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Ordinance Number 968ORDINANCE NO. 968 AN ORDINANCE OF THE CITY OF SAN JUAN CAPISTRANO APPROVING AND ADOPTING A DEVELOPMENT AGREEMENT FOR THE SAINT MARGARETS EPISCOPAL SCHOOL MASTER PLAN PROJECT (ST. MARGARET OF SCOTLAND EPISCOPAL SCHOOL) The City Council of the City of San Juan Capistrano hereby ordains as follows: SECTION 1. Recitals &Findings 1. St. Margaret of Scotland Episcopal School has requested approval of a Development Agreement, entitled "Development Agreement (St. Margaret's Episcopal School Expansion Project) by and between the City of San Juan Capistrano and St. Margaret of Scotland Episcopal School'; and, 2. The City's Environmental Administrator reviewed the Initial Study prepared by Ed Almanza & Associates pursuant to Section 15063 and 15064 of the California Environmental Quality Act (CEQA) Guidelines; has issued a Mitigated Negative Declaration pursuant to Section 15070 of those guidelines; has caused a Notice of Negative Declaration to be posted and mailed to affected property owners pursuant to Section 15072 of those guidelines; and has otherwise complied with all applicable provisions of the California Environmental Quality Act (1970); and all mitigation measures have been included herein; and, 3. The Planning Commission conducted duly -noticed public hearings on June 23, 2009, July 14, 2009, December 8, 2009, January 12, 2010, and January 26, 2010 pursuant to Title 9, Land Use Code, Section 9-2.335, Public Hearing Procedures to consider the environmental determination and documentation pursuant to Section 15074 of the California Environmental Quality Act, and to consider public testimony on the proposed project and has considered all relevant public comments; and, 4. The City Council conducted a duly -noticed public hearing on February 16, 2010 pursuant to Title 9, Land Use Code, Section 9-2.335, Public Hearing Procedures to consider the environmental determination and documentation pursuant to Section 15074 of the California Environmental Quality Act, and to consider public testimony on the proposed project, has considered all relevant public comments. SECTION 2. Amendment. Pursuant to Government Code sections 65864 et seq., the City Council does hereby approve and adopt the "Development Agreement (St, Margaret's Episcopal School Expansion Project) by and between the City of San Juan Capistrano and St. Margaret of Scotland Episcopal School', which is attached as Exhibit A, and incorporated herein by reference and "Covenant and Agreement Regarding Mitigation of 1 0968 Financial Impacts and Calculation of Student Enrollment Cap" which is attached as Exhibit B, and incorporated herein by reference. The Mayor is hereby authorized to execute said agreement on behalf of the City of San Juan Capistrano. SECTION 3. Effective Date. This Ordinance shall take effect and be in force thirty (30) days after its passage. SECTION 4. City- Clerk's Certification The City Clerk shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and adoption as required by law; or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five (5) days prior to the date of adoption of this Ordinance; and, within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of the City Clerk. (.- PASSED, APPROVED AND ADOPTEQ this 1q` d6y3of March, 2010. STATE OF CALIFORNIA ) COUNTY OF ORANGE )ss. CITY OF SAN JUAN CAPISTRANO ) LONDRES\USO, MAYOR I, MARIA MORRIS, appointed City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing is a true and correct copy of Ordinance No. 968 which was regularly introduced and placed upon its first reading at the Regular Meeting of the City Council on the 2°d day ofi arch 2010 and that thereafter, said Ordinance was duly adopted and passed at the Regular eeti of the City Council on the 16t day of March 2010 by the following vote, to wit: AYES: ;!;fi�NCIL CIL MEMBERS: NOES�-CIL MEMBERS:ABSENT, MEMBERS: IS, CITY(CLERK Allevato, Hribar, Nielsen, Freese, and Mayor Uso None None 2 0968 STATE OF CALIFORNIA } COUNTY OF ORANGE ) ss AFFIDAVIT OF POSTING CITY OF SAN JUAN CAPISTRANO ) 1, MARIA MORRIS, declare as follows: That I am the duly appointed and qualified City Clerk of the City of San Juan Capistrano; That in compliance with State laws, Government Code section 35933(1) of the State of California, on the 41h day of March 2010, at least 5 days prior to March 16, 2010, the date of adoption of the ordinance, I caused to be posted, in the City Clerk's Office a certified copy of the proposed Ordinance entitled: AN ORDINANCE OF THE CIT APPROVING AND ADOPTING A D' THE SAINT MARGARETS EPIjSC PROJECT (ST. MARGARET OF 91CC STATE OF CALIFORNIA ) COUNTY OF ORANGE ss CITY OF SAN JUAN CAPISTRANO ) SAN JUAN CAPISTRANO PMENT AGREEMENT FOR SCHOOL ,MASTER PLAN ).EPISCOPAL SCHOOL) ;IS, CCLERK istran alifornia AFFIDAVIT OF POSTING I, MARIA MORRIS, declare as follows: That I am the duly appointed and qualified City Cleric of the City of San Juan Capistrano; That in compliance with State laws, Government Code section 36933(1) of the State of California. On the 23`d day of March 2010, 1 caused to be posted, in the City Clerk's office, a certified copy of Ordinance No. 968, adopted by the City Council on March 16, 2010 entitled: AN ORDINANCE OF THE CIT APPROVING AND ADOPTING A DI THE SAINT MARGARETS EPI C PROJECT (ST. MARGARET OF S�O i MP San OF SAN JUAN CAPISTRANO E OPMENT AGREEMENT FOR AA SCHOOL MASTER PLAN ISD EPISCOPAL SCHOOL) FUS, CIT CLERK pistrano, ifornia RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City Clerk City of San Juan Capistrano 32400 Paseo Aielanto San Juan Capistrano, CA 92675 IW:I1:31x.1 (Space Above This Line for Recordets Office Use Only) (Exempt from Recording Fee per Gov. Code §§ 6103 and 27383) DEVELOPMENT AGREEMENT (ST. MARGARET'S EPISCOPAL SCHOOL EXPANSION PROJECT) by and between CITY OF SAN JUAN CAPISTRANO and ST. MARGARET OF SCOTLAND EPISCOPAL SCHOOL 909188.5 DEVELOPMENT AGREEMENT (ST. MARGARET'S EPISCOPAL SCHOOL EXPANSION PROJECT) This DEVELOPMENT AGREEMENT (ST. MARGARET'S EPISCOPAL SCHOOL EXPANSION PROJECT) (the "Agreement") is dated for reference purposes only as of the day of , 2009, and is being entered into by and between the CITY OF SAN JUAN CAPISTRANO, a municipal corporation, organized and existing under the laws of the State of California ("CITY"), and ST. MARGARET OF SCOTLAND EPISCOPAL SCHOOL, a California non-profit public benefit corporation ("SMES"), pursuant to the authority of Sections 65864 through 65869.5 of the California Government Code (the "Development Agreement Legislation") and Article XI, Section 2, of the California Constitution. CITY and SMES are sometimes hereinafter referred to as the "Parties." RECITALS This Agreement is predicated upon the following facts: A. These Recitals refer to and utilize certain capitalized terms which are defined in this Agreement. The Parties intend to refer to those definitions in conjunction with the use thereof in these Recitals. B. The Development Agreement Legislation authorizes CITY to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property in order to, among other things: ensure high quality development in accordance with comprehensive plans, provide certainty in the approval of development projects so as to avoid the waste of resources and the escalation in the cost of housing and other development to the consumer; provide assurance to the applicants for development projects that they may proceed with their projects in accordance with existing policies, rules, and regulations, subject to the applicable conditions of approval, in order to strengthen the public planning process and encourage private participation in comprehensive planning and reduce the private and public economic costs of development; and encourage and provide for the development of public infrastructure and amenities to support the development of new housing and commercial projects. C. SMES and its single member, the Protestant Episcopal Church in the Diocese of Los Angeles ("Diocese"), are the fee owners of that certain real property consisting of 26.89 acres of land located in and adjacent to a block defined by Ortega Highway, La Novia Avenue, Calle Arroyo and Rancho Viejo Road in the in the City of San Juan Capistrano, County of Orange, State of California, that is more particularly described and depicted in Exhibit "A attached hereto and made a part hereof (the "Property"). D. Of the total Property's 26.89 acres, 18.82 acres comprise the development commonly known as "St. Margaret's Episcopal School" depicted and described as the "Campus Parcels" in Exhibit "A", and the remaining approximately 8.07 acres constitute the "Expansion Parcels" depicted and described in. Exhibit "A". The Diocese is the fee owner of the Campus. Parcels and SMES has the exclusive right to use the Campus Parcels pursuant to a Memorandum of Agreement between SMES and the Diocese and is the owner of all of the buildings thereon. -1- 909188.5 SMES is the fee owner of the Expansion Parcels. SMES owns the three Rancho Viejo Road lots of the Expansion Parcels as the sole member of Ortega III LLC. E. SMES applied for, and CITY approved Development of the Campus Parcels and Expansion Parcels pursuant to General Plan Amendment 06-03, Rezone 07-05, Architectural Control 07-22, Saint Margaret's Episcopal School Master Plan, in accordance with the provisions of this Agreement, the Saint Margaret's Episcopal School Master Plan ("Master Plan"), and other applicable regulations of the City of San Juan Capistrano and other governmental agencies having jurisdiction over the Property and the "Project" as defined in Section 1.22 below. P. SMES has applied for, and CITY has approved, this Agreement in order to create a beneficial development project and a physical environment that will conform to and complement the goals of CITY, be sensitive to human needs and values, and facilitate efficient traffic circulation. By its approval and execution of this Agreement CITY has determined that CITY (including, without limitation the existing and future residents of CITY) will receive the following direct and indirect benefits from the implementation of this Agreement: 1. The Project will conform to CITY's goal to manage growth through the use of, among other things, comprehensive planning and design, project -wide continuity of landscaping and architectural design, state-of-the-art development standards, and planning concepts. 2. The traffic and circulation elements of the Development Plan will conform to CITY's General Plan by reducing the impact of the average daily trips generated by the Development of the Project on arterial roads and thoroughfares adjacent to the Expansion Parcels consistent with Transportation and Traffic Mitigation Measures set forth in the Mitigation Monitoring and Reporting Program for the Project. 3. As a religious organization, SMES is exempt from paying property taxes on land dedicated to educational and religious uses. SMES does pay property taxes today on the Expansion Parcels, which in the future, upon conversion to school uses, would be subject to the property tax exemption. Also, the CITY would potentially lose sales tax revenue as a result of the Project's removal of commercial buildings from the Expansion Parcels and development of the Expansion Parcels for non-commercial uses. Notwithstanding the SMES exemption from property taxes by virtue of its status as a religious organization, in exchange for CITY's agreement to enter into and perform its obligations set forth in this Agreement, SMES has agreed that SMES shall make an annual payment to CITY as set forth in Section 4.1.3 below to, among other things, compensate CITY for the loss of property taxes from removing the Expansion Parcels from the tax rolls and loss of potential sales tax revenues, thereby providing substantial benefits to CITY and its residents. 4. The Project will result in the expansion of the existing St. Margaret's Episcopal School which will be of benefit to CITY and its residents by providing additional educational resources to the community. Approximately 250 students (20% of the students currently enrolled at St. Margaret's Episcopal School) are residents of San Juan Capistrano, and 700 students (57% of currently enrolled students) would otherwise attend the Capistrano Valley Unified School District. In exchange for CITY'S agreement to enter into and perform its obligations set forth in this Agreement, SMES has agreed to provide for increased financial aid to expand enrollment of students who are residents of San Juan Capistrano, as set forth in Sections 4.1.4 below. 5. The Project will result in dedication of an easement to CITY for a multi- use trail connector along La Novia Avenue along the frontage of SMES . upon CITY's approval of a final trail alignment as part of CITY's General Plan. 6. The Project will result in a shared parking agreement with CITY providing an additional parking lot to serve CITY's Cook Park and Trails that will provide substantial benefits to CITY and its residents. 