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HomeMy WebLinkAboutAGENDA REPORT 2017 0510 CC SPC ITEM 06A ITEM 6.A. CITY OF MOORPARK,CALIFORNIA City Council Fleeting of 3-/6 -.20, 1 ACTION: /tet_ MOORPARK CITY COUNCIL BY: AGENDA REPORT TO: Honorable City Council FROM: Jessica Sandifer, Program Mana•I51- . 0 DATE: May 4, 2017 (Special CC Meeting of 05/10/17) SUBJECT: Consider Resolution Approving Disposition and Development Agreement for a Portion of Property Owned by the City of Moorpark Located at 192 High Street to Apricot Lane Market Holdings, LLC; Making Findings Pursuant to Government Code Section 52201; and Finding the Project Categorically Exempt from California Environmental Quality Act(CEQA) BACKGROUND The Redevelopment Agency of the City of Moorpark ("Agency") acquired a 2.34 acre site, located at 192 High Street ("Property"), from the Ventura County Transportation Commission on August 8, 1993, at a cost of $393,451.34. This Property was part of a 4.77 acre purchase for $800,000. In 2011, AB X1 26 (the "Dissolution Act"), as upheld and modified by the Supreme Court in California Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Cal.4th 231(2011)), dissolved the Redevelopment Agency as of February 1, 2012 and created the Successor Agency to the Redevelopment Agency of the City of Moorpark ("Successor Agency"). As part of the dissolution process, the Successor Agency prepared a Long Range Property Management Plan ("LRPMP") addressing the disposition of real properties acquired by the former Redevelopment Agency. The LRPMP provides that the property identified in the LRPMP as Property No. 5(a), consisting of a portion (approximately 2.14 acres) of APN 512-0-090-115 (the "Property") will be retained by the City of Moorpark (the "City"), provided that the City pays compensation (the "Compensation") to the taxing entities. Pursuant to the LRPMP, as approved by the California State Department of Finance, the 2.14 acre property (approximately 95,396 sq. ft) was conveyed to the City, upon the City's payment of $470,000 as compensation to the taxing entities. DISCUSSION The City has negotiated a Disposition and Development Agreement with Apricot Lane Market Holdings, LLC ("Developer") to sell them a 1.12 acre (49,000 sq.ft.) portion ("Development Site") of the property located at 192 High Street and to develop one two- 1 Honorable City Council May 10, 2017 Page 2 story commercial building and one single-story commercial building totaling approximately 16,865 square feet. The majority of the square footage (approximately 13,636 sq. ft.) will be occupied by a restaurant/market place. The use will be a market, professional kitchen, and restaurant use showcasing food and other products made utilizing the unique produce and meats farmed at Apricot Lane Farms. The second structure will house a bar/tasting room and.brewery space for a local brewery. The two referenced buildings and related improvements, defined in the DDA will be subject to the conditions of approval of Commercial Planned Development (CPD) Permit No.2016- 01 ("CPD 2016-01") which was approved by the City Council in November 2016. DEAL POINTS The major deal points in the DDA are summarized as follows: • The sale price of the Sale Property is $612,500 which is the current fair market value of the land. • Consistent with previous City Council direction, the DDA has language stating that the City is not selling the property for land speculation. • Developer will complete the demolition of the improvements on the site as noted in the CPD 2016-01 approval and would only be allowed to begin demolition operations after the grading plan has been approved, a grading permit has been pulled, and building improvement plans have been submitted for plan check. • Developer will have a five year option (from the date the DDA is signed) to purchase a 7,500 square foot portion of Parcel Three at fair market value (the "Option Property"); however, the Option Property could only be purchased if the Developer proposes a project and pursuant to a separate negotiated DDA. • The Developer asked for an additional 4,500 sq. ft. of land on the east side of the property, late in the negotiations, after CPD 2016-01 had been approved. As no development can take place on this site without the proper planning and zoning approvals, the Developer is required to landscape this 4,500 sq. ft. area consistent with a Landscape Plan approved by the Community Development Department. • Developer is required to build the project as contemplated by CPD 2016- 01 within two years from the close of escrow on the project. 2 Honorable City Council May 10, 2017 Page 3 • Developer has agreed to operate the property for a minimum of two years after the issuance of the Certificate of Completion. • City will work with the Ventura County Transportation Commission (VCTC) to obtain a license agreement for the use of 20' of VCTC property that abuts the north property line of the Development Site. The City would execute a sub-license agreement with Developer for their use of the 20' area. • City will subdivide the Property into five parcels. Parcel One will be the property leased by the Chamber of Commerce. Parcel Two will be the Development Site contemplated by the DDA. Parcel Three will be the remaining part of the property which will be available for sale to a future developer (and as previously stated contains the 7,500 sq_ ft. Option Property). Parcel Four will contain the expansion area for the North Metrolink Parking Lot, and Parcel Five will be the North Metrolink Parking lot. DDA DEVIATIONS DDA's typically have routine requirements that most Developer's follow because they are consistent with basic practice in commercial real estate development. The proposed DDA with the Developer is lacking two critical elements that would normally act as a check and balance on the project. If approved the City Council would be waiving these ordinary requirements. These elements are described in detail below. • Financing - With a development project of this size and scope, there is typically financing obtained from a commercial lender. The benefit of having a commercial lender involved in the project is that there is an entity, besides the City, that has a vested interest in seeing the project get completed. As a result, the finances of the Developer are thoroughly vetted through the credit approval process. In addition, should something go wrong with the entity that the credit has been extended to, the bank will oftentimes step in and have the project completed, so that while the project might not be operated as you expected, one could be assured that there would at least be a completed building. The Developer is not using commercial financing sources. They are self-funded. As such the DDA includes other protections including Reversion Rights to the Sale Property. • Bonding - With any construction project, the general contractor who will be building the project is always required to obtain a payment and performance bond for the project. The payment and performance bond provides funds that can be used should something happen to the general 3 Honorable City Council May 10, 2017 Page 4 contractor and they are unable to complete the project. The Developer has requested that the City Council waive the requirement for their general contractor to obtain a