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11-0104_CHRYSLER GROUP REALTY CO. LLC._Agenda Report_D1RESOLUTION NO. 11-01-04-01 A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY APPROVING AN AGREEMENT REGARDING OPERATING COVENANT AND RESTRICTIVE COVENANTS BETWEEN THE AGENCY AND CHRYSLER GROUP REALTY COMPANY LLC, AND MAKING CERTAIN OTHER FINDINGS IN CONNECTION THEREWITH WHEREAS, the San Juan Capistrano Community Redevelopment Agency ("Agency") is a community redevelopment agency duly organized and existing under the California Community Redevelopment Law, Health and Safety Code Section 33000, et seq. ("CRL"), and has been authorized to transact business and exercise the power of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of San Juan Capistrano ("City"); and WHEREAS, the existing Redevelopment Plan (the "Redevelopment Plan") and the boundaries of the Redevelopment Plan (the "Project Area") were duly established by ordinances of the City Council; and WHEREAS, Agency is vested with the power to implement the Redevelopment Plan and to carry out its goals and objectives of the San Juan Capistrano Community Redevelopment Agency, including without limitation the goals and objectives adopted by the Agency's'implementation plan (the "Implementation Plan") pursuant to the CRL; and WHEREAS, the Agency is authorized and empowered by the CRL to enter into agreements for the acquisition, of real or personal property, to receive consideration for the provision by the Agency of redevelopment assistance and to make and execute contracts and other instruments necessary or convenient to the exercise of its powers; and WHEREAS, Chrysler Group Realty Company LLC is a Delaware limited liability company'and experienced in the operation of new car dealerships; and WHEREAS, Agency desires to enter into that certain Agreement Regarding Operating Covenant and Restrictive Covenants ("Agreement") with Chrysler Group Realty Company LLC relating to the operation of Orange Coast Chrysler/Jeep/Dodge of San Juan Capistrano ("Orange Coast Chrysler") on that certain real property (the "Site") shown on the Site Map attached hereto as Exhibit A and incorporated herein and WHEREAS, the Agency has adopted the Implementation Plan pursuant to CRL Section 33490, which sets forth the objective of eliminating blighting conditions including impaired investments with specific emphasis on the blighting conditions resulting from the significant downturn in the automotive industry; and 1 1/4/2011 3. The Agency hereby finds and determines that the Agreement is consistent with the provisions and goals of the Redevelopment Plan and Implementation Plan. 4. The Agency hereby finds that the Agreement will not result in physical impacts to the environment as it seeks to induce the continued operation of property for automobile sales and service, which has been the historical use of the property, and is otherwise exempt from the California Environmental Quality Act pursuant to CEQA Guideline 15060(c)(2) and 15061(b)(3) as the Agreement will not cause a significant effect on the environment, or is otherwise exempt under CEQA Guideline 15301 Class 1 (Operation, repair, maintenance, or minor alteration of existing structures), 15302 (replacement or reconstruction of existing structures or, facilities), and/or 15304 (minor alteration to land) and therefore the Agency Secretary is hereby authorized and directed to file a Notice of Exemption with the County Clerk in accordance with the provisions of CEQA Guideline 15062. 5. The Agency hereby approves the Agreement between the Agency and CRL, in the form of the Agreement, which has been submitted herewith. 6. The Agency Executive Director and the Agency Secretary are hereby authorized to execute and attest the Agreement, including any related attachments, on behalf of the Agency. Copies of the final form of the Agreement, when duly executed and attested, shall be placed on file in the office of the City Clerk. 7. The Agency Executive Director (or his duly authorized representative) is further authorized to implement the Agreement and take all further actions and execute all documents referenced therein and/or necessary and appropriate to carry out the Agreement. The Agency Executive Director (or his duly authorized representative) is hereby authorized to the extent necessary during the implementation of the Agreement to make technical or minor changes thereto after execution, as necessary to properly implement and. carry out the Agreement, provided the changes shall not in any manner materially affect the rights and obligations of the Agency. S. The Agency Secretary shall certify to the adoption of this Resolution. 3 1/4/2011 POSTEDRecoo.'led is Officiai Records, Orkinge Cou lity FL E D Tom Daly, Coutity Recorder JAN 2011 A[1v NO FEE. JAN 2011 TOM OALY, CLERK - RECOROER 2,01'185000074 3-38 pm 01/24/11 Q�IQER _0ERUTY 2V SC , 2 Z01 o"A ui�tr OLI�RK-Mc 0.00 6G.00 0.00 OM OM 0,00 0.00 0.00 DEPUTY lahnva for oj-,zr b Count . rk-Pecorder's Mee ori! NOTICE OF EXEMPTION From., Community Development Department 32400 Paseo Adelanto San Juan Capistrano, California 92676 1. APPLICANT: San Juan Capistrano Community Redevelopment Agency (RDA) 2. ADDRESS- 32400 Paseo Adelanto; San Juan Capistrano, CA 92675 3. LEAD AGENCY. City of San Juan Capistrano Community Redevelopment Agency (RDA) 4PROJECT MGM: Cindy Russell, Treasurer, CFO & PHONE NUMBER: (949) 443-6301 S.. PROJECT TITLE: Operating Covenant for Chrysler Group Realty Company LLC 7. PROJECT LOCATION: The project site is located at 32881 Camino Capistrano. 8. DESCRIPTION. The SJC Community Redevelopment Agency has acquired a 20 -year operating covenant from Chrysler Group Realty Company LLC, a Delaware limited liability company (Chrysler), to operate a Chrysler dealership at 32881 Camino Capistrano (formerly the site of Honda Performance Motorsports.). ). The 1.96 acre site is improved with an existing 24,323 square foot building designed to accommodate motor vehicle sales use. The site will undergo a series of tenant improvements, including upgrading the existing facility by renovating the interior and exterior f4ade to complement the dealership and provide corporate branding (signage) consistent with the City's Architectural Design Guidelines. The opening of the Orange Coast Chrysler franchise will expand the sales and inventory of. the auto dealerships in City and will create between 36 and 38 jobs within the Redevelopment Agency boundaries. The auto dealership l . has received City approval of sitearchitectural development plans for the remodel and addition. Chrysler is obligated to designate the Chrysler dealership within the City as the point-of-sale for internet/online deliveries, and provide a guarantee and liquidated damages in the amount of $300,000 until the end of the covenant period, if the 20 -year operating covenant is not completed. The property and dealership is required to be maintained in first-class condition, and will participate in and actively support a proposed business improvement district consisting of automobile dealers in San Juan Capistrano, The Agency obligations consist of an initial payment of $300,000 payable to Chrysler within 5 days of the execution of the agreement by the parties, and as long as the dealership remains open and operating, additional consideration in an amount equal to. 50% of the sales tax generated from the site annually until Chrysler receives the nominal amount of $2,000,000 or expiration of the sales tax accrual period of thirteen years. Notice of Exemption ChoLsfer.0perating Covenant 2 Citv of San Juan Capistrano, CA ADMINISTRATIVE DETERMINATION: Development Services Department staff has completed a preliminary review of this project in accordance with the City of San Juan Capistrano's Environmental Review Guidelines and with Section 15661 of the California Environmental Quality Act (CEQA) Guidelines (Guidelines), Eased on that review, the Environmental Administrator finds that the proposed project constitutes an activity covered by the general rale that CEQA applies only to projects which have the potential for causing a significant effect on the environment. In the case of the subject project, the operating covenant would impose certain requirements and obligations on TCAG, but those requirements and obligations wouldnot, in and of themselves, create potential significant effects. Therefore, the Environmental Administrator and the Agency have determined that further environmental evaluation is not required because: [x] "The activity is covered by the general rule that CEA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no passibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA"( Section 15061(b)(3)); or, [ l The project is statutorily exempt, Section <name> (Sections 15260- 15277); or, [x] The project is categorically exempt under CEQA Guideline Section 15301 Class 1 (operation, repair, maintenance, or minor alteration of existing structures); or, [ j The project does not constitute a "project" as defined by CEQA (Section 15370. Environmental Adrn CC' [ j project file [ I CEQA file CRA 11/4/2011 AGENDA REPORT D1 TO: Joe Tait, Executive Director FROM: Cindy Russell, Finance Officer SUBJECT: Consideration of Agreement Regarding Operating Covenant and Restrictive Covenants for Tenanting of the Vacant Dealership located at 32881 Camino Capistrano (Chrysler Group Realty Company LLC, a Delaware limited liability company) RECOMMENDATION: a) Adopt the Resolution approving the Agreement Regarding Operating Covenant and Restrictive Covenants with Chrysler Group Realty Company LLC (CRC), for the operation of the Capo Motors, LLC, dba Orange Coast Chrysler/Jeep/Dodge of San Juan Capistrano automobile dealership at the vacant dealership located at 32881 Camino Capistrano. b) Direct the Agency Secretary to file the Notice of Exemption in accordance with the provisions of CEQA Guideline 15062. SUMMARY: As identified in the 2010-2014Implementation Plan for the San Juan Capistrano Redevelopment Agency adopted in January 2010, the downturn in the automotive industry, combined with obsolete facilities, has resulted in an approximate 40 percent loss in retail auto sales revenues to the City. In 2004, the City had 10 "new car" automotive dealerships in operation. Since that time, five dealerships have closed. Although, City can expect one existing dealership franchise to re -open in March 2011, the City still experienced a 4.8% drop in new auto sales year -over -year from FY 08109 to FY 09110, based on information provided by the City's sales tax consultant, MuniServices, MBIA (Attachment 5). The 2010--2014 Implementation Plan identified the Agency's plans to work with the remaining dealerships to ensure their continued viability into the future, including re - tenanting, relocation and consolidation among the existing facilities. Additionally, the Implementation Plan identified automotive dealership assistance as a potential project in the furtherance of the Agency's goals and objectives to be funded from the Agency's Tax Allocation bonds issued in May 2008. The City's Long -Term Strategic Plan, Agenda Report Page 2 January 4, 2011 adopted in October 2010 has five strategic priorities for the City including, Fiscal Sustainability. The re -tenanting of the City's auto dealerships is one of the on-going initiatives under this priority to restore, strengthen and diversify the City's revenue portfolio. The re -tenanting of the this vacant dealership Chrysler Group Realty Company LLC (CRC) through its operator Capo Motors, LLC (dba Orange Coast Chrysler/Jeep/Dodge of San Juan Capistrano) has requested Agency assistance to re -tenant the vacant Performance Motorsports dealership located at 32881 Camino Capistrano. The proposed agreement for a 20 -year operating covenant will benefit the City and the Agency by achieving the following objectives: • Elimination of blight within the redevelopment project by bringing a new franchisee to a vacant dealership location; • Enhancement to local employment,' by creating 36 to 38 new jobs in our community; and • Expansion of the City and Agency revenue base through increased auto sales and property tax revenues. Agency assistance will support a new franchise for the row of auto dealers along Camino Capistrano, reinforcing the City's auto dealers as a competitive destination. The re -tenanting of the vacant dealership is projected to generate $181,000 in its first year of operations, increasing annually and projecting approximately $6.4 million in sales tax to the City over the life of the operating covenant. In addition, the City will receive additional revenue if the Chrysler dealership remains open for business after the 20 --year covenant period ends. The cost to Agency for the operating covenant is $2 million ($300,004 upon the opening of the dealership and $1.7 million annually based on 50% of the sales tax generated to the City) Staff recommends the Agency Board of Directors adopt the Resolution (Attachment 1) approving the Agreement Regarding Operating Covenant and Restrictive Covenants (Attachment 2) with Chrysler Group Realty Company LLC, for the operation of the Orange Coast Chrysler automobile dealership:. at the vacant dealership located at 32881 Camino Capistrano. BACA ci +lll1 Proposed Operating Automotive Dealership CRC will sign a lease agreement at the vacant Performance Motorsports site located next to the California Highway Patrol office on Camino Capistrano, and directly adjacent to the I-5 freeway. CRC has a franchise agreement with Capo Motors, LLC (dba Orange Coast Chrysler/Jeep/Dodge of San Juan Capistrano to open a dealership in San Juan Capistrano. The site totals approximately 1.96 acres, with an existing building consisting of 24,323 square feet. The site will undergo a series of tenant improvements, Agenda Report Page 3 January 4, 2011 including upgrading the existing facility by renovating the interior and exterior facade to complement the dealership, corporate branding requirements and the City's Architectural Design Guidelines. The interior renovation will optimize function and flow between the service, sales and the parts departments. The existing showroom floor exterior will be improved and the