Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
19-1015_RIVER STREET SJC, LLC_Agenda Report_D1_Attachment_4
1 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT FOR CERTAIN REAL PROPERTY LOCATED AT 31825 LOS RIOS STREET (ASSESSOR PARCEL NUMBERS 121-160-22, 28, 49) BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND RIVER STREET SJC, LLC PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 65864 ET SEQ.(APPLICANT: (DAN ALMQUIST, RIVER STREET SJC, LLC) WHEREAS, the City of San Juan Capistrano (“City”) has found that development agreements will strengthen the public planning process, encourage private participation in comprehensive planning by providing a greater degree of certainty in that process, reduce the economic costs of development, allow for the orderly planning of public improvements and services, allocate costs to achieve maximum utilization of public and private resources in the development process, and ensure that appropriate measures to enhance and protect the environment are achieved; and, WHEREAS, pursuant to California Government Code Sections 65864 et seq., the City of San Juan Capistrano is authorized to enter into development agreements providing for the development of land under terms and conditions set forth therein; and, WHEREAS, Dan Almquist, River Street SJC, LLC, 610 Newport Center Drive, Newport Beach, CA 92660 (the “Applicant”), has requested approval of a General Plan Amendment (GPA) 16-03 and Flood Plain Land Use Permit (FP) 16-003 to develop a 59,067 square foot office/commercial development at 31825 Los Rios Street, which is General Plan-designated Specific Plan/Precise Plan and Specific Plan/Precise Plan on the Official Zoning Map and regulated by the Los Rios Specific Plan 78-01 (the “Project”); and, WHEREAS, Sheree & Doug Ito are the owners of the real property located at 31825 Los Rios Street (Assessor Parcel Numbers 121-160-22, 28, 49); and, WHEREAS, on April 3, 2018, the City Council initiated a General Plan Amendment to conduct an appropriate study to update the description of the Los Rios Specific Plan contained in the General Plan as a result of the proposed Los Rios Specific Plan Amendment requested for the proposed commercial development project located on 5.86 acres; and, WHEREAS, the Project has been processed pursuant to Section 9-2.307, General Plan Amendment 17-002, Section 9-2.309, Code Amendment 16-003, Section 9-2.321, Flood Plain Land Use Permit 16-003, of Title 9, Land Use Code ATTACHMENT 4 2 of the City of San Juan Capistrano to establish the land use policies and zoning regulations; and pursuant to Government Code Section 65864 et. seq., Development Agreement 18-002, for the project site, in the form of the proposed River Street Marketplace; and, WHEREAS, pursuant to section 21067 of the Public Resources Code, and section 15367 of the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), the City of San Juan Capistrano is the lead agency for the proposed Project; and, WHEREAS, consistent with CEQA (Pub. Resources Code, § 21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), the City prepared a Draft Environmental Impact Report (“Draft EIR”) and circulated that DEIR for public review and comment; and, WHEREAS, consistent with CEQA and the State CEQA Guidelines, the City prepared a Final Environmental Impact Report (“Final EIR”), consisting of the Draft EIR, all technical appendices prepared in support of the Draft EIR, all comment letters received on the Draft EIR, written responses to all comment letters received on the Draft EIR, and errata to the Draft EIR and technical appendices; and, WHEREAS, the “EIR” consists of the Final EIR and its attachments and appendices, as well as the Draft EIR and its attachments and appendices (as modified by the Final EIR); and, WHEREAS, the City has approved the all necessary entitlements for the Project to provide for the orderly growth and quality development of the Project in accordance with the General Plan; and, WHEREAS, because of the logistics, magnitude of the expenditure and considerable lead time prerequisite to planning and developing the Project, Developer has proposed to enter into a development agreement concerning the Project (“Development Agreement”) to provide assurances that the Project can proceed without disruption caused by a change in the City's planning policies and requirements except as provided in the Development Agreement, which assurance will thereby reduce the actual or perceived risk of planning for and proceeding with development of the Project; and, WHEREAS, the City desires the timely, efficient, orderly and proper development of the Project in furtherance of the goals of the General Plan and the Specific Plan; and, WHEREAS, the City Council has found that this Development Agreement is consistent with the City's General Plan and the Specific Plan; and, 3 WHEREAS, the City Council has determined that by entering into the Development Agreement: (i) the City will promote orderly growth and quality development on the Property in accordance with the goals and policies set forth in the General Plan and the Specific Plan; (ii) significant benefits will be created for City residents and the public generally from increased employment and the public gathering opportunities created by the Project; and, WHEREAS, the City and Developer have reached mutual agreement and desire to voluntarily enter into the Development Agreement to facilitate development of the Project subject to conditions and requirements set forth therein; and, WHEREAS, the terms and conditions of the Development Agreement have undergone review by the City Council at a publicly noticed hearing and have been found to be fair, just and reasonable and consistent with the General Plan and Specific Plan; and, WHEREAS, on July 2, 2019, the City Council held a duly advertised public hearing on the Development Agreement and continued consideration; and, WHEREAS, on August 6, 2019, the City Council held a duly advertised public hearing on the Development Agreement and continued consideration; and, WHEREAS, on August 20, 2019, the City Council held a duly advertised public hearing on the Development Agreement and continued consideration; and, WHEREAS, on October 15, 2019, the City Council held a duly advertised public hearing on the Development Agreement; and, WHEREAS, the City Council considered the Staff Report, all other relevant documents, all recommendations by staff, and public testimony. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO DOES ORDAIN AS FOLLOWS: Section 1. Pursuant to Resolution No. 19-10-15-___, the City Council has adopted Environmental Findings of Fact, a Statement of Overriding Considerations, a Mitigation Monitoring and Reporting Program, and certified the EIR prepared for the Project, including approval of Development Agreement (DA) 18-002 for the River Street Marketplace Project. Section 2. Pursuant to California Government Code Section 65865, the City Council hereby approves the development agreement attached hereto as Exhibit "A", entitled "River Street SJC, LLC Development Agreement” (the "Development Agreement"). 4 Section 3. Pursuant to California Government Code Section 65867.5(b), and based on the entire record before the City Council, including all written and oral evidence presented to the City Council, the City Council hereby finds that the Development Agreement is consistent with the General Plan and the Specific Plan because the Development Agreement will result in the development of the Property at the intensity and density allowed under the General Plan and consistent with the restrictions and standards in the Specific Plan. Section 4. Based on the entire record before the City Council and all written and oral evidence presented to the City Council, the City Council finds the Development Agreement is in the best interests of the City and good land use practices as it ensure the orderly development of the Property with amenities and infrastructure that will be beneficial to the community. Section 5. Based on the entire record before the City Council and all written and oral evidence presented to the City Council, the City Council finds this Ordinance promotes the public health, safety and welfare of the community because the Development Agreement will permit land uses that best reflect community needs, including the need for office, commercial and retail spaces, and will allow for the most efficient and logical development of the real property governed by the Development Agreement in the City. Section 6. Based on the entire record before the City Council and all written and oral evidence presented to the City Council, the City Council finds that: (i) the economic interests of San Juan Capistrano citizens and the public health, safety and welfare will be best served by entering into the Development Agreement; (ii) this Development Agreement is compatible with the uses authorized in, and the regulations prescribed for, the area in which the Property is located; (iii) the Development Agreement is in conformity with the public convenience, general welfare and good land use practice; (iv) the Development Agreement will not be detrimental to the public health, safety and general welfare; and (v) the Development Agreement will not adversely affect the orderly development or the preservation of property values for the property it governs or any other property. The City Council further finds that among the public benefits to accrue to the residents of the City as a result of the Development Agreement are: 1. The revitalization of an underdeveloped site. 2. The development of onsite infrastructure upgrades that would not occur otherwise. 