payment and performance bond. The proposed DDA does not contain a requirement for the payment and performance bond, however, it does require that the Developer provide funding for the City to have a third party consultant, selected by the City, to review the proposed general contractor's financial statements and make a determination on the adequacy of the contractor. If these financial statements are inadequate as determined by a consultant retained by the City, then the Developer would be required to pay for the payment and performance bond or select a separate contractor, who would also have to be vetted in a similar manner. This requirement is pending and is a condition that needs to be satisfied prior to the close of escrow. CREATION OF ECONOMIC OPPORTUNITY FINDINGS • Government Code Section 52201 authorizes the City to dispose of City-owned property for the creation of economic opportunity, if the City Council holds a public hearing and makes certain findings. Staff has prepared the report required by Section 52201, attached to the staff report, which details the City's cost associated with the acquisition, holding and sale of the Property; that the Property is being sold for the fair market value; and describes how the sale of the Property will create economic opportunity. Pursuant to the Government Code Section 52201, the City Council is making the following findings regarding the sale of the City-owned property for economic opportunity: (A) The disposition of the Property pursuant to the DDA is in furtherance of the creation of economic opportunity, in that the Project, as contemplated by the DDA, is expected to increase property tax revenues to all applicable property tax collecting entities. Upon full implementation of the DDA, it is expected that there will be an at least 15 percent increase of total property tax revenues, when compared to the year prior to the Property being acquired by the City; and (B) The consideration to be received by the City for the sale of the Property (in the amount $612,500, the purchase price to be paid by the Developer) is also not less than the fair market value of the Property at its highest and best use; and (C) The consideration to be received by the City for the sale of the Property (in the amount $612,500, the purchase price to be paid by the Developer) is also not less than the fair reuse value of the Property at the use and with the covenants and conditions and development costs authorized by the DDA. 4 Honorable City Council May 10, 2017 Page 5 ENVIRONMENTAL DETERMINATION The Community Development Director has determined that the Project is categorically exempt from environmental review under the California Environmental Quality Act (CEQA) because it qualifies as a project under the Class 32 categorical exemption for "In-Fill Development Projects" (State CEQA Guidelines Section 15332). Specifically, staff has determined that there is substantial evidence that the project is consistent with the General Plan and zoning designation for the property. The site is designated in the General Plan for commercial uses and on the Zoning Map for commercial uses and the proposed restaurant/market and brewing space are permitted or conditionally permitted uses in those designations and zones. The site is located within the City and on a site that is 1.12 acres in size surrounded by other commercial uses to the north, east and west and a railroad line to the south. This site is currently developed with structures and because of that previous development and the condition of the property, the site has no value as habitat for endangered, rare or threatened species. The approval would not result in significant effects relating to traffic, noise, air quality, or water quality due to the type of commercial uses in proximity of the site and the site's location in an urban area. Lastly, the site is already adequately served by all required utilities and public services that are accessible to the site from High Street that abuts the northern boundary of the Property. FISCAL IMPACT The City would receive a cash payment of $612,500, less escrow costs, at the close of escrow. STAFF RECOMMENDATION 1) Open the public hearing, accept public testimony, and close the public hearing; and 2) Adopt Resolution No. 2017- approving the Disposition and Development Agreement for the sale of a portion of the property at 192 High Street; making findings pursuant to Government Code Section 52201; and finding the project categorically exempt from CEQA. Attachments: 1 Disposition and Development Agreement 2 Section 52201 Report 3 Resolution 2017- 5 ATTACHMENT 1 DISPOSITION AND DEVELOPMENT AGREEMENT by and between the CITY OF MOORPARK and APRICOT LANE MARKET HOLDINGS, LLC, a California limited liability company 6 TABLE OF CONTENTS Page 1. DEFINITIONS 1 1.1 Definitions 1 2. PURCHASE AND SALE OF THE PROPERTY; PURCHASE PRICE; DEPOSIT 4 2.1 Purchase and Sale; Purchase Price 4 2.2 Deposit 4 2.3 Opening and Closing of Escrow 4 2.4 Condition of Title; Title Insurance 5 2.5 Conditions to Close of Escrow 6 2.6 Costs; Escrow Holder Settlement Statement 8 2.7 Condition of the Property 9 2.8 City Deposits into Escrow 11 2.9 Developer Deposits into Escrow 12 2.10 Authorization to Record Documents and Disburse Funds 12 2.11 Escrow's Closing Actions 12 2.12 Additional Instructions 13 3. DEVELOPMENT COVENANTS 13 3.1 Development of the Project 13 3.2 City's Right to Review Plans and Specifications 14 3.3 Construction Contracts 14 3.4 Post-Closing Parcel Map 15 3.5 Costs of Entitlement, Development and Construction 15 3.6 Rights of Access and Inspection 15 3.7 Local, State and Federal Laws 15 -i- 7 TABLE OF CONTENTS (cont.) Page 3.8 City and Other Governmental City Permits and Approvals 15 3.9 No Discrimination During Construction 15 3.10 Taxes, Assessments, Encumbrances and Liens 15 3.11 No Agency Created 15 3.12 Certificate of Completion 16 4. LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS 16 4.1 Restriction on Transfer of Developer's Rights and Obligations 16 4.2 Holders of Deeds of Trust 17 4.3 Rights of Holders 17 4.4 Noninterference with Holders 17 4.5 Right of City to Cure 18 5. USE AND OPERATION OF THE PROPERTY 18 5.1 Maintenance by Developer 18 5.2 Use and Operation Covenant 18 5.3 Developer's Right to Purchase the Option Property 19 5.4 Assessment Districts 20 5.5 Fee Protest Waiver 20 5.6 Historical Trees 20 5.7 Streetlights 20 6. DEFAULT, REMEDIES AND TERMINATION 20 6.1 Defaults 20 6.2 Remedies 21 6.3 No Speculation 23 6.4 No Personal Liability 23 -ii- 8 TABLE OF CONTENTS (cont.) Page 6.5 Rights and Remedies are Cumulative 23 6.6 Inaction Not a Waiver of Default 23 6.7 Force Majeure 23 6.8 Plans and Data 23 7. INSURANCE; INDEMNITY 24 7.1 Insurance 24 7.2 Indemnity 25 8. REPRESENTATIONS AND WARRANTIES 26 8.1 Developer Representations 26 8.2 City Representations 26 9. GENERAL PROVISIONS 27 9.1 Notices 27 9.2 Construction 27 9.3 Interpretation 27 9.4 Time of the Essence 27 9.5 Warranty Against Payment of Consideration for Agreement 27 9.6 Attorneys' Fees 27 9.7 Entire Agreement Waivers and Amendments 28 9.8 Severability 28 9.9 Headings 28 9.10 No Third Party Beneficiaries 28 9.11 Governing Law; Jurisdiction; Service of Process 28 9.12 Survival 29 9.13 Estoppel Certificates 29 -iii 9 TABLE OF CONTENTS (cont.) Page 9.14 City Actions 29 9.15 Counterparts 29 