square footage increased to increase visibility to customers. The site's existing service area will be improved to allow for 11 service bays, and accessibility upgrades. The opening of the Orange Coast Chrysler franchise will expand the sales and inventory of the auto dealerships in City and will create between 35 and 38 jobs within the Redevelopment Agency boundaries. The auto dealer has approved entitlements for development plans for remodel and addition. Orange Coast Chrysler has been in operating since 1981 and is the #5 volume Chrysler/Jeep/Dodge dealership in the Western US out of over 300 top volume dealerships. The dealership is the number one volume dealership in all of Orange County, and #2 in the entire state of California. The dealer is the recipient of the Chrysler l=ive Star award for excellence in customer satisfaction and sales volume for 15 straight years. The dealership is a supporter of local charitable organizations and events, such as Costa Mesa Cruising for a Cure, Estancia High School Football, and the Spark of Love Toy Drive. The company expects to also be a community partner in the City of San Juan Capistrano (see Attachment 4). Request for Agency Assistance/Terms of the Proposed Agreement On ,July 21, 2010, CRC/Capo Motors, LLC submitted a petition to the Agency for assistance. After review of their request by staff and Agency Special Counsel, and further negotiation, the Agreement for consideration by the Agency Board of Directors provides for the following: Chrysler ObEga#ions: Provide an operating covenant ("Operating Period") from CRC, to operate a Chrysler dealership (primarily selling new Chrysler automobiles) for a period of 20 years ■ Designate the Chrysler dealership within the City as the point of sale for all scheduled deliveries resulting from'internet/online sales ■ Provide a guarantee from CRC and liquidated damages in the amount of $300,000 until the end of the covenant period, if the 20 -year operating period is not completed. • Maintain the property and the dealership in a first class condition 00 Participate in, and actively support, a business improvement district of automobile dealers in San Juan Capistrano. Agenda Report Page 4 January 4, 2011 Agency Obligations: ■ Operating Covenant Consideration as follows for be provided by the Agency: a) Three hundred thousand dollars ($300,000), payable within five (5) business days within the execution of this Agreement by the parties, and CRC, proving written notice to the Agency that Chrysler Group Realty Company LLC, has obtained a leasehold interest in the Property. This initial payment of consideration will be deposited into a joint escrow account within five (5) business days after the Conditions Precedent, subsections (a) and (b) described below have been satisfied or waived. b) If the Chrysler Dealership remains open and continues to operate, the Agency will provide additional operating covenant consideration in an amount equal to 50% of the sales tax generated by the Site annually until the earlier to occur of (i) receipt by Chrysler of the nominal amount of $2,000,000 or (ii) expiration of the Sales Tax Accrual Period of thirteen (13) years. Conditions Precedent: a) CRC shall execute an Operating Covenant and Restrictive Covenant b) CRC shall provide written notice, within 5 business days after execution of an Operating Covenant and Restrictive Covenant, to the Agency of an obtained leasehold interest in the Property. In no event shall CRC be considered to be in breach or default of this Agreement as a result of the failure of any of the Conditions'' Precedent to be satisfied for any reason whatsoever. CALIFORNIA ENVIRONMENTAL QUALITY ACT CEQA The Agreement seeks to induce an operator to continue to use the property as an automobile dealer. The Agreement does not require a change of use of the property, nor does it require construction. As such, approval of the Agreement should not be considered a "project" under CEQA Guideline 15060(c) (2) because its approval will not result in a direct or reasonably foreseeable indirect physical change in the environment. CEQA Guideline 15061(b)(3) further provides that even if an action is deemed to be a "project", it is exempt from CEQA if the activity is covered by the general rule that CEQA applies only to projects which have the. potential for causing a significant effect on the environment. Again, the Agreement seeks to foster the historical use of the property as an automobile sales and servicing. business. Additionally, even if the Agreement were considered a "project" under CEQA it is categorically exempt under CEQA Guideline 15301 Class 1 (Operation, repair, Agenda Report Page 5 January 4, 2011 maintenance, or minor alteration of existing structures), 15302 (replacement or reconstruction of existing structures or facilities), and/or 15304 (minor alteration to land). COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: No commissions or boards have reviewed the request for assistance. FINANCIAL CONSIDERATIONS: Impact to the Agency's Budget The FY 10111 budget includes funding from bond proceeds for business retention/economic development as well as available bond proceeds for future Agency projects. The FY 10/11 budget projected $2;3`97,280 in remaining bond funds at June 30, 2010. Based on actual funds expended and `carryover projects, the amount of bond proceeds available for new projects for FY 10/11 is $2,471,894. Projected expenditures for new projects for FY 10/11 are $1,970,000, leaving approximately $500,000 in bond proceeds available for future projects. The proposed operating covenant agreement would use $300,000 in bond proceeds, leaving approximately $200,000 remaining. Tax increment projections are sufficient to fund all current obligations of the Agency and the future payments under the proposed agreement. Impact to the City's Budge Based on the operator's sales projections, the City will received approximately $6.4 million in new sales tax revenues over the next twenty years. First year sales tax revenues are projected at approximately $181,000. Operating Covenant Valuation The City's economist Keyser Marston Associates, Inc. (KMA) has reviewed the sales projections and other financial information for the proposed TCAG dealership and prepared an Operating Covenant Valuation Report (Attachment 3). The purpose of the KMA analysis is to: ® Estimate the value of CRC'.s: agreement'to be bound by a 20 -year operating covenant; • Project the net present value (NPV) of the purchase price to be paid by the Agency to acquire the operating covenant,, and, • Project the NPV of the local sales tax revenues anticipated to be generated by the Chrysler dealership. The KMA report identifies gross sales beginning at $27.1 million increasing to $59.9 million by the end of the operating period. Based on a projected taxable sales factor of 67%, total taxable sales during the operating period are projected at $639.3 million, generating $6.4 million in sales tax revenue to the City. The City will retain 100% of the sales tax generated by the dealership. Agenda Report Page 6 January 4, 2011 The Agency's Operating Covenant Purchase Price is $300,000 upon the opening of the Orange Coast Chrysler dealership. at. the. Site and an additional $1.7 million made in semi-annual payments based on taxable sales generated from the operation. The Agency will fund the initial $300,000 from bond proceeds under business retentionleconomic development as identified in the Agency Board approved allocation of bond proceeds, FY 09110 and 10111 budget and 2010214 Implementation Plan adopted in January 2010. The $1.7 million obligation is considered a debt of the Agency and will be funded annually from tax increment proceeds. The breakeven point of the Agreement based on the projected sales taxes revenue and payment calculations occurs in Year 13. Keyser Marston has calculated the net present value (NPV) of sales tax generated over twenty (20) years to be retained by the City to be $2,898,300. The NPV of the Agency's payments to Orange Coast Chrysler is $1,321,900. The NPV of the sales tax received by the City, net of the payments made by the Agency is $1,576,400. NOTIFICATION: Jon Gray, Orange Coast Chrysler Sally Rutledge, Attorney for Chrysler RECOMMENDATION: By motion, a) Adopt the Resolution approving the Agreement Regarding Operating Covenant and Restrictive Covenants with Chrysler Group Realty Company LLC (CRC), for the operation of the Capo Motors, LLC, dba Orange Coast Chrysler/Jeep/Dodge of Sart Juan Capistrano automobile dealership at the vacant dealership located at 32881 Camino Capistrano. b) Direct the Agency Secretary to file the Notice of Exemption in accordance with the provisions of CEQA Guideline 15062. Respectfully submitted, aw f. e IX Cindy Russell, Finance Offic Attachments: 1. Resolution 11-01-04 Agenda Report Page 7 January 4, 2011 2. Agreement Regarding Operating Covenant and Restrictive Covenants 3. Keyser -Marston Report of Operating Covenant Valuation 4. Orange Coast Chrysler Business and Community Involvement Information 5. MuniServices Sales Tax News Summary for July 2009 -June 2010 RESOLUTION NO. 11-01-04- A RESOLUTION OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY APPROVING AN AGREEMENT REGARDING OPERATING COVENANT AND RESTRICTIVE COVENANTS BETWEEN THE AGENCY AND CHRYSLER GROUP REALTY COMPANY LLC, AND MAKING CERTAIN OTHER FINDINGS IN CONNECTION THEREWITH WHEREAS, the San Juan Capistrano Community Redevelopment Agency ("Agency") is a community redevelopment agency duly organized and existing under the California Community Redevelopment Law, Health and Safety Code Section 33000, et seq. ("CRL"), and has been authorized to transact business and exercise the power of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of San Juan Capistrano ("City"); and WHEREAS, the existing Redevelopment Plan (the "Redevelopment Plan") and the boundaries of the Redevelopment Plan (the "Project Area") were duly established by ordinances of the City Council; and WHEREAS, Agency is vested with the power to implement the Redevelopment Plan and to carry out its goals and objectives of the San Juan Capistrano Community Redevelopment Agency, including without limitation the goals and objectives adopted by the Agency's implementation pian (the "Implementation Plan") pursuant to the CRL; and WHEREAS, the Agency is authorized and empowered by the CRL to enter into agreements for the acquisition, of real or personal property, to receive consideration for the provision by the Agency of redevelopment assistance and to make and execute contracts and other instruments necessary�or convenient to the exercise of its powers; and WHEREAS, Chrysler Group Realty Company LLC is a Delaware limited liability company and experienced in the operation of new car dealerships; and WHEREAS, Agency desires to enter into that certain Agreement Regarding Operating Covenant and Restrictive Covenants ("Agreement") with Chrysler Group Realty Company LLC relating to the operation of Orange Coast Chrysler/Jeep/Dodge of San Juan Capistrano (`Orange Coast Chrysler") on that certain real property (the "Site") shown on the Site Map attached hereto as Exhibit A and incorporated herein; and WHEREAS, the Agency has adopted the Implementation Plan pursuant to CRL Section 33490, which sets forth the objective of eliminating blighting conditions including impaired investments with specific emphasis on the blighting conditions resulting from the significant downturn in the automotive industry; and Page 1 of 5 ATTACHMENT 1 WHEREAS, by providing for the operation of Orange Coast Chrysler on the Site, the Agreement will assist the Agency in meeting the development policies and objectives set forth in the Redevelopment Plan and Implementation Plan, specifically the goal of reducing blighting economic conditions by encouraging new investment in the community through facilitating the use of underutilized and vacant buildings; and WHEREAS, pursuant to the CRL, the Agency is authorized to acquire the "Covenants" as defined in the Agreement; and WHEREAS, on January 4, 2011, the Agency held a duly noticed hearing on the proposed Agreement, at which time the Agency reviewed and evaluated all of the information, testimony, and evidence presented during the hearing; and WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and WHEREAS, the City Council has previously determined, in its adoption of the ordinance approving the Redevelopment Plan, that the Site was blighted; and WHEREAS, the Agreement will assist in the elimination of blight by providing for the operation of a Chrysler dealership on the Site; and WHEREAS, the Agreement will not result in physical impacts to the environment as it seeks to induce the continued operation of property for automobile sales and service, which has been the historical use of the property, and is otherwise exempt from the California Environmental Quality Act pursuant to CEQA Guideline 15060(c)(2) and 15061(b)(3) as the Agreement will not cause a significant effect on the environment, or is otherwise exempt under CEQA Guideline 15301 Class 1 (Operation, repair, maintenance, or minor alteration of existing structures), 15302 (replacement or reconstruction of existing structures or facilities), and/or 1.5304 (minor alteration to land); and WHEREAS, the Agency has duly considered all terms and conditions of the proposed Agreement and believes that the operation of a Chrysler dealership on the Site is in the best interests of the City .of%San Juan Capistrano and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements. NOW, THEREFORE, BE IT RESOLVED by the San Juan Capistrano Community Redevelopment Agency as follows: 1. Each of the foregoing recitals is true and correct. 