7. SMES will allow the Ortega Equestrian Center ("OEC") to continue operating on the Project site until May 31, 2012 or any later date agreed upon in writing by both SMES and OEC, and will work with OEC to accommodate relocation of the facilities in an orderly manner by May 31, 2012, or any later date agreed upon in writing by both SMES and OEC. G. The following actions have been taken with respect to this Agreement and the Project: I. On or about , 2009, pursuant to the applicable provisions of the California Environmental Quality Act, Public Resources Code Section 21000 et seq., and the regulations promulgated by the Secretary of Resources pursuant thereto (Title 14 of the California Code of Regulations, Section 15000 et seq.) (collectively, "CEQA"), the City Council. of CITY found and determined that all of the significant environmental impacts of the Project, including this Agreement, were adequately mitigated in Mitigated Negative Declaration No. ; 2. On or about , 2009, the City Council of CITY approved the Project; 3. On or about , 2009, following a duly noticed and conducted public hearing, the Planning Commission of CITY recommended to the City Council that it approve this Agreement; 4. On or about , 2009, after a duly noticed and conducted public hearing, the City Council of CITY determined that the provisions of this Agreement are consistent with the General Plan of CITY; and 5. On or about , 2009, after a duly noticed and conducted public hearing, the City Council of CITY introduced Ordinance No. approving and authorizing the execution of this Agreement and on , 2009, the City Council of CITY adopted said Ordinance (hereinafter the "Authorizing Ordinance"), a copy of which Authorizing Ordinance is on file in the City Clerk's office at City Hall. -3- H. In consideration of the substantial public improvements and benefits to be provided by SMES and the Project, and in order to strengthen the public planning process and provide significant educational and economic benefits to the City of San Juan community, by this Agreement CITY intends to provide to SMES the assurance that it can proceed with Development of the Project for the Term of this Agreement pursuant to the terms and conditions of this Agreement and in accordance with the CITY's General Plan, ordinances, policies, rules, and regulations existing as of the Effective Date. In reliance on CITY's covenants in this Agreement concerning Development of the Property, SMES has and will in the future incur substantial costs in site preparation and the construction and installation of major infrastructure and facilities in order to make the Master Plan feasible. 1. Pursuant to Section 65867.5 of the Development Agreement Legislation, the City Council has found and determined that: (i) this Agreement and the Development Plan for the Project implement the goals and policies of CITY's General Plan, provide balanced and diversified land uses and impose appropriate standards and requirements with respect to land development and usage in order to maintain the overall quality of life and the environment within the City of San Juan Capistrano, (ii) this Agreement is in the best interests of and not detrimental to the public health, safety, and general welfare of CITY and its residents; (iii) adopting this Agreement is consistent with CITY's General Plana and constitutes a present exercise of CITY's police power; and (iv) this Agreement is being entered into pursuant to and in compliance with the requirements of Section 65867 of the Development Agreement Legislation. J. CITY and SMES agree that it may be beneficial to enter into additional agreements and operating memoranda, or to modify this Agreement with respect to the implementation of the separate components of the Development Plan when more information concerning the details of each component is available, and that this Agreement should expressly allow for such contemplated additional agreements, operating memoranda, and modifications to this Agreement. AGREEMENT NOW, THEREFORE, pursuant to the authority contained in the Development Agreement Legislation, as it applies to CITY, pursuant to Article XI, Section 2 of the California Constitution, and in consideration of the foregoing recitals of fact, all of which are expressly incorporated into this Agreement, the mutual covenants set forth in this Agreement, and for the further consideration described in this Agreement, the Parties agree as follows: 1. Definitions. The following words and phrases are used as defined terms throughout this Agreement and each defined term shall have the meaning set forth below: 1.1 Authorizing Ordinance. "Authorizing Ordinance" means Ordinance No. approving this Agreement. 1.2 Campus Parcels. "Campus Parcels" has the meaning ascribed in Recital D of this Agreement. -4- 1.3 CEQA. "CEQA" has the meaning ascribed to that term in Recital F.1 of this Agreement. 1.4 CITY. "CITY" means the City of San Juan Capistrano, a California municipal corporation, duly organized and existing under the Constitution and laws of the State of California, and all of its officials, employees, agencies, and departments. 1.5 City Council. "City Council" means the duly elected and constituted city council of CITY. 1.6 Default. "Default" has the. meaning ascribed in Section 9.1 or 9.2 of this Agreement, as applicable. 1.7 Develop or Development or Developing. "Develop" or "Development" or "Developing" means the improvement and use of the Property for purposes consistent with the Project and this Agreement, including, without limitation: subdividing, grading, the construction of infrastructure and public facilities related to the St. Margaret's Episcopal School Master Plan, the construction of structures and buildings, and the installation of landscaping, all in accordance with the provisions of this Agreement, but does not include the maintenance, repair, reconstruction, or redevelopment of any building, structure, improvement, or facility after the initial construction and completion thereof. 1.8 Develoner. Developer means St. Margaret's of Scotland Episcopal School, all successors in interest, in whole or part, to the right, title, and 'interest of any of such entity in and to this Agreement with respect to all or any portion of the Property. 1.9 Development Agreement Legislation. "Development Agreement Legislation" means Sections 65864 through 65869.5 of the California Government Code as it exists on the Effective Date. 1.10 Development Exactions. "Development Exactions" means any requirement of CITY for the dedication of land (including without limitation through the encumbrance of land with an easement or use restriction in favor of a public agency, the public, or a private non-profit entity), the construction or improvement of public improvements or facilities (including without limitation improvements or facilities located on land that is encumbered with an easement or use restriction in favor of a public agency, the public, or a private non-profit entity), or the formation of any Financing District and/or payment of any special taxes, assessments, or fees, in order to provide any such public improvements or facilities in conjunction with Development or to lessen, offset, mitigate, or compensate for the impacts of development on the environment or other public interests consistent with the Project and this Agreement. 1.11 Development Plan. "Development Plan" means the plan for Developing the Project on the Property in accordance with this Agreement, the Development Plan Approval(s), and the Future Approvals. As of the Effective Date, the Development Plan consists of the Master Plan, provisions of CITY's General Plan (as amended through the General Plan Amendment referred to in Recital E) applicable to the Property, the narrative description of the Project set forth in Exhibit `B" to this Agreement, the Development Plan Approvals set forth in Exhihit "C" to this Agreement, and the express provisions set forth in this Agreement that define -5- or describe the Project. The Future Development Approvals automatically shall become apart of the Development Plan and included within the scope of SMES's vested rights provided for in this Agreement without the need for any amendment of this Agreement when the same are issued or approved by CITY and become effective. Each of the documents memorializing the Development Plan is (or will be) maintained in the official records of CITY and shall be utilized whenever required to interpret or apply this Agreement. 1.12 Development Plan Approval(s). "Development Plan Approval(s)" means the approvals of the City Council described in Exhibit "C" hereto insofar as the same relate to the Property and the Development Plan, including those amendments to this Agreement made in accordance with Section 3.5 hereof, those amendments to the Development Plan Approval(s) made in accordance with Section. 3.6 hereof, and those Future Development Approvals made in accordance with Section 3.7 hereof. 1.13 Development Transferee. "Development Transferee" means a person or entity that expressly assumes obligations under this Agreement pursuant to Section 2.5 hereof. 1.14 Effective Date. "Effective Date" means the date the Authorizing Ordinance becomes effective. 1.15 Expansion Parcels. "Expansion Parcels" has the meaning ascribed in Recital D of this Agreement. 1.16 Future Development Approvals. "Future Development Approvals" means those entitlements and approvals that are: (a) made in accordance with Section 3.7 hereof; and (b) requested by SMES in order to authorize the Development to occur upon the Property in a manner consistent with the Development Plan Approval(s). By way of enumeration, and not limitation of the foregoing, the Future Development Approvals include such development permits, development plan reviews, use permits, variances, grading permits, building permits, and occupancy permits that are required as a condition to SMES`s right to Develop pursuant to the Development Approvals for all or any portion of the Project. 1.17 On -Site Improvements. "On -Site Improvements" means physical infrastructure improvements or facilities that are or will be located on the Property consistent with the Development Plan Approvals. 1.18 [RESERVED] 1.19 Party or -Parties. "Party" means either CITY or SMES, as the context dictates, and "Parties" means CITY and SMES. 1.20 Property. "Property" means the Property referred to in Recital C and more particularly described in Exhibit "A" to this Agreement. 1.21 Planning Commission. "Planning Commission" means the duly appointed and constituted planning commission of CITY. 0 1.22 Pr, erect. "Project" means the Development and approvals summarized in Recital E, the planning elements of which are more specifically described in Exhibit "B" hereto. 1.23 Property. "Property" means the Property referred to in Recital C and more particularly described in Exhibit "A" to this Agreement. 1.24 St. Mar�aret'-s Episcopal School Master Plan. "St. Margaret's Episcopal School Master Plan" means the Master Plan approved by CITY Council Resolution No. 1.25 Term. "Term" means the period of time that this Agreement remains in effect with respect to the Property or any portion thereof, as provided in Section 2.3. 2. General Provisions. 2.1 Binding Covenants_ The provisions of this Agreement to the extent permitted by law shall constitute covenants which shall run with the Property for the benefit thereof, and the benefits and burdens of this Agreement shall bind and inure to the benefit of the Parties and all successors in interest to the Parties hereto. 