9.16 Governmental Powers Reserved 29 TABLE OF EXHIBITS EXHIBIT "A-1" LEGAL DESCRIPTION OF PROPERTY EXHIBIT "A-2" LEGAL DESCRIPTION OF OPTION PROPERTY EXHIBIT "B" SCHEDULE OF PERFORMANCE EXHIBIT "C" SCOPE OF DEVELOPMENT EXHIBIT "D" FORM OF GRANT DEED EXHIBIT "E" LIST OF DOCUMENTS DELIVERED TO DEVELOPER -iv- 10 DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (the"Agreement") is dated as of May 10, 2017 and is entered into by and between the CITY OF MOORPARK,a municipal corporation(the "City"), and APRICOT LANE MARKET HOLDINGS, LLC, a California limited liability company("Developer"). RECITALS A. City owns or shall own by the date set forth in this Agreement the real property described or depicted on Exhibit"A-1" (the "Property")and real property adjacent to the Property described or depicted on Exhibit"A-2" (the"Option Property"). B. Developer desires to acquire the Property from City for the purpose of developing one two-story commercial building and one single-story commercial building totaling approximately 16,865 square feet. The majority of the square footage (approximately 13,636 sq. ft.) will be occupied by a restaurant/market place. The use would be a market,professional kitchen, and restaurant use showcasing food and other products made utilizing the unique produce and meats farmed at Apricot Lane Farms' main farm facility located in Moorpark. The second structure would house a bar/tasting room and brewery space for a local brewery. The two referenced buildings and related improvements, defined in this Agreement as Improvements and subject to the conditions of approval of Commercial Planned Development(CPD) Permit No. 2016-01 ("CPD 2016-01") as approved by the Moorpark City Council are hereinafter referred to as the Project. (the "Project"). A material inducement to the City to enter into this Agreement is the agreement by Developer to develop the Project as provided herein. AGREEMENT NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants contained in this Agreement, the parties hereto agree as follows: 1. DEFINITIONS. 1.1 Definitions. The following capitalized terms used in this Agreement shall have the meanings set forth below: 1.1.1 "Agreement"means this Disposition and Development Agreement. 1.1.2 "Building Permit"means, collectively, any and all permits necessary to grade the Property and construct the Project. 1.1.3 "Certificate of Completion"means the certificate described in Section 3.12. 1.1.4 "City" means the City of Moorpark, a municipal corporation. 11 1.1.5 "City Manager" means the City Manager of the City. 1.1.6 "Close of Escrow" is defined in Section 2.3. 1.1.7 "Construction Contract" is defined in Section 3.3. 1.1.8 "Deposit" is defined in Section 2.2. 1.1.9 "Disapproved Title Exceptions" is defined in Section 2.4. 1.1.10 "Due Diligence Period" is defined in Section 2.7.2 1.1.11 "Escrow" is defined in Section 2.3. 1.1.12 "Escrow Holder" means Lawyer's Title Company, 2751 Park View Court, Suite 241, Oxnard, CA 93036 (Attn: Shirley Franks, Escrow Officer, sfranks@ltic.com (805/484-2701);Noel Palacio, Title Officer, npalacio@ltic.com (800/726-2949). 1.1.13 "FIRPTA Affidavit" is defined in Section 2.8.3. 1.1.14 "Force Majeure Delay" is defined in Section 6.7. 1.1.15 "General Contractor" or"Contractor" is defined in Section 3.3. 1.1.16 "Grant Deed"is defined in Section 2.4. 1.1.17 "Hazardous Materials"means any chemical, material or substance now or hereafter defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste,restricted hazardous waste, toxic substances, pollutant or contaminant, imminently hazardous chemical substance or mixture, hazardous air pollutant, toxic pollutant, or words of similar import under any local, state or federal law or under the regulations adopted or publications promulgated pursuant thereto applicable to the Property, including, without limitation: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601,et seq. ("CERCLA"); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. 1801, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq.; and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901, et seq. ("RCRA") The term Hazardous Materials shall also include any of the following: any and all toxic or hazardous substances, materials or wastes listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR. Part 302) and in any and all amendments thereto in effect as of the Close of Escrow; oil, petroleum,petroleum products (including, without limitation, crude oil or any fraction thereof),natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, not otherwise designated as a hazardous substance under CERCLA; any substance which is toxic, explosive, corrosive, reactive, flammable, infectious or radioactive (including any source, special nuclear or by product material as defined at 42 U.S.C. 2011, et seq.), carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority; asbestos in any form; urea formaldehyde foam insulation; transformers or other equipment which contain dielectric fluid containing levels of -2- 1 2 polychlorinated byphenyls; radon gas; or any other chemical, material or substance(i) which poses a hazard to the Property, to adjacent properties, or to persons on or about the Property, (ii) which causes the Property to be in violation of any of the aforementioned laws or regulations, or (iii)the presence of which on or in the Property requires investigation, reporting or remediation under any such laws or regulations. 1.1.18 "Holder" is defined in Section 4.2. 1.1.19 "Improvements"means all buildings, hardscape and landscape, infrastructure, utilities,and other improvements to be built on the Property, as described in the Scope of Development and in conformance with the CPD 2016-01. 1.1.20 "Option Property"means the property described on Exhibit"A-2" attached hereto. 1.1.21 "Party"means any party to this Agreement, and"Parties"means all parties to this Agreement. 1.1.22 "Permitted Exceptions"is defined in Section 2.4. 1.1.23 "Plans and Specifications" means all drawings, Property scaping and grading plans, engineering drawings, final construction drawings, and any other plans or specifications for construction of the Project. 1.1.24 "Project"means the Property and Improvements and conditions of approval of CPD 2016-01. 1.1.25 "Project Budget" is defined in Section 2.5.6. 1.1.26 "Property" means the Property described on Exhibit"A-1" attached hereto. 1.1.27 "Purchase Price" is defined in Section 2.1. 1.1.28 "Released Parties"is defined in Section 2.7.3. 1.1.29 "Schedule of Performance" means the schedule on Exhibit"B" attached hereto and incorporated by reference herein. 1.1.30 "Scope of Development"means the description of the Project set forth in Exhibit"C" attached hereto and incorporated by reference herein. 1.1.31 "Site"means the Property. 1.1.32 "Site Designs" is defined in Section 6.8. 1.1.33 "Title Commitment" is defined in Section 2.4. -3- 13 1.1.34 "Title Company" shall mean the Escrow Holder(i.e., the Title Company and the Escrow Holder are the same). 1.1.35 "Title Due Diligence Date is defined in Section 2.4. 1.1.36. "Title Objection Notice" is defined in Section 2.4. 1.1.37 "Title Response Notice" is defined in Section 2.4. 1.1.38 "Transfer"is defined in Section 4.1.1. 1.1.39 "Transferee"is defined in Section 4.1.2. 1.1.40 "Withholding Affidavit" is defined in Section 2.8.2. 