3. The generation of additional sales and property tax. 4. The stimulation of adjacent areas in the downtown area of the City by introducing unique shopping, dining and entertainment experiences. 5 5. The implementation of numerous City planning and economic development policies which benefit the health and fiscal welfare of the City and its residents. 6. The provision for the creation of public gathering spaces Section 7. Pursuant to California Government Code Section 65867.5(b), and based on the entire record before the City Council, including all written and oral evidence presented to the City Council, the City Council hereby finds that the Development Agreement is consistent with the General Plan and the Specific Plan because the Development Agreement will result in the development of the Property at the intensity and density allowed under the General Plan and consistent with the restrictions and standards in the Specific Plan. Section 8. Based on the entire record before the City Council and all written and oral evidence presented to the City Council, the City Council finds that the Development Agreement is in compliance with the conditions, requirements, restrictions, and terms of the Municipal Code, in that it includes all mandatory provisions required by Government Code § 65865.2 and does not include any provisions that are not authorized by the Development Agreement Act. Section 9. The provisions of the Development Agreement pertaining to the uses, density and intensity of use, and development standards for the Subject Property are intended to be and shall be consistent with those same provisions of the Specific Plan. Section 10. The City Clerk shall certify the adoption of this Ordinance and shall cause the same to be posted as required by law. Pursuant to Government Code Section 65868.5, within 10 days following the entering into of the Development Agreement, as evidenced by the full execution thereof, the Secretary shall record with the Orange County Recorder a copy of the Development Agreement. PASSED, APPROVED, AND ADOPTED this 15th day of October, 2019. Mayor ATTEST: City Clerk 6 EXHIBIT “A” RIVER STREET SJC, LLC DEVELOPMENT AGREEMENT Recorded at request of: ) City Clerk ) City of San Juan Capistrano ) ) When recorded return to: ) City of San Juan Capistrano ) 32400 Paseo Adelanto ) San Juan Capistrano, CA 92675 ) Attention: City Clerk ) ) ______________________________________________________________________________ Exempt from filing fees pursuant to Government Code §6103 DEVELOPMENT AGREEMENT NO. _____ A DEVELOPMENT AGREEMENT BETWEEN CITY OF SAN JUAN CAPISTRANO and River Street SJC, LLC, a California limited liability company EXHIBIT A -1- DEVELOPMENT AGREEMENT NO. _____ This Development Agreement (hereinafter “Agreement”) is entered into as of this ___ day of ___________, 2019 by and between the City of San Juan Capistrano, California (hereinafter “CITY”), and Riverstreet SJC LLC, a California limited liability company (hereinafter “OWNER”): RECITALS WHEREAS, CITY is authorized to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property, pursuant to Section 65864, et seq. of the Government Code; and WHEREAS, This Agreement constitutes a current exercise of City’s police powers to provide predictability to Owner in the development approval process by vesting the permitted uses, density, intensity of use, and timing and phasing of development consistent with the Development Plan in exchange for Owner’s commitment to provide significant public benefits to City as set forth in Section 4, below. WHEREAS, OWNER has requested CITY to enter into a development agreement and proceedings have been taken in accordance with the rules and regulations of CITY; and WHEREAS, the best interests of the citizens of the CITY and the public health, safety and welfare will be served by entering into this Agreement; and WHEREAS, the City Council hereby finds and determines that this development agreement is of major significance because it will enable the City to provide a rich and diverse retail, entertainment and dining experience to the citizens of the City and will therefore implement numerous general plan and other public policies of the City; and WHEREAS, the provision by Owner of these aforementioned public benefits allows the City to realize significant economic, and social benefits. WHEREAS, the physical effects, if any, of the Project and this Agreement have been analyzed pursuant to the California Environmental Quality Act (“CEQA”) (Pub. Res. Code section 21000 et seq.) and State CEQA Guidelines; and WHEREAS, this Agreement and the Project are consistent with the San Juan Capistrano General Plan, as amended, and any specific plan, as amended, applicable thereto; and WHEREAS, all actions taken and approvals given by CITY have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and -2- WHEREAS, development of the Property in accordance with this Agreement will provide substantial benefits to CITY and will further important policies and goals of CITY; and WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property, ensure progressive installation of necessary improvements, provide for public services appropriate to the development of the Project, and generally serve the purposes for which development agreements under Section 65864, et seq. of the Government Code are intended; COVENANTS NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. DEFINITIONS AND EXHIBITS. 1.1 Definitions. The following terms when used in this Agreement shall be defined as follows: 1.1.1 “Agreement” means this Development Agreement. 1.1.2 “CITY” means the City of San Juan Capistrano, a California municipal corporation. 1.1.3 “City Council” means the duly elected city council of the City of San Juan Capistrano. 1.1.4 “Commencement Date” means the date the Term of this Agreement commences. 1.1.5 “Development” means the improvement of the Property for the purposes of completing the structures, improvements and facilities comprising the Project including, but not limited to: grading; the construction of infrastructure and public facilities related to the Project whether located within or outside the Property; the construction of buildings and structures; and the installation of landscaping. “Development” does not include the maintenance, repair, reconstruction or redevelopment of any building, structure, improvement or facility after the construction and completion thereof. 1.1.6 “Development Approvals” means all permits and other entitlements for use subject to approval or issuance by CITY in connection with development of the Property including, but not limited to: (a) general plan, general plan amendments, specific plans and specific plan amendments; -3- (b) tentative and final subdivision and parcel maps; (c) conditional use permits, public use permits, architectural review, and plot plans; (d) zoning; (e) grading and building permits. 1.1.7 “Development Exaction” means any requirement of CITY in connection with or pursuant to any Land Use Regulation or Development Approval for the dedication of land, the construction of improvements or public facilities, or the payment of fees in order to lessen, offset, mitigate or compensate for the impacts of development on the environment or other public interests. 1.1.8 “Development Impact Fee” a monetary exaction other than a tax or special assessment, whether established for a broad class of projects by legislation of general applicability or imposed on a specific project on an ad hoc basis, that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project, but does not include park “in lieu” fees specified in Government Code Section 66477, fees for processing applications for governmental regulatory actions or approvals, or fees collected under development agreements adopted pursuant to Article 2.5 of the Government Code (commencing with Section 65864) of Chapter 4. 1.1.9 “Development Plan” means the plan for development of the Property as set forth in Exhibit “C”. 1.1.10 “Effective Date” means the date the ordinance approving and authorizing this Agreement becomes effective. 1.1.11 “Land Use Regulations” means all ordinances, resolutions, codes, rules, regulations and official policies of CITY governing the development and use of land, 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. “Land Use Regulations” does not include any CITY ordinance, resolution, code, rule, regulation or official policy, governing: (a) the conduct of businesses, professions, and occupations; (b) taxes (special or general) and assessments; (c) the control and abatement of nuisances; (d) the granting of encroachment permits and the conveyance of rights and -4- interests that provide for the use of or the entry upon public property; (e) the exercise of the power of eminent domain. 