22-0215_JHC AQUISITIONS, LLC_Option to Purchase Real PropertyOPTION TO PURCHASE REAL PROPERTY
THIS OPTION TO PURCHASE REAL PROPERTY (this "Agreement") is entered into
as of the 15th day of February , 2022 (the "Effective Date"), by and between CITY OF
SAN JUAN CAPISTRANO, a California municipal corporation ("Optionor"), and JHC-
ACQUISITONS LLC, a California limited liability company ("JHC"). Optionor and JHC are
sometimes referred to collectively herein as the "Parties."
RECITALS
A. Optionor currently owns fee title to that certain real property located at 32400 Paseo
Adelanto, in the City of San Juan Capistrano ("City"), County of Orange ("County"), State of
California, as more particularly described on Exhibit "A" attached hereto (the "City Property").
B. JHC desires to develop and operate on a portion of the City Property comprising
approximately forty-five thousand four hundred one square feet (45,401 sf) (the "Property") a
permanent supportive housing apartment community containing approximately fifty (50) units for
extremely low- and very low-income households earning 50% or less of the area median income
(the "Affordable Housing Project").
C. Optionor and JHC desire to enter into this Agreement to provide for Optionor to
grant to JHC and for JHC to obtain from Optionor an option to purchase the Property upon the
terms more particularly set forth in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS,
WHICH ARE INCORPORATED HEREIN BY THIS REFERENCE, AND THE MUTUAL
PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:
AGREEMENT
Grant of Option.
(a) Option. Optionor hereby grants to JHC the option (the "Option') to
purchase the Property on the terms and conditions set forth in this Agreement.
(b) DDA Form. Prior to the exercise of the Option, Optionor and JHC shall
agree on the final form, terms and conditions of the disposition and development agreement for
the Property ("DDA"), which DDA shall incorporate the basic terms set forth on Exhibit "B"
attached hereto. Upon the mutual agreement of the final form, terms and conditions of the DDA,
the Parties shall attach the form of the DDA, to this Agreement as a substitute Exhibit "B". If
Optionor and JHC do not agree in writing on the form, terns and conditions of the DDA prior to
the expiration of the Term (as hereinafter defined), this Agreement and the Option shall
automatically terminate, without the need of any notice or documentation, and neither party shall
have any further rights or obligations hereunder.
2. Term of Option.
(a) Term. The term of the Option shall be for a period commencing on the
Effective Date and ending at the earlier of 5:00 p.m. (California time) on August 15, 2022 or upon
thirty days following the City Council approval of the DDA (the "Term").
(b) Exercise of Option. At any time during the Term after the Parties have
agreed on the terms and conditions of the DDA, and the City Council of the City has considered
and approved the DDA, JHC may exercise the Option by giving written notice to Optionor of its
exercise of the Option (the "Option Notice"). Promptly after the exercise of the Option, JHC and
Optionor shall execute and deliver the DDA.
(c) Expiration. The Option shall expire at 5:00 p.m. (California time) on the
last day of the Term.
3. Option Consideration. The Option is granted in consideration of JHC's payment to
Optionor of the sum of Ten Dollars ($10.00). JHC shall pay such amount to Optionor upon the
execution of this Agreement.
4. Right of Entry on the Pro e . During the Term, at JHC's sole cost and expense,
JHC and its designated agents, employees, contractors and representatives shall have the right to
enter on the Property at all reasonable times and from time to time, for the purpose of conducting
any and all procedures, inspections, surveys, tests and investigations as JHC may desire in
connection with this Agreement and the Property (or any part thereof), including, without
limitation, soils tests, surveys and environmental assessments, except that no invasive testing or
boring shall be performed unless Optionor has approved the work plan therefor, which approval
will not be unreasonably withheld or delayed. JHC shall indemnify Optionor, its affiliates (and
the officers, directors, agents and employees of such affiliates), directors, officers, agents and
employees from and against all damage to the Property or injury to persons caused by JHC and/or
its agents, employees, contractors or representatives in exercising its rights under this Section 4.