2. The Agency hereby finds and determines that the operation of a Chrysler dealership, pursuant to the Agreement will assist in the elimination of blight within the Project Area by providing for the proper reuse of a portion of the Project Area, which was previously declared blighted and encourage the redevelopment of nearby blighted properties. Page 2 of 5 3. The Agency hereby finds and determines that the Agreement is consistent with the provisions and goals of the Redevelopment Plan and Implementation Plan. 4, The Agency hereby finds that the Agreement will not result in physical impacts to the environment as it seeks to induce the continued operation of property for automobile sales and service, which has been the historical use of the property, and is otherwise exempt from the California Environmental Quality Act pursuant to CEQA Guideline 15060(c)(2) and 15061(b)(3) as the Agreement will not cause a significant effect on the environment, or is otherwise exempt under CEQA Guideline 15301 Class 1 (Operation, repair, maintenance, or minor alteration of existing structures), 15302 (replacement or reconstruction of existing structures or facilities), and/or 15304 (minor alteration to land) and therefore the Agency Secretary is hereby authorized and directed to file a Notice of Exemption with the County Clerk in accordance with the provisions of CEQA Guideline 15062. 5. The Agency hereby approves the Agreement between the Agency and CRL, in the form of the Agreement, which has been submitted herewith. 5. The Agency Executive Director. and the Agency Secretary are hereby authorized to execute and attest the Agreement, including any related attachments, on behalf of the Agency. Copies of the` final form of the Agreement, when duly executed and attested, shall be placed on file in the office' of the City Clerk. 7. The Agency Executive Director (or his duly authorized representative) is further authorized to implement the Agreement and take all further actions and execute all documents referenced therein and/or necessary and appropriate to carry out the Agreement. The Agency Executive Director (or his duly authorized representative) is hereby authorized to the extent necessary during the implementation of the Agreement to make technical or minor changes thereto after execution, as necessary to properly implement and carry out the Agreement, provided the changes shall not in any manner materially affect the rights and obligations of the Agency. The Agency Secretary shall certify to the adoption of this Resolution. Page 3 of 5 PASSED AND ADOPTED this 4th day of January, 2011. Laura Freese Chairman, Community Redevelopment Agency ATTEST: Maria Morris, Agency Secretary Thomas P. Clark Stradling Yocca Carlson & Raut Agency Special Counsel STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) 1, , Secretary of the San Juan Capistrano Community Redevelopment Agency, hereby certify that the above and foregoing Resolution was duly and regularly adopted by the Agency at a regular meeting thereof held on the 4th day of January, 2011, and that it was so adopted by the following vote of the Agency: AYES: NOES: ABSENT: IN 'WITNESS WHEREOF, I have hereunto set my hand and seal this day Of 2011. Maria Morris, Agency Secretary _r AGREEMENT REGARDING OPERATING COVENANT AND RESTRICTIVE COVENANTS This AGREEMENT REGARDING OPERATING COVENANT AND RESTRICTIVE COVENANTS (the "Agreement") is entered into this day of _ , 2010 (the "Date of Agreement"), by and between the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and CHRYSLER GROUP REALTY COMPANY LLC, a Delaware limited liability company ("CRC"), with reference to the following facts: A. CRC desires to open and operate a new automobile dealership under a Chrysler franchise within the Redevelopment Project Area. Ii, The Agency has found that it would benefit the Redevelopment Project Area specifically, and the City generally, to induce CRC to open and operate a new Chrysler dealership at 32881 Camino Capistrano (the "Property") which Property is further described in Exhibit A hereto. C. CRC is willing to be bound by the terms of the Covenants contained herein in return for which the Agency will pay to CRC the Covenant Consideration also described herein. D. The purpose and intention of the Agel'cy entering into this Agreement with CRC is to (i) assist in the elimination of blight, (ii) enhancelocal employment, and (iii) expand the Agency's and City's revenue base. NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, the parties hereto agree as follows: 1. Definitions. 1.1 "Additional Covenants of CRC" is defined in Section 8. 1.2 "Affiliate" means any person, directly or indirectly, in control of, controlled by, or under common control with, a Party. A Party shall be deemed to control another person if such Party possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other person, whether through the ownership of voting securities, by contract or otherwise. 1.3 "Agency" means the San Juan Capistrano Community Redevelopment .Agency, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law, and any assignee of or successor to its rights, powers and res. onsibil,ities, 1.4 "Agreement" means this Agreement Regarding Operating Covenant and Restrictive Covenants. 1.5 "Automobile Dealership Improvements" is defined in Recital B. 1.6 "Business Days" and "Days" are defined in Section 3.0. DOESOCl1454142v4/022299-0490 ATTACHMENT 2 1.7 "Chrysler Dealership" means a dealership operating pursuant to a franchise agreement with Chrysler Group LLC. 1.8 "Chrysler Group" means Chrysler Group LLC, a Delaware limited liability company, which is the parent entity of CRC. 19 "City" means the City of San Juan Capistrano, a California municipal corporation. 1.10 "Covenant Consideration" is defined in Section 3.1. 1.11 "Covenants" is defined in Section 2.4. 1.12 "CRC" means Chrysler Group Realty Company LHC, a Delaware limited liability company. 1.13 "Date of Agreement" is defined in the Preamble. 1.14 "Escrow Account" is defined in Section 3.4. 1.15 "Escrow Holder" shall. mean Fidelity National Title Company, Attention: Valerie Rapp, located at 1300 Dove Street, Suite 310 Newport Beach, California 92660. 1.16 "Environmental Claim" shall mean any claim, action, suit, or proceeding for personal injury (including sickness, disease or death), or for tangible or intangible injury or damage to property or natural resources or the environment; including, without limitation, compensation for lost profits, wages, business income, or other economic loss, consequential damages, diminution of property value or loss of use of property, nuisance, or for any violation or alleged violation of, or noncompliance with, the requirements of any Environmental Law. 1.17 "Environmental Cleanup Liability" shall mean any cost or expense incurred to investigate, monitor, remove, remediate, treat, clean up, abate or otherwise respond to any Release or threatened Release of Hazardous Materials, including, without limitation, the cost of obtaining site closure from applicable governmental agencies and the cost of restoring the affected property upon completion of responsive action, all to the extent necessary in consideration of the commercial use of the Property. 1.18 "Environmental Compliance Costs" shall mean any cost or expense necessary to enable the real property impacted by the presence of Hazardous Materials to comply with all applicable Environmental Laws. 1.19 "Environmental Law" shall mean any applicable federal, California, regional or local law, statute, ordinance, rule, regulation or order for the protection of human health or the environment, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601, et seq.); the Resource Conservation and Recovery Act of 1976. (42 U.S.C. § 6901 et seq.); the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.); the Clean Air Act (42 US(. §,fi401 et seq.); the Safe Drinking Water Act (42 U.S.C. § 300f et seq.); the Emergency `Planmrg and. Community Right To Know Act of 1986 (42 U.S.C. § 11001 et seq.); the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.); the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.); the Hazardous Materials 2 Transportation Act (49 U.S.C. § 5101 et seq.); the Carpenter Presley Tanner Hazardous Substance Account Act (Health and Safety Code § 25300 et seq.); the Hazardous Waste Control Law (Health and Safety Code § 25100 et seq.); the Hazardous Waste Disposal Land Use law (Health and Safety Code § 25220 et seq.); the Porter Cologne Water Quality Control Act (Water Code § 13000 et seq.); Hazardous Materials Release Response Plans and Inventory (Health and Safety Code § 25500 et seq.); Underground Storage of Hazardous Substances (Health and Safety § 25280 et seq.); The Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65) (Health and Safety Code § 25249.5 25249.13}; the Asbestos Notification Law (Health and Safety Code § 25915 et seg.); the California Occupational Safety and Health Act (Labor Code § 6300 et seq.); Chapters 10 and 11, Division 4.5, Title 22, California Code of Regulations; and any law or regulation implementing, amending or succeeding any of the foregoing, :and any similar laws or regulations at any time in effect having any of the purposes designated above. 1.20 "Event of Default" is defined in Section 4.3. 1.21. "Force Majeure" is defined in Section 15. 1.22 "Franchise(s)" means the Chrysler Dealership which will operate on the Property under a name which will include "San duan Capistrano" or "Capistrano' ("Capistrano") and any other automobile dealership permitted to operate on the Property hereunder. 1.23 "Governmental Requirement(s)" means all valid and enforceable laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State, the County, the City or any other political subdivision in which the Property is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over Agency, Developer or the Property, including, without limitation, all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation (to the extent applicable), Labor Code Sections 1770 et seq., the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq.; andthe Unruh Civil Rights Act, Civil Code Section 51, el seq. 1.24 "Hazardous Materials" shall mean any pollutant, contaminant, hazardous or toxic substance material or waste which is or becomes identified, listed or regulated as such under any Environmental Law by the United States government, the State of California or any regional or local governmental authority having jurisdiction over the Property. 1.25 "indemnitees" is defined in Section 2.3. 1.26 "initial Payment" shall be an amount equal to Three hundred Thousand Dollars ($300,000). 1.27 "initial Payment Date" is defined in Section 3.1. 1.28 "Liquidated Damages Amount" is defined in Section 4.4. 1.29 "Opening for Business"or "Open(ed) for Business" is defined in Section 2.1. 1.30 "Operate" or "Operation" is defined in Section 2.1. 1.31 "Operating Period" is defined in Section 2.1. 1.32 "Operator(s)" means the entity designated by Chrysler Group as the operator of the Franchise. The initial Operator will be Capo Motors, LLC, a California limited liability company, dba Orange Coast Chrysler/Jeep/Dodge of San .yuan Capistrano. 1.33 "Permitted Assignee" is defined in Section 9. 1.34 "Person" or "Party" is defined in Section 16. 1.35 "Property" is defined in Recital B. 1.36 "Redevelopment Project Area" means the geographical boundaries of the redevelopment plan ("Redevelopment Plan") approved and adopted by the City Council of the City on July 12, 1983 by Ordinance No. 488, as the same has been amended from time to time. 1.37 "Release" shall mean the release, as defined in Health and Safety Code §§ 25320 and 25321, of a Hazardous Material. or Hazardous Materials. 1.38 "Sales and Use Tax Law" is defined in Section 1.39. 1.39 "Sales Tax Revenues" means that portion of tax revenues derived and received by the City from the imposition of the Bradley Burns Uniform Local Sales and Use Tax Law, commencing with Section 7200 of the Revenue and Taxation Code of the State of California, as amended, or its equivalent (the "Sales and Use Tax Law"), that the State Board of Equalization ("SBOE") determines are generated by the Chrysler Dealership and any additional Franchises on the Property, conducted from the date that CRC Opens for Business and commences operation of its Chrysler Dealership on the Property, until thirteen (13) years from the date of Opening for Business unless the Operating Period is earlier terminated (the "Sales Tax Revenue Accrual Period"); provided that the Semi -Annual Payments shall not be first paid unless and until the Initial Payment Date occurs and the accrual of such Sales Tax Revenues for purposes of computing the Semi -Annual Payments shall be for a period of not to exceed'6ne hundred eighty (180) days. In no event, shall the Sales Tax Revenue Accrual Period exceed thirteen (13) years from the Opening of Business. Sales Tax Revenues shall be based upon the total Sales Tax Revenues received by the City (less any State Board of Equalization adjustments that would have modified previous payments to CRC) during the applicable preceding semi-annual period (for the'Febru:ary Ist payment, Sales Tax Revenues received during the preceding months of April through $eptermber; and for the August 1st payment, Sales Tax Revenues received during the preceding months:.af October through March) as confirmed by the report furnished by the City's sales tax consultant as provided by the State Board of Equalization, and the sales tax returns as filed by CRC, and any verifiable reporting as it relates to sales and leasing activities generated by CRC and use taxes assessed and collected thereon by a third party leasing or financing company. CRC shall provide documentation supporting the calculation of Sales Tax Revenues to the CRC. In the event that the first payment measured by Sales Tax Revenues hereunder (i.e., other than the Initial Payment) or the last such payment due hereunder covers less than a full semi-annual period, the amount of Sales Tax Revenues for said partial semi-annual period shall be calculated by multiplying the total Sales Revenues for the entire semi-annual period (assuming that CRC was entitled to receive Covenant Consideration for the semi-annual period) by a fraction in which the numerator equals the number of days in such semi-annual period included within the period of Agency's payment obligation, and in which the denominator equals the total number of days in the semi-annual period. 1.40 "Sales Tax Revenue Accrual Period" is defined in Section 1.39. 1.41 "SBOE" is defined in Section 1.39. 1.42 "Semi -Annual Payments" is defined in Section 3.1. 