2. PURCHASE AND SALE OF THE PROPERTY; PURCHASE PRICE; DEPOSIT. 2.1 Purchase and Sale; Purchase Price. In accordance with and subject to the terms and conditions hereinafter set forth,the City agrees to sell the Property to Developer, and Developer agrees to purchase the Property from the City. The purchase price for the Property to be paid by Developer(the "Purchase Price") shall be $612,500.00. The City shall deliver the Property to Developer without any occupants, but with all improvements thereon, including without limitation, all buildings, concrete, foundations, parking area, and all trees, bushes and shrubs, and subject to all matters of record subject to Developer's rights under Section 2.4. Notwithstanding anything to the contrary contained herein,the Close of Escrow shall not occur until such time as the Closing Conditions, as defined in Section 2.5 hereof, have been satisfied or waived. 2.2 Deposit. Within ten(10)business days after the date this Agreement is mutually executed and delivered by the City and Developer, the Developer shall deposit the sum of ten thousand dollars ($10,000.00) with Escrow Holder(together with all interest thereon, the "Deposit"). The Deposit shall be held by Escrow Holder in an interest bearing account. The Deposit shall be credited to the Purchase Price at the Close of Escrow. In the event the Close of Escrow does not occur due to a default by Developer,the Deposit shall be delivered to and retained by the City as liquidated damages for such default. DEVELOPER AND CITY AGREE THAT BASED UPON THE CIRCUMSTANCES NOW EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH CITY'S DAMAGES BY REASON OF A DEFAULT BY DEVELOPER PRIOR TO THE CLOSE OF ESCROW. ACCORDINGLY, DEVELOPER AND CITY AGREE THAT IN THE EVENT OF A DEFAULT BY DEVELOPER PRIOR TO THE CLOSE OF ESCROW, CITY SHALL BE ENTITLED TO RETAIN THE DEPOSIT, PLUS ANY ACCRUED INTEREST THEREON, AS LIQUIDATED DAMAGES. 2.3 Opening and Closing of Escrow. Within five(5) business days after the date this Agreement is executed by the City and delivered to Developer, the City and the Developer shall cause an escrow(the "Escrow")to be opened with Escrow Holder for the sale of the Property by the City to Developer. The Parties shall deposit with Escrow Holder a fully executed duplicate original of this Agreement as the escrow instructions for the Escrow. The City and Developer -4- 14 shall provide such additional instructions as shall be necessary and consistent with this Agreement. Provided that each of the conditions to closing described in Section 2.5 have been satisfied or waived, Escrow shall close (the "Close of Escrow") as soon as reasonably possible, but no earlier than June 15, 2017, nor later than June 22, 2017. If the Close of Escrow does not occur by June 22, 2017, any party not then in default may terminate this Agreement by written notice to the other and all the funds and documents deposited with Escrow Agent shall be promptly refunded or returned, as the case may be, by Escrow Agent to the depositing party, except that all escrow and title cancellation fees shall be paid by Developer. 2.4 Condition of Title; Title Insurance. Within five (5) business days after the opening of Escrow, Developer shall obtain from the Title Company a preliminary report for the Property and Option Property showing all title exceptions applicable thereto, a copy of all underlying documents referenced in such title commitment, and a plot of all easements, if any, applicable to the Property and Option Property(the foregoing is referred to herein as the "Title Commitment"). No later than the date that is twenty-five (25) days after the Effective Date ("Title Due Diligence Date"), Developer shall notify City in writing("Title Objection Notice") of any objections Developer may have to the title exceptions contained in the Title Commitment. In the event Developer fails to deliver the Title Objection Notice by the Title Due Diligence Date, Developer shall be deemed to have disapproved all such exceptions encumbering the Property. In the event Developer delivers a Title Objection Notice by the Title Due Diligence Date disapproving any exceptions in the Title Commitment or is deemed to have disapproved such exceptions (collectively, "Disapproved Title Exceptions"), City shall have ten(10) business days from receipt of Developer's Title Objection Notice or deemed disapproval to notify Developer in writing("Title Response Notice") of City's election to either(i)agree to remove or cure the objectionable items prior to the Close of Escrow, or(ii) decline to remove or cure the objectionable items and terminate this Agreement. City's failure to deliver a Title Response Notice shall be deemed City's election to terminate this Agreement. If City notifies Developer of City's election to terminate this Agreement rather than remove and cure the objectionable items or City is deemed to have made that election, Developer shall have the right, by written notice delivered to City no later than the date that is five (5) days after receipt of City's Title Response Notice, or twelve (12)days after delivery of Developer's Title Objection Notice if City does not deliver a Title Response Notice, to agree to accept the Site subject to the objectionable items, in which event City's election to terminate this Agreement shall be of no effect, and Developer shall take title at the Close of Escrow subject to such objectionable items without any adjustment to or credit against the Purchase Price. The exceptions to title that Developer approves pursuant to this Section 2.4 shall be referred to herein as the "Permitted Exceptions." The Permitted Exceptions shall also include the standard printed exceptions and exclusions contained in the form of the Title Policy approved by Developer, non-delinquent real property taxes (which shall be prorated as of the Closing as set forth in Section 2.6), and the documents to be recorded through the Escrow under this Agreement. Nothing in this Agreement shall obligate Developer to proceed with the Close of Escrow in the event new liens or encumbrances on the Site are discovered or arise through no fault of Developer after the date of Developer's title report, and any such additional matters shall be removed by the City at the City's sole cost and expense. -5- 1 5 Concurrently with recordation of the grant deed (the "Grant Deed"), Title Company shall provide and deliver to Developer, an ALTA Extended Coverage Owner's Policy of title insurance (Form 1970-B) ("ALTA Policy") with a policy coverage limit in the amount of the Purchase Price. Developer shall pay for the extended coverage portion of such title policy; City shall pay for the standard coverage (formerly known as "CLTA")portion. The ALTA Policy shall show title to the Property vested in Developer with an option to acquire the Option Property on the terms set forth in this Agreement. Such title policy shall be subject to the Title Company's standard terms, conditions and exceptions and the other Permitted Exceptions described above. The Title Company shall provide the City with a copy of the ALTA Policy. In the event the Title Company requires an ALTA survey as a condition to issuance of the ALTA Policy or as a condition to elimination of any survey exception shown therein, Developer shall provide such ALTA survey at its sole cost and expense