As a condition to entering on the Property, JHC shall provide Optionor with not less than one (1)
business days' prior written notice of each such entry and deliver to Optionor a certificate of
liability insurance in an amount not less than two million dollars ($2,000,000.00) combined single
limit reasonably acceptable to Optionor.
5. ❑ tionor's Cooperation in Seeking Permits and Approvals. During the Term, JHC
may meet with all city, county, district and other governmental entities to discuss JHC's proposed
development of, and other matters relating to, the development of the Property and may obtain all
project approvals that JHC may deem necessary or advisable in connection therewith. Provided
Optionor does not incur any liabilities or out-of-pocket costs except those authorized by Optionor
and without binding the Property prior to the execution and delivery of the DDA in any way,
Optionor agrees to cooperate with JHC in any such matters and execute any and all documents or
join in any applications that may be required to obtain all such project approvals in connection
with the development of the Property. However, Parties agree that this Agreement shall not be
binding on the City Council or the Planning Commission of the City regarding any approvals of
the Affordable Housing Project required by such bodies. JHC obtains no right to develop the
Affordable Housing Project on the Property or any portion of the Property by virtue of this
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Agreement. Optionor acknowledges JHC may have to process a parcel or tract map to subdivide
the Property from the balance of the City Property. As of the Effective Date, the proposed
configuration of the Property is as depicted in Exhibit "C" attached hereto.
6. Notices. All notices or other communications made pursuant to this Agreement
shall be in writing and shall be served to the parties at the following addresses (i) mailed by
certified mail, postage prepaid. return receipt requested; (ii) sent by express delivery service,
charges prepaid with a delivery receipt; (iii) personally delivered with a delivery receipt; or (iv)
delivered via facsimile with a follow-up notice as provided below:
Optionor: City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attention: City Manager
(T)949-493-1171
(F)949-493-1167
With a copy to: Best Best & Krieger, LLP
18101 Von Karman Ave, Suite 1000
Irvine, CA 92614
Attention: Elizabeth Wagner Hull
(T)949-263-2600
(F)949-260-0972
JHC: Jamboree Housing Corporation
17701 Cowan Ave, Suite 200
Irvine, CA 92614
Attention: Laura Archuleta
Fax No. (949) 263-8676
With a copy to: Rutan & Tucker, LLP
18575 Jamboree Road, 9t' Floor
Irvine, CA 92612
Attention: Patrick D. McCalla
Fax No. (714) 546-9035
All notices (other than facsimiles) shall be deemed received on the date shown on the
delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was
returned as undeliverable. All notices delivered via facsimile shall be deemed received upon
confirmation of electronic transmission, provided that the applicable notice is confirmed by a
follow-up notice using another approved method hereunder within seventy-two (72) hours. Either
party may change its address for the purposes of this paragraph by giving prior written notice of
the change to the other party in the manner provided in this Section.
7. Assignment of Option. JHC may assign its rights and obligations under this
Agreement to a limited partnership in which a limited liability company managed by Jamboree
Housing Corporation, a California nonprofit public benefit corporation, is the general partner
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("Partnership") without consent of Optionor. Except as provided in the preceding sentence, JHC
may not assign its rights or obligations under this Agreement without the prior written consent of
Optionor.
8. Binding_ Effect. This Agreement and its terms and conditions shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective successors and
permitted assigns.
9. Time. Time is of the essence of this Agreement.
10. Further Documents. Upon the reasonable request of the other party, each party will
execute, acknowledge and deliver or cause to be executed, acknowledged and delivered, such
further instruments and documents as may be reasonably necessary in order to carry out the intent
and purpose of this Agreement, including escrow instructions.
11. Exhibits. All exhibits attached to this Agreement and referred to in this Agreement
are incorporated into this Agreement by this reference as though they were fully set forth in this
Agreement.