1.43 `Site Map" means that map attached hereto as Exhibit B and incorporated herein by reference showing the Property. 2. Operating Covenant and Restrictive Covenants. 2.1 Operating Covenant. CRC hereby covenants and agrees that it shall open, or cause to be opened, for business to the general public ("Opening for Business" or "Open(ed) for Business") and continuously operate, or cause to be operated on the Property, an automobile dealership during normal business hours, as permitted by the City, primarily for the sale and lease of all makes and. models of Chrysler vehicles, and secondarily, the sale and lease of used vehicles, and other ancillary automotive uses commonly associated with such uses from time to time, including without limitation the servicing and repair of; vehicles, and vehicle parts sales ("Operate" or "Operation") for a period of twenty (20) years- from the date of Opening for Business (the "Operating Period"). Such continuous Operation. shall be subject to the Force Majeure provisions of Section 15 hereof, and temporary interruptions for commercially reasonable periods of time for casualty losses, repairs, replacement of an Operator',' and the like. 2.2 Restrictive Covenants. During the Operating Period, CRC shall do or cause to be done the following: (1) designate the Property as the point of sale for sales tax purposes in all retail sales and lease contracts for vehicles whose sales and leases originate from the Property; (2) cause all vehicles purchased through the Operator via internet/online sales and scheduled for delivery from the Property, and (3) at no cost to Agency, beep and maintain the Property and the Automobile Dealership Improvements thereon and all facilities appurtenant thereto, consistent with automobile dealerships, in good order and repair and safe condition, and the whole of the Property, the Automobile Dealership Improvements, and landscaping in a clean, sanitary, and orderly condition free from debris, graffiti and waste materials. In addition, during such Operating Period and subject to CRC's right to contest same, CRC shall observe and comply with all Governmental Requirements, 2.3 Indemnities/Release. CRC.agrees to indemnify, protect, defend, reimburse and hold the Agency and City and their elected and appointed officials, employees, representatives, agents, consultants, attorneys, volunteers, successors and assigns, each of them jointly and severally (collectively, the "Indemnitees"), harmless from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses, proceedirigs, lawsuits, orders, judgments, fines, obligations, encumbrances, liens, expenses (including. without limitation all costs and expenses reasonably incurred to investigate and defend claims, whether;or not any such claim is ultimately defeated, and costs and expenses reasonably incurred for consultants, court fees, administrative fees, expert witness fees, and attorneys' fees and remedial and response costs) of whatever kind or nature, contingent or otherwise, matured or not matured, foreseeable or unforeseeable, at law or in equity, any of which are suffered or incurred by said Indemnitees, or assessed, levied or asserted by any person or entity {whether governmental or private) against said Indemnitees, relating to, resulting from, arising out of or based upon, in whole or in part, the following: (i) any act, omission or negligence of CRC or any lessee of CRC; or their respective contractors, licensees, invitees, agents, sublessees, servants or employees, wheresoever on or adjacent to the Property that the same may occur, (ii) any use of the Property, or any accident, injury, death or damage to any person or property occurring in, on or about the Property or any part thereof, or from the conduct of CRC's business or from any activity, work or thing done, permitted. or suffered by CRC or its sublessees, contractors, employees, or invitees, in, on, or about the Property, (iii) CRC's failure to. comply with Governmental Requirements, (iv) the presence, release, use, generation, discharge,. storage, disposal, removal or remediation of any Hazardous Materials on, in, under, or emanating;, from the Property, (v) the violation, or alleged violation, or compliance with the requirements of any Environmental Law, or any other statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials to, from, on, in, under, about or around the .Property, or (vi) any Environmental Cleanup Liability or Environmental Compliance Costs related to the Property. This indemnity shall include, without limitation, any liabilities arising from or out of or relating in any manner to any Environmental Claim or any nuisance, contamination, leak, spill, release or other adverse effect on the environment caused by or resulting from any Hazardous Material, or toxic substances or waste existing on, under, or emanating from the Property. Notwithstanding the foregoing, the indemnities described in (i) and (ii) above shall not apply to the extent of the sole negligence or misconduct of the Indemnitees. CRC, on behalf of itself and its successors, Affiliates, partners, and assigns hereby fully and entirely releases and discharges the Agency (including its elected and appointed officials, employees, representatives, agents, consultants, attorneys, volunteers, successors and assigns), and of each of them alone, of and from any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses, proceedings, lawsuits, orders, judgments, fines, obligations, encumbrances, or liens, of whatever kind or nature, matured or not matured, anticipated or unanticipated, known or unknown, at law or in equity, on account of the presence of any Hazardous Materials (i). in, on, under, or emanating from the Property, or (ii) in connecticsri'.�v�ith, or in any way related to, the Property, or (iii) for or on account of the physical condition of the, Property. This release constitutes an explicit waiver by CRC of each and all of the provisions of California Civil Code Section 1542, which states as follows: "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." CRC hereby declares and represents that it is effecting and executing this release of the Agency after having read all of this release and with full understanding of its meaning and effect and after having received full legal advice as to its rights from an attorney., 2.4 Covenants. The foregoing sub -Sections 2.1, 2.2 and 2.3 are collectively hereinafter referred to as the "Covenants." 2.5 Additional Franchise(s). Subject to compliance with applicable laws related thereto, including, without limitation, the provisions of health and Safety Code Section 33426.7, CRC, or any Affiliate of CRC, shall have the right to Operate additional Franchise(s) on the Property without the prior written approval of the Agency. 3. Covenant Consideration, 3.1 Payment of Consideration. In consideration for CRC's agreement to be bound by the Covenants, Agency agrees to pay to CRC (i) the all cash sum in the amount of the Initial Payment within five (5) business days from the date of Opening for Business (the "Initial Payment Date") plus (ii) an amount equal to fifty percent (50%) of all Sales Tax Revenues in each such year generated during the Sales Tax Revenue Accrual Period, which payments shall be made until the earlier of (a) receipt by CRC of an amount equal to Two Million Dollars ($2,000,000) inclusive of the Initial Payment; or (b) expiration of or earlier termination of the Sales Tax Revenue Accrual Period (payments described in clause (ii) are referred to herein as the "Semi -Annual Payments," and together with the Initial Payment are collectively referred to herein as the "Covenant Consideration"). CRC shall notify the Agency when the Initial Payment is due; provided, however, in no event shall the Initial Payment or the first Semi -Annual Payment be due earlier then five (5) business days following the Agency's receipt of notice from CRC that the Initial Payment Date has occurred. CRC and Agency acknowledge and agree that the definition of Sales Tax Revenues as used herein is used strictly as a measure of the amount of payment due hereunder and as a means of computing the Semi -Annual Payments. Semi -Annual Payments shall be made semi annually, on or before February 1 st and August 1 st of each year during the Sales Tax Revenue Accrual Period, consistent with the procedure described in the definition of "Sales Tax Revenues" above. The Agency, prior to making each such Semi -Annual Payment, shall work with the City to determine the total Sales Tax Revenues actually paid to the City during the prior semi-annual period. Based on the data provided by the SBOE to City, and based upon such determination and the formula described above, the Agency shall determine the amount of the applicable Semi -Annual Payment, 3.2 Cap on Consideration. Notwithstanding anything else herein contained, in no event shall the Semi -Annual Payments paid to CRC pursuant to Section 3.1 exceed the sum of One Million Seven Hundred Thousand Dollars ($1,700,000), nor shall the Covenant Consideration exceed Two Million Dollars ($2,000,000). 3.3 leo Acceleration. It is acknowledged by the parties that any payments by the Agency provided for herein may only be paid in those periods in which CRC is in compliance with the Covenants provided for herein. Therefore, the failure of the Agency to mance any payments as and when provided for in Section 3.1 shall not cause the acceleration of any future payments by the Agency to CRC beyondthe date of CRC's uncured default. 3.4 Initial Payment to Escrow. Within five (5) business days after the later of (a) the execution of this Agreement by the parties, and (b) CRC providing written notice to the Agency that CRC has obtained a leasehold interest in the Property, the Agency shall deposit cash in the amount of the Initial Payment into a joint escrow account for the benefit of Agency and CRC ("Escrow Account") with Escrow Holder, which funds shall remain in the Escrow Account until the earlier to occur of (x) the date the Initial Payment is required to be made to CRC in accordance with Section 3.1 above, at which time such funds shall be disbursed by Escrow Holder to CRC, or (y) the date that this Agreement is terminated as provided herein at which time such funds shall be disbursed by Escrow Holder to Agency. Except for accrued interest (which shall be and remain the sole 7 property of the Agency and shall be disbursed by Escrow Holder to the Agency from time to time as requested by the Agency without the requirement of the joint signature of CRC) and except following termination hereunder, no disbursements or withdrawals may be made from the Escrow Account without the joint signature of an authorized representative of the Agency and an authorized representative of CRC. Agency and CRC shall each cooperate to open the Escrow Account and deliver to Escrow Agent a commercially reasonable agreement and/or instructions that Escrow Agent may reasonably request in order to hold and manage the Initial Payment funds. 4. Defaults and Remedies. Occurrence of any or all of the following shall constitute a default by CRC under this Agreement: 4.1 CRC's failure to fully and completely comply with the Covenants as and when such compliance is required. 4.2 The filing of a petition in bankruptcy by or against CRC or appointment of a receiver or trustee of any property of CRC, or an assignment by CRC for the benefit of creditors, or adjudication that CRC is insolvent by a court, and a failure of CRC to cause such petition, appointment or assignment to be removed or discharged within sixty (60) days. 4.3 The failure by CRC to comply with any other provision of this Agreement. In the event of any default underthe terms of this Agreement, the nondefaulting party shall give written notice to the defaulting party.;' Tide 'de:faulting party shall commence and diligently thereafter pursue the curing of said default within thirty (30) days after receipt of notice of such default; provided, however, if such a cure cannot reasonably be effected within such thirty (30) day period, such failure shall not be a default so long as the defaulting party promptly commences a cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. Failure to cure, as specified above, shall constitute an "Event of Default" hereunder. 4.4 Liquidated Damages. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, IF THERE IS AN EVENT OF DEFAULT BY CRC HEREUNDER AFTER THE DATE THATTHE INITIAL PAYMENT IS RELEASED TO CRC IN ACCORDANCE WITH SECTION 3, THEN AGENCY'S SOLE AND EXCLUSIVE REMEDY FOR SUCH EVENT OF DEFAULT SHALL BE TO TERMINATE THIS AGREEMENT AND RECEIVE FROM CRC AS LIQUIDATED DAMAGES AN AMOUNT EQUAL TO THREE HUNDRED THOUSAND DOLLARS ($300,000) (THE "LIQUIDATED DAMAGES AMOUNT"). THE PARTIES HAVE AGREED THAT AGENCY'S ACTUAL DAMAGES, IN THE EVENT OF SUCH AN EVENT OF DEFAULT BY CRC, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE, AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, TME LIQUIDATED DAMAGES AMOUNT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT AGENCY WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW; EACH _PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS, MADS, �"BOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE PARTIES ACKNOWLEDGE THAT SUCH PAYMENT OF THE DEPOSIT IS NOT INTENDED AS A FORFEI'T'URE OR PENALTY WITHIN "THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONS'T'ITUTE LIQUIDATED DAMAGES TO AGENCY UNDER CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 .AND 1677. Initials: Agency CRC In the Event of Default by CRC, and without seeking judicial relief, the following shall automatically and immediately occur: (i) CRC's right to receive Covenant Consideration during the period that the Franchise is not in compliance with the Covenants shall be suspended and the terrn of the payment period described in Section 3.,1 herein shall not be extended; and (ii) subject to the provisions of Section 15 below, in the event the Franchise is closed for a continuous period of one (1) year, CRC's right to receive payments from Agency pursuant to this Agreement shall be permanently terminated and the terms of this Agreement shall be of no further force or effect, except for the provisions of Sections 2.3, 4, S, 12 and 20 hereof which shall survive termination as set forth herein. 