2.2 Interest of SMES. As of the date this Agreement is being executed by the Parties, SMES represents that SMES and its single member, the Protestant Episcopal Church in the Diocese of Los Angeles ("Diocese"), are the fee owners of that certain real property consisting of 26.89 acres of land located in and adjacent to a block defined by Ortega Highway, La Novia Avenue, Calle Arroyo and Rancho Viejo Road in the in the City of San Juan Capistrano, County of Orange, State of California, that is more particularly described and depicted in Exhibit "A" attached hereto and made a part hereof (the "Property"). Of the total Property's 26.89 acres, 18.82 acres comprise the development commonly known as "St. Margaret's Episcopal School" depicted and described as the "Campus Parcels" in Exhibit "A ", and the remaining approximately 8.07 acres constitute the "Expansion Parcels" depicted and described in Exhibit "A". The Diocese is the fee owner of the Campus Parcels and SMES has the exclusive right to use the Campus Parcels pursuant to a Memorandum of Agreement between SMES and the Diocese and is the owner of all of the buildings thereon. SMES is the fee owner of the Expansion Parcels. SMES owns the three Rancho Viejo Road lots of the Expansion Parcels as the sole member of Ortega III LLC. 2.3 Term. Subject to the provisions of Section 10.4 of this Agreement, the initial term (hereinafter called "Term") of this Agreement shall commence on the Effective Date and shall terminate at the end of the day immediately preceding the twentieth (20th) anniversary of the Effective Date, subject to the termination provisions set forth herein; provided, however, that so long as SMES is not in Default of this Agreement and the Agreement has not been otherwise terminated, SMES may, without the prior written consent of CITY, extend the Term for one (1) additional period of two (2) years; and provided further that with respect to such 2 - year extension option, SMES shall give CITY written notice of its intent to extend the Term not more than one hundred eighty (18 0) days and not less than sixty (60) days before the end of the initial Term. Pursuant to California Government code sections 65863.9 and 66452.6(x), the expiration date of all Development Plan Approval(s) shall be extended through the Term of this -7- Agreement, and any extension pursuant to, this Section 2.3. Notwithstanding any other provision of this Agreement, the provisions of Sections 4.1.3 and 4.1.4 shall survive termination of this Agreement and shall remain in effect coterminous with Conditional Use Permit 02-14. 2.4 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events: (i) If termination occurs pursuant to any specific provision of this Agreement; or (ii) As to provisions of this Agreement governing On -Site Improvements on any separate legal lot(s) or parcel(s) within the Property, upon the completion of On -Site Improvements on and with respect to said lot(s) or parcels) pursuant to the terms of this Agreement and CITY's issuance of all required occupancy permits or final inspections, as applicable, and acceptance of all dedications and improvements required to complete such On -Site Improvements; or (iii) Entry after all appeals have been exhausted of a final judgment or issuance of a final order directed to CITY invalidating this Agreement. The termination of this Agreement in its entirety or with respect to a particular lot(s) or parcel(s) shall not affect any right or duty of SMES arising from any provisions of this Agreement that remain effective or from a source other than this Agreement. In the event this Agreement terminates in its entirety or with respect to a particular lot(s) or parcel(s), and notwithstanding any other provision set forth herein, upon request by SMES, or any other successor or assignee of either of them, CITY shall cooperate, at no cost to CITY, in executing in recordable form a document prepared by the requesting party that confirms the termination of this Agreement with respect to the Property or applicable portion thereof. 2.5 Transfers and Assignments. 2.5.1 SMES and/or the Protestant Episcopal Church in the Diocese of Los Angeles ("Owners") shall not assign all or any part of this Agreement without the prior written approval of the City. Such written approval by the City shall not be unreasonably withheld, provided that: (a) if Owners' proposed assignee is an. entity, such entity shall be legally formed and qualified to conduct business in the State of California; (b) Owners shall have delivered evidence to City that Owners' proposed assignee has the ability to comply with the Agreement; (c) Owners and its/their assignee execute an assignment and assumption agreement pursuant to which the assignee expressly assumes all of Owners' obligations under the Agreement; and (d) City shall bear no expenses in connection with such assignment. Notwithstanding any other provision of this Agreement, Owners need not obtain the prior written approval of City for the assignment of this Agreement to a limited liability company, limited partnership or corporation wholly-owned by, or under common control with, Owners. In 3. Development Provisions. 3.1 Vesting. 3.1.1 Project. CITY covenants SMES has and shall have the right to Develop the Project on the Property consistent with the Development Plan and the Development Plan Approval(s), including, without limitation, the Future Development Approvals after the same have been issued or approved by CITY and become effective ("vested right"). 3.1.2 Limits on Development. The California Supreme Court held in Pardee Construction Company v. City of Camarillo, 37 Cal.3d 465 (1984), that the failure of the parties to address certain limits on a city's ability to condition, restrict, or regulate a development allowed a later adopted initiative to restrict the development. This Agreement is intended to cure that deficiency by expressly addressing the timing for the Development, the vested rights afforded by this Agreement, and the scope of CITY's reserved authority described in Section 3.2 hereof. Except as expressly set forth in the Development Plan and Development Plan Approval(s), regardless of any future enactment, whether by initiative or otherwise, SMES shall have the vested right to Develop the various components of the Project in such order, at such rate, in one phase or in multiple phases, and at such times as SMES deems appropriate within the exercise of its subjective business judgment. Specifically, CITY agrees that SMES shall be entitled to apply for and receive the Future Development Approvals and to Develop and use the Property at any time, provided that such application is made and such Development occurs in accordance with this Agreement, and the other Development Plan Approval(s). No future amendment of any CITY law and no future adoption of any CITY law or other action that purports to limit the scope, rate, or timing of Development on the Property or to alter the sequencing of the Development in a manner inconsistent with the Development Plan or the Development Plan Approval(s) (including without limitation the Future Development Approvals when issued by CITY), whether the same are adopted or imposed by the City Council or through the initiative or referendum process, shall apply to the Property. Notwithstanding the foregoing, nothing in this Section 3.1 shall limit or restrict CITY's reserved authority as described in Section 3.2. 3.1.3 Entitlements, Permits, and Approvals ---- Cooperation. 3.1.3.1 Processing. CITY agrees that it shall accept and expeditiously process, pursuant to CITY's regular procedures, complete applications for the Future Development Approvals and, if applicable, SMES's complete applications for amendments to this Agreement, to the Development Plan Approval(s), and to any of the Future Development Approvals (after the same have been initially approved). 3.1.3.2 Other Permits. CITY further agrees to reasonably cooperate with SMES, at no cost to CITY, in securing any County, State, and Federal permits or authorizations which may be required in connection with Development of the Property that are consistent with the Development Plan and Development Plan Approval(s); provided, that nothing in this Section 3.1.3.2 shall be deemed to require CITY's assumption of any obligations under any said permits or authorizations. 0 3.1.3.3 Acquisition of Off -Site Property_. CITY shall not postpone or refuse approval of any Future Development Approval because SMES or a Development Transferee has .failed to acquire off-site property required for the construction or installation of offsite improvements. To the extent CITY, SMES, or a Development Transferee does not have sufficient title or interest to permit any of such offsite improvements that are such entity's responsibility to be constructed or installed at the time the application for a Future Development Approval is processed or approved by CITY, SMES or the Development Transferee shall mare a good faith effort to acquire the required property. If SMES or the Development Transferee is unable to acquire the required property, CITY shall consider in good faith the acquisition of the required property. If CITY is unable to acquire the required property by negotiation or condemnation within the time frame provided for in Government Code Section 66462.5, CITY shall continue to issue the Future Development Approval(s) for the Property despite the fact that the offsite improvement has not been completed. Notwithstanding the foregoing, CITY's obligation to continue to issue the Future Development Approvals as provided for in this Section is contingent upon: (i) SMES or the Development Transferee submitting the improvement plans required for the improvement to CITY; and (ii) consistent with Government Code Section 66462.5, SMES or the Development Transferee entering into a mutually acceptable agreement with CITY that requires SMES or the Development Transferee to pay or reimburse or secure the future payment or reimbursement of CITY for SMES's fair share of the costs incurred in acquiring the land and constructing the applicable offsite improvement(s) at such time as CITY acquires the required land. 3.2 Reserved Authority. 3.2.1 Reservation of Authority With Respect to Future Develo ment Approvals, Future Changes in Development Exactions. Notwithstanding any other provision set forth in this Agreement to the contrary, CITY reserves the right after the Effective Date of this Agreement to change its development standards applicable to the Property and the Project and to exercise the same degree of discretion and control in its consideration of Future Development Approvals that it would have in the absence of this Agreement to impose conditions under CEQA and other applicable laws and regulations that apply to all similar development throughout the CITY in order to mitigate the Project's impact on the environment, subject to the following limitations: (i) No such future changes in CITY's development standards or mitigation measures shall be inconsistent with the Development Plan, the Project Development Approvals, or any of the provisions set forth in Sections 3.1 or 4.1- 4.2 of this Agreement, nor shall any such future changes materially jeopardize or impair the rights of SMES thereunder; (ii) No change in CITY's development standards or mitigation measures adopted or imposed after the Effective Date with respect to the affected portion of the Property shall apply except to the extent the -same shall be applicable to similarly situated properties or projects on a citywide or areawide basis; and -10- (iii) . CITY shall not require the Project or the Property to participate in regional programs (i.e., programs that are not initiated by CITY and that include properties located in whole or in part outside the City of San Juan Capistrano) nor shall CITY require the Project or the Property to pay or contribute to regional Development Exactions to the extent that such programs or Development Exactions are not in effect as of the Effective Date with respect to the affected portion of the Property, including without limitation any such programs or Development Exactions initiated by the County of Orange. 3.2.2 Uniform Codes. This Agreement shall not prevent CITY from applying to the Project new uniform construction standards adopted by the State of California as State Codes, such as the Uniform Building Code, National Electrical Code, Uniform Mechanical Code; and Uniform Fire Code, provided those same standards are applied to all other development within the City of San Juan Capistrano. 3.2.3 State and Federal Laws and Regulations. SMES shall comply with all applicable state and federal laws and regulations, provided that nothing in this Agreement shall be deemed to limit or restrict the right of SMES to contest or challenge the validity of any such laws or regulations or their applicability to the Property or the Project. In the event that either CITY or SMES determines that a state or federal law or regulation prevents the full implementation of the Development Plan and/or any of the Development Plan Approval(s), that Party shall provide the other Party with written notice of the state or federal law or regulation, a copy of the law or regulation, and a written statement of the conflicts between such state or federal law or regulation and this Agreement. Promptly thereafter CITY and SMES shall meet and confer in good faith in a reasonable attempt to determine whether a modification or suspension of this Agreement is required, provided that each Party reserves its discretion with respect thereto. CITY agrees to cooperate with SMES in resolving the conflict in a manner which minimizes any adverse fiscal or other impact of the conflict upon. SMES, provided only that in no event does CITY agree that in such event it will materially increase its financial obligations set forth in this Agreement or otherwise materially increase its obligations. CITY also agrees to process in a prompt manner SMES's proposed changes to the Development Plan and/or Development Plan Approval(s) as may be necessary to comply with such federal or state law or regulation; provided, however, that the approval of such changes by CITY shall be subject to the discretion of CITY, consistent with this Agreement. 