12. Commission. Each party to this Agreement represents to the other party that it has
not engaged or used the services of any person, firm or corporation that may claim a broker's
commission or finder's fee upon execution of this Agreement, the exercise of the Option or the
execution of the DDA, and each party hereto agrees to hold the other party harmless from any loss,
damage, expense or liability, including attorney's fees, resulting from any claim by any person,
firm or corporation based upon its having acted as broker or finder on behalf of said indemnifying
party.
13. Captions. The captions of the sections/paragraphs of this Agreement are for
convenience and reference only, and the words contained in the captions shall in no way be held
to explain, modify, amplify or aid in the interpretations, constructions or meaning of the provisions
of this Agreement.
14. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and the same
Agreement.
15. Attorney's Fees. In any action between JHC and Optionor to enforce or interpret
any of the terms of this Agreement, the prevailing party shall be entitled to recover its costs and
expenses, including, without limitation, reasonable attorneys' fees and expert witness fees.
16. Entire A reement. This Agreement contains the entire agreement between the
parties respecting the matters set forth herein, and supersedes all prior agreements between the
parties respecting such matters.
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[END OF AGREEMENT - SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
ATTEST:
C lerk
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
City Attorney
"Optionor"
CITY OF SAN JUAN CAPISTRANO, a California
municipal corporation
YLBy:
«JHC„
JHC-ACQUISITIONS LLC, a California limited
liability company
By: Jamboree H usin Corpor tion, a California
nonprofit p lis n it co oration
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By: pg v I IL�
Name:/Nlichael Massie
Title: Chief Development Officer
EXHIBIT "A"
DESCRIPTION OF THE CITY PROPERTY
Real property in the City of San Juan Capistrano, County of Orange, State of California, described as
follows:
THAT PORTION OF LOT 60 OF TRACT NO. 103, IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 11, PAGES 29 TO 33
INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF LOT 59 OF SAID TRACT NO. 103;
THENCE NORTH 870 55'30" WEST ALONG THE SOUTHERLY LINE OF SAID LOT 59 AND THE WESTERLY
PROLONGATION THEREOF, 392.00 FEET;
THENCE SOUTH 20 04'30" WEST 555.53 FEET;
THENCE SOUTH 870 55'30" EAST 380.00 FEET TO AN INTERSECTION WITH THE WESTERLY LINE OF
THE RIGHT OF WAY OF THE ATCHISON, TOPEKA AND SANTA FE RAILWAY RIGHT OF WAY, AS SHOWN
ON SAID MAP:
THENCE NORTHERLY ALONG SAID WESTERLY LINE TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM, THAT PORTION INCLUDED WITHIN THE LAND DESCRIBED IN DEED TO
OYHARZABAL AND OTHERS, RECORDED JUNE 16, 1970 IN BOOK 9318, PAGE 861 OF OFFICIAL
RECORDS OF SAID ORANGE COUNTY.
ALSO EXCEPTING THEREFROM THAT PORTION OF SAID LAND CONVEYED TO THE ORANGE COUNTY
FLOOD CONTROL DISTRICT AS SET FORTH AND DESCRIBED IN THAT CERTAIN DOCUMENT RECORDED
JULY 28, 2011 AS INSTRUMENT NO. 2011000368777 OF OFFICIAL RECORDS.
APN: 668-101-23
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EXHIBIT "B"
TERMS OF DDA
1. The Purchase Price shall be Eight Million Seven Hundred Fifty Thousand
Dollars ($8,750,000.00).