or accept title subject to an exception for survey matters in the Title Policy. The City shall execute and deliver to the Title Company such affidavits and covenants as are customarily required for the Title Company to issue the ALTA Policy. Notwithstanding anything above which is or appears to be to the contrary, Developer shall have the right to require issuance of any endorsements to the ALTA Policy which it may desire as a condition to the Close of Escrow; provided that all expense or cost attributable to issuance of any such endorsement(other than endorsements to cure any defect on title) shall be the sole responsibility of Developer. City shall not cause or consent to the recordation of any additional liens, encumbrances, covenants, conditions,restrictions, easements, rights of way or similar matters against the Property after the Effective Date which will not be eliminated prior to the Close of Escrow; however, City may cause, or consent to, the recordation of reasonable and typical utility easements across the Option Property that will not be eliminated(provided they do not require removal of improvements or prevent a project on the Option Property as contemplated by Section 5.3 below), and City may permit temporary uses of the Option Property provided they cease as of the close of escrow for the applicable property and do not result in any release of Hazardous Materials (or if such a release occurs, City remediates the same in accordance with applicable law prior to the close of escrow for sale of the Option Property to Developer). 2.5 Conditions to Close of Escrow. The obligation of the City and Developer under this Agreement to close Escrow shall be subject to the satisfaction(or express written waiver by the benefited party) of each of the following conditions (collectively, the "Closing Conditions"): 2.5.1 There shall have been no change to the physical condition of the Property and no new title exceptions that, in either case, would materially and adversely affect the development, use or operation of the Property. 2.5.2 City's removal (or Title Company's reasonably insuring over)the Disapproved Title Exceptions. 2.5.3 The representations and warranties of the City and Developer contained in this Agreement being true and correct in all material respects. -6- 16 2.5.4 The delivery by City and Developer of all documents and funds required to be delivered pursuant to Sections 2.8 and 2.9 hereof. 2.5.5 The Title Company shall have committed to issue at the Close of Escrow an ALTA Policy,with any endorsements reasonably requested by Developer, showing fee simple title to the Property vested in Developer (or Developer's assignee as permitted by this Agreement), subject only to the Permitted Exceptions. 2.5.6 Developer shall have submitted to the City Manager, and the City Manager shall have approved(which approval shall not be unreasonably withheld, conditioned or delayed) a comprehensive Project budget, showing line items for each type of expenditure and the applicable sources of funds,together with a copy of all commitments obtained by the Developer for construction financing,permanent financing, and other financing from external sources (including proposed joint ventures and partnerships) to assist in financing the development of the Project, certified by the Developer to be true and correct in all material respects, and an audited financial statement (or other evidence in a form satisfactory to the City) demonstrating that the Developer has sufficient additional capital funds available and is committing such funds to cover the difference, if any,between costs of development of the Project and the amount available to the Developer from external sources (the "Project Budget"). 2.5.7 City shall have issued to Developer a Certificate of Compliance or shall have approved and filed a parcel map for the Property establishing that the Property is in compliance with the Subdivision Map Act under the exemption for conveyances by a public entity/city. 2.5.8 City shall have obtained a written agreement from the Ventura County Transportation Commission on the 20 feet of land adjacent to the railroad and the Property (approximately 9800 square feet), and City and Developer shall have negotiated, approved and executed an agreement between City and Developer for that area on the same terms as the City's written agreement with the Ventura County Transportation for that area. 2.5.9 Developer has submitted to City evidence that Developer and its principal owners are creditworthy and financially capable of paying for the Project, and have experience or engaged consultants with experience in developing projects of the same or greater scope as the Project, and the City Manager shall have reasonably determined that such financial capability and experience are satisfactory. 2.5.10 The City has approved the executed Construction Contract for the Project. The City shall have approved any amendments to the executed Construction Contract for the Project that materially extends the schedule or increases the budget for the Project, as provided in Section 3.3 hereof. 2.5.11 The Developer shall submit to the City Manager any material modification of the description of the legal and ownership structure of the Developer and any assignee (and its organizational documents) and the City Manager shall have approved (which approval shall not be unreasonably withheld, conditioned or delayed) such modification to the entity and documents. -7- 17 2.5.12 The City shall have received evidence reasonably acceptable to the City Manager that the construction-related insurance required by Section 7.1 of this Agreement shall be in effect. 2.5.13 All entitlements for the Project have been obtained, and there are no further discretionary approvals for the Project. The City shall file the CEQA Notice of Exemption no later than May 12, 2017 (i.e., one business day after the date this DDA is approved by City). Nevertheless, out of an abundance of caution, Developer shall have confirmed that all conditions required for the issuance of the entitlements for the development, demolition, construction, operation and use of the Project shall have been granted. 2.5.14 Developer and City shall have performed, observed and complied with all material covenants, agreements and conditions required by this Agreement to be performed, observed and complied with on its part prior to or as of the Close of Escrow. 2.5.15 Developer shall have delivered to City a deposit of$7,000 (the "Contractor Review Deposit") which City shall use for costs of a consultant to (i) review and analyze the Kitchell financial statements and the bondability of Kitchell Contractors, Inc., and (ii) discuss its conclusions-with the City Council. City shall return to Developer any unused portion of the Contractor Review Deposit within thirty (30) days after receipt of the final invoice from the consultant. 2.5.16 The City consultant described in Section 2.5.15 determining that Kitchell Contractors, Inc. is bondable and that payment and performance bonds therefore need not be required, and the City Manager's reasonable concurrence with such determination. 2.5.17 Developer shall have approved any conditions of approval (including any requirements for improvements) imposed by the City upon the 4,500 square feet of the Property added late in the negotiations. 