5. Representations and Warranties of CRC. CRC hereby represents and warrants as follows, each of which representations and warranties is made as of the Date of Agreement: 5.1 CRC is a Delaware limited `liability company, duly organized, validly existing and in good standing under the laws of the State of California, with corporate and/or partnership powers adequate for the making and performing of this Agreement and for carrying on the business now conducted or proposed to be conducted by it. CRC has taken all corporate action required to execute, deliver and perform this Agreement and to make all of the provisions of this Agreement the valid and enforceable obligations they purport to be and has caused this Agreement to be executed by a duly authorized partner or officer. Such corporate action is evidenced by an appropriate resolution of the members of CRC which resolution shall be delivered to Agency concurrently with CRC's delivery to Agency of an executed copy of this Agreement. 5.2 The execution and delivery of this Agreement and all related documents and the performance of its obligations hereunder by CRC- do not conflict with any provision of any law or regulation to which CRC is subject, conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of any agreement or instrument to which CRC is a party or by which CRC is bound, or any order or decree applicable to CRC, or result in the creation or imposition of any lien on any of CRC's assets or property which would materially and adversely affect the Agreement; and CRC has obtained all consents, approvals, authorizations or orders of any court or governmental agency or body, if any, required for the execution, delivery, and performance by CRC of its obligations under this Agreement. 5.3 There are no judgments, orders or decrees of any kind of record against CRC which are unpaid or unsatisfied, nor are there any other legal or administrative proceedings pending, threatened or reasonably anticipated which could be filed before any court or administrative agency which has or is likely to have any material adverse effect on (a) the business or assets or the condition, financial or otherwise, of CRC, or (b) the ability of CRC to perform its obligations under this Agreement. 5.4 CRC has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against CRC. No general assignment of CRC's property has been made for the benefit of creditors, and no receiver, master, liquidator, or trustee has been appointed for CRC or any of its property. CRC is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render CRC insolvent. CRC has now and will have throughout the term of this Agreement, sufficient capital or net worth to meet its current obligations, including all obligations under this Agreement. 5.5 CRC is a sophisticated real estate development company and its decision to enter into this Agreement is based upon its own independent investigations, evaluations, and assessments. CRC has not relied in entering into this Agreement upon any oral or written information from Agency or its employees, agents, consultants, advisors, or representatives, other than the express representations and warranties of Agency specifically set forth herein. CRC acknowledges no employee, agent, consultant, advisor or .representative of Agency has been authorized to make, and CRC has not relied upon,. any statements or representations made thereby; other than those specifically contained in this Agreement. 5.6 The information provided to Agency by CRC was, is, and shall remain true and correct and accurate and complete in all rriaterial.respects throughout the term of this Agreement. 6. Representations and Warranties of Agency. Agency represents and warrants as follows, each of which representations and warranties is made as of the Date of Agreement: 6.1 The execution of this Agreement and the performance by Agency of its obligations hereunder have been duly authorized and approved. The term of the Redevelopment flan expires on July 12, 2028. 6.2 The execution and delivery of this Agreement and all related documents and the performance of Agency's obligations hereunder by Agency do not conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of any agreement or instrument to which Agency is a party or by which Agency is bound, or any order or decree applicable to Agency, or result in the creation or imposition of any lien on any of Agency's assets or property which would materially and adversely affect the Agreement; and Agency has obtained all consents, approvals, authorizations or orders of any court or governmental agency or body, if any, required for the execution, delivery, and per by Agency of its obligations under this Agreement. 6.3 There are no judgments, orders or decrees of any kind of record against Agency which are unpaid or unsatisfied, nor are'there any other legal or administrative proceedings pending, threatened or reasonably anticipated- Which could be filed before any court or administrative agency which has or is likely to have any material adverse effect on (a) the business or assets or the condition, financial or otherwise, of Agency, or (b) the ability of Agency to perform its obligations under this Agreement. 6.4 Agency has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against Agency. No general assignment of Agency's property has been made for the benefit of creditors, and no receiver, master, liquidator, or trustee has been appointed for Agency or any of its property. Agency is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Agency insolvent, 10 6.5 The information provided to CRC by Agency was, is, and shall remain true and correct and accurate and complete in.all material respects throughout the term of this Agreement. 7. Disclaimer of Representations and Warranties of Agency, 7.1 There are no representations, agreements, arrangements, or circumstances, oral or written, between the parties hereto relating to the subject matter contained in this Agreement that are not fully expressed herein, and Agency has not made and does not make any representation or warranty concerning any matter or thing affecting or relating to the Chrysler franchise and/or the Property. 7.2 Agency has made no representations or warranties with regard to zoning and subdivision laws, ordinances, resolutions and regulations of governmental authorities having jurisdiction over the Property, and the use and improvement of the Property. 8. Additional Covenants of CRC. The following are referred to herein as "Additional Covenants of CRC." 8.1 Nondiscrimination Covenants. CRC herein covenants by and for itself, and its successors and assigns, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed .in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in: Sections 12926, 12926.1, subdivision (in) and paragraph (1) of subdivision (p) of Section 12955° and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall the CRC or any person claiming under or through CRC, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the :Property. The foregoing covenants shall run with the Property. Notwithstanding the immediately preceding paragraph, with respect to familial status, the immediately preceding paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in the immediately preceding paragraph shall be construed to affect Sections 51.2, 51.3, 51..4, 51.10, 51.1 1, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 1.2955 of the Government Code shall apply to the immediately preceding paragraph. Any deeds, leases or contracts for the sale, lease, sublease or other transfer of any portion of the real property consisting of the Property shall contain the following language: (a) In deeds: The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators,,., and assigns, and all persons claiming under or through them, that there shall be no discrimina"bon' against or segregation of, any person or group of persons on account of any basis listed in subdivisi6h (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 129-26, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. Notwithstanding the immediately preceding paragraph, with respect to familial status, the immediately preceding paragraph shall not be construed to apply to housing for older persons, as defined in Section 129559 of the Government Code. With respect to familial status, nothing in the immediately preceding paragraph shall be construed to .affect Sections 51.2, 51.3, 51 A, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the immediately preceding paragraph. (b) In leases: The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased. Notwithstanding the immediately preceding paragraph, with respect to familial status, the immediately preceding paragraph shall not be construed to apply to housing for older persons, as defined in Section 129559 of the Government Code.: With respect to familial status, nothing in the immediately preceding paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the immediately preceding paragraph. (c) In contracts: There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, I2926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this Agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. The Agency shall be a third -party beneficiary of such provisions in each such deed, lease or contract. 12 8.2 Compliance with Governmental Requirements. Subject to CRC's right to contest same, CRC shall, at all tinges, comply with all applicable laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Orange, the Agency or any other political subdivision in which the Property is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, CRC, or the Property, including all applicable federal, state and local occupation, safety and health laws, rules, regulations and standards, applicable state and labor standards, applicable prevailing wage requirements, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City of San Juan Capistrano and its Municipal Code, and all applicable disabled and handicapped access requirements, including, without the limitation, the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq., Government Code §4450 et seq., and the Unruh Civil Rights Act, Civil Code §51 et seq. ("Governmental Requirements"). Nothing in this Agreement is intended by the parties to in any way require, or be construed to require, CRC to Pay prevailing wages with respect to any work of.construction or improvement within the Property (a "Non -Intended Prevailing Wage Requirement':'). But for the understanding of the parties as reflected in the immediately preceding sentence,-theparties would not have entered into this Agreement based. upon terms and conditions set forth herein. CRC and Agency have made every effort in reaching this Agreement to ensure that its terms and conditions will not result in a Non -Intended Prevailing Wage Requirement. These efforts have been conducted in the absence of any existing judicial interpretation of the recent amendment to the California prevailing wage law. If, despite such efforts, any provision of this Agreement shall be determined by any court of competent jurisdiction to result in a Non - Intended Prevailing Wage Requirement, such determination shall not invalidate or render unenforceable any provisions hereof, provided, however, that the parties hereby agree that, in such event, the parties, each acting in their sole and absolute discretion, shall attempt to reform. this Agreement such that each provision of this Agreement that results in the Non -Intended Prevailing Wage Requirement may be removed from. this Agreement that results in the Non -Intended Prevailing Wage Requirement may be removed from this agreement as though such provisions were never a part of this Agreement, and, in lieu of such provision(s), replacement provisions including, without limitation, the provisions of Section 2, Section 3, and this Section 8.2 , may be included that are legal, valid and enforceable but without resulting in the Non -Intended Prevailing Wage Requirement. 8.3 Participation in Business Improvement District. Subject to commercially reasonable standards and conditions, CRC agrees to participate in, and actively support, a business improvement district or similar type association of automobile dealers the purpose of which is to promote sales of automobiles in San Juan Capistrano, 9. Assignment and Assumption. The terms, covenants, and obligations of CRC pursuant to this Agreement shall be binding upon, CRC's lessees, successors and assigns to its leasehold interest in the Property or any portion thereof. It is understood that the identity of the holder of the leasehold interest in the Property will be different from CRC and that the franchise will be operated by the Operator. Wherever the term CRC is used in this Agreement, such terra shall be deemed to refer to CRC and/or any other holder of a leasehold interest in all or a portion of the Property and/or the Operator and any authorized successor or assign of same, as provided herein. Except as to a transfer described in the last paragraph of this Section 9, notwithstanding any transfer by CRC of its leasehold interest in the Property or any portion thereof or any rights therein or any assignment by CRC of any obligations under this Agreement to an Affiliate or any other person or entity, CRC shall remain fully liable for all obligations and requirements set forth in this Agreement. During the Operating Period, CRC shall include reference to this Agreement in any lease or operating agreement respecting the Property, and each lessee or Operators must, in such lease or 13 operating agreement, acknowledge and agree (i) that its interests, rights and obligations are subject to this Agreement, and (ii) that it must comply, or enable CRC to comply, with all terms and provisions of this Agreement applicable and in farce and effect following the effective date of such lease or operating agreement. The rights of CRC under this Agreement shall not be subject to assignment by attachment, execution or proceedings under any provision of the Bankruptcy Act, and any such assignment or transfer shall be wholly void and of no force and effect unless written consent thereto is first obtained from the Agency. CRC may transfer its leasehold interest in all or any portion of the Property and/or Franchise(s) being operated on the Property, including its rights and obligations under this Agreement, without the approval or consent from the Agency, to any entity approved by Chrysler Group LLC or, if more than. one Franchise is being operated on the Property, to any entity approved by the automobile manufacturer issuing the Franchise that is the subject of CRC's proposed transfer (a "Permitted Assignee"); provided that in any such event, CRC shall remain liable hereunder. If CRC elects to request the Agency's consent to an assignment by CRC of its leasehold interest in the Property and/or a Franchise, including its rights and obligations under this Agreement, the Agency, acting in its sole and absolute discretion, shall have the right to approve CRC's proposed assignee; provided, however, that Agency shall not withhold such consent if the proposed assignee has financial capability and operating experience at least equal to CRC's and the proposed assignee expressly assumes the obligations of CRC hereunder. If the Agency approves CRC's proposed assignee, CRC shall, following the date of suer assignment, be relieved of any and all obligations including, without limitation, the Covenants set forth in Section 2 and the "Additional Covenants of CRC" set forth in Section 8 above, accruing after the date of such assignment. 