3.2.4 Suspension of Development in Order to Protect Health and Safet . Nothing in this Agreement shall be construed to be in derogation of CITY's police power to suspend the right of SMES to develop all or any portion of the Project in order to protect the public health and safety (e.g., in the event of the unavailability of adequate water, wastewater treatment, or storm drainage facilities). In the event that CITY determines that the public health or safety require a suspension of SMES's right to develop all or any portion of the Project, the scope of the suspension shall be limited to the extent determined by CITY to be reasonably necessary to protect the public health or safety, the term of the suspension shall be limited to the period of time during which the public health or safety concern continues, and CITY shall exercise reasonable good faith efforts to minimize the period of such suspension to the extent that the cause thereof is within CITY's control. As soon as is reasonably practicable after the commencement of an event that results in a suspension of the rights of SMES to develop -11- hereunder due to public health or safety concerns, CITY shall provide SMES with written notice of the existence of such event, a detailed explanation of CITY `s proposed anion, and a written statement of any conflicts with the provisions of this Agreement that require a suspension of any of the terms hereof. Promptly thereafter CITY and SMES shall meet and confer in good faith in a reasonable attempt to determine whether a modification or suspension of this Agreement in whole or in part, is necessary. In such negotiations, CITY and SMES agree to preserve the terms of this Agreement and the rights of SMES as derived from this Agreement to the maximum feasible extent while resolving the conflict. CITY agrees to cooperate with SMES in a good faith reasonable effort to resolve any such conflict in a manner which minimizes any adverse financial or other impact of the conflict upon SMES without materially increasing the obligations of CITY under this Agreement. CITY also agrees in such event to process in an expedited manner SMES's proposed changes to the Development Plan and any previously issued Development Plan Approval(s) as may be necessary to appropriately respond to the public health and safety concern with respect to the portion of the Property owned by SMES; provided, however, that the approval of any such changes by CITY shall be subject to the discretion of CITY, consistent with this Agreement, and no such change shall apply to any other portion of the Property without the prior written consent of the owner(s) thereof. 3.3 Further Assurances to SMES Regarding Exercise of Reserved Authority. The Parties further acknowledge that the public benefits to be provided by SMES to CITY pursuant to this Agreement are in consideration for and reliance upon assurances that the Property may be developed and used in accordance with the Development Plan and the Development Plan Approval(s). Accordingly, while recognizing that the Development of the Property may be affected by the exercise of the authority and rights reserved and excepted as provided in Sections 3.1 ("Vesting") and 3.2 ("Reserved Authority") SMES is concerned that normally the judiciary extends to local agencies significant deference in the adoption of rules, regulations, and policies and that in the absence of an express provision set forth in this Agreement such judicial deference might be construed to permit CITY, in violation of the limitations on its reserved authority, to attempt to apply rules, regulations, and policies that are inconsistent with the Development Plan and the Development Plan Approval(s). Accordingly, SMES desires assurances that CITY shall not, and CITY agrees that it shall not, further restrict or limit the Development of the Property in violation of this Agreement except in strict accordance with the reserved authority described in Section 3.2 hereof, which exercising of CITY's reserved authority shall not be considered to be a violation of this Agreement. In this regard, from and after the date that CITY approves the St. Margaret Episcopal School Master Plan for the Project, if SMES judicially (including by way of a reference proceeding) challenges CITY's purported exercise of its reserved authority as being in violation. of this Agreement, SMES shall bear the burden of alleging that such purported exercise by CITY of its Reserved Authority is inconsistent with the Development Plan or the Development Plan Approval(s) and CITY thereafter shall bear the burden of proof in establishing by a preponderance of the evidence that such exercise of its Reserved Authority is in accordance with and not a violation of this Agreement. 3A Vested Right. By entering into this Agreement and relying thereupon, SMES is obtaining certain vested rights to proceed with the Development anticipated by the Development Plan and the Development Approvals and in accordance with the terms and conditions of this Agreement (as the same may be amended and supplemented from time to -12- time as expressly set forth herein). By entering into this Agreement and relying thereupon, CITY is securing certain public benefits which enhance the public health, safety, and welfare. CITY therefore agrees to the following: 3.4.1 No Conflicting Enactments. Except as provided in Section 3.2 of this Agreement, after the Effective Date neither the City Council nor any other agency of CITY shall enact a rule, regulation, ordinance, or other measure (collectively, "law") applicable to the Property which is inconsistent or in conflict with this Agreement. Not by way of limitation of the foregoing, any law, whether by specific reference to this Agreement or otherwise, shall be considered to be inconsistent. and in conflict with this Agreement if it has any of the following effects: (i) It limits or reduces the enrollment, density or intensity of the Project as provided for in the Development Plan or the Development Plan Approval(s); (ii) It applies to the Property, but is not uniformly applied by CITY to all substantially similar development within CITY; or (iii) It imposes Development Exactions on the Property other than those in effect on the Effective Date or as otherwise expressly permitted by Section 3.2.1 of this Agreement. 3.4.2 Consistent Enactments. By way of enumeration and not limitation, the following types of laws shall be considered consistent and not in conflict with this Agreement: (i) Laws that provide for the relocation of structures within the Property pursuant to an application from SMES; (ii) Laws that provide for changes in the phasing of the Development pursuant to an application from SMES; and. (iii) Any law that is expressly authorized by this Agreement. 3.4.3 Initiative Measures. In addition to and not in limitation of the foregoing, it is the intent of SMES and CITY that no moratorium or either limitation (whether relating to the Development of all or any part of the Property and whether enacted by initiative or otherwise) affecting site development permits, precise plans, site development plans, building permits, occupancy certificates, or other entitlements to use approved, issued, or granted within. CITY, or portions of CITY, shall apply to the Property to the extent such moratorium or other limitation would restrict SMES's right to Develop the various elements of the Project on the Property in such order and at such rate as SMES deems appropriate. 3.5 Amendment of Development Agreement. 3.5.1 Initiation of Amendment. Any Party may propose an amendment to this Agreement, and all Parties agree that it may be beneficial to enter into additional written -13- agreements or modifications of this Agreement in connection with the Development of the separate components of the Development Plan. Notwithstanding any provision of this Agreement to the contrary, no amendment to the Development Plan or to any conditions of approval contained therein shall require an amendment of this Agreement. 3.5.2 Procedure. Except as set forth in Section 3.5.4 below, the procedure for proposing and adopting an amendment to this Agreement shall be the same as the procedure required for entering into this Agreement in the first instance. 3.5.3 Consent. Except as expressly provided in this Agreement, any amendment to this Agreement shall require the written consent of all affected Parties. An amendment to this Agreement shall not be deemed to affect a portion of the Property if it does not alter,. jeopardize, or impair the rights and does not increase the obligations of SMES that owns said portion of the Property. No amendment to all or any provision of this Agreement shall be effective unless set forth in writing and signed by duly authorized representatives of each of the affected Parties. —14— MR-11WTV TIM A _ v i W v i V Y A w 3.5.5 Operating_ Memoranda. The Parties acknowledge that refinements and further development of the Development Plan may demonstrate that changes are appropriate with respect to the details and performance of the Parties under this Agreement. The Parties desire to retain a certain degree of flexibility with respect to the details of the Development Plan and with respect to those items covered in general terms under this Agreement. If and when the Parties mutually find that changes, adjustments, or clarifications are appropriate to further the intended purposes of this Agreement, they may, unless otherwise required by law, effectuate such changes, adjustments, or clarifications without amendment to this Agreement through operating memoranda mutually approved by the Parties, which, after execution, shall be attached hereto as addenda and become a part hereof and which may be further changed and amended from time to time. To the maximum extent permitted by law, the City Manager shall have the authority, on behalf of CITY, to approve and execute such operating memoranda and the Headmaster Officer of SMES shall have the authority, on behalf of SMES, to approve and enter into such operating memoranda. Unless otherwise required by law or by the Development Plan Approval(s), no such changes, adjustments, or clarifications shall require prior notice or hearing. 3.6 Future Amendments to Development Plan. The following rules apply to future amendments to the Development Plan: 3.6.1 SMES's Written Consent. Any Development Plan amendment to which SMES does not agree in writing shall not apply to the Property while this Agreement is in effect. 3.6.2 Concurrent Development Agreement Amendment. Any Development Plan amendment requiring amendment of this Agreement shall be processed concurrently with an amendment to this Agreement. 3.6.3 Effect of Amendment. Except as ,expressly set forth in the Development Plan amendment itself or this Agreement, a Development Plan amendment shall not alter, affect, impair, or otherwise impact the rights, duties, and obligations of the Parties set forth in this Agreement. 3.7 Future Development Approvals. 3.7.1 Exercise of CITY Discretion. In connection with Future Development Approvals or any other actions which CITY is expressly permitted to take consistent with this Agreement relating to the Property, to the maximum extent permitted by law CITY shall exercise its discretion or take action in a manner which complies and is consistent with the Development Plan, any Development Plan Approval(s) issued by CITY consistent with this Agreement prior to the date CITY takes final action on the Future Development Approval then in question, and the other terms and conditions set forth herein. -15- 3.7.2 Concurrent Development Agreement Amendment. Any Future Development Approval requiring amendment of this Agreement, as provided for in Section 3.5 hereof, shall be processed concurrently with an amendment to this Agreement. 3.7.3 Effect of Future Development Approvals. To the maximum extent permitted by law and except as expressly set forth in this Section 3.7, a Future Development Approval. shall not alter, affect, impair, or otherwise affect the rights, duties, and obligations of any of the Parties set forth in this Agreement. To the extent a Future Development Approval is approved in accordance with Sections 3.7.1 and 3.7.2, the Future Development Approval shall constitute for all purposes a Development Plan Approval. 