2. The Closing Date shall mean and refer to the date which is the later of the
following: (a) five (5) business days following the date JHC has obtained its entitlements
for the development of the project, (b) five (5) business days following the date the final
map creating a separate legal parcel for the Property has been recorded (applicable only if
final map is required by either Parry), or (c) one hundred eighty (180) days after JHC has
received written binding commitments for the J1 IC tsnancing; provided, however, that in
no event shall be the Closing Date occur following the date which is the thirtieth (30th)
month anniversary of the Effective Date. Notwithstanding the foregoing, JHC shall have
the right to extend the Closing Date for a maximum of an additional ninety (90) days by
delivering written notice of such election to Optionor not later than five (5) days prior to
the then scheduled Closing Date; provided JHC has timely satisfied or waived its financing
contingency.
3. Optionor shall provide JHC with an CLTA owner's policy of title insurance
with liability in the amount of $8,750,000.00 showing title to the Property vested in JHC
free and clear of exceptions and encumbrances except non -delinquent general and special
real property taxes and assessments, easements, encumbrances, covenants, conditions,
restrictions, rights of way and other matters of record approved by JHC during the due
diligence period and the standard preprinted exceptions of exclusions from coverage set
forth in the title policy along with such endorsements as may be reasonably requested by
JHC. JHC shall have the right to obtain, at its sole cost and expense, an ALTA extended
coverage policy of title insurance.
4. JHC shall have a ninety (90) day due diligence period to approve the
condition of the Property and any other matters related to the Property including JHC's
intended use and development thereof, in JHC's sole and absolute discretion.
5. Title to the Property shall be conveyed by Optionor to JHC pursuant to a
grant deed in a form and content to be approved by the Parties and attached to the DDA.
6. All items of income and expense related to the Property, including non -
delinquent real property taxes and assessments shall be prorated to the Closing Date.
7. Optionor shall pay one-half (1/2) of the escrow fee, all documentary transfer
taxes and all title insurance premiums for that portion of the owner's title policy which
would be incurred for a standard CLTA form of owner's title insurance policy. JHC shall
pay one-half (1/2) of the escrow fee, all title insurance premiums associated with any title
insurance coverage required by any lender, that portion of the owner's title policy premium
which is attributable to the additional cost of ALTA extended coverage, if applicable, the
cost of any survey of the Property requested by JHC and the cost of any title endorsements
requested by JHC and the cost of recording the deed.
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8. The DDA shall contain representations and warranties from Optionor and
JHC to be agreed to by the Parties. Otherwise, the Property shall be acquired by JHC in
its AS -IS, WHERE -IS and SUBJECT TO ALL FAULTS condition.
9. The DDA shall require JHC to construct a new City Hall for City on a
portion of the City Property. The Parties agree that the construction of the City Hall is an
essential component for the sale of the Property to JHC, and the Parties Further agree that
the City Hall Project is to be constructed prior to or concurrently with the Affordable
Housing Project.
10. The DDA shall include a commitment by Optionor to provide the following
loans to JHC (collectively. the "City Loans"), to cover costs incurred by JHC in
developing the Affordable Housing Project: (i) a loan in the prinicipal amount of Five
Million Nine Hundred Thousand Dollars ($5,900,000) sourced from Optionor's low and
moderate income housing asset fund, and (ii) a loan in the principal amount of One Million
Three Hundred Forty -Seven Thousand Eight Hundred Dollars ($1,347,800), sourced from
Permanent Local Housing Allocation funds allocated to Optionor. Each of the City Loans
shall be secured by a deed of trust. Disbursed portions of the City Loans shall accrue
simple interest of three percent (3%) per year. The City Loans shall be repaid from a
proportionate share of fifty percent (50%) of the cash flow generated by operation of the
Affordable Housing Project. The City Loans will mature [57] years following the closing
date under the DDA. The City Loans shall be nonrecourse to the Borrower. The deeds of
trust securing the City Loans, and the Optionor's regulatory agreement, will be subordinate
to the lien of the deed of trust securing a construction and a permanent loan from an
institutional lender and each deed of trust securing a greater loan amount, respectively.
11. The DDA shall contain such other terms and conditions as agreed to by the
Parties.
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EXHIBIT "C"
PROPOSED CONFIGURATION OF PROPERTY
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