10. Notices. All notices under this Agreement shall be given in writing by personal delivery, or by certified mail or registered United States Mail, return receipt requested, postage prepaid, or by overnight delivery, or by facsimile and shall. be deemed communicated when received if given by personal delivery or upon receipt or rejection if mailed as provided above or upon the delivery date or attempted delivery date shown on the air bill or facsimile on a business day during business hours in the location where received, and if not then on the next business day, as the case may be. Mailed notices shall be addressed as set forth below, but either party may change its address by giving written notice thereof to the other in accordance with the provisions of this article: To Agency: San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attention: Agency Executive Director With a copy to: Stradling Yocca Carlson & Rauth 560 Newp©rt Center Drive, Suite 1600 Newport Beach, California 92660 . Attention: �Thornas P. Clark, Jr., Esq. To CRC: Chrysler Group Realty Company I.,LC 1000 Chrysler Drive, CIMS: 485-0320 Auburn Hills, Michigan 48326 Attention: Mark E. Nagel 14 With a copy to: Howard and Howard Attorneys PLLC c/o Chrysler Group Realty Company LLC 1.000 Chrysler Drive, CIMS: 485-03-20 Auburn Hills, Michigan 45326 Attention: Sally A. Rutledge, Esq, 11. Miscellaneous. This Agreement. constitutes the entire agreement between the parties concerning the subject matter hereof and suprsedes'all prior agreements and understandings written and oral. This Agreement may not be modified or amended except in a writing signed by all parties hereto. 12. Brokerage Commissions. Agency and CRC shall each indemnify, defend and hold the other party harmless from and against any and all costs, liabilities, losses, damages, claims, causes of action or proceedings which may result from the Indemitor's dealing with any broker, agency or finder, license or otherwise in connection with the transaction covered by this Agreement. 13. Construction. The parties agree that each party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement or any amendments or exhibits to this Agreement. 14. Police Power. Nothing contained in this Agreement shall be deemed to limit, restrict, amend or modify, or to constitute a waiveror release of, any ordinances, notices, orders, rules, regulations or requirements (now or hereafter enacted or adopted and/or as amended from time to time) of the City and Agency, or their departments, commission, agencies and boards and the officers of'the City and Agency, including without limitation, any redevelopment or general plan or any zoning ordinances, or any of their duties, obligations, rights or remedies thereunder or pursuant thereto or the general policy powers, rights privileges and discretion in the furtherance of the public health, welfare and safety of the inhabitants of the City of San Juan Capistrano, provided, however, that neither shall take any action to frustrate or hinder the intent or effect of this Agreement. 15, Force Majeure. Time for performance hereunder shall be extended by any period of delay caused by circumstances beyond the reasonable control of the party claiming the delay despite the party's diligent efforts, other than financial ability, provided the party claiming the delay provides written notice to the other party within a reasonable period following commencement of any such circumstances which circumstances shall include, without limitation, fire/casualty losses; dealer protests; strikes; litigation; unusually severe weather; inability to secure necessary labor, materials, or tools; environmental remediation; including governmental review and processing of environmental remediation; delays of any contractor, subcontractor, or supplier; delay caused by the other party; and acts of God (collectively, "Force Majeure"). 16, Interpretation. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words "person" and "Party" include corporation, partnership, firm, trust, or association where the context so requires. 17. Time of the Essence. Time is of the essence of this Agreement and all parties' obligations under this Agreement. 5 18. Authority to Execute. The person or persons executing this Agreement on behalf of CRC warrant and represent that they have the authority to execute this Agreement on behalf of their corporation, partnership or business entity and warrant and represent that they have the authority to bind CRC to the performance of its obligations hereunder. 19. "Warranty Against Payment of Consideration for Agreement. CRC warrants that it has not paid or given, and will not pay or give, to any third person, any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, engineers and attorneys. 20. Release of Public Officials. No member, official, agent, employee, or attorney of the City or Agency shall be personally liable to CRC, or any successor in interest of CRC, in the event of any default or breach by the Agency or for any amount which may become due to CRC or its successors, or on any obligations under the terms of this Agreement. CRC hereby waives and releases any claim it may have personally against the members, officials, agents, employees, consultants, or attorneys of the City and Agency with respect to any default or breach by them or for any amount which may become due to CRC or its successors, or on any obligations under the terms of this Agreement. CRC makes such release with full knowledge of Civil Code Section 1542, and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable California Civil Code Section 1542 provides as follows: "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." 21. Headings. The headings to the Sections of this Agreement have been inserted for convenience reference only and shall not to any extent have the effect of modifying, amending or changing the expressed terms and provisions of this Agreement. 22, Venue. In the event of any litigation under this Agreement, all such actions shall be instituted in the Superior Court of the County of Orange, State of California, or in an appropriate municipal court in the County of Orange, State of California. 23. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 24. Successors and Assigns. The provisions of this Agreement shall be binding upon, and inure to the benefit of, the Agency and CRC and their successors and assigns as the case or context may require. 25. No Joint Venture. Nothing contained in this Agreement shall be construed to render the Agency in any way or for any purpose a'partner or joint venturer, or in any manner associated in any relationship with CRC, nor shall this Agreement be construed to authorize any party to act as agent for the other. 26. 'Waiver. The waiver by the Agency or CRC of any breach by the other party of any term, covenant, or condition in this Agreement contained shall not be deemed to be a waiver of such term, covenant, or condition or any subsequentbreach of the same or any other term, covenant, or 16' condition herein contained. Anyparty's acceptance of any performance by the other party after the due date of such performance shall not be decreed to be a waiver by any party or any preceding breach by the other party of any term, covenant, or condition of this Agreement,. regardless of such party's knowledge of such preceding breach at the time of acceptance of such performance. 27. Counterparts. This Agreement may be executed and acknowledged in multiple counterparts, each of which shall be deemed an original, but all of which shall constitute one (1) Agreement, binding on the parties hereto. 28. Memorandum of Agreement. A Memorandum of this Agreement in a form mutually agreeable to the parties shall be recorded in the records of the Orange County Recorder's Office after CRC has acquired a leasehold interest in the Property (directly or through an Affiliate). Following the termination of the Operating Period or the earlier termination of this Agreement in accordance with the terms thereof, the parties, shall cooperate in removal of the Memorandum of Agreement from the records of the Orange County Recorder's Office. 29. Facsimile Signatures. Signatures delivered by facsimile shall be as binding as originals upon the parties so signing and delivering.. 30. Business Days. As usedin this Agreement, the term "business days" shall mean days other than Saturdays, Sundays,and legal holidays and closures observed by the City and "days" shall mean calendar days. If the time: for performance of an obligation under this Agreement falls on other than a business day, the time for performance shall be extended to the next business day. 31. Attorneys' Fees. In the event that suit is brought for the enforcement of this Agreement or as of the result of any alleged breach hereof, the prevailing party in such suit shall be entitled to recover their reasonable attorneys' fees from the losing party, and any judgment or decree rendered in such proceeding shall include an award thereof. Attorneys' fees under this Section shall include attorneys' fees on any appeal and, in addition, a party entitled to attorneys' fees shall be entitled to all other reasonable costs and expenses incurred in connection with such action. In addition to the foregoing award of attorneys' fees to the prevailing party, the prevailing party in any lawsuit shall be entitled to its attorneys' fees incurred in any post -judgment proceedings to collect or enforce the judgment. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement.. 32. No Third Party Beneficiary. Except for the indemnities in favor of the City set forth in Section 2.3 above, this Agreement is not intended, nor shall it be construed, to create any third party beneficiary rights and any person who is not a party hereto, unless expressly provided otherwise. 33. Captions. 'The captions of this Agreement are inserted for convenience and are not part of this Agreement. 17 IN WITNESS WHEREOF, the parties hereto have executed this Agreement Regarding Operating Covenant and Restrictive Covenants as of the Date of Agreement. ATTEST: Maria Morris, Agency Secretary APPROVED AS TO FORM: Thomas P. Clark, Jr. Stradling Yocca Carlson & R.auth Agency Special Counsel AGENCY: SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executive Director CRC: CHRYSLER GROUP REALTY COMPANY LLC, a Delaware limited liability company By: 18 Mark E. Nagel Vice President LEGAL DESCRIPTION OF THE PROPERTY ALTA/ACSM LAND TITLE SURVEY of PARCEL I Em THE CITY OF SAN 3UAN C APISTRANO, COUNTY OF ORANCE, STATE OF CALIFORNIA, AS SHOWN ON A PARCEL MAP FILE WBOOK 79, PAGES 26 AND 27 OF PAht.Ft MM'S, IN THE OFFICE OF THE CQUrY NRECORDER OF SAID COUNTY, LYINGWITHIN THE SOUTH HALF OF 5EMi)N j?., TO. NSHIP 9W' . SCUTH, FANrE U WEST OF 7 HE SAN BERNARDINO 8ASe A, MERIDIAN, sTAT= OF CALf"NfA. SIJRVEYORI DESCRLF�T_qq 01 0C KITY -P li,I�'�Lulv ILE" _NG18HOWN m Exhibit A - l. DOCSOC/ I 454142v4/022299-0090 EXHIBIT B SITE MAP Exhibit B-1 DOC SOLI 1454142v4/022299-0090 TABLE OF CONTENTS 1, Definitions. Page 2. Operating Covenant and Restrictive Covenants........................................................................5 3. Covenant Consideration.............................................................................................................7 4. Defaults and Remedies.............................................................................................................. 8 5. Representations and Warranties of CRC...................................................................................9 6. Representations and Warranties of Agency.............................................................................10 7. Disclaimer of Representations and Warranties of Agency......................................................1.1 8. Additional Covenants of CRC.................................................................................................11 9. Assignment and Assumption...................................................................................................13 10. Notices.....................................................................................................................................14 11, Miscellaneous....................................................................................................:.....................15 12. Brokerage Commissions..........................................................................................................15 13, Construction.............................................................................................................................15 14. Police Power......................................................:.....................................................................15 15. Force Majeure..................................... 