4. Miscellaneous Obligations of the Parties._ 4.1 SMES's Rights. and Obligations With Respect -to ImplementiRg ImplementingSt. Margaret's Episcopal School Master Plan. In carrying out the Master Plan, SMES shall comply with the following: 1. The Project shall conform to CITY's goal to manage growth through the use of, among other things, comprehensive planning and design, project -wide continuity of landscaping and architectural design, state-of-the-art development standards, and planning concepts. 2. The traffic and circulation elements of the Development Plan will conform to CITY's General Plan and will be designed to reduce the impact of the average daily trips generated by the development of the Project on arterial roads and thoroughfares adjacent to the Expansion Parcels by implementing the Mitigation Measures set forth in the Mitigation Monitoring and Reporting Program for the Project. 3. As a religious organization, SMES is exempt from paying property taxes on land dedicated to educational and religious uses. SMES does pay property taxes today on the Expansion Parcels, which in the future, upon conversion to school uses, would be subject to the property tax exemption. Also, the CITY would potentially lose sales tax revenue as a result of the Project's removal of commercial buildings from the Expansion Parcels and development of the Expansion Parcels for non-commercial uses. Notwithstanding the SMES exemption from property taxes by virtue of its status as a religious organization, in exchange for CITY's agreement to enter into and perform its obligations set forth in this Agreement, SMES has agreed that SMES shall make an annual payment to CITY in an amount calculated as set forth in this Section 4.1.3, providing substantial benefits to CITY and its residents: In order to fully mitigate potential impacts of the lost property tax and sales tax revenues associated with the Development Plan and provide financial benefits to CITY and its residents, SMES shall pay to CITY each year an amount calculated as follows for CITY's General Fund: (1) $25,000 by September 30, 2011 5[Z (2) $50,000 by September 30, 2012 (3) $75,000 by September 30, 2013 and by September 30 of every year thereafter (4) The above payments shall be increased by 2% compounded annually beginning October 1, 2013 This is described further in Exhibit "D". 4. The Project will result in the expansion of the existing St. Margaret's Episcopal School which will be of benefit to CITY and its residents by providing additional educational resources to the community. As of this date, approximately 250 students (20% of the students enrolled at St. Margaret's Episcopal School) are residents of San Juan Capistrano, and 700 students (57% of currently enrolled students) would otherwise attend the Capistrano Valley Unified School District. Compliance with the student enrollment cap established by Conditional Use Permit 02-14 ("Cap") shall be determined annually, based on SMES's enrollment count as reported to the California Department of Education. In order to encourage enrollment of high -need San Juan Capistrano Students, SMES shall be entitled to enroll students who will be exempt from the Cap, as detailed below and as described further in Exhibit "D": (1) SMES may, in its sole discretion, enroll up to thirty (30) students who are residents of San Juan Capistrano and are receiving financial aid of 80% or more of tuition fees ("SJC80 Students"); and (2) For each SJC80 Student in excess of twenty (20) (i.e. for the 215 through 30`� SJC80 Student enrolled), SMES may, in its sole discretion, enroll up to one additional student ("Non-SJC80 Student") up to a maximum of ten. (10) Non- SJC80 Students. (3) The SJC80 students (up to 30) and Non-SJC80 students (up to 10) allowed by this Section 4.1.4 shall be exempt from the Cap established by Conditional Use Permit 02-14 and shall not be included in SMES's annual calculation of full time equivalent students. The traffic and other potential impacts associated with the increased number of students authorized by this Section 4.1.4 are mitigated to a level below significant by the Development Plan's removal of commercial buildings and commercial uses from the Expansion Parcels. 5. The Project will result in dedication of an easement to CITY for a multi- use trail connector along La Novia Avenue along the frontage of SMES upon CITY's approval of a final trail alignment as part of CITY's General Plan. 6. The Project will result in a shared parking agreement with CITY providing an additional parking lot to serve CITY's Cook Park and Trails that will provide substantial benefits to CITY and its residents. -17- 7. SMES will allow the Ortega Equestrian Center ("OEC") to continue operating on the Project site under the terms of its existing lease with SMES until May 31, 2012, or any later date agreed upon in writing by both SMES and OEC, and will work with OEC to accommodate relocation of the facilities in an orderly manner by May 31, 2012, or any later date agreed upon in writing by both SMES and OEC. 4.2 Future Development Approvals. To the maximum extent permitted by law CITY agrees to expedite the processing of the Future Development Approvals, and to use ,its reasonable good faith efforts to approve or adopt the Future Development Approvals in form and content reasonably satisfactory to SMES; provided, however, that nothing in this Section 4.2 shall, or shall be construed to, constitute a promise or commitment by CITY to approve the Future Development Approvals or to approve the same with or without any particular requirements or conditions, and provided further that prior to the date that the Future Development Approvals may be so approved, CITY reserves its full legislative police power authority with respect thereto consistent with its obligations set forth elsewhere in this Agreement. To the extent a Future Development Approval is approved that pertains to the Property, the Future Development Approval shall constitute for all purposes a Development Plan Approval. 5. Indemnification. Except to the extent of the gross negligence or willful misconduct of CITY and its agents, officers, contractors, attorneys, and employees (the "Indemnified Parties"), SMES, and with respect to the portion of the Property transferred to them, the Development Transferee agree: to indemnify, defend, and hold harmless the Indemnified Parties from and against each and every claim; action, proceeding, cost, fee, legal cost, damage, award or liability of any nature arising from alleged damages caused to third parties and alleging that CITY is liable therefor as a direct or indirect result of CITY's approval of or performance under this Agreement. The duties of SMES under this Section 5 are solely subject to and conditioned upon the Indemnified Parties' written request to SMES to defend and/or indemnify CITY. Without in any way limiting the provisions of this Section 5, the Parties hereto agree that this Section 5 shall be interpreted in accordance with the provisions of California Civil Code Section 2778 in effect as of the Effective Date. 6. Relationship of Parties. The contractual relationship between CITY and SMES is such that SMES is an independent contractor and not an agent or employee o f CITY. CITY and SMES hereb y renounce the existence of any form of joint venture or partnership between them, and agree that nothing contained in this Agreement or in any document executed in connection with the Property shall be construed as making CITY and SMES joint venturers or partners. 7. Amendment or Cancellation of Agreement. This Agreement may be amended or canceled in whole or in part only by mutual consent of the Parties in the manner provided for in Government Code Section 65868. No amendment or modification of this Agreement or any provision hereof shall be effective unless set forth in -18- writing and signed by duly authorized representatives of each Party hereto. This provision shall not limit any Party's remedies as provided by Section 9. 8. Periodic Review of Compliance with Agreement. 8.1 Periodic Review. CITY and SMES shall review this Agreement at least once every 12 -month period from the date this Agreement is executed, in September or such other month as the City my notify SMES. CITY shall notify SMES in writing of the date for review at least thirty (30) days prior thereto. Such periodic review shall be conducted in .accordance with Government Code Section 65865.1. 8.2 Good Faith Compliance. During each periodic review, SMES shall be required to demonstrate good faith compliance with the terms of this Agreement, including, but not limited to: its compliance with SMES's enrollment Cap, calculated in accordance with Section 4.1.4 above, and the annual payment required by Section 4.1.3 above. SMES agrees to furnish such reasonable evidence of good faith compliance as CITY, in the exercise of its reasonable discretion, may require. If requested by SMES, CITY agrees to provide to SMES a certificate that SMES or its Development Transferee is in compliance with the terms of this Agreement, provided SMES reimburses CITY for all reasonable and direct costs and fees incurred by CITY with respect thereto. 8.3 Failure to Conduct Annual Review. The failure of CITY to conduct the annual review shall not be a Default by SMES, nor shall any such failure alter, suspend, or terminate any of the Parties' other rights and obligations hereunder. Further, SMES shall not be entitled to any remedy for a failure by CITY to conduct this annual review. 8.4 Initiation of Review by.City Council. In addition to the annual review, the City Council may at any time initiate a review of this Agreement by giving written notice to SMES. Within thirty (30) days following receipt of such notice, SMES shall submit evidence to the City Council of SMES's good faith compliance with this Agreement and such review and determination shall proceed in the same manner as is provided in Sections 8.1 and 8.2 and the Development Agreement Legislation for the annual review. The City Council shall initiate its review pursuant to this Section 8.4 only if it has probable cause to believe CITY's general health, safety, or welfare is at risk as a result of specific acts or failures to act by SMES. 8.5 Administration of Agreement. Any final decision by the CITY's staff concerning the interpretation and administration of this Agreement and Development of the Property in accordance herewith may be appealed by SMES to the City Council, provided that any such appeal shall be filed with the City Clerk within ten (10) days after SMES receives written notice that the staff decision is final. The City Council shall render, at a noticed public hearing, its decision to affirm, reverse, or modify the staff decision within thirty (30) days after the appeal is so filed. 8.6 Availability of Documents. If requested by SMES, CITY agrees to provide to SMES copies of any documents, reports, or other items reviewed, accumulated, or prepared by or for CITY in connection with any periodic compliance review by CITY, provided SMES reimburses CITY for all reasonable and direct costs and fees incurred by CITY with respect -19- thereto. CITY shall respond to SMES's request on or before ten (10) business days have elapsed from CITY's receipt of such request. 9. Events of Default: Remedies and Termination. 9.1 Defaults by SMES. If CITY determines on the basis of a preponderance of the evidence that SMES has not complied in good faith with the terms and conditions of this Agreement, CITY may, by written notice to SMES, specify the manner in which SMES has failed to so comply and state the steps SMES must take to bring itself into compliance. If, within sixty (60) days after the effective date of notice from CITY specifying the manner in which SMES has failed to so comply, SMES does not commence all steps reasonably necessary to bring itself into compliance as required and thereafter diligently pursue such steps to completion, then SMES shall be deemed to be in default under the terms of this Agreement (a "Default"). In such event, CITY may terminate this Agreement pursuant to Government Code Section 65865.1 with respect to the Property. In material event of Default by SMES, except as provided in Section 9.3, CITY's sole remedy for any breach of this section 9.1 shall be CITY's right to terminate this Agreement. 9.2 Defaults by CITY. If SMES determines on the basis of a preponderance of the evidence that CITY has not complied in good faith with the terms and conditions of this Agreement, SMES may, by written notice to CITY, specify the manner in which CITY has failed to so comply and state the steps CITY must take to bring itself into compliance. If, within sixty (60) days after the effective date of notice from SMES specifying the manner in which CITY has failed to so comply, CITY does not commence all steps reasonably necessary to bring itself into compliance as required and thereafter diligently pursue such steps to completion, then CITY shall be deemed to be in default under the terms of this Agreement (a "Default"). In such event, SMES may terminate this Agreement with respect to the Property and, in addition, may pursue any other remedy available at law or equity, including specific performance as set forth in Section 9.3. 