1.1.12 “OWNER” means the persons and entities listed as OWNER on page 1 of this Agreement and their successors in interest to all or any part of the Property. 1.1.13 “Mortgagee” means a mortgagee of a mortgage, a beneficiary under a deed of trust or any other security-device lender, and their successors and assigns. 1.1.14 “Project” means the development of the Property contemplated by the Development Plan as such Plan may be further defined, enhanced or modified pursuant to the provisions of this Agreement. 1.1.15 “Property” means the real property described on Exhibit “A” and shown on Exhibit “B” to this Agreement. 1.1.16 “Public Benefit” refers to those benefits provided to the City and the community by Owner pursuant to Section 4 below. 1.1.17 “Reservation of Rights” means the rights and authority excepted from the assurances and rights provided to OWNER under this Agreement and reserved to CITY under Section 3.3 of this Agreement. 1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement: Exhibit “A” – Legal Description of the Property. Exhibit “B” – Map showing Property and its location. Exhibit “C” – Development Plan. Exhibit “D” – Development Impact Fees. 2. GENERAL PROVISIONS. 2.1 Binding Effect of Agreement. The Property is hereby made subject to this Agreement. Development of the Property is hereby authorized and shall be carried out in accordance with the terms of the Development Plan and this Agreement. 2.2 Ownership of Property. OWNER represents and covenants that it is the owner of the fee simple title to, or has an equitable interest in, the Property or a portion thereof. -5- 2.3 City Council Findings. The City Council finds that: 2.3.1 This Agreement is consistent with the City’s General Plan. 2.3.2 This Agreement ensures a desirable and functional community environment, provides effective and efficient development of public facilities, infrastructure, and services appropriate for the development of the Project, enhances effective utilization of resources within the City. 2.3.3 This Agreement provides public benefits beyond those which are necessary to mitigate the development of the Project. 2.3.4 This Agreement strengthens the public planning process, encourages private participation in comprehensive planning and reduces costs of development and government. 2.3.5 The best interests of the citizens of the City and the public health, safety, and welfare will be served by entering into this Agreement. 2.4 Term. The term of this Agreement shall commence on the date (the “Commencement Date”) that is the Effective Date, and shall continue for a period of Five (5) years thereafter, unless this term is modified or extended pursuant to the provisions of this Agreement. Thereafter, the OWNER shall have no vested right under this Agreement, regardless of whether or not OWNER has paid any Development Impact Fee. 2.5 Assignment. 2.5.1 Right to Assign. OWNER shall have the right to sell, transfer or assign the Property in whole or in part (provided that no such partial transfer shall violate the Subdivision Map Act, Government Code Section 66410, et seq.) to any person, partnership, joint venture, firm or corporation at any time during the term of this Agreement; provided, however, that any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement and be made in strict compliance with the following conditions precedent: (a) No sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property. (b) Concurrent with any such sale, transfer or assignment, OWNER shall notify CITY, in writing, of such sale, transfer or assignment and shall provide CITY with an executed agreement (“Assignment and Assumption Agreement”), in a form reasonably acceptable to CITY, by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes all the duties, obligations, agreements, covenants, waivers of OWNER under this Agreement, including, without limitation, the covenants not to sue and waivers contained in Sections 7.2and 8.4 hereof. -6- Any sale, transfer or assignment not made in strict compliance with the foregoing conditions shall constitute a default by Owner under this Agreement. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by Paragraph (b) of this Subsection 2.5.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to such purchaser, transferee or assignee until and unless such agreement is executed. 2.5.2 Release of Transferring Owner. Notwithstanding any sale, transfer or assignment, a transferring OWNER shall continue to be obligated under this Agreement with respect to the transferred Property or any transferred portion thereof, unless such transferring OWNER is given a release in writing by CITY, which release shall be provided by CITY upon the full satisfaction by such transferring OWNER of the following conditions: (a) OWNER no longer has a legal or equitable interest in all or any part of the Property subject to the transfer. (b) OWNER is not then in default under this Agreement. (c) OWNER has provided CITY with the notice and executed agreement required under Paragraph (b) of Subsection 2.5.1 above. (d) The purchaser, transferee or assignee provides CITY with security equivalent to any security previously provided by OWNER to secure performance of its obligations hereunder. 2.5.3 Subsequent Assignment. Any subsequent sale, transfer or assignment after an initial sale, transfer or assignment shall be made only in accordance with and subject to the terms and conditions of this Section. 2.5.4 Utilities. The Project shall be connected to all utilities necessary to provide adequate water, sewer, gas, electric, and other utility service to the Project, prior to the issuance of a certificate of occupancy for any portion of the Project. 2.5.5 Sale to Public and Completion of Construction. The provisions of Subsection 2.5.1 shall not apply to the sale or lease (for a period longer than one year) of any lot that has been finally subdivided and is individually (and not in "bulk") sold or leased to a member of the public or other ultimate user. This Agreement shall terminate with respect to any lot and such lot shall be released and no longer be subject to this Agreement without the execution or recordation of any further document upon satisfaction of both of the following conditions: (a) The lot has been finally subdivided and individually (and not in "bulk") sold or leased (for a period longer than one year) to a member of the public or other ultimate user; and -7- (b) A certificate of occupancy has been issued for a building on the lot, and the fees for such lot set forth in this Agreement have been paid. 2.6 Amendment or Cancellation of Agreement. This Agreement may be amended or canceled in whole or in part only by written consent of all parties in the manner provided for in Government Code Section 65868. This provision shall not limit any remedy of CITY or OWNER as provided by this Agreement. 2.7 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events: (a) Expiration of the stated term of this Agreement as set forth in Section 2.4. (b) Entry of a final judgment setting aside, voiding or annulling the adoption of the ordinance approving this Agreement. (c) Completion of the Project in accordance with the terms of this Agreement including issuance of all required occupancy permits and acceptance by CITY or applicable public agency of all required dedications. Termination of this Agreement shall not constitute termination of any other land use entitlements approved for the Property. Upon the termination of this Agreement, no party shall have any further right or obligation hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement that has occurred prior to such termination or with respect to any obligations that are specifically set forth as surviving this Agreement. 2.8 Notices. (a) As used in this Agreement, "notice" includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. (b) All notices shall be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) on the date of delivery shown in the records of the telegraph company after transmission by telegraph to the recipient named below. All notices shall be addressed as follows: If to CITY: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, Ca 92675 Attn: City Manager -8- Copy to: If to OWNER: Frontier Real Estate Investments 610 Newport Center Drive Suite 1520 Newport Beach, Ca 92660 Attn: Dan Almquist Telephone: (949) 800-8067 Copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92694 Attn: John A. Ramirez Telephone (714) 662-4610 (c) Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change. 3. DEVELOPMENT OF THE PROPERTY. 