15 16. interpretation............................................................................................................................15 17. Time of the Essence.................................................................................................................15 18. Authority to Execute .................................. 16 19, Warranty Against Payment of Consideration for Agreement..................................................16 20. Release of Public Officials... ................................. I .............................. .............................. 1.6 21. fleadings............................................................................................................16 22. Venue.......................................................................................................................................16 23. Applicable Law........................................................................................................................16 24. Successors and Assigns ............................ .................................................. .............................16 25. No Joint Venture......................................................................................................................16 26. Waiver......................................................................................................................................16 27. Counterparts.............................................................................................................................17 28. Memorandum of Agreement.....................::...:.........................................................................17 29. Facsimile Signatures................................................................................................................17 30. Business Days .................... ......................................................................................................17 DOCSOC/ 1454142v4/022299-0090 Table of Contents (continued) Pag,e 31. Attorneys' Fees...... ............... .................................................................................................. 17 32. No Third Party Beneficiary......................:..............................................................................17 33. Captions...................................................................................................................................17 AU)VI10ItS iN1 Pa1BLfC/0RIVATE' R k A i. F.4TAIF C)fVkL.01'a;.it-NI MEMORANDUM The purposes of the KMA analysis are: 1. To estimate the value of the Developer's agreement to be bound by a 20 -year operating covenant; 2. To project the net present value (NPV) of the purchase price to be paid by the Agency to acquire the operating covenant; and 3. To project the NPV of the local sales tax revenues anticipated to be generated by the Chrysler dealership. 300SOU`rH GRAND AVENUL, SUiFE, 1480 > LOS ANUl.kti, CALIhC7RN[A90071, 1� E'EEC?NE21;3 622.8095 ir, FAX: 2-136225204 _ 1011029SX:JAR:gbd To: Cindy Russell, Chief Financial Officer 1 City Treasurer {, City of San Juan Capistrano A'f k)]'UMBL6 HoI lh,°C, 1-'C011l)AAI' 1.1F,V11_C'W1kYNT From: James Rabe Wll 1',—,1tiC. 0 A. jI"R RY Itii"�. IR T f Sto i i I Y f,,.. K ftiY Date: November 24, 2010 -. KAH €: RIA RNM, DIRIIM-M KERN 1Z4M% fFi .V,I,'mAou Subject: Orange County Chrysler: Operating Covenant Valuation !t },Fl:E 1. �.ALVli F€:S.Rat L.CtS';'hs''.F'LtiIS I.S.FFIP.F'..1';A PI. {`I F:ia.I3 I; MESA, 3,..tU At your request, Keyser Marston Associates, Inc. (KMA) reviewed the proposed Agreement Regarding Operating Covenant and Restrictive Covenants (Agreement) by 1C1iJ [h' €E�C'iD1F.iDha: and between the San Juan Capistrano Community Redevelopment Agency (Agency) and Chrysler Realty Group, LILC (Developer). The Agreement calls for the Developer to operate a new automobile dealership located at 32881 Camino Capistrano (Property) for at least a 20 -year period. The Property is proposed to be used as a site for a new IIAUI C, MA1.11iA Chrysler Franchise; that will operate under the name Orange Coast Chrysler (Chrysler). The purposes of the KMA analysis are: 1. To estimate the value of the Developer's agreement to be bound by a 20 -year operating covenant; 2. To project the net present value (NPV) of the purchase price to be paid by the Agency to acquire the operating covenant; and 3. To project the NPV of the local sales tax revenues anticipated to be generated by the Chrysler dealership. 300SOU`rH GRAND AVENUL, SUiFE, 1480 > LOS ANUl.kti, CALIhC7RN[A90071, 1� E'EEC?NE21;3 622.8095 ir, FAX: 2-136225204 _ 1011029SX:JAR:gbd To. Cindy Russell, City of San Juan Capistrano November 24, 2010 Subjects Orange County Chrysler: Operating Covenant Valuation Page 2 ANALYSIS Operating Covenants Operating covenants are used by municipal governments and private parties as a mechanism to ensure that important companies will remain open for business for a minimum specified time period. In exchange for the operating covenant in a private transaction, the business typically receives a contribution from the private property owner toward the capital costs incurred for the project. In public transactions, the business typically receives consideration based on the public revenues of the project. In this case, the Agency is proposing to enter into the Agreement with the Developer to achieve the following objectives: To assist in eliminating blight in the redevelopment project area; 2. To enhance local employment; and 3. To expand the Agency's and the City of San Juan Capistrano's (City) revenue base. Proposed Covenant Consideration Payment Package To ensure that the Developer will operate the Chrysler dealership in San Juan Capistrano for at least a 20 -year period, the Agency is proposing to purchase an operating covenant. Under the proposed Agreement, the Agency will purchase the operating covenant in return for the following payments: 1. A $300,000 initial payment; and 2. Semi-annual payments measured by the sales tax revenues received by the City from the Chrysler dealership each year. The payments will be made by the Agency based on the following calculation methodology: a. The Developer will also receive 50% of the local sales tax revenues generated by the Chrysler dealership. b. The semi-annual payments to the Developer are capped at a cumulative total of $2,000,000, inclusive of the initial payment. 1011029,SJC:JAR:ghd 95085,001.030 To: Cindy Russell, City of San ,Juan Capistrano November 24, 2010 Subject: Orange County Chrysler: Operating Covenant Valuation Page 3 During the 20 -year operating covenant, the Developer is required to: Designate the Property as the Point of Sale for sales tax purposes. 2. Maintain the Property and the Automobile Dealership Improvements in a first class condition. 3. Observe and comply with all Governmental Requirements. 4. Participate in, and actively support, a business improvement district of automobile dealers in San Juan Capistrano. Projected Covenant Consideration Payment The Covenant Consideration package includes a $300,000 initial payment, plus annual payments tied to the Ford dealership's taxable sales volumes. The annual payments are projected in Table 1, based on the following assumptions: The Year 1 gross sales are projected at nearly $27.1 million. 2. The gross sales at the newly opened dealership are projected to increase by 21.0% in the second year, 12% in third year and grow more slowly thereafter. 3. Taxable sales are projected to equal approximately 67% of the gross sales. 4. The City will receive 11% of the taxable sales generated by the Chrysler dealership. As can be seen in Table 1, the NPV of the revenues to be received by the Developer is projected at $1,321,900 including the $300,000 initial payment. LOCAL SALES TAX REVENUES PROJECTIONS The Agency payments to the Developer are calculated based on the sales tax revenue received by the City from the Ford dealership. The calculations are presented in Table 1, and the results can be summarized as follows: The Developer will receive an amount equal to 50% of the local taxable safes revenue received each year. The payments are projected to approximately $90,000 in Year 1 and nearly $110,000 in Year 2. Annual payments to the Developer grow more slowly thereafter. 1011029.SJC:JAR:gbd 19095.001.030 To: Cindy Russell, City of San Juan Capistrano November 24, 2010 Subject: Orange County Chrysler: Operating Covenant Valuation Page 4 2. The $2,000,000 payment cap is projected to be reached in Year 12. As shown in Table 1, the NPV of the local taxable sales revenues is projected to total $2,898,300. When this is reduced by the $1,321,900 in NPV payments to the Developer, the NPV of the revenue to be received by the City/Agency is projected at $1,576,400. The net benefit to the City is $254,500 greater than the payments made to the Developer to acquire of the operating covenant. In addition, the CitylAgency can potentially receive additional net revenue if the Chrysler dealership remains open for business after the 20 -year covenant period ends. CONCLUSION The Agreement requires the Agency to purchase the operating covenant with a $300,000 initial payment, plus semi-annual payments calculated based on the local sales tax generated by the Chrysler dealership. KMA projects that these payments have a NPV of $1,321,900. The NPV of the local sales tax revenue to be generated by the Chrysler dealership is projected to be approximately $1,576,400. The net benefit to the City and Agency is approximately $254,500. In addition, significant opportunity exists for additional sales tax revenues if the Chrysler dealership remains in business after the 20 -year operating covenant ends_ Attachments 1011029,SJC: JAR', gbd 19685.631.036 ui In 9 C7 C� C3 c 0 C3 Q a tYJ trs Co Q C 9 b CJ C3 Q CS Q C3 C] Q C. tC) 0 C3) > M r-. 0 xt t-- Co to M Si} �4 r CSS C3 r~ i3S £'S CD to CYi :�3 n tCS r- Pte ' C3- t;") to r" rn cr CSS ( C\i r-- N C.? v to tw Y e-- r-• c^ � r- r- i'Q E'�3 i3 ['7 C� Cl)C+i 'V" ---- CF) ^".Y v tt7 Lo 0 0 M Cf3 'Ct' f- TT,- r 1[} C� C? C? Cfl >A t13 f- CV CU r" rw Q CC3 C*7 0 W 0 QcirnNciicsm6u3x= rr0 � C X cacsr7Qcacacacaooc�oacsca�raQc�a ca � Q 0 L"] 0 a 0 0 Q Q Lo ua U.) C3 Q 0 o O C3 C7 0 -01 Q 0 C5 0 isa M N M t- U) W W r n 0 C.? 0 to tw L 1- 1� CS 10 C? C7� Lo 0 0 M Cf3 'Ct' f- TT,- r 1[} C� C? C? Cfl >A t13 f- CV CU r" rw Q CC3 C*7 0 W 0 QcirnNciicsm6u3x= rr0 � C � w © CSS N co CYi v to "D r cm Lv L. M �`"' �'"' q... "�." Y Y 4..` Y cf w uzcrsr--«3rn 'xr---�--cv ;V qs t�Ef"1�t O m tL c coa(Do Qa00c>caoa0Ck000 C> ca as C3 V r- V Q 8 t— m V- p 2 as �— cap Q r- w co cv Ca o cl r- 't d• -- u7 iso rt• o ti uy en r, Cn v 0 u> MM�.or:.--MNaS NM0MQspLoai� cis �t Ci3 r~ as o s- N N v to m r- t a� C5 d nCi cza .— N N N CV N m m m Cl) m co m V) n Ch cr3 M M to cacsr7Qcacacacaooc�oacsca�raQc�a ca � C� Q 0 a C) C� 0 0 0 Q 0 cx C3 8 CS n to Ca o 0 Ca r c ncac at�Qcsc7r ooc�QQcst�cs g Q Q C] Q C.3 Q C,3 C.] C7 Ci C] C3 C3 Ct Q CF Q Q Cp CwS 00 m v r~ N• a C43 r- '�-= C3 GYS Cp r C]Y C7 r+ m CO CO C'3 r~ 11• g4' '�- t!9 rn CPS C? fw af3 h» M V 0) Ct3 CA #p' CF C£3 Q v Ch N tai (S) C' -t C77 Q C+? t3 CXs l(3 M - +� w00 t --to Ca Y N N CO ' t ' � � r" t-- W (D 0 y Y N N N N N m V) C+3 M Cr} V) m C7 Ce) Cri Cl? V) V' W Cn 0 0 0 C? CS o o Q Q Q C3 Q o Q o t.3 Cn C3 QM QQt�cat�ca� t� Q 8 (0) 0 C3 Q CD CJ iS Q Q 0© C) a m C3 C3 C3 0 C� C�1 0 x 0OD0vr-�avofc-,. W m (1) P- 'T 't -„ Ve fk at ; r I -C! " ria C3 Q C7 Q Q Q Q to tw r: t660 r.mN0ai!N iEMolfoU;imr ct� Nt" Y 00 Lo 0 0 M Cf3 'Ct' f- TT,- r 1[} C� C? C? Cfl >A t13 f- CV CU r" rw Q CC3 C*7 0 W 0 ix3 N N N N cq m ce) m m (Y) N N � ry Cv � m rs en n7 r7 � n� t+� c*S rn r'3 r�3 � � w �— r C� Q 0 a C) C� 0 0 0 Q 0 cx C3 8 CS n to Ca o 0 Ca r c ncac at�Qcsc7r ooc�QQcst�cs g Q Q C] Q C.3 Q C,3 C.] C7 Ci C] C3 C3 Ct Q CF Q Q Cp CwS 00 m v r~ N• a C43 r- '�-= C3 GYS Cp r C]Y C7 r+ m CO CO C'3 r~ 11• g4' '�- t!9 rn CPS C? fw af3 h» M V 0) Ct3 CA #p' CF C£3 Q v Ch N tai (S) C' -t C77 Q C+? t3 CXs l(3 M - +� w00 t --to Ca Y N N CO ' t ' � � r" t-- W (D 0 y Y N N N N N m V) C+3 M Cr} V) m C7 Ce) Cri Cl? V) V' W Cn 0 0 0 C? CS o o Q Q Q C3 Q o Q o t.3 Cn C3 Q 8 (0) 0 C3 Q CD CJ iS Q Q 0© C) a m C3 C3 C3 0 C� C�1 0 C3 Q C7 Q Q Q Q Q 10 h4 Y CY.S 0 Li Lo 0 0 M Cf3 'Ct' f- TT,- r 1[} C� C? C? Cfl >A t13 f- CV CU r" rw Q CC3 C*7 0 W 0 Q S w (fl C7Ej CO CO0 CO LSE T- CV CN V 'q� Cfl C F r V)mmdc.€ui�n*tcsiomNchMtotor,to0 d �r�r�c+��•��ru�u�u7rr�uy�uz�e��n c � w uzcrsr--«3rn 'xr---�--cv m qs t�Ef"1�t tis tss m m w m m s m `m ro aP -- m om m tL F NEWS RELEASE Orange Coast Chrysler Jeep Dodge 2929 Harbor Blvd, Costa Mora, CA 92626 Orange Coast Chrysler Jeep Dodge's Business is Booming in this Downward Economy March 17, 2009 COSTA MESA, Calif., March 17, 2009 —Orange Coast Chrysler Jeep Dodge continues to grow and prosper in a time when marry dealerships are closing their doors. After their successful merger in August of 2008 they have risen to become the #5 volume dealership in the Western US (out of over 300) and also been named one of the top 100 Chrysler/Jeep/Dodge dealers in the entire US (out of over 3,000). This family-owned and operated business is proud to announce new for 2009 they vill be opening OC Motorsports, an off-road and performance parts, service, and sales superstore which will be located at 2524 Harbor blvd in Costa Mesa( one mile from the dealership) - "We are very proud to announce even in this rough economy we are expanding our business, promoting employees and hiring fox new positions," said Jonathan Gray, owner of Orange Coast Chrysler Jeep Dodge. "Our business model is performing well and will continue to do so because we live by our values of treating employees and customers like family and by investing heavily in training, employee retention, and customer loyalty." Orange Coast Chrysler Jeep Dodge understands the needs of consumers so they will continue to offer innovative and transparent rebates, discounts and incentives to help consumers get into the vehicle of their choice. In addition "we have extended the hours of the farts & Service Department to be open on Sundays." "While others are cutting and eliminating new programs we continue to focus on our customers needs and loyalty as the recipe for long term viability-" About Orange Coast Chas ler3eeIDod e Since 1981 Orange Coast Chrysler/Jeep/Dodge has been operating under the same disciplines to never loose their focus, keep their employees happy and offer an easy and enjoyable car buying experience. Orange Coast is the number one volume Chrysler Jeep Dodge dealer in all of Orange County and the proud recipient of the Chrysler Five Star Award for excellence in customer satisfaction and sales volume for 13 straight years. ATTACHMENT 4 'd S ��'O ?€ qb G o� iia ,sroa�a u�E� AdiG E 0 10 Z '0 1 �� NET'S RELEASE Orange Coast Chrysler Jeep Dodge 2929 Harbor Blvd., Costa Mesa, CA 92626 Orange Coast Dodge and Orange Coast .Jeep Chrysler Merger Creates 91 Volume Dealer in Orange County August 15, 2008 COSTA MESA, Calif., August 15, 2008 — Orange Coast Dodge and Orange Coast ,Jeep Chrysler recently merged to become Orange Coast Chrysler Jeep Dodge. The dealership is now the #1 volume Chrysler .seep Dodge dealer in Orange County and top 5 in the Western United States!! This family-owned and operated business has been serving the community since 1981 and believes this merger will increase its revenues to over $60 million annually. "Streamlining the two businesses under one roof offers tremendous benefits including lower operating cost, which means more savings for our customers" said Jonathan Gray, owner of Orange Coast Chrysler Jeep Dodge. "We pride ourselves on being active in the community and will continue to focus on making and keeping our customers happy through providing a fun and enjoyable buying experience." About Orange Coast C sler/Jee /Dod e Since 1981 Orange Coast bodge and Orange Coast Jeep Chrysler have been operating under the same disciplines to never loose their focus, keep their employees happy and offer an easy and enjoyable car 'buying experience. Orange Coast Chrysler ,seep Dodge is the number one volume Chrysler Jeep Dodge dealer in all of Orange County and the proud recipient of the Chrysler Five Star Award annually since it was first introduced is located in Costa Mesa, California. ? d Clti� 'DV BZbbtibL ua�aa�<}src�aua�j�b� ClN'Gl '�0 L& -A A Mgt e, 1 4r o c tJ .w � z = 40 C v � :� tJ 4 '610..0 ouj p V V M L& -A A Mgt e, 1 14 jr 2323 Placentia Ave. Costa Mesa, CA. 92627 949-515-6515 www.estanciafootball ,com August 12, 2010 Dear Jon, 1 would like to take this opportunity to personally thank you for your generosity in supporting the student athletes at Estancia High School. We are extremely proud of the athletic programs at Estancia with a long tradition of excellence both on the field and in the classroom. Our students love and appreciate athletics but recognize academics as the foundation and key to their fixture. E It is through your Financial assistance and dedication to the Estancia students that our programs have succeeded. Our fundraising provides the desperately needed dollars to purchase the essentials necessary to become champions. Again, thank you for your commitment to the Estancia High School. The coaching staff and student athletes will never forget your loyalty and kindness. Sincerely, Chuck terry Football Program CoordinatorY 0 C— F C) X116 aK- J r� re !'S ,s-,�-n Pursuit of Excellence `z d'ON C ui11,aa��sPo�a�u�a0 � C--""Y!Fwt—U—: " West Business Center March 18, 2010 ,ion Gray Orange Coast Chrysler .deep Dodge 2929 Harbor. Blvd Costa Mesa, CA 926263912 Dear Jon. Congratulations on being awarded 2009 Five Star Certification. In this challenging market, the team at Orange Coast Chrysler Jeep Dodge has distinguished themselves by providing the best possible experience for our customers, and earning the highest recognition award from Chrysler Group LLC. We recognize your efforts in attaining Five Star Certification as a team effort, as your entire dealership worked diligently to earn this award. Five Star requirements were designed as a challenge to close the gap between customer needs and your ability to meet them, and you have delivered on that challenge. Chrysler Group and the West Business Center commend you and your entire team for providing an outstanding retail experience for our collective customers, and, for demonstrating a commitment to automotive retail excellence. Thank you for your continued leadership and steadfast focus on delivering total customer satisfaction. Sincerely, Chris Chandler, Director West Business Center [V� 'ON u)" 0[ DO 10.20101 3 Oq',�; '�140rangeCaastF 1 ee' cc 7144445328 (12 4 15 8. `P a t If it i: -G W W I It P C i c , 6 1 � t�Qi � s: � � # � � v � •- � r m � `,a � . � si �i �' � ''v 7.. '� a n cam. - w - � c rs C c a � � '�^ � �'� .� �� v E ° E c c � P o� a,E`z L� �`� n �� C E.c dv'�'E �•- �'a.�`�'`t •GL o E �� Z Ic o'S" P A7C .o c p e+ c w A- a C M �. � .ao cw ry o m �, 0 ro n 4! +- ^ �Y 03'6 �1 7• �. J l] y iy y� " % 5 tg v Y 3 :n E •n TVs 'rc 6 8 .2 ass € E i R E Q TV r yp�b� y gpNy H g i - ��7 L� �i 4 n n ; Ff U .dam ismEa �! ^ z'>1{ ci CA HE z' y R s - 'fide-EGg vo � ESR ills LY1 '�ryr ��q �n�9•Qy�� U i 3 �F � TF "0 L p� am4 h� rU �t WAT wAp 10 22 c �lot" 5£1�ahi � TwOMM, a $ W A c F D MON ZI ;O .io Ri 'yam it 8_ 911 -miss 15 Q PRO.' I fid_ ``� cS'£gi pHw k3a �&S-M, .c��6.wh�' h OHO Seo&0q 1; �5 � ��.�Q � 'i oC &S ��,�� {$�j En Y��g f.oY 321m w yY ❑ Y g ch y c L � � y � aL� L' 2` i ' � � +� L• "� � c E 2L77' � io RRin g�g6 � 5 Ymm � E � � Y -11 f �d £'� cy �' � � 9 �i �a� M .°.� �,r� �+' 1EQ �'g VIA �� F�� u � g�25 $¢ w �� D,��`s� �'E•�'�' �_ �� Y �n1�� g+w s� � �'•yro� �-�`a lA ��• 4s�E ru�Lin a s:y 'P rout�t7UtH• IS n � � � t� �•n �vo �'� �� 3� .� b �5 �i �U an January 2010 CITY F COSTA MESA P.Q. BOX 1200 CALIFORNIA 92028-1200 FROM THE OFFICE OF THE N RE CHIEF Orange Coast Chrysler/ Jeep/ Dodge Attn: Jonathan Gray 2929 Harbor Blvd. Costa Mesa, Ca 92626 Dear Spark of Love Community Partner, The Costa Mesa Fire Department would like to thank you and your staff' for collecting toys for the 200Y Spark of Love Toy Drive. We sincerely appreciate your help this year as the need for toys was great. Your kind and generous support of this programa .helped over 400 non profit organizations. These organizations support thousands of disadvantaged children in Grange County- Many Christmas wishes. came true because your company was there to assist. We hope to continue our collaboration efforts -with your company in the future. Thank you again for your assistance and cooperation. Happy New Year Best :regards, Mike Mor a Costa Mes ire Chief L lV 'ON IaaI]ja0 P9 E 0 0[ .1 C :. ta'TY O]' SAN i�;rQ�t E;hfP1.�'iRA�O , �prr�:n .... ...... .. .......'i I n NOTIFICATION OF MEETING OF POTENTIAL INTEREST SAN JUAN CAPISTRANO REDEVELOPMENT AGENCY The Board of Directors of San Juan Capistrano Community Redevelopment Agency will meet at 6:30 p.m. on Tuesday, January 4, 2011, in the City Council Chamber in City Hall, to consider: "Consideration of an Agreement Regarding Operating Covenant and Restrictive Covenants for Tenanting of the Vacant Dealership located at 32881 Camino Capistrano (Chrysler Group Realty Company LLC, a Delaware limited liability company)" — Item No. D1. If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the Board of Directors through correspondence addressed to the Board and/or by attending the meeting and speaking to the Board during the public meeting. Correspondence related to this item must be received at the City Clerk's office by 5:00 p.m. on Monday, January 3, 2011, to allow time for the Board to consider its content. If you would like to speak at the meeting, please complete a yellow "Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Chairman when the item is considered. You have received this notice at the request of the City staff member Cindy Russell, Chief Financial Officer/Treasurer. You may contact that staff member at (949) 443-6301 with any questions. The agenda, including agenda reports, is available to you on our web site: www.sanjuancapistrano.00. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: citycler ansanivancapistrano.org. Maria Morris, CMC City Clerk cc: Jon Gray, Orange Coast Chrysler; Sally Rutledge, Attorney for Chrysler 32400 ' gee c elant e San .i'uan Capistrano a California 92675 4 03-1171 • Federal Reserve is considering second wave of monetary easing to combat potential deflation from too -low inflation and sluggish recovery. • California's budget, employment, water and transportation problems coupled with an unfriendly business environment continue to hold back economic recovery. • Potential expansion of sales tax base to include services would stabilize the tax base. Sales Period: July 2009 - June 2010 • Flomebuilders confidence in the housing market continues at the lowest level in 18 months amid worries traffic of potential buyers is falling. Expect no change over next six months. • Weakest sectors are construction, government, wholesale trade and manufacturing. • Tight credit and nervous investors perpetuate flat economy. *Expect decent but not robust holiday sales, moderate growth in restaurants, strong growth in service stations and flat growth in business -to -business sector. -Car sales will remain flat during 2010 with a slight increase of 3% in 2011. *According to an LA Times article (9/27), the State is owed $1.48 from businesses who have collected sales and use tax but have not remitted to the SBE. This represents $190M in local taxes or 4% of annual local taxes. ATTACHMENT 5 City of San City of San South Coast Statewide South Coast Statewide Juan Juan Total -1.9% 3.2% 13.4% -7.0% -5.0% 4.2% General Retail -1.1% 0.8% 10.8% -4.5% -3.4% 6.0% Food Products -2.9% -0.1% 9.1% -6.0% -3.1% 63% Transportation 3.5% 12.5% 23.2% -5.9% -1.0% 8.7% Construction -9.6% -1.3% 5.1% -11.4% -10.5% -5.0% Business To Business -16J% 3.3% 16.0% -16.2% -11.2% -0.5% Auto Sales - New 7.8% 16.4% 26.6% -4.8% 0.5% 9.8% Department Stores -1.1% 1.3% 9.1% -0.7% -0.7% 6.9% Restaurants -3.7% 0.1% 9.6% -6.7% -3.5% 5.8% Bldg. Matls-Retail -14.0% -0.9% 4.4% -12.5% -5.4% 1.0% Service Stations 5.8% 13.7% 26.6% 13.1% 0.0% 10.3% Florist/Nursery -1.8% -1.5% 3.2% -5.2% -6.4% -1.7% Apparel Stores -4.0% 3.2% 14.6% -0.6% 0.6% 11.4% Miscellaneous Retail -7.2% -3.6% 8.4% -8.5% -8.0% 3.4% Bldg.Matls-Whsle -1.1% -1.8% 5.9% -9.6% -17.0% -10.8% Leasing -20.6% -2.2% 11.0% -20.1% -8.4% 3.6% Food Markets -1.2% 0.0% 8.1% -3.8% -1.2% 8.1% Auto Parts/Repair 6.6% 1.5% 8.7% 3.3% -4.9% 4.5% Office Equipment -22.0% 9.2% 22.9% -12.5% -5.8% 3.8% Furniture/Appliance 21.4% 7.7% 19.1% -20.8% -6.9% 3.2% ATTACHMENT 5 Sales Period: July 2009 - June 2010 City of San Juan Capistrano's annualized sales tax divided by its population as reported by State Department of Finance Jul '00- ul'01- J�I Jun'01 un `02 J $162 $184 $ ■ General R tail Food - Jul '03 - Jul'0 - Jun'04 Jun' S $197 $ 2 uct ■Transport ion W S- Jul'06- ul'07- Jul'08- Jul '09- 06 Jun '07 Jun '08 Jun '09 Jun '10 1212 $209 $18isiness $150 $138 nstruction usiness To Miscellaneous = Capture; W'nder 100% = 34% 6° % 25%L 3i 24% 24% �9(� 8% 3�4% ff ;8 31% 25% 5 6 20% cA 0 r�40,a o at`�\ a�� \AQ i Qt �� 5 e`'�a©t ay`�� \ay• a. ��c a�4 a�� o .� o �� `��,• �,��. Q�`�� \�e5 2a.0 l e N 10.0% 0.0% -10.0% -20.0 0 0 0 r -I r -i .-i N N N N M M M M T-* d' �t Ln ill u1 Ln f o to W to r- r- r- n w w w m m m to m o o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o o o o o o 0 o o o 0 o o o o o o ,� � I I I 1 1 1 I I I I I I I I I 1 1 1 I I I 1 I I - I I 1 1 a U ` C d U �-. C 'Ci U � C Q. U - C o. U L a a u i S@ U S C O. U S C C2. u L C Q U L C vvi C� cn O vii in O cn D M cnw co as w N a N 3 m w m cC to vl Cl Ln 0 Ln 0 Recession City of San Juan Capistrano Orange. Countywide California Sales Period: July 2009 - June 2010 City of San Juan Capistrano's annualized safes tax divided by its population as reported by State Department of Finance Jul '00 - Jul '01 - Jul '02 - Jul '03 - Jul'04 - Jul '05 - Jul '06 - Jul'07 - Jul'08 - Jul'09 - Jun '01 Jun '02 Jun '03 Jun '04 Jun '05 Jun '06 Jun'07 Jun '08 Jun '09 Jun '10 $162 $184 $197 $197 $202 $212 $209 $185 $150 $138 ■ General Retail Food Products ■ Transportation Ei Construction a Business To Business Miscellaneous 100%= Equilibrium; Over 100%= Capture; lander 100%= Leakage 427% 150% 34% 60% 0 41% 37%L245% 0 34%. 0 31% 25% 52% 63% 25/0 24/0 22% 8�0 17/ 20% _Al ry wy �y +? �� d h y c t c IQ � � t o a e �e y ca el °cy ��.�°ca '�ply ° Sa �`C` �e ,�.\Z``'�c�\� away a��y: o �?° () o °5 yah e�� 4q; ��S y� Annualized 20.03°0 10.0% 0.0% -10.0% -20.0% 0 O o r•+ N N N N m m m m er st +.n un Ln in co Lo to w N ir. n N w w w w m m m m a O M w M C O. u C Q U M C C3. U- C Q. U` C C1 U- C 9. u w v m wra �, ar Mn a w M Z w v no Z m w m v w M w w M V v M 3 w a oy m Ln0��cn0��v402 n0in0cn02 v)02cn02tn02—cn0� Recession City of San Juan Capistrano Orange Countywide California Maria Morris From: KorooRojaa Sent: January 11 2011 4:35 PM To: Maria Morris; Cindy Russell Subject: RE: Chrysler Agreement item from January 4th Hi Maria, I arn working with Bill to file a Notice of Exemption. Thanks, ... ....... - From, Maria Morris Sent: Tuesday, January 11,20114;2BPM To: cindyruoneU(crussmU@eanjuancapistnann.org) Cc: KarisaRoiao Subject. Chrysler Agreement item from January 4th CPA One of the recommendations from the January 4 Ih meeting regarding the Chrysler Agreement was to direct the Agency Secretary to file the Notice of Exemption. I just I Maria Morris From: Cindy Russell Sent: Tuesday, January 11.30l1 5:43 PM To: Maria Morris Co: Kmhea Rojas Subject: RE: Chrysler Agreement item from January 4th Maria, Mr, Rarnsey i5 working on the NOE and wHI file it. We'li send you a copy when ffled. PausseZ/ Chief Financial Treasurer City qfSan Juan Capistrano 3240OPaseo Ade|anto San Juan Capistrano, Ca92675 (849)443-63O1direct line (94Q)488-3874fax _....... ..... ___'__-~_~-_-.^_-_-_____'______.__-__--'--__^ From. Maria Morris Sent. Tuesday, January 11,ZO114:28PM To: Cindy Russell Cc' kadsaRojas Subject: Chrysler Agreement item from January 4th One of the recommendations from the January 4 th meeting regarding the Chrysler Agreement was to direct the Agency Secretary to file the Notice of Exemption. I just w9int to r#Qke sure that this was taken care of.