9.3 Specific Performance Remedy. Due to the size, nature, and scope of the Development Plan, it will not be practical or possible to restore the Property to its pre - development condition once implementation of this Agreement has begun. After such implementation, SMES may be foreclosed from other choices they may have had to utilize the Property and provide for other benefits. SMES has invested significant time and resources and performed extensive planning and processing of the Development Plan and Development Plan Approval(s) in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Development Plan and Development Plan Approvals) in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate SMES for such efforts. For the above reasons, CITY and SMES agree that damages would not be an adequate remedy if CITY fails to carry out its obligations under this Agreement and that SMES shall have the right to seek and obtain injunctive relief and specific performance as a remedy for any Default by CITY hereunder. CITY and SMES further acknowledge that, if SMES fails to carry out its obligations under this Agreement, CITY shall have the right to refuse to issue any permits or other approvals which SMES otherwise would have been entitled to pursuant to this Agreement that are related to and depend upon SMES's performance hereunder. Therefore, CITY's remedy -20- specific performance pursuant to Section 9. 1, or else the remedy of terminating this Agreement as to the portion of the Property as to which a material breach of Section 9.1 exists shall be sufficient in most circumstances if SMES fails to carry out its obligations hereunder. Notwithstanding the foregoing, if CITY issues a permit or other approval pursuant to this Agreement in reliance (explicitly stated in writing) upon a specified condition being satisfied in the future, and if SMES then fails to satisfy such condition, CITY shall be entitled to specific performance for the sole purpose of causing SMES to satisfy such condition. CITY`s right to specific performance shall be limited to those circumstances set forth above, and CITY shall have no right to seek specific performance to cause SMES to otherwise proceed with the Development of the Property in any manner. 9.4 Institution of. Le al Action. Except to the extent a non -Defaulting Party's rights or remedies are limited by the express provisions set forth herein, SMES or CITY may institute legal action to cure, correct, or remedy any Default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, to recover damages for any Default, or to obtain any other remedies consistent with the purpose of this Agreement. Such legal action shall be heard by a reference from the Orange County Superior Court. 9.5 Estoppel Certificates. Any Party or the holder or prospective holder of a mortgage or deed of trust secured by an interest in any portion of the Property (a „holder") may at any time during the Term of this Agreement deliver written notice to the other Party requesting an estoppel certificate (the "Estoppel Certificate") stating: (i) The Agreement is in full force and effect and is a binding obligation of the Parties; (ii) This Agreement has not been amended or modified either orally or in writing or, if so amended, identifying the amendments; (iii) No Default exists hereunder, nor would any Default exist with the passage of time or the giving of notice, or both, or, if a Default or failure does exist, the nature thereof and the actions required to be taken by the non-performing Party to cure the Default or prevent the same from occurring; and (iv) Any other matter affecting the status of the rights and obligations of the Parties hereunder as to which the requesting Party or the holder may inquire. A Party receiving a request for an Estoppel Certificate shall provide a signed certificate to the requesting Party or holder within thirty (34) days after . receipt of the request. The City Manager or any person designated by the City Manager may sign Estoppel Certificates on behalf of CITY. The Headmaster of SMES may sign on behalf of SMES. An Estoppel Certificate may be relied on by the holder and by Development Transferees. In the event that one Party requests an Estoppel Certificate from another Party of Parties, the requesting Party shall reimburse the other Party or Parties for all reasonable and direct costs and fees incurred by such Party or Parties with respect thereto. -21- 10. Waivers and Delays. 10.1 No Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by another Party, and failure by a Party to exercise its rights upon a Default by another Party hereto, shall not constitute a waiver of such Party's right to demand strict compliance by such other Party or Parties in the future for the same, similar, or any different Default. 10.2 Third Parties. The Parties' respective performance obligations hereunder shall not be delayed or excused because of any act or failure to act by a third person, except as provided in Section 10.3. 10.3 Force Majeure. Notwithstanding any other provision set forth in this Agreement to the contrary, SMES shall not be deemed to be in Default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond SMES's control, SMES's inability to obtain required permits or approvals from governmental agencies with jurisdiction over the applicable portions of the Property and the Project, government regulations (including, without limitation, local, state, and federal environmental and natural resource regulations), voter initiative or referenda, moratoria (including, without limitation, any "development moratorium" as that term is applied in Government Code Section 66452.6), litigation, or any other causes that are without the fault and beyond the reasonable control of SMES. 10A Extensions. The Term of this Agreement and the times for performance by SMES or CITY of any of its obligations hereunder or pursuant to the Development Plan. Approval(s) shall be extended by the period of time that any of the events described in Section 10.3 exist and./or prevent performance of such obligations. In addition, the Term shall be extended for delays arising from the following events for a time equal to the duration of each delay which occurs during the Term: (i) The period of time after the Effective Date during which litigation challenging the validity or enforceability of this Agreement or related to the Development Plan Approval(s) or having the actual effect of delaying implementation of the Development Plan is pending, including litigation pending on the Effective Date. This period shall include any time during which appeals may be filed or are pending; and (ii) Any delay resulting from the acts or omissions of CITY or any other governmental agency or public utility and beyond the reasonable control of SMES. 10.5 Notice of Delay. SMES shall give notice to CITY of any delay which SMES believes to have occurred as a result of the occurrence of any of the events described in Section 10.3. For delays of, six months or longer, this notice shall be given within a reasonable time after SMES becomes aware that the delay has lasted six months or more. In no event, however, shall notice of a delay of any length be given later than thirty days after the end of the delay or thirty days before the end of the Term, whichever comes first. -22- 11. Notices. All notices required or provided for under this Agreement shall be in writing and delivered in person or sent by certified mail, postage prepaid, return receipt requested. Notices to CITY shall be addressed as follows: City of San Juan Capistrano 32400 Paseo Adelanto San .Tuan Capistrano, CA 92675 Attention: City Manager with a copes: Woodruff, Spradlin & Smart 555 Anton Boulevard, Suite 1200 Costa Mesa, CA 92626 Attention: Omar Sandoval, City Attorney Notices to SMES shall be addressed as follows: The Headmaster Saint Margaret's of Scotland Episcopal School 31641 La Novia San Juan Capistrano, CA 92675 with a copy to: Gibson Dunn & Crutcher, LLP 3161 Michelson Drive Irvine, CA 92612 Attention: Joseph P. Busch III, Esq. Any notice given as required herein shall be deemed given only if in writing and upon delivery personally or by independent courier service. A Party may change its address for notices by giving notice in writing to the other Parties as required herein and thereafter notices shall be addressed and transmitted to the new address. CITY shall additionally provide written notice of any Default by SMES (including, as applicable, any Development Transferee) and any act or omission by SMES (or such Development Transferee) that would constitute a Default with the passage of time or giving of notice or both, to the holder of any mortgage or deed of trust secured by all or any interest in the Property which (i) delivers a written notice to CITY requesting such notices and (ii) provides CITY with such holder's address(es) for notice purposes. -23- 12. Attornevs' Fees. If legal action is brought by one Party against another Party for breach of this Agreement, including actions derivative from the performance of this Agreement, or to compel performance under this Agreement, the prevailing Party shall be entitled to an award of its costs, including reasonable attorneys' fees, and shall also be entitled to recover its contribution to the costs of the referee referred to in Section 9.4 above as an item of damage and/or recoverable costs. 13. Recording. This Agreement and any amendment or cancellation hereto shall be recorded against the Property at no cost to CITY, in the Official Records of Orange County by the City Clerk within the period required by Section 65868.5 of the Government Code. In addition, at such time that SMES acquires fee title to any of the Expansion Parcels and such parcel(s) is (are) added to this Agreement as provided in Section 3.5.4 this Agreement, this Agreement and any amendment or cancellation hereto shall be recorded, at no cost to CITY, with respect to any such Expansion Parcel(s). Notwithstanding the foregoing, in no event shall any failure or delay in recording this Agreement and any amendment to this Agreement limit or restrict the validity or enforceability of this Agreement. 14. Effect of Aureement on Title. 14.1 Effect on Title. The Parties agree that this Agreement shall not continue as an encumbrance against the Property once the Agreement has terminated. Notwithstanding the foregoing, the provisions of Sections 4.1.3 and 4.1.4 shall remain effective coterminous with Conditional Use Permit 02-14. 14.2 Encumbrances and Lenders' Rights. The Parties hereby agree that this Agreement shall not prevent or limit SMES (including without limitation any Development Transferee hereunder), at any time or from time to time in any manner, at its or their sole discretion, from encumbering the Property, the improvements thereon, or any portion thereof with any mortgage, deed of trust, sale and leaseback arrangement, or other security device. CITY acknowledges that the holder of any such security interest in all or any portion of the Property may require certain clarifications, interpretations, or modifications to this Agreement or the Development Plan and CITY agrees, upon request, from time to time, to meet with the applicable Party and/or representatives of any such holder to negotiate in good faith any such request for clarification, interpretation, or modification. CITY further agrees that it will not unreasonably withhold its consent to any such requested clarification or interpretation to the extent such clarification or interpretation is consistent with the intent and purpose of this Agreement. A Default under this Agreement shall not defeat, render invalid, diminish, or impair the lien of any such holder. The mortgagee of a mortgage or beneficiary of a deed of trust or holder of any other security interest in the Property or any portion thereof and its or their successors and assigns, including without limitation the purchaser at a judicial or non judicial foreclosure sale or a person or entity which obtains title by deed -in -lieu of foreclosure (collectively, a "holder") shall be entitled to receive a copy of any notice of Default (as defined in Section 9.1 hereof) delivered -24- to SMES as to whose portion of the Property such a Default exists and, as a pre -condition to the institution of legal proceedings or termination proceedings, CITY shall deliver to all such holders written notification of any Default by SMES in the performance of its obligations under this Agreement which is not cured within sixty (60) days (the "Second Default Notice") and shall allow the holder(s) an opportunity to cure such Defaults as set forth herein. The Second Notice of Default. shall specify in detail the alleged Default and the suggested means to cure it. After receipt of the Second Default Notice, each such holder shall have the right, at its sole option, within ninety (90) days to cure such Default or, if such Default cannot reasonably be cured within that ninety (90) day period, to commence to cure such Default, in which case no Default shall exist and CITY shall take no further action. Notwithstanding the foregoing, if such Default shall be a Default which can only be remedied by such holder obtaining possession of the applicable portion of the Property, and such holder seeks to obtain possession, such holder shall have until ninety (90) days after the date obtaining such possession to cure or, if such Default cannot reasonably be cured within such period, then to commence to cure such Default. Further, a holder shall not be required to cure any non -curable Default of SMES, and any such Default shall be deemed cured if any lender obtains possession. 