3.1 Rights to Develop. Subject to the terms of this Agreement including the Reservation of Rights, OWNER shall have a vested right to develop the Property in accordance with, and to the extent of, this Agreement. Except as expressly provided otherwise herein, the Project shall remain subject to all Land Use Regulations and Development Approvals in effect on the Effective Date that are required to complete the Project as contemplated by the Development Plan. Except as otherwise provided in this Agreement, the permitted uses of the Property, the density and intensity of use, the maximum height and size of proposed buildings, and provisions for reservation and dedication of land for public purposes shall be those set forth in the Land Use Regulations and Development Approvals in effect on the Effective Date or, if consented to by OWNER, those subsequently adopted or amended. OWNER shall comply with all mitigation measures required to be undertaken pursuant to any document prepared in compliance with the California Environmental Quality Act with respect to the Project. 3.2 Effect of Agreement on Land Use Regulations. Except as otherwise provided under the terms of this Agreement including the Reservation of Rights, the rules, regulations and official policies governing permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement and construction -9- standards and specifications applicable to development of the Property shall be the Land Use Regulations and Development Approvals in effect on the Effective Date. In connection with any subsequently imposed Development Approvals and except as specifically provided otherwise herein, CITY may exercise its discretion in accordance with the Land Use Regulations then in effect, as provided by this Agreement, including, but not limited to, the Reservation of Rights. CITY shall accept for processing, review and action all applications for subsequent development approvals, and such applications shall be processed in the same manner and the CITY shall exercise its discretion, when required or authorized to do so, to the same extent it would otherwise be entitled in the absence of this Agreement. 3.3 Reservation of Rights. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following regulations shall apply to the development of the Property: (a) Processing fees and charges of every kind and nature imposed by CITY to cover the estimated actual costs to CITY of processing applications for Development Approvals or for monitoring compliance with any Development Approvals granted or issued. (b) Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure. (c) Regulations, policies and rules governing engineering and construction standards and specifications applicable to public and private improvements, including, without limitation, all uniform codes adopted by the City and any local amendments to those codes adopted by the CITY, including, without limitation, the CITY's Building Code, Plumbing Code, Mechanical Code, Electrical Code, and Grading Ordinance. (d) Regulations imposing Development Exactions; provided, however, that no such subsequently adopted Development Exaction shall be applicable to development of the Property unless such Development Exaction is applied uniformly to development, either throughout the CITY or within a defined area of benefit which includes the Property. No such subsequently adopted Development Exaction shall apply if its application to the Property would physically prevent development of the Property for the uses and to the density or intensity of development set forth in the Development Plan. In the event any such subsequently adopted Development Exaction fulfills the same purposes, in whole or in part, as the fees set forth in Section 4 of this Agreement, CITY shall allow a credit against such subsequently adopted Development Exaction for the fees paid under Section 4 of this Agreement to the extent such fees fulfill the same purposes. (e) Regulations that may be in material conflict with this Agreement but that are reasonably necessary to protect the residents of the project or the immediate community from a condition perilous to their health or safety. To the extent possible, any such regulations shall be applied and construed so as to provide OWNER with the rights and assurances provided under this -10- Agreement. (f) Regulations that are not in material conflict with this Agreement or the Development Plan. Any regulation, whether adopted by initiative or otherwise, limiting the rate or timing of development of the Property shall be deemed to materially conflict with the Development Plan and shall therefore not be applicable to the development of the Property. (g) Regulations that are in material conflict with the Development Plan; provided OWNER has given written consent to the application of such regulations to development of that Property in which the OWNER has a legal or equitable interest. (h) Regulations that impose, levy, alter or amend fees, charges, or Land Use Regulations relating to consumers or end users, including, without limitation, trash can placement, service charges and limitations on vehicle parking. (i) Regulations of other public agencies, including Development Impact Fees adopted or imposed by such other public agencies, although collected by CITY. 3.3.2 Subsequent Development Approvals. This Agreement shall not prevent CITY, in acting on subsequent development approvals and to the same extent it would otherwise be authorized to do so absent this Agreement, from applying subsequently adopted or amended Land Use Regulations that do not materially conflict with this Agreement. 3.3.3 Modification or Suspension by State or Federal Law. In the event that State, County or Federal laws or regulations, enacted after the Effective Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations; provided, however, that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce. 3.3.4 Intent. The parties acknowledge and agree that CITY is restricted in its authority to limit certain aspects of its police power by contract and that the foregoing limitations, reservations and exceptions are intended to reserve to CITY all of its police power that cannot be or are not expressly so limited. This Agreement shall be construed, contrary to its stated terms if necessary, to reserve to CITY all such power and authority that cannot be or is not by this Agreement's express terms so restricted. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of CITY may possess authority to regulate aspects of the development of the Property separately from or jointly with CITY and this Agreement does not limit the authority of such other public agencies. 3.5 Timing of Development. Because the California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 37 Cal. 3d 465 (1984), that the failure of the parties in that -11- case to provide for the timing of development resulted in a later-adopted initiative restricting the timing of development to prevail over the parties’ agreement, it is the specific intent of the Parties to provide for the timing of the Project in this Agreement. To do so, the Parties acknowledge and provide that Owner shall have the right, but not the obligation, to complete the Project in such order, at such rate, at such times, and in as many development phases and sub- phases as Owner deems appropriate in its sole subjective business judgment 3.6 Conditions, Covenants and Restrictions. Owner shall have the ability to reserve and record such covenants, conditions, and restrictions (CC&Rs) against the Property as Owner deems appropriate, in its sole and absolute discretion. Such CC&Rs may not conflict with this Agreement or the General Plan. Before recording any CC&Rs, Owner shall provide a copy of the CC&Rs to the City for review and approval by the City Attorney. The City Attorney’s review shall be limited to determining if the CC&Rs substantially comply with this Agreement. Within thirty (30) days after receiving a copy of the proposed CC&Rs from Owner, the City Attorney shall provide Owner with either (i) a statement that the CC&Rs comply with this Agreement (“CC&R Approval”) or (ii) written comments identifying each aspect of the CC&Rs which the City Attorney believes not to be in compliance with this Agreement (a “Statement of Non- Compliance”). If the City Attorney fails to provide Owner with either CC&R Approval or a Statement of Non-Compliance within thirty (30) days following a written request by Owner, City shall be deemed to have approved the CC&Rs and Owner may record the CC&Rs against the Property. If the City Attorney provides a Statement of Non-Compliance, Owner shall have thirty (30) days in which to respond to the Statement of Non-Compliance. Upon submittal of Owner’s response, the procedure described above for the initial submittal and City Attorney review of proposed CC&Rs shall again be followed. This procedure shall be followed until Owner either (1) receives CC&R Approval, (2) submits the compliance issues to binding arbitration pursuant to the rules of the American Arbitration Association, (3) files an action for declaratory relief in Orange County Superior Court seeking a judicial determination of the compliance of the proposed CC&Rs, or (4) agreement is otherwise reached between the Parties allowing for the recording of the CC&Rs. The CC&Rs may run with the land and bind Owner’s successors and assigns. Except as provided above, any dispute between the Parties regarding the City’s approval or rejection of the CC&Rs shall be subject to immediate and binding arbitration pursuant to the rules of the American Arbitration Association. 