2.5.18 No litigation challenging the validity of this Agreement shall be pending. 2.5.19 The City shall have received clearance from a reputable biologist(Parties agree that Brian Holy BRC Consultants is a reputable biologist) enabling Developer to proceed with demolition of the improvements on the Property. Developer may waive (which waiver shall be in writing) any of the conditions to the Closing intended to favor Developer solely, including Sections 2.5.1, 2.5.2, 2.5.3, 2.5.5, 2.5.8, 2.5.13 (last sentence only) and 2.5.17. 2.6 Costs; Escrow Holder Settlement Statement. 2.6.1 Developer shall be solely responsible for all costs and expenses related to all surveys,the extended coverage portion of its title policy, all title policy endorsements thereto (other than curative endorsements), escrow charges and recording fees. City shall be solely responsible for all costs and expenses related to the title policies and curative endorsements and any transfer taxes. -8- 1 8 2.6.2 Escrow Holder is authorized on the Close of Escrow to pay and charge the Developer for any fees, charges and costs payable under Section 2.6.1 as set forth on the settlement statements approved by the Parties. Before such payments are made, Escrow Holder shall notify the City and Developer of the fees, charges, and costs necessary to close under the Escrow, by delivering draft settlement statements to the Parties for their mutual approval. 2.7 Condition of the Property. 2.7.1 "As-Is" Sale. Developer acknowledges and agrees that, except as expressly set forth herein, Developer is acquiring the Property in its "AS IS" condition, WITH ALL FAULTS, IF ANY, AND, EXCEPT AS EXPRESSLY SET FORTH HEREIN, WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED and neither City nor any agents, representatives, officers, or employees of City have made any representations or warranties, direct or indirect, oral or written, express or implied, to Developer or any agents, representatives, or employees of Developer with respect to the condition of the Property, its fitness for any particular purpose, or its compliance with any laws, and Developer is not aware of and does not rely upon any such representation to any other party. Except as expressly set forth herein, neither City nor any of its representatives is making or shall be deemed to have made any express or implied representation or warranty, of any kind or nature, as to (a)the physical, legal or financial status of the Property, (b) the Property's compliance with applicable laws, (c) the accuracy or completeness of any information or data provided or to be provided by City, or(d) any other matter relating to the Property. 2.7.2 Inspections by Developer. Upon the execution of this Agreement, the City shall promptly deliver to Developer all documents in the City's possession or in the possession of a consultant to the City concerning the Property (including those set forth on Exhibit"E"), and until thirty (30) days after(the "Due Diligence Period"), Developer and its contractors and consultants who are designated in writing to City ("Developer Designees") shall have the right to enter onto the Property(without disturbing any occupants thereof) for the purpose of performing the Survey, hazardous materials inspections, soils inspections and other physical inspections and investigations, including but not limited to Phase I and Phase II Environmental Site Assessments, at their sole cost and expense; provided,however, that: (a) Developer shall deliver copies of all third party inspection reports to City (excluding Developer's feasibility studies and reports protected by the attorney-client privilege); (b) no inspections or investigations shall damage the Property or any improvements thereon or shall be"invasive" unless approved in writing by the City Manager, which approval shall not be unreasonably withheld, conditioned or delayed; (c) Developer shall immediately repair all damage caused by its inspections; and (d) neither Developer nor any of Developer's Designees shall enter the Property unless Developer has provided City reasonable written evidence (such as insurance certificates and/or copies of policies) that the activities of Developer and the Developer Designees are covered by reasonable liability insurance naming City as an additional insured. Developer shall defend, indemnify and hold City harmless from and against any and all claims, liabilities, losses, damages, costs and expenses (including, without limitation, attorneys' fees and cost) resulting from the entry onto the Property, inspections or tests by Developer or Developer's Designees, provided in no event shall Developer be responsible for any pre-existing conditions. If Developer disapproves or objects to any condition of the Property, then Developer may terminate this Agreement by -9- 19 written notice to City given on or prior to the end of the Due Diligence Period that describes the basis for the disapproval or objection. 2.7.3 Releases and Waivers. Developer acknowledges and agrees that in the event Developer does not approve of the condition of the Property under Section 2.7.2, Developer's sole right and remedy shall be to terminate this Agreement under and in accordance with Section 2.7.2, and thereupon Developer hereby waives any and all objections to or complaints regarding the Property and its condition, including, but not limited to, federal, state or common law based actions and any private right of action under state and federal law to which the Property is or may be subject, including, but not limited to, CERCLA(as defined in Section 1.1.17), RCRA (as defined in Section 1.1.17), physical characteristics and existing conditions, including, without limitation, structural and geologic conditions, subsurface soil and water conditions and solid and hazardous waste and Hazardous Materials on, under, adjacent to or otherwise affecting the Property. Developer further hereby assumes the risk of changes in applicable laws and regulations relating to past, present and future environmental conditions on the Property and the risk that adverse physical characteristics and conditions, including, without limitation, the presence of Hazardous Materials or other contaminants, may not have been revealed by its investigations. Developer and anyone claiming by, through or under Developer also hereby waives its right to recover from and fully and irrevocably releases City and its council members, board members, employees, officers, directors, representatives, agents, servants,attorneys, successors and assigns ("Released Parties")from any and all claims, responsibility and/or liability that it may now have or hereafter acquire against any of the Released Parties for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related to (i) the condition(including any defects, errors, omissions or other conditions, latent or otherwise, and the presence in the soil, air, structures and surface and subsurface waters of materials or substances that have been or may in the future be determined to be Hazardous Materials or otherwise toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Property under current or future federal, state and local laws regulations or guidelines), valuation, salability or utility of the Property, or its suitability for any purpose whatsoever, and(ii) any information