15. Severability of Terms. If any term, provision, covenant, or condition of this Agreement shall be determined invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby if the tribunal finds that the invalidity was not a material part of consideration for the affected Party or Parties. The covenants contained herein are mutual covenants. The covenants contained herein constitute conditions to the concurrent or subsequent performance by each Party benefited thereby of the covenants to be performed hereunder by such benefited Party. 16. Subsequent Amendment to Authorizing; Statute, This Agreement has been entered into in reliance upon the provisions of the Development Agreement Legislation in effect as of the Effective Date. Accordingly, to the extent that subsequent amendments to the Development Agreement Legislation would affect the provisions of this Agreement, such amendments shall not be applicable to this Agreement unless necessary for this Agreement to be enforceable or required by law or unless this Agreement is modified pursuant to the provisions set forth in this Agreement and Government Code Section 65868 as in effect on the Effective Date. 17. Rules of Construction and Miscellaneous Terms. 17.1 Interpretation and GoverningLaw. The language in all parts of this Agreement shall, in all cases, be construed as a whole and in accordance with its fair meaning. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the internal laws of the State of California, with regard to conflict of laws rules. The Parties understand and agree that this Agreement is not intended to constitute, nor shall be construed to constitute, an impermissible attempt to contract away the legislative and governmental functions of CITY, and in particular, CITY's police powers. In this regard, the Parties understand and agree that this Agreement is a current exercise of CITY's police powers -25- and except as expressly provided for herein this Agreement shall not be deemed to prevent the future exercise by CITY of its lawful governmental powers over the Property. 17.2 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 17.3 Gender, The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory, "may" is permissive. 17.4 Time of Essence. Time is of the essence regarding each provision of this Agreement as to which time is an element. 17.5 Recitals. All Recitals set forth herein are incorporated in this Agreement as though fully set forth herein. 17.6 Entire Agreement. This Agreement constitutes the entire agreement between and among the Parties with respect to the subject matter hereof, and this Agreement supersedes all previous negotiations, discussions, and agreements between and among the Parties with respect thereto. 18. Not for Benefit of Third Parties. This Agreement and all provisions hereof are for the exclusive benefit of CITY and SMES and their respective Development Transferees and shall not be construed to benefit or be enforceable by any third party, excepting only to the extent of the limited rights provided to the holders of security interests in all or a portion of the Property. 19. Cooperation in Event of Legal Challenge. CITY agrees to cooperate with SMES as may be needed in order to keep this Agreement in full force and effect during the entire Term. In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity or enforceability of any provision of this Agreement or any of the Development Plan Approval(s) (including without limitation any Future Development Approvals after the same have been issued by CITY), the Parties hereby agree to cooperate in defending such action and, in this regard, CITY shall not allow its default to be taken in such legal action or otherwise compromise the legal action without SMES's prior written consent. In the event of any such litigation, to the maximum extent permitted by law this Agreement shall remain in full force and effect while such litigation, including any appellate review, is pending. Notwithstanding the foregoing, SMES shall be responsible for all costs, including but not limited to attorney's fees, costs, expert witness fees, and the like,, incurred with respect to any such litigation. [Remainder of Page Intentionally Left Blank] -26- IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year dated below. Dated: , 200 "CITY" CITY OF SAN JUAN CAPISTRANO, a municipal corporation Name: Title: Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Dated: , 200_ "SMES" ST. MARGARET'S OF SCOTLAND EPISCOPAL SCHOOL, a California non-profit public benefit corporation By: Name: Title: By: Name: Title: -27- STATE OF CALIFORNIA COUNTY OF ORANGE On a Notary Public, personally appeared } ) ss before Erle, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On a Notary Public, personally appeared Notary Public before me, personally known to me (or proved. to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public am 909188.5 pi W Q U ro -OQ`i�'1VQWG�wU` M v m �D Vi N r n o4 O C� QQ c; C5 Vr Q 00 0, 't V-� "D w -w CO O, © © © O *- O In oc O O cs3 p O I& lc:�Ib too ?>j ml m d �p on vA U MNNUO©{� In oc N EXHIBIT "B" NARRATIVE DESCRIPTION OF THE PROJECT • Construction of a 41,777 SF Performing Arts Education Center and adjacent parking lot reconfiguration, on the site of the current 7`h and 8b grade classrooms and Middle School administration offices • Construction of a 24,116 SF Middle School classroom building and adjacent pedestrian area reconfiguration, on the site of two buildings in the Ortega Business Center • To facilitate construction of the above, installation of new temporary modular classroom buildings to house displaced 7`h and 8h grade students • Renovation of existing Church administrative building and adjacent courtyard • Reconfiguration of parking space in the Ortega Business Center • Construction of a new satellite parking facility at La Novia and Calle Arroyo • Grant of easement over school property to facilitate City construction of a multi -use trail along La Novia • Conversion of existing `Sillers Hall' multi-purpose room to a dedicated all -school dining facility • Renovation, and possible 10,500 SF second -story expansion, of the Lower School classroom. buildings • Renovation of the existing Campaigne Center building including a 1,000 SF addition • Renovation of the second floor of the existing Gateway building • Renovation and 3,000 SF expansion of the Chapel • Development of 5 acres of land on Calle Arroyo, currently leased to the Ortega Equestrian Center, as a multi -sport athletic field; with a 3,000 SF maintenance and restroom building • Establishment of calculation procedure for SMES enrollment cap of 1,194 full-time equivalent students, to exclude the students that would otherwise exceed the cap as described in Exhibit D. - 1 - 909188.5 EXHIBIT 't C't DEVELOPMENT PLAN APPROVALS I . Conditional Use Permit 02-14 2. General Plan Amendment 06-03 3. Rezone 06-06, 07-05 4. Architectural Control 07-22 5.. St. Margaret's Episcopal School Master Plan 6. Development Agreement 7. Mitigated Negative Declaration S. Future Development Approvals (as and when., and in the form and substance, adopted by CITY). Erroe unknown document property nameArror! Unknown document property name. -Error! Unknown document property name. Error! Unknown document property nameArror! Unknown document property name. a0310411O..-1— -Ba�38 lt9 " 2 - 909188.5 EXHIBIT "D" FURTHER DESCRIPTION OF ENROLLMENT CAP AND CITY FEE PAYMENTS * The additional SJ80 students (up to 30) and Non-SJ80 students (up to 10) allowed pursuant to Section 4.1.4 of the Development Agreement shall be exempt from the Cap established by Conditional Use Permit 02-14 and shall not be included in SMES's annual calculation of full time equivalent students. Error! unknown document property nameArror! Unknown document property name. -Error! Unknown document property name. Error! Unknown document property nameAerror! Unknown [ document property name. a03/04/10 03iG 4G.,4xVn-2" - 3 - 909188.5 # of # of Enrollment Cap - Total SJC80 Non- Students students SJC80 Enrolled students 1,194 Full -Time 1,194 Terms of Conditional Use Permit 02-14 0 0 Equivalent Students Terms of this Agreement — Enrollment Cap The first twenty (20) enrolled SJC80 0-20 0 1,194 Full -Time Up to 1,214 students shall be excluded from the Equivalent enrollment cap Students Plus up to 20 SJC80 Students* Up to an additional ten (10) enrolled SJC80 21-30 1-10 1,194 Full -Time Up to 1,234 students shall be excluded from the Equivalent enrollment cap. For each such additional Students Plus up SJC80 student, one Non-SJC80 student may to 30 SJC80 be enrolled and excluded from the , Students and up enrollment cap to 10 Non-SJC80 Students* Annual Fee to Terms of this Agreement — Annual City City Fee September 30, 2011 $25,000 September 30, 2012 $50,000 September 30, 2013 $75,000 September 30, 2014 and every year $75,000+2% thereafter Compounded annually * The additional SJ80 students (up to 30) and Non-SJ80 students (up to 10) allowed pursuant to Section 4.1.4 of the Development Agreement shall be exempt from the Cap established by Conditional Use Permit 02-14 and shall not be included in SMES's annual calculation of full time equivalent students. Error! unknown document property nameArror! Unknown document property name. -Error! Unknown document property name. Error! Unknown document property nameAerror! Unknown [ document property name. a03/04/10 03iG 4G.,4xVn-2" - 3 - 909188.5 1 2 N TABLE OF CONTENTS rage - DEFINITIONS................................................................................................................... 5 1.1 Authorizing Ordinance......................................................................................... 5 1.2 Campus Parcels...................................................................................................... 5 1.3 CEQA..................................................................................................................... 5 1.4 CITY...................................................................................................................... 5 1.5 City Council........................................................................................................... 5 1.6 Default....................................................................................................................5 1.7 Develop or Development or Developing............................................................... 5 1.8 Developer...............................................................................................................5 1.9 Development Agreement Legislation.................................................................... 5 1.10 Development Exactions.... ............................... ..................................... ............... 5 1.11 Development Plan.................................................................................................. 6 1.12 Development Plan Approval(s).................................... ......... .................................. 6 1.13 Development Transferee........................................................................................ 6 1.14 Effective Date........................................................................................................ 6 1.15 Expansion Parcels.................................................................................................. 6 1.16 Future Development Approvals............................................................. ............ 6 1.17 On -Site Improvements...........................................................................................6 1.18 [Reserved].... ...................................................................................... ................... 7 1.19 Party or Parties ....... ........................ ............................ ,........................................... 7 1.20 Property................................................................................................................7 1.21 Planning Commission ............... ..................................... ...................................... 7 1.22 Project.................................................................................................................... 7 1.23 Property..................................................................................................................7 1.24 St. Margaret's Episcopal School Master Plan :........................................................ 7 1.25 Term............................................................................................................:..........7 GENERAL PROVISIONS................................................................................................ 7 2.1 Binding Covenants................................................................................................. 7 2.2 Interest of SMES.................................................................................................... 7 2.3 Term.......................................................................................................................7 2.4 Termination............................................................................................................8 2.5 Transfers and Assignments.................................................................................... 8 DEVELOPMENT PROVISIONS ............... :............................................................ .......... 9 3.1 Vesting....................................................................................................................9 3.2 Reserved Authority.............................................................................................. 11 3.3 Further Assurances to SMES Regarding Exercise of Reserved Authority.......... 12 3.4 Vested Right..........................................................................................................13 3.5 Amendment of Development Agreement............................................................14 -1- 909188.5 -11- 949188.5 Paye 3.6 Future Amendments to Development Plan..........................................................16 3.7 Future Development Approvals...........................................................................16 4. MISCELLANEOUS OBLIGATIONS OF THE PARTIES............................................16 4.1 SMES's Rights and Obligations With Respect to Implementing St. Margaret's Episcopal School Master Play ............................. ...... 16 4.2 Future Development Approvals.................................................................................18 5. INDEMNIFICATION.................................................. 18 6. RELATIONSHIP OF PARTIES......................................................................................18 7. AMENDMENT OR CANCELLATION OF AGREEMENT ......................................... 18 8. PERIODIC REVIEW OF COMPLIANCE WITH AGREEMENT . ............ I................... 19 8.1 Periodic Review...................................................................................................19 ............................ 8.2 Good Faith Compliance.................................................... .....1.19 8.3 Failure to Conduct Annual Review., ........... ............ .......................... ................ 19 8,4 Initiation. of Review by City Council .................... :......................... ..................... 19 8.5 Administration of Agreement.............................................................................. 19 8.6 Availability of Docurnents...................................................................................19. 9. EVENTS OF DEFAULT: REMEDIES AND TERMINATION .................................... 19 9.1 Defaults by SMES................................................................................................19 9.2 Defaults by CITY, ................................ .................... -- ....................................... 20 9.3 Specific Performance Remedy............................................................................. 20 9.4 Institution of Legal Action................................................................................... 21. 9.5 Estoppel Certificates............................................................................................ 21 10. WAIVERS AND DELAYS... ........ ...................... --- .............. .................. 21 10.1 No Waiver.. ......................... ....... ....... .............. ............................... --- ...... 21 10.2 Third Parties......................................................................................................... 22 10.3 Force Majeure...................................................................................... ................ 22 10.4 Extensions............................................................................................................ 22 10.5 Notice of Delay.................................................................................................... 22 11. NOTICES....................................................................... .............22 ..................................... 12. ATTORNEYS' FEES.......................................................................................................23 13. RECORDING.................................................................................................................. 24 -11- 949188.5 Page 14. EFFECT OF AGREEMENT ON TITLE........................................................................ 24 14.1 Effect on Title...................................................................................................... 24 14.2 Encumbrances and Lenders' Rights..................................................................... 24 15. SEVERABILITY OF TERMS.........................................................................................25 16. SUBSEQUENT AMENDMENT TO AUTHORIZING STATUTE ............................... 25 17. RULES OF CONSTRUCTION AND MISCELLANEOUS TERMS............ ................. 25 17.1 Interpretation and Governing Law....................................................................... 25 17.2 Section Headings................................................................................................. 25 173 Gender..................................................................................................................25 17.4 Time of Essence ............................................... ............ ........................................ 25 17.5 Recitals.................................................................................................................26 17.6 Entire Agreement................................................................................................. 26 18. NOT FOR BENEFIT OF THIRD PARTIES................................................................... 26 19, COOPERATION IN EVENT OF LEGAL CHALLENGE ............................................. 26 -1i1- 909188.5 Recorded at the request of and mail to: I EXHIBIT B City Clerk City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 (Space Above This Line for Recorder§ Office Use Only) (Exempt from Recording Fee per Gov. Code §§ 6103 and 27383) APN: 666-272-09, 666-251-04, 666-251-05, 666-261-06, 666-261-11, 666-261-10, 666-261-09, 666-261-03, 666- 261-02, 666-261-01, 666-232-04, 666-123-01& 2 COVENANT AND AGREEMENT REGARDING MITIGATION OF FINANCIAL IMPACTS AND CALCULATION OF STUDENT ENROLLMENT CAP RECITALS A. ST. MARGARET OF SCOTLAND EPISCOPAL SCHOOL. ("Owner") hereby certifies that it is the owner of real property located in the City of San Juan Capistrano, State of California, Assessor's Parcel Numbers , which is legally described as follows (and more particularly described in the attached Exhibit "A") ("Property"): [SEE ATTACHED EXHIBIT A] B. Owner and City have entered into the Development Agreement recorded- concurrently herewith and adopted on , 2010 pursuant to City Council Ordinance No. (St. Margaret's Episcopal School Expansion Project) securing the issuance of various land use entitlements allowing the Owner to expand its existing educational institution on said Property consistent with the Development Plan described therein. C. This Covenant and Agreement is executed and recorded for the purpose of memorializing the provisions of Section 4.1.3 and 4.1.4 of the Development Agreement applicable to the Property that survive termination of' the Development Agreement, and providing constructive notice of the provisions of Section 4.1.3 and 4. of the Development Agreement to any successors or assignees of Owner's fee interest therein. Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the Development Agreement. COVENANTS 1. The Owner hereby agrees and covenants with the City of San ,Juan Capistrano ("City") that so long as the above legally -described property shall be held for use pursuant to Conditional Use Permit 02-14 as an educational institution exempt from taxation it shall fully mitigate potential financial impacts of lost property tax and sales tax revenues to the City of San Juan . Capistrano and its residents associated with the Development Plan by making the following payments to the City for its general fund each year: 672404.1 945050.1 (1) $25,000 by September 30, 2011 (2) $50,000 by September 30, 2012 (3) $75,000 by September 30, 2013 and by September 30 of every year thereafter (4) The above payments in item (3) shall be increased by 2% compounded annually beginning October 1, 2013. 2. The City hereby agrees and covenants with the Owner that compliance with the student enrollment cap established by Conditional Use Permit 02-14 ("Cap") shall be determined annually, based on Owner's enrollment count as reported to the Department of Education. In order to encourage enrollment of high -need San Juan Capistrano students, Owner shall be entitled to enroll students who will be exempt from the Cap, as detailed below: (1) Owner may, in its sole discretion, enroll up to thirty.(30) students who are residents of San Juan Capistrano and are receiving financial aid of 80% or more of tuition fees ("SJC80 Students"); and (2) For each SJC80 Student in excess of twenty (20) (i.e. for the 21St through 301h SJC80 Student enrolled), Owner may, in its sole discretion, enroll up to one additional student ("Non-SJC80 Student") up to a maximum of ten (10) Non- SJC80 Students. (3)The SJC80 students (up to 30) and Non-SJC80 students (up to 10) allowed by this Section 4.1.4 shall be exempt from the Cap established by Conditional Use Permit 02-14 and shall not be included in Owner's annual calculation of full time equivalent students. The traffic and other potential impacts associated with the increased number of students authorized by this Covenant and Agreement are mitigated to a level below significant by the Development Plan. 3, This Covenant and Agreement shall run with all of the above-described land and shall be binding upon and inure to the benefit of the City and the Owner, and all future owners, encumbracers, their successors, heirs or assignees and shall continue in effect until released. by the authority of the City Council of the City upon evidence that this Covenant and Agreement is no longer required. IN WITNESS WHEREOF, the Parties hereto have executed this Covenant and Agreement on the day and year dated below. Dated: ATTEST: 672404.1 , 2010 "CITY" CITY OF SAN JUAN. CAPISTRANO, a municipal corporation Name: Title: Mayor 4 945080.'[ Maria Morris, City Clerk waw:.9 __0i 0M Omar Sandoval, City Attorney Dated: , 2010 "OWNER" ST. MARGARET'S OF SCOTLAND EPISCOPAL SCHOOL, a California non-profit public benefit corporation By: Name: Title: By: Name: Title: Dated this day of 9 672404.1 945080.1 1:0011U111111W Vl LEGAL DESCRIPTION OF THE SMES PROPERTY That certain real property located in the City of San Juan Capistrano, County of Orange, State of California, described as follows: CAMPUS PARCELS: Location 31641 La Novia 27461 Calle Arroyo 27481 Calle Arroyo Calle Arroyo Ortega Village Center Ortega Village Center Ortega Village Center EXPANSION PARCELS: Location 31732 Rancho Viejo Road 31658 Rancho Viejo Road 31648 Rancho Viejo Road 27252 Calle Arroyo Calle Arroyo 672404.] APN Acres 666-272-09 11.90 666-251-04 1.21 666-251-05 1.30 666--251-06 3.07 666-261-11 0.33 666-261-10 0.36 666-261-09 0.65 Total 18.82 APN Acres 666-261-03 1.11 666-261-02 0.47 666-261-01 0.38 666-232-04 5.20 666-123-01&2 0.91 Total 8.07 112 945080.1 STATE OF CALIFORNIA COUNTY OF ORANGE On , before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct; WITNESS my hand and official seal. Notary Public 5 572404.1 9450&0.1