4. PUBLIC BENEFITS. 4.1 Public Benefits. The Project will redevelop a underutilized and closed nursery site that has long been deemed to be blighted by the City’s former redevelopment plans. The Project will serve to revitalize an under developed site, will provide on-site infrastructure upgrades and will provide additional sales tax revenue to the City. In addition, the Project will stimulate adjacent areas in the downtown area of the City by introducing unique shopping, dining and entertainment experiences. Lastly, the Project will implement numerous City planning and economic development policies which benefit the health and fiscal welfare of the City and its residents. 4.2 Development Impact Fees. -12- 4.2.1 Amount of Fee. The Development Impact Fees set forth in Exhibit “D” shall be charged to the Project. 4.2.2 Time of Payment. The fees required pursuant to Subsection 4.2.1 shall be paid to CITY prior to the issuance of building permits. No fees shall be payable for building permits issued prior to the Effective Date of this Agreement, but the fees required pursuant to Subsection 4.2.1 shall be paid prior to the re-issuance or extension of any building permit for which such fees have not previously been paid. 4.2.3 Fee Credits. OWNER shall be entitled to credit against the fees required pursuant to Subsection 4.2.1 for the dedication of land, the construction of improvements or the payment of fees as specifically set forth in Exhibit “E”. 4.2.4 Future Development Impact Fees; Increases. The Parties hereby agree that, in addition to the Development Impact Fees included in Exhibit “D”, the Project shall be subject to the imposition of any Development Impact Fee that becomes effective after the Effective Date. In addition, the Project shall be subject to any increase, amendment or alteration of any Development Impact Fee that becomes effective after the Effective Date. 4.2.5 Prepayment. In no event shall the prepayment of any Development Impact Fees required hereunder establish a vested right on the part of OWNER or any other owner of the Property or any person or entity with an interest therein to develop the Project or the Property following the expiration, cancellation or termination of the Term of this Agreement. Following the expiration, cancellation or termination of this Agreement, all Development Impact Fees then in effect shall be applicable to the Project and Property notwithstanding any provision of this Agreement and notwithstanding the prepayment of the Development Impact Fees set forth in Exhibit “D”, any increase or amendment of any Development Impact Fee, or any combination thereof. Nothing contained in this Subsection 4.2.5 shall be construed as limiting the right of OWNER to a credit against any Development Impact Fees as set forth in Section 4.2.3 hereof. 4.4 Dedication of On-Site Easements and Rights of Way. OWNER shall dedicate to CITY all on-site rights of way and easements deemed necessary for public improvements, in CITY's sole discretion, within 15 days of receipt of written demand from CITY. 4.5 Timing of Construction of Off-Site Infrastructure. Approval of any building permits on the Property shall be conditioned upon CITY's determination, in its sole discretion, that sufficient progress is being made on construction of off-site infrastructure serving development of OWNER's Property. 5. FINANCING OF PUBLIC IMPROVEMENTS. OWNER may propose, and if requested by CITY shall cooperate in, the formation of any special assessment district, community facilities district or alternate financing mechanism to pay for the construction and/or maintenance and operation of public infrastructure facilities required as part of the Development Plan. To the extent any such district or other financing entity is formed and sells bonds in order to finance such reimbursements, OWNER may be reimbursed to the extent that OWNER spends funds or dedicates -13- land for the establishment of public facilities. Notwithstanding the foregoing, it is acknowledged and agreed by the parties that nothing contained in this Agreement shall be construed as requiring CITY or the City Council to form any such district or to issue and sell bonds. 6. REVIEW FOR COMPLIANCE. 6.1 Periodic Review. The CITY shall review this Agreement annually, on or before the anniversary of the Effective Date, in order to ascertain the compliance by OWNER with the terms of the Agreement. OWNER shall submit an Annual Monitoring Report, in a form acceptable to the City Manager, within thirty (30) days after written notice from the City Manager. The Annual Monitoring Report shall be accompanied by an annual review and administration fee sufficient to defray the estimated costs of review and administration of the Agreement during the succeeding year. The amount of the annual review and administration fee shall be set annually by resolution of the City Council. 6.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The City Manager, or his or her designee, shall conduct such special reviews. 6.3 Procedure. (a) During either a periodic review or a special review, OWNER shall be required to demonstrate good faith compliance with the terms of the Agreement. The burden of proof on this issue shall be on OWNER. (b) Upon completion of a periodic review or a special review, the City Manager, or his or her designee, shall submit a report to the Planning Commission setting forth the evidence concerning good faith compliance by OWNER with the terms of this Agreement and his or her recommended finding on that issue. (c) If the Planning Commission finds and determines on the basis of substantial evidence that OWNER has complied in good faith with the terms and conditions of this Agreement, the review shall be concluded. (d) If the Planning Commission finds and determines on the basis of substantial evidence that OWNER has not complied in good faith with the terms and conditions of this Agreement, the Commission may recommend to the City Council modification or termination of this Agreement. OWNER may appeal a Planning Commission determination pursuant to this Section 6.3(d) pursuant to CITY’s rules for consideration of appeals in zoning matters then in effect. Notice of default as provided under Section 7.3 of this Agreement shall be given to OWNER prior to or concurrent with proceedings under Section 6.4 and Section 6.5. 6.4 Proceedings Upon Modification or Termination. If, upon a finding under Section 6.3, CITY determines to proceed with modification or termination of this Agreement, CITY shall give -14- written notice to OWNER of its intention so to do. The notice shall be given at least ten (10) calendar days prior to the scheduled hearing and shall contain: (a) The time and place of the hearing; (b) A statement as to whether or not CITY proposes to terminate or to modify the Agreement; and, (c) Such other information that the CITY considers necessary to inform OWNER of the nature of the proceeding. 6.5 Hearing on Modification or Termination. At the time and place set for the hearing on modification or termination, OWNER shall be given an opportunity to be heard. OWNER shall be required to demonstrate good faith compliance with the terms and conditions of this Agreement. The burden of proof on this issue shall be on OWNER. If the City Council finds, based upon substantial evidence, that OWNER has not complied in good faith with the terms or conditions of the Agreement, the City Council may terminate this Agreement or modify this Agreement and impose such conditions as are reasonably necessary to protect the interests of the CITY. The decision of the City Council shall be final. 6.6 Certificate of Agreement Compliance. If, at the conclusion of a Periodic or Special Review, OWNER is found to be in compliance with this Agreement, CITY shall, upon request by OWNER, issue a Certificate of Agreement Compliance ("Certificate") to OWNER stating that after the most recent Periodic or Special Review and based upon the information known or made known to the City Manager and City Council that: (1) this Agreement remains in effect; and (2) OWNER is not in default. The Certificate shall be in recordable form, shall contain information necessary to communicate constructive record notice of the finding of compliance, shall state whether the Certificate is issued after a Periodic or Special Review and shall state the anticipated date of commencement of the next Periodic Review. OWNER may record the Certificate with the County Recorder. Whether or not the Certificate is relied upon by assignees or other transferees or OWNER, CITY shall not be bound by a Certificate if a default existed at the time of the Periodic or Special Review, but was concealed from or otherwise not known to the City Manager or City Council. 7. DEFAULT AND REMEDIES. 7.1 Remedies in General. It is acknowledged by the parties that CITY would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof. In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that CITY shall not be liable in damages to OWNER, or to any successor in interest of OWNER, or to any other person, and OWNER covenants not to sue for damages or claim any damages: (a) For any breach of this Agreement or for any cause of action that arises out of -15- this Agreement; or (b) For the taking, impairment or restriction of any right or interest conveyed or provided under or pursuant to this Agreement; or (c) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement. 7.2 Release. Except for non-monetary remedies, OWNER, for itself, its successors and assignees, hereby releases CITY, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments to the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon CITY because it entered into this Agreement or because of the terms of this Agreement. OWNER hereby acknowledges that it has read and is familiar with the provisions of California Civil Code Section 1542, which is set forth below: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." By initialing below, OWNER hereby waives the provisions of Section 1542 in connection with the matters that are the subject of the foregoing waivers and releases. _______________ Owner's Initials 7.3 Termination or Modification of Agreement for Default of OWNER. CITY may terminate or modify this Agreement for any failure of OWNER to perform any material duty or obligation of OWNER under this Agreement, or to comply in good faith with the terms of this Agreement (hereinafter referred to as "default"); provided, however, CITY may terminate or modify this Agreement pursuant to this Section only after providing written notice to OWNER of default setting forth the nature of the default and the actions, if any, required by OWNER to cure such default and, where the default can be cured, OWNER has failed to take such actions and cure such default within sixty (60) days after the effective date of such notice or, in the event that such default cannot be cured within such sixty (60) day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such sixty (60) day period and to diligently proceed to complete such actions and cure such default. -16- 7.4 Termination of Agreement for Default of CITY. OWNER may terminate this Agreement only in the event of a default by CITY in the performance of a material term of this Agreement and only after providing written notice to CITY of default setting forth the nature of the default and the actions, if any, required by CITY to cure such default and, where the default can be cured, CITY has failed to take such actions and cure such default within sixty (60) days after the effective date of such notice or, in the event that such default cannot be cured within such sixty (60) day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such sixty (60) day period and to diligently proceed to complete such actions and cure such default. 8. LITIGATION. 8.1 Third Party Litigation Concerning Agreement. OWNER shall defend, at its expense, including attorneys' fees, indemnify, and hold harmless CITY, its agents, officers and employees from any claim, action or proceeding against CITY, its agents, officers, or employees to attack, set aside, void, or annul the approval of this Agreement, or the approval of any permit granted pursuant to this Agreement. CITY shall promptly notify OWNER of any claim, action, proceeding or determination included within this Section 8.1, and CITY shall cooperate in the defense. If CITY fails to promptly notify OWNER of any such claim, action, proceeding or determination, or if CITY fails to cooperate in the defense, OWNER shall not thereafter be responsible to defend, indemnify, or hold harmless CITY. CITY may in its discretion participate in the defense of any such claim, action, proceeding or determination. 8.2 Environmental Assurances. OWNER shall indemnify and hold CITY, its officers, agents, and employees free and harmless from any liability, based or asserted, upon any act or omission of OWNER, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions, and OWNER shall defend, at its expense, including attorneys' fees, CITY, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. CITY may in its discretion participate in the defense of any such action. 8.3 Reservation of Rights. With respect to Section 8.1 and Section 8.2 herein, CITY reserves, the right to either (1) approve the attorney(s) that the indemnifying party selects, hires or otherwise engages to defend the indemnified party hereunder, which approval shall not be unreasonably withheld, or (2) conduct its own defense; provided, however, that the indemnifying party shall reimburse the indemnified party forthwith for any and all reasonable expenses incurred for such defense, including attorneys' fees, upon billing and accounting therefor. 8.4 Challenge to Existing Land Use Approvals. By accepting the benefits of this Agreement, OWNER, on behalf of itself and its successors in interest, hereby expressly agrees and covenants not to sue or otherwise challenge any land use approval affecting the Property and in effect as of the Effective Date. Such agreement and covenant includes, without limitation, the covenant against any direct suit by OWNER or its successor in interest, or any participation, encouragement or -17- involvement whatsoever that is adverse to CITY by OWNER or its successor in interest, other than as part of required response to lawful orders of a court or other body of competent jurisdiction. OWNER hereby expressly waives, on behalf of itself and its successors in interest, any claim or challenge to any land use approval affecting the Property and in effect as of the Effective Date. In the event of any breach of the covenant or waiver contained herein, CITY shall, in addition to any other remedies provided for at law or in equity, be entitled to: (a) impose and recover (at any time, including after sale to a member of the public or other ultimate user) from the party breaching such covenant or waiver, the full amount of Development Impact Fees that the breaching party would have been required to pay in the absence of this Development Agreement; and (b) impose any subsequently adopted land use regulation on those land use approvals for which the breaching party had not, as of the time of such breach, obtained a building permit. OWNER hereby acknowledges that it has read and is familiar with the provisions of California Civil Code Section 1542, which is set forth below: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." By initialing below, OWNER hereby waives the provisions of Section 1542 in connection with the matters that are the subject of the foregoing waivers and releases. _______________ Owner's Initials 8.5 Survival. The provisions of Sections 8.1 through 8.4, inclusive, shall survive the termination of this Agreement. 9. MORTGAGEE PROTECTION. The parties hereto agree that this Agreement shall not prevent or limit OWNER, in any manner, at OWNER's sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property. CITY acknowledges that the lenders providing such financing may require certain Agreement interpretations and modifications and agrees upon request, from time to time, to meet with OWNER and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. CITY will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent -18- with the intent and purposes of this Agreement. Any Mortgagee of the Property shall be entitled to the following rights and privileges: (a) Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish or impair the lien of any mortgage on the Property made in good faith and for value, unless otherwise required by law. (b) The Mortgagee of any mortgage or deed of trust encumbering the Property, or any part thereof, which Mortgagee, has submitted a request in writing to the CITY in the manner specified herein for giving notices, shall be entitled to receive written notification from CITY of any default by OWNER in the performance of OWNER's obligations under this Agreement. (c) If CITY timely receives a request from a mortgagee requesting a copy of any notice of default given to OWNER under the terms of this Agreement, CITY shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to OWNER. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. (d) Any Mortgagee who comes into possession of the Property, or any part thereof, pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the Property, or part thereof, subject to the terms of this Agreement. Notwithstanding any other provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty under this Agreement to perform any of OWNER's obligations or other affirmative covenants of OWNER hereunder, or to guarantee such performance; provided, however, that to the extent that any covenant to be performed by OWNER is a condition precedent to the performance of a covenant by CITY, the performance thereof shall continue to be a condition precedent to CITY's performance hereunder, and further provided that any sale, transfer or assignment by any Mortgagee in possession shall be subject to the provisions of Section 2.5 of this Agreement. 10. MISCELLANEOUS PROVISIONS. 10.1 Recordation of Agreement. This Agreement and any amendment or cancellation thereof shall be recorded with the Orange County Recorder by the Clerk of the City Council within ten (10) days after the City enters into the Agreement, in accordance with Section 65868.5 of the Government Code. If the parties to this Agreement or their successors in interest amend or cancel this Agreement, or if the CITY terminates or modifies this Agreement as provided herein for failure of the OWNER to comply in good faith with the terms and conditions of this Agreement, the City Clerk shall have notice of such action recorded with the Orange County Recorder. 10.2 Entire Agreement. This Agreement sets forth and contains the entire understanding and agreement of the parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements that are not contained or expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement. -19- 10.3 Severability. If any term, provision, covenant or condition of this Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. Notwithstanding the foregoing, the provision of the Public Benefits set forth in Section 4 of this Agreement, including the payment of the Development Impact Fees set forth therein, are essential elements of this Agreement and CITY would not have entered into this Agreement but for such provisions, and therefore in the event such provisions are determined to be invalid, void or unenforceable, this entire Agreement shall be null and void and of no force and effect whatsoever. 10.4 Interpretation and Governing Law. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, all parties having been represented by counsel in the negotiation and preparation hereof. 10.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 10.6 Singular and Plural. As used herein, the singular of any word includes the plural. 10.7 Joint and Several Obligations. If at any time during the Term of this Agreement the Property is owned, in whole or in part, by more than one OWNER, all obligations of such OWNERS under this Agreement shall be joint and several, and the default of any such OWNER shall be the default of all such OWNERS. Notwithstanding the foregoing, no OWNER of a single lot that has been finally subdivided and sold to such OWNER as a member of the general public or otherwise as an ultimate user shall have any obligation under this Agreement except as expressly provided for herein. 10.8 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element. 10.9 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party's right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter. 10.10 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 10.11 Force Majeure. Neither party shall be deemed to be in default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other -20- Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond the party's control, (including the party's employment force), government regulations, court actions (such as restraining orders or injunctions), or other causes beyond the party's control. If any such events shall occur, the Term of this Agreement and the time for performance by either party of any of its obligations hereunder may be extended by the written agreement of the parties for the period of time that such events prevented such performance, provided that the Term of this Agreement shall not be extended under any circumstances for more than five (5) years. 10.12 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party. 10.13 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain from doing some act hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon every portion of the Property; (b) runs with the Property and each portion thereof; and (c) is binding upon each party and each successor in interest during ownership of the Property or any portion thereof. 10.14 Counterparts. This Agreement may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instrument. 10.15 Jurisdiction and Venue. Any action at law or in equity arising under this Agreement or brought by a party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Orange, State of California, and the parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court. 10.16 Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between CITY and OWNER is that of a government entity regulating the development of private property and the owner of such property. 10.17 Further Actions and Instruments. Each of the parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of either party at any time, the other party shall promptly execute and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. -21- 10.18 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by CITY of its power of eminent domain. 10.19 Agent for Service of Process. In the event OWNER is not a resident of the State of California or it is an association, partnership or joint venture without a member, partner or joint venturer resident of the State of California, or it is a foreign corporation, then in any such event, OWNER shall file with the City Manager, upon its execution of this Agreement, a designation of a natural person residing in the State of California, giving his or her name, residence and business addresses, as its agent for the purpose of service of process in any court action arising out of or based upon this Agreement, and the delivery to such agent of a copy of any process in any such action shall constitute valid service upon OWNER. If for any reason service of such process upon such agent is not feasible, then in such event OWNER may be personally served with such process and such service shall constitute valid service upon OWNER. OWNER is amenable to the process so served, submits to the jurisdiction of the Court so obtained and waives any and all objections and protests thereto. 10.20 Authority to Execute. The person or persons executing this Agreement on behalf of OWNER warrants and represents that he or she/they have the authority to execute this Agreement on behalf of his or her/their corporation, partnership or business entity and warrants and represents that he or she/they has/have the authority to bind OWNER to the performance of its obligations hereunder. -22- IN WITNESS WHEREOF, the parties hereto have executed this Development Agreement on the last day and year set forth below. OWNER RIVER STREET SJC LLC, a California limited liability company By _____________________________________ Dan Almquist Manager Dated: _______________ CITY CITY OF SAN JUAN CAPISTRANO, a California municipal corporation By:_________________________________ Mayor Dated: _______________ ATTEST: By:_________________________________ City Clerk APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP ____________________________________ City Attorney Exhibit A 61147.80009\32025416.4 EXHIBIT “A” (Legal Description of the Property) Order Number: OSA-4864665 (50) Page Number: 9 First American Title LEGAL DESCRIPTION Real property in the City of San Juan Capistrano, County of Orange, State of California, described as follows: THAT PORTION OF LOT 56 OF TRACT NO. 103, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 11, PAGES 29 TO 33 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF RIVER STREET, AS ABANDONED BY ORDER OF THE BOARD OF SUPERVISORS OF THE COUNTY OF ORANGE, A COPY OF WHICH WAS RECORDED MAY 15, 1948 IN BOOK 1637, PAGE 220 OF OFFICIAL RECORDS AND RE- RECORDED MAY 21, 1948 IN BOOK 1640, PAGE 545 OF OFFICIAL RECORDS, SHOWN ON A MAP OF SAID TRACT NO. 103; AND TOGETHER WITH THAT PORTION OF LOT 4, BLOCK 3 OF THE TOWNSITE OF SAN JUAN CAPISTRANO, AS SHOWN ON A MAP THEREOF, RECORDED IN BOOK 3, PAGES 120 TO 125 INCLUSIVE OF MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 56; THENCE NORTH 8° 52' 56" WEST ALONG THE NORTHERLY PROLONGATION OF THE EASTERLY BOUNDARY OF SAID LOT 56, 22.56 FEET TO AN INTERSECTION WITH THE CENTER LINE OF SAID RIVER STREET, AS ABANDONED THENCE SOUTH 53° 31' 34" WEST ALONG THE CENTER LINE OF SAID RIVER STREET 558.74 FEET TO AN ANGLE POINT IN SAID CENTER LINE; THENCE SOUTH 20° 41' 34" WEST CONTINUING ALONG SAID CENTER LINE 21.91 FEET TO AN INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE WESTERLY BOUNDARY OF SAID LOT 56; THENCE SOUTH 14° 59' 00" EAST ALONG THE WESTERLY BOUNDARY OF SAID LOT 56 AND THE NORTHERLY PROLONGATION THEREOF, 482.07 FEET TO THE SOUTHWEST CORNER OF SAID LOT 56; THENCE SOUTH 87° 34' 00" EAST 385.35 FEET TO THE WESTERLY LINE OF LOS RIOS STREET, AS SHOWN ON A MAP RECORDED IN BOOK 37, PAGE 1 OF RECORD OF SURVEYS OF SAID ORANGE COUNTY; THENCE NORTH 2° 04' 30" EAST ALONG THE WESTERLY LINE OF SAID LOS RIOS STREET 102.62 FEET; THENCE NORTH 89° 33' 38" WEST 46.65 FEET; THENCE NORTH 2° 20' 38" WEST 86.98 FEET; THENCE SOUTH 89° 33' 38" EAST 16.00 FEET; THENCE NORTH 2° 20' 38" WEST 43.75 FEET TO AN ANGLE POINT IN THE EASTERLY BOUNDARY OF SAID LOT 56, SAID ANGLE POINT BEING ON THE NORTH LINE OF SAID LOT 4, BLOCK 3, TOWNSITE OF SAN JUAN CAPISTRANO; THENCE NORTH 89° 33' 38" WEST 73.13 FEET TO