furnished by the Released Parties under or in connection with this Agreement. This release includes claims of which Developer is presently unaware or which Developer does not presently suspect to exist which, if known by Developer, would materially affect Developer's release to City. Developer specifically waives the provision of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE . MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR." In this connection and to the extent permitted by law, Developer hereby agrees, represents and warrants that Developer realizes and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to causes of action, claims, demands, -10- 2 0 debts, controversies, damages, costs, losses and expenses which are presently unknown, unanticipated and unsuspected, and Developer further agrees, represents and warrants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Developer nevertheless hereby intends to release, discharge and acquit Released Parties from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses which might in any way be included as a material portion of the consideration given to City by Developer in exchange for City's performance hereunder. Notwithstanding anything to the contrary herein, the foregoing release and waiver shall not apply to any obligations of the City under this Agreement. Developer hereby agrees that, if at any time after the Close of Escrow any third party or any governmental agency seeks to hold Developer responsible for the presence of, or any loss, cost, or damage associated with, Hazardous Materials in, on, above or beneath the Property or emanating therefrom, which presence or emanation was caused by Developer or its agents, employees or contractors,then Developer waives any rights it may have against City in connection therewith, including, without limitation, under CERCLA(as defined in Section 1.1.17 and Developer agrees that it shall not(i)implead the City, (ii)bring a contribution action or similaraction against City, or(iii) attempt in any way to hold City responsible with respect to any such matter. The provisions of this Section 2.7.3 shall survive the Close of Escrow. City and Developer have each initialed this Section 2.7.3 to further indicate their awareness and acceptance of each and every provision hereof. CITY'S INITIALS DEVELOPER'S INITIALS 2.7.4 Environmental Indemnity. From or after the Close of Escrow, Developer shall indemnify, protect, defend and hold harmless the City and its officials, officers, attorneys, employees, consultants, agents and representatives, from and against any and all claims, liabilities, suits, losses, costs, expenses and damages, including but not limited to attorneys' fees and costs, arising directly or indirectly out of any claim for loss or damage to any property, including the Property, injuries to or death of persons, or for the cost of cleaning up the Property and removing Hazardous Materials or toxic substances, materials and waste therefrom, by reason of contamination or adverse effects on the environment, or by reason of any statutes, ordinances, orders, rules or regulations of any governmental entity or agency requiring the clean-up of any Hazardous Materials caused by or resulting from any Hazardous Material, or toxic substances or waste existing on or under, any portion of the Property acquired by Developer, provided the presence of such Hazardous Materials or toxic substances, materials or wastes was not caused by the City or its agents, employees, consultants or contractors. 2.8 City Deposits into Escrow. The City hereby covenants and agrees to deliver to Escrow Holder prior to the Close of Escrow the following documents,the delivery of each of which shall be a condition in favor of Developer to the Close of Escrow: 2.8.1 A Grant Deed duly executed and acknowledged by the City, in the form attached hereto as Exhibit"D"; -11- 21 2.8.2 The affidavit as contemplated by California Revenue and Taxation Code 590 ("Withholding Affidavit"); 2.8.3 A Certification of Non Foreign Status in accordance with I.R.C. Section 1445 (the "FIRPTA Certificate"); 2.8.4 The Certificate of Compliance; and 2.8.5 Such proof of the City's authority and authorization to enter into this transaction, including but not limited to the taking of all actions as required to develop, construct and operate the Project and all portions thereof, as the Title Company may reasonably require in order to issue Developer's policy of title insurance including a zoning endorsement insuring the entitlement right to the use and operation of the Project for the purposes set forth in this Agreement for the issuance of the ALTA Policy. 2.9 Developer Deposits into Escrow. The Developer hereby consents and agrees to deliver to Escrow Holder prior to the Close of Escrow, the following funds and documents, the delivery of each of which shall be a condition in favor of City to the Close of Escrow: 2.9.1 The Purchase Price (less the Deposit). 2.10 Authorization to Record Documents and Disburse Funds. Escrow Holder is hereby authorized to record the documents and disburse the funds and documents called for hereunder upon the Close of Escrow, provided each of the following conditions has then been fulfilled: (i) The Title Company can issue in favor of Developer an ALTA Policy, with liability equal to the Purchase Price (or such lesser amount as shall have been requested by Developer), showing the Property vested in Developer subject only to the Permitted Title Exceptions. (ii) The City shall have deposited in Escrow the documents required pursuant to Section 2.8, or otherwise required by the Title Company or Escrow, and Developer shall have deposited in Escrow the Purchase Price and all Escrow closing costs required under this Agreement to be paid by Developer. - (iii) The City and Developer have confirmed to Escrow Holder that all of the other closing conditions set forth in Section 2.5 and have been satisfied or expressly waived in writing by the Party(s) benefited thereby. Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any instrument delivered through this Escrow if necessary or proper for issuance of Developer's title insurance policy. 2.11 Escrow's Closing Actions. On the Close of Escrow, Escrow Holder shall: 2.11.1 Record the Certificate of Compliance,then the Grant Deed in the Official Records of Ventura County; -12- 2 2 2.11.2 Issue the Title Policy (or cause the Title Company to issue the Title Policy); 2.11.3 Prorate assessments and other charges as of the Close of Escrow in accordance with the settlement statements approved by the Parties. 2.11.4 From funds deposited by Developer, pay prorated amounts and charges to be paid by or on behalf of Developer, and return any excess to Developer; 2.11.5 Prepare and deliver to both Developer and the City one signed copy of Escrow Holder's closing statement showing all receipts and disbursements of the Escrow; and 2.11.6 Deliver the FIRPTA Certificate,the Withholding Affidavit to Developer. 2.12 Additional Instructions. If required by the Escrow Holder, the Parties shall execute appropriate escrow instructions, prepared by the Escrow Holder, which are not inconsistent herewith. If there is any inconsistency between the terms of this Agreement and the terms of the escrow instructions,the terms of this Agreement shall control unless an intent to amend the terms of this Agreement is expressly stated in such instructions. 3. DEVELOPMENT COVENANTS. 3.1 Development of the Project. Developer shall develop the Improvements on the Property in accordance with the Scope of Development,the Schedule of Performance, all requirements of any and all applicable federal, state and local laws, rules and regulations, and CPD 2016-01,the Plans and Specifications, and all other terms, conditions and requirements of this Agreement. Developer shall comply with the Schedule of Performance in a timely manner, provided that the obligations of Developer set forth therein which are to be performed after the Close of Escrow shall be delayed by Force Majeure Delays, if applicable, and provided, further, that the City Manager may extend any deadline therein in his sole and absolute discretion, not to exceed ninety(90) days per applicable deadline, provided each such extension is in writing. Until a Certificate of Completion is issued, the Developer shall provide the City with periodic progress reports at least quarterly, commencing upon the end of the first calendar quarter after execution of this Agreement, and otherwise, as reasonably requested by the City, regarding the status of the construction of the Improvements. If Close of Escrow occurs and thereafter Developer fails to cause the Project or any portion thereof to qualify for a certificate of occupancy or temporary certificate of occupancy for the Project("Occupancy Certificate") by the date which is two (2) full calendar years following the Close of Escrow, subject to extensions by Force Majeure Delay (as defined in Section 6.7), and Developer does not timely cure the failure as provided in Section 6.1.2 below, then City shall have the Reversion Rights described in Section 6.2.2. City shall also have such Reversion Rights if Developer fails to timely complete grading as required by the Schedule of Performance, subject to extensions by Force Majeure Delay, as described in Section 6.2.2. 3.1.1 Upon severance by Developer of the existing improvements on the Property from the sheet metal building to the east of the Property (located on City property), Developer shall cover any apertures caused by such severance in the sheet metal building using -13- 23 3/4"marine grade plywood with"vandal proof'screws. Once covered, Developer shall have no maintenance obligations with respect to the sheet metal building. 3.1.2 Developer shall landscape(without any requirement of hardscape, vertical or other non-organic improvements) the approximately 4,500 square feet of the Property based on a plan prepared by Developer and approved by the Community Development Department, which shall be approved provided such plan is consistent and compatible with the Project. 3.1.3 Developer shall construct public improvements for such 4,500 square foot area in accordance with the public improvements required by CPD 2016-01 in order to carry such CPD 2016-01 public improvements to the eastern end of the 4,500 square foot area. 3.1.4 By May 10, 2017, the City shall perform a resource survey to confirm that fledging owls have left their nests in the improvements on the Property, and shall notify Developer of such fact, whereupon Developer shall secure the improvements to prevent entry of owls. The City shall provide the Developer with reasonable notice, so that Developer may have a representative present at the time the biologist surveys the owls. If the owl hatchlings have not fledged, City agrees to perform a resource survey(with Developer having the right to have its representative present) as often as is reasonably recommended by a reputable biologist. 3.2 City's Right to Review Plans and Specifications. In connection with construction of the Project, Developer shall comply in all respects with Plans and Specifications approved by the City. By the City's execution and approval of this Agreement,the City acknowledges that there shall be no discretionary approvals for the Project, including the use and operation of all portions thereof in accordance with the terms of the Agreement: 3.3 Construction Contracts. Developer has retained Kitchell Contractors, Inc. as its general contractor("General Contractor" or"Contractor") which the City has (subject to Sections 2.5.15 and 2.5.16)approved to undertake the construction of the Project. Any replacement of the General Contractor shall be reasonably acceptable to and approved in writing by the City Manager(in the exercise of his reasonable discretion as to the financial capability of such replacement General Contractor, and the City Manager may require payment and performance bonds if the financial statements for the replacement General Contractor are not acceptable as determined by a consultant engaged by City at Developer's cost), licensed in California, shall have any other licenses customarily required by the City, and shall be experienced in constructing the type of improvements constituting the Improvements. Developer enter into a written contract reasonably approved by the City Manager(the "Construction Contract"), with the General Contractor(s) for performing the work constituting the construction of all of the Project, which is a guaranteed maximum cost contract or stipulated sum insuring construction of the improvements for a fixed or maximum price, and which obligates the General Contractor to commence and complete such construction in accordance with this Agreement and all applicable federal, state and local laws,rules and regulations. Each such Construction Contract shall provide for retention of at least five percent from each progress payment(except there shall be no retention for any items excused from retention as specified in the Construction Contract) until the final payment, and said final payment shall not be paid to the General Contractor until the portion of the Project covered by such Construction Contract shall have been completed to Developer's satisfaction, and Developer shall have obtained all appropriate lien -14- 2 4 waivers from the General Contractor and its subcontractors,or bonds acceptable to Developer in form and amount, insuring against loss arising from any mechanics', laborers', materialmen's or other like liens filed against the Property. 3.4 Post-Closing Parcel Map. If not yet performed, City shall prepare, and pay for the costs of preparing, a parcel map for the Property within ninety(90) days after the Close of Escrow and shall schedule the parcel map for City Council action within twenty-one (21) days thereafter(and Developer shall execute all necessary documents in connection therewith as owner of the Property. 3.5 Costs of Entitlement, Development and Construction. The Developer agrees that all costs, expenses and fees associated with the development and construction of the Project, including the construction of the new Improvements (including, but not limited to, the Property acquisition costs and governmental permits and approvals to the extent expressly set forth in this Agreement) shall be borne by Developer. 3.6 Rights of Access and Inspection. In addition to those rights of access to and across the Property to which the City may be entitled by law,members of the staff of the City shall have a reasonable right of access to the Property, without charge or fee, at any reasonable time, upon reasonable notