natsis LLP 1900 Main Street, 5"' Floor Irvine, CA 92614 Attention: John Condas, Esq. Any notice given as required therein 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. -23- CITY shall additionally provide written notice of away 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. Attoreys' 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 9.4 above as an item of damage and/or recoverable costs. 1.3. 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. Notwithstanding the foregoing; in no event shall any failure or delay in 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. 14.2 Encumbrances and Lenders' Rias. 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 -nay 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 flurther 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 under 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 9.1 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 tennination proceedings, CITY shall deliver to all such holders written notification of -24- 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 bolder seeps 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. 15. Severability of Terms. If any tern, 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. Subseguent 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. ha 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. -25- 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. I T3 Gender. The singular includes the plural; the masculine guider includes the feminine; "shall" is mandatory, "may" is permissive. 1.7.4 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. 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 party 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 lees, and the like, incurred with respect to any such litigation. -26- 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: Title: Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Dated: , 2010 "STROSCI ER" S'IROSCI-ILR O3, ,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 u/d/t dated October 8, 1990 Its: Authorized Person -27- STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On , before me, _ a Notary Public, personally appeared proved to zne 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 } On , before me, , a Notary Public,personally appeared personally known to axe (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrujnent 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 "I3" DEPICTION AND LEGAL DESCRIPTION OF PARKING LOT AIR SPACE PARCEL Exhibit "B" EXHIBIT "C" DEPICTION AND LEGAL DESCRIPTIONS OF EXCESS ORTEGA RIGIITS-OF-WAY Exhibit „C„ EXHIBIT "D" NARRATIVE DESCRIPTION OF T14E PROJECT Exhibit "D" EXHIBIT "E" DEVELOPMENT PLAN APPROVALS i,xhibit F'E" TALE OF CONTENTS P� 1. Definitions.........................................................................................................................4 1.1 Authorizing Ordinance..........................................................................................4 12 CEQA....................................................................................................................4 1.3 CITY ... ..............................................................................................................4 1.4 City Council..........................................................................................................5 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)..............................i........ ......I......-.11...................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 1.1.9 On-Site Improvements..........................................................................................7 1.20 Owner....................................................................................................................7 1.21 Party or Parties......................................................................................................7 1.22 Planning Commission...........................................................................................7 1.23 Processing Fees........................................................ .........................................7 1.24 Project...................................................................................................................7 125 Property.................................................................................................................7 1.26 Tenn................................................................................................................. 7 2. General Provisions............................................................................................................7 2.1 Binding Covenants....................................................:...........................................7 22 Interest of STROSCHER......................................................................................7 2.3 Tenn..................................................................................................... ................8 2.4 Termination.................................. ......................... ..........._._...... .................8 2.5 Transfers and Assignments-............................................ 3. Development Provisions--.................... ..................-..... ............9 3.1 Vesting. .............................................................................................................9 3.2 Reserved Authority.............................................................................................10 3.3 Further Assurances to S'T'ROSCHER Regarding Exercise of Reserved Authority................ ...............................__... ... ........................................ 12 3.4 Vested Right........................................................................................................12 15 Subsequent CEQA Review................................................................................. 13 3.6 Subsequent Project Approvals............................................................................1.4 (i) Pa2e (c) The holding of any required public hearings; and ................ ............................. 15 (d) CITY performance of all required inspections called for by Developer within fifteen (15) business days following the request for inspection by Developer............................................................................................................. 15 3.7 Development Impact Fees...................................................................................15 3.8 Amendment of Development Agreement........................................................... 16 3.9 Future Amendments to Development Plan.........................................................16 4. Miscellaneous Obligations of the Parties........................................................................17 4.1 STROSCIIER's Obligations ...............................................................................17 4.2 CITY's Obligations .............................................................................................17 5. Indemnification............................................:...:.......................111,1.............. 6. Relationship of Parties.............................................. ....... 19 ............................................... 7. Amendment or Cancellation of Agreement.................................................................... 19 8. Periodic Review of Compliance with Agreement ..........................................................19 8.1 Periodic Review.................................................................................................. 19 8.2 Good Faith Compliance......................................................................................19 8.3 Failure to Conduct Annual Review.....................................................................19 8.4 Initiation of Review by City Council..................................................................19 8.5 Administration of Agreement............... ................................ .......... .......... ....20 8.6 Availability ofDocu.ments..................................................................................20 9. Events of Default: Remedies and Termination...............................................................20 9.1 Defaults by STROSCHER..................................................................................20 9.2 Defaults by CITY................................................................................... .........20 9.3 Specific Performance Remedy............................................................................20 9.4 Institution of Legal Action..................................................................................21 9.5 Estoppel Certificates,...,........................ .................. ....-........ ...........21 10. Waivers and Delays ...................................................... ...........22 ....................................... 10.1 No Waiver,............................................................................... ..22 ......................... 10.2 Third Parties................1.1.11............:....1111.. ............................22 10.3 Force Majeure............................................................:........................................22 10.4 Extensions...........................................................................................................22 10.5 Notice of Delay........................................................... .............. .... ....23 11. Notices ............................................................................................................................23 12. Attorneys' tees.............................................. ....24 13. Recording........................................................................................................................24 14. Effect of Agreement on Title..........................................................................................24 (ii) Fuge 14.1 Effect on Title.................................................................................',.......,...........24 14.2 Encumbrances and Lenders' R.iglits............................. ..24 15. Severability of Ten-ns......................................................................................................25 16. Subsequent Amendment to Authorizing Statute.............................................................25 17. Rules of Construction and Miscellaneous Terms ...........................................................25 17.1 Interpretation and Governing Law......................................................................25 17.2 Section Headings ................................................................................................26 17.3 Gender—... ........................... ..............--................................................ .......—,26 17.4 Time of Essence...................................................................,..............................26 17.5 Recitals................................................................................................................26 17.6 Entire Agreement................................................................................................26 18. Not for Benefit of Third Parties......................................................................................26 19. Cooperation in Event of Legal Challenge.......................................................................26 (iii) PC Meeting Minutes 10 December 14 2010 The motion passed by a 6-0 vote. AYES: Chairman Cohen, Commissioners Ratcliffe, Kerr, Neely, Tatarian and Williams NOBS; None ABSTAIN: None 4. Development A reement -GPA 10-001` Plaza Banderas: el' Stroscher.G3 LLC has reguested approval of a Development A reemea r a previouslyapproved mixed-use development that encompasses a 74,970 '� .are foot 124-roam hotel approximately 14,500 square feet of commercial, u, including 6,509 square feet of retail commercial floor area a 5 747 :sdRre food%�Wurant. and a 1,971 s uare foot private office on an existing 3.1$: ;": ro ert loci at 26871 & 26891 Ortega Highway and generalIV located a °����.' northeast cornu` Arte a Highway and BI Camino Real Assessor Parc hers 124-170-12 1 . 51& 16). The Development Agreement would estab certain ri-ft. and res ori Mies on the art of.the,applicant and the City. The t sitel .' eneral Plan-desi nated "PC" Planned Community) and is designated ` �`V Official Zoning Map as "PC" Planned Community) fApplMa Strosche� LLC Project Manager: David Contreras, Senior Planner). lk < ; R Staff presentation & recommend, bn David Contreras Planneifg aresentation and advised the Commission th µa ant ham red andT`submitted a draft Development Agreement t ouId es is spe a assurances and responsibilities on the part of both they icant and �°City. St recommending the Planning Commission to forward ct��ents � cpmmeni��: revisions on the Draft Plaza Banderas Development Arn a , r for consideration and final action. =rt N [SSI estiF: mmissione liam .ad a question on page 15 of the draft development reement in re it" s to thdrater system. C6ififbi.ssioner Kerr wed if this Draft Development Agreement was already decided and 96d not be cged. Mr. Contreras responded that it was not set, was in a draft for rid Cora i ssion comments would be forwarded to the City Council. Chairman Con had a question on page two paragraph one of the Development Agreement. He also asked if this agreement was drafted by the applicant. Mr. Contreras responded that the document was drafted by the applicant and applicant's attorney. Chairman Cohen said he had a problem with the language that discussed the assignments on page eight. Commissioner Tatarian had a question on page eight of the Draft Development Agreement Section 2.51 under "Transfer of Assignments" and Section 2.3 under "Term". Page 1 ATTACHMENT 2 PC Meeting Minutes 11 December 14 2010 Commissioner Neely had a question on page 15 of the Draft Development Agreement in Section 3.6.4 under "Changes in the Project". Grant Taylor stated that since the applicant was not in attendance to answer Commission questions, the item could be returned to the Commission as an information item at the January 11 Planning Commission meeting to provide responses. However, the Commission needed to complete its review of the Development Agreement this evening. All Planning Commissioners agreed that.the item needed to be returned to the Commission for this purpose. Several Commissioners expressed the perspective that the draft Development Agreement conflicts with aspects of the discretionary approvals and that the current draft D.A. is not approvable in its current form. The Commissioners stated that the draft D,.A. would convey significant and unprecedented financial benefits to the applicant. Public Hearing w Chairman Cohen opened the Public He Tgnras no public testimony and 72 Chairman Cohen closed the public hearing 43--l' VI Commission Discussion T none v Commission ACt[on r - fy The Commissio �ppit a motio �crward the'tevelopment Agreement to the 41 City Council94 nsideraft with th� oncerns expressed by the Commission, and requestedll e agendize4u; or Janu 11 to provide a status and address any mmission Cotions A IR J. STIFF=: ISSN MIVIENT8 >' Im Willi amsey UO -h th .ommission on the status of the 2010 State Habitat Conte ation Fund P %pam Aht,. applications noting that the Blas Aguilar Adobe applic _appeared to grate thi��Tnost interest and apparent support. Grant Taylor's#ed that thi as the last week for the staff before the furlough and City Hall would be close I eecaA&'nday, December 22 and Friday, December 31 and would open again on Mon day;',. g 3. He said that the Plaza Banderas project was scheduled for the January 20, 2b }esign Review Committee meeting and now for the January 11 Planning Commission meeting. Commissioner Williams questioned the propane tanks at the Chevron Gas Station located at the corner of Camino Capistrano and Del Obispo in regards to the signage and asked the status of the Tuttle Click Dealership. Mr. Grant Taylor responded that the signage and use were permitted as accessory uses. He stated that Tuttle-Click had received financial support from the Community Redevelopment Agency (RDA) and was moving forward with building plans which were in process. Page 2 PC Meeting Minutes 12 December 14,_201 0 Mr. Grant Taylor said Costco Wholesale was going to allow the Ford dealership to stay in their present location on the Costco site until March 2011. K. ADJOURNMENT There being no further business before the Commission, the meeting was adjourned at 10:50 p.m. The next regular meeting is scheduled for Tuesday, January 11, 2011 , at 6:30 p.m. in the Council Chambers. Respectfully submitted, 2 William Ramsey, AICP, Principal Planner Planning Commission Secretary G; Heti A Nr. c . ...� M , u �#, NEW,` 73 r iP 't T 1s�z Page 3 ` uA111V NOTICE OF y � PUBLIC HEARING (`�fr�L 1. •c,� \/ I, CITY OF SAN JUAN CAPISTTtANO NOTICE IS HEREBY GIVEN, that on the 18th day of January, 2011, at 6:30 P.M. in the City Council Chamber, 32400 Paseo Adelanto, San Juan Capistrano, California, the City Council will hold a public hearing on the following: CONSIDERATION OF A DEVELOPMENT AGREEMENT— PLAZA BANDERAS HOTEL Stroscher G3, LLC has requested approval of a Development Agreement for a previously approved mixed-use development that encompasses a 74,973 square foot, 124-room hotel, approximately 14,500 square feet of commercial land uses, including 6,509 square feet of retail commercial floor area, a 5,747 square foot restaurant, and a 1,971 square foot private office on an existing 3.18 acre property located at 26871 & 26891 Ortega Highway and generally located at the northeast corner of Ortega Highway and El Camino Real (Assessor Parcel Numbers 124-170-12, 14, 15 & 16). The Development Agreement would establish certain rights and responsibilities on the part of the applicant and the City. The project site is General Plan-designated "PC" (Planned Community) and is designated on the Official Zoning Map as "PC" (Planned Community). The entitlements for the subject project have been reviewed in accordance with the California Environmental Quality Act and the City has prepared an EIR which was certified by the City Council on October 5, 2010 and on October 19, 2010. Those desiring to be heard in favor of, or opposition to, this time extension request will be given an opportunity to do so during such hearing. Written information pertaining to this item must be submitted to the City Clerk by 5:00 p.m., on Monday, January 17, 2011, at 32400 Paseo Adelanto, San Juan Capistrano, CA 92675. E-mail correspondence may be sent to: cit clerk san'uanca istrano.or . Individuals desiring to submit late written information at the meeting must orally request such action. For more information, please contact the project mana�er,�ID*id Contreras, Senior Planner at (949) 443-6320 or by e-mail at dcontreras(u-_)sanjuanc6, istr:'nolorg. i ` f I MARIA �ORRI ITY CLERX ATTACHMENT 3 Planning Commission Mtg 11-Jan-2011 Plaza Banderas Hotel — Development Agreement review Transfer of Ownershit� 2.5 (p.8-9) -Transfer and Assignments: Written approval not necessary if STROSCHER has some ownership. • What % triggers CITY right to approve new ownership? • Suggest less than 51% RECEIVED Project Phasing. Plan JAN 11 2011 3.1.2 (p.9) _ Limits on Development: Phasing plan COMMUNITY DEVELOPMENT • CITY and OWNER should agree to some overall phasing pian. • We want the hotel. 3.7.1 (p.15) —Temporary Reductions in Dev Impact Fees: 75% if first building permit within 2 years. • Which building? • Similar concern as phasing plan section 3.1,2. • !be incentive should be to get the hotel started. Airspace Easement Recital F.3 (p.2) —Airspace Dedication to City (Just clarify) • Actual airspace TBD (nothing Exhibits) • Define"disrupt" • Some spaces will most likely disappear 4.1.2 (p.17) —Air Space Dedication to CITY • If CM does not accept before Agreement expires, than reverts to STROSCHER. • Q: When does Agreement expire, when complete? Changes in Agreement 3.6.4 (p.15) — Changes in Project: Processed as "ministerial Approval" • Does this cut out CC or PC for significant changes in scope? 3.8.4 (p.16) — Operating Memoranda: Changes in Development Agreement • Decision rests with "City Manager" • CC should not be cut out (same issue as 3.6.4) Page 1 ATTACHMENT 4 �fflall_Questions 3.3 (p.12) — Assurances to STROSCHER re: Exercise of Reserved Authority. • CITY has burden of"preponderance of evidence". Is this the normal test in this case? 9.1 & 9.2 (p.20) — Remedies for Default • If STROSCHER breaches Agreement: CITY sole remedy is termination. • If CITY breaches Agreement. STROSCHER has additional remedies. • Unequal treatment? misc.. Recital G.6 (p.3) - (simple renumbering) — MINOR TYPO Recital L. (p.4) -- What specific rights-of-way? • Exhibit C blank • Include the large developable parcel on Ortega? 2.3 (p.8) --- Essentially a 10 yr agreement. Typical? 3.1.3.3 (p.10) - Acquisition of Off Site Property Clause. Is there an issue here? Page 2