ANOTHER ANGLE POINT IN SAID EASTERLY BOUNDARY OF LOT 56; THENCE NORTH 2° 20' 38" WEST 42.00 FEET TO ANOTHER ANGLE POINT IN SAID EASTERLY BOUNDARY OF LOT 56; THENCE SOUTH 89° 33' 38" EAST 14.98 FEET; THENCE LEAVING SAID BOUNDARY OF LOT 56 AND RUNNING THENCE NORTH 2° 20' 38" WEST PARALLEL TO THE WESTERLY BOUNDARY OF SAID LOS RIOS STREET, 214.62 FEET; THENCE NORTH 8° 52' 56" WEST 234.96 FEET TO AN INTERSECTION WITH A LINE WHICH LIES PARALLEL TO AND 40.00 FEET SOUTHWESTERLY OF, MEASURED AT RIGHT ANGLES, SAID CENTER LINE OF RIVER STREET; THENCE NORTH 53° 31' 34" EAST PARALLEL TO THE CENTERLINE OF RIVER STREET 113.87 FEET TO SAID WESTERLY LINE OF LOS RIOS STREET; THENCE NORTH 8° 52' 56" WEST 22.57 FEET TO THE POINT OF BEGINNING. APN: 121-160-22, 121-160-28 and 121-160-49 Exhibit B 61147.80009\32025416.4 EXHIBIT “B” (Map of the Property) © 2012 Digital Map Products. All rights reserved.1 92 feet Exhibit C 61147.80009\32025416.4 EXHIBIT “C” (Development Plan) 61147.80009\32025416.4 EXHIBIT “D” (Development Impact Fees) Current Fees Term Parks and Recreation Facilities Development Fees 49 Units or Less Single family detached dwelling units $11,600.00 Per Unit Attached units, including duplex, townhomes and apartments $10,512.00 Per Unit Mobile Homes $6,525.00 Per Unit 50 Units or More Section (1) (b) Town houses and 4 bedroom apts.3.1 persons per dwelling unit (c) Multiple family dwelling units 2.4 persons per dwelling unit (d) Mobile home dwelling units 1.9 persons per dwelling unitSection (2) Section (3) NOTE: BASED UPON ORDINANCE NUMBER 316 PASSED ON JANUARY 19, 1977 $500.00 Per Unit $1,000.00 Per Acre Per dwelling unit or per meter whichever is greater $4,441.69 Per mobile home space $4,441.69 Per motel room with kitchen facility $4,441.69 $4,441.69 Per 1500 SF of floor area or fraction thereof Capistrano Circulation Fee Program Traffic Impact Fees Residential Land Use Category/Unit Single DU (Primary and Secondary)/Dwelling Unit $7,387.00 Multiple DU/Dwelling Unit $6,088.00 Sewer Connection Fees (note 1) Non-residential- including commercial, industrial, public buildings, schools, churches, motels, and hotels without kitchen facilities; Descriptions Agricultural Preservation Residential Development Commercial or Industrial Development NOTE: BASED UPON CSJC RESOLUTION NO. 02-05-21-02 Adopted May 21, 2002 Developer Impact Fees Summary Exhibit K If there is no park or recreational facility designated in the Recreational Element to be located in whole or in part within the proposed subdivision to serve the immediate and future needs of the residents of the subdivision, the subdivided shall, in lieu of dedicating land, pay a fee equal to the value of the land prescribed for dedication as indicated in Section (1) below and in an amount determined in accordance with the provision of Section (2) below, such fee to be used for a park which will serve the residents of the area being subdivided. Where a fee is required to be paid in lieu of land dedication, the amount of such fee shall be based upon the fair market value of the amount of land which would otherwise be required to be dedicated pursuant to Section (1). The fee shall be paid pursuant to the provisions contained in Section (3). The "fair market value" shall be determined by City Council prior to tentative map approval, based on an appraisal approved by the City and paid for by the subdivider. Time of commencement must be designated. At the time the final tract map is approved, the City council shall designate the time when development of the park and recreational facilities shall be paid. NOTE: BASED UPON ORDINANCE NO. 210 PASSED ON DECEMBER 11, 1972, UPDATED 1999 NOTE: BASED UPON CSJC RESOLUTION NO. 04-11-16-05, Adopted November 16, 2004 Pursuant to Resolution 12-05-01-02 (Unless Otherwise Noted)Page 1 of 4 Current Fees Term Descriptions Developer Impact Fees Summary Exhibit K Commercial Land Use Category/Unit Auto Dealership/Acre $228,000.00 Auto Repair/Service/sf of floor area $3.04 Church/sf of floor area $3.54 Clinic/sf of floor area $12.99 Commercial/sf of floor area $8.51 Elementary/Middle School/student $170.00 Equestrian/Stable $76.00 Golf Course/Acre $6,330.00 High School/student $520.00 Hospital/sf of floor area $7.60 Hotel/Room $3,310.00 Industrial/sf of floor area $3.88 Mortuary/sf of floor area $9.42 Motel/Room $3,870.00 Museum/sf of floor area $5.32 Nursing Home/bed $2,280.00 Office/R & D/sf of floor area $6.40 Private School/student $360.00 Racquet Club/Health Spa/Court $15,200.00 Self Storage/Unit $150.00 Service Station/Site $35,625.00 Service Station w/Mart/Site $35,625.00 Theater/Seat $680.00 NOTE: BASED UPON ORDINANCE NUMBER 364 PASSED ON JUNE 29, 1978 Systems Development 1 % of estimated building permit valuation of a building or $1.00, whichever is higher NOTE: BASED UPON ORDINANCE NUMBER 211 PASSED ON NOVEMBER 13, 1972 (1) Residential Single family dwellings $50.00 Per Unit Duplexes $50.00 Per Unit Multi-family dwellings (three or more units)$50.00 Per Unit For each hotel or motel room without a kitchen excluding bathrooms $25.00 Per Unit Mobile home park pads *$25.00 Per Pad * Permanent buildings and landscape only need conform to qualify. New Building Construction (Ordinance 211) Schedule A - Fees for plans submitted to the Architectural Systems Development (Ordinance 364) Pursuant to Resolution 12-05-01-02 (Unless Otherwise Noted)Page 2 of 4 Current Fees Term Descriptions Developer Impact Fees Summary Exhibit K (2) Commercial For each commercial building unit in a building, per square foot of gross floor area, including any area within a building designed for the parking of vehicles $0.03 Per Sq Ft (3) Industrial For each commercial building unit in a building, per square foot of gross floor area, including any area within a building designed for the parking of vehicles $0.03 Per Sq Ft (1) Residential Single family dwellings $75.00 Per Unit plus $10 per bedroom over one Duplexes $75.00 Per Unit plus $10 per bedroom over one Multi-family dwellings (three or more units)$75.00 Per Unit plus $10 per bedroom over one For each hotel or motel room without a kitchen excluding bathrooms $35.00 Per Unit Mobile home park pads $35.00 Per Pad (2) Commercial For each commercial building unit in a building, per square foot of gross floor area, including any area within a building designed for the parking of vehicles $0.05 Per Sq Ft (3) Industrial For each commercial building unit in a building, per square foot of gross floor area, including any area within a building designed for the parking of vehicles $0.05 Per Sq Ft Housing In-Lieu Development Valuation as determined under the City of San Juan Capistrano Municipal Code Section 9- 5.103 Drainage Area L01 $1,170.00 Per Acre L02 $860.00 Per Acre L03 $320.00 Per Acre L05 $170.00 Per Acre M01 $780.00 Per Acre L01S02 $1,470.00 Per Acre Schedule B - Fees for plans not submitted to the Architectural Review Board for approval Housing In-Lieu Development NOTE: BASED UPON ORDINANCE NUMBER 767 PASSED ON JULY 5, 1995 Pursuant to Resolution 12-05-01-02 (Unless Otherwise Noted)Page 3 of 4 Current Fees Term Descriptions Developer Impact Fees Summary Exhibit K Development Charges Plan Check & Inspection Fees 7.1% of improvement value or $150/sheet plus a processing fee, whichever is higher Per Application Preliminary Processing fee, Tract & Parcel Map $311.92 Per Application Water Capacity $3,975.94 Per Meter or DU $0.6545 Per SF commercial area. Capital Improvement Per dwelling unit or per meter whichever is greater $3,060.47 Per Application Per mobile home space $1,531.83 Per Application $0.50 Per SF commercial area. $0.07 $/SF planted agricultural area Storage Charge Per dwelling unit or per meter whichever is greater $3,659.75 Per Application Per mobile home space $1,830.94 Per Application $0.74 Per SF commercial area. Non-Domestic Water (Recycled Water) Plan Check & Inspection Fees 7.1% of improvement value Per Application 857,474.43 $/cfs maximum day demand. 13,858.55 $/AF of annual demand. Preliminary Processing fee, Tract & Parcel Map 311.92 Per Application Water Capacity for Commercial area per SF of building area: the greater of the $/SF price or the $/DU for the meter given above. Water Capacity per meter or DU, whichever is greater NOTE: BASED UPON CSJC RESOLUTION NO. 04-05-18-04, Adopted May 18, 2004 Recycled Water Capacity Charge: the greater of the $/AF demand charge given or the $/cfs charge above. Water Capital Improvement for Commercial per SF of building area: the greater of the $/SF price or the$/DU for the meter given above. Recycled Water Capacity Charge: the greater of the $/ cfs maximum day demand charge given or the $/AF charge below. Domestic Water (note 1) NOTE: BASED UPON CVWD RESOLUTION NO. 00-9-5-1, Adopted September 5, 2000 Water storage for Commercial and Industrial per square foot of building area; the greater of the $/SF price or the $/DU for the meter given above. Water Capital Improvement for Agricultural per SF of planted area: the greater of the $/SF price or the$/DU for the meter given above. Pursuant to Resolution 12-05-01-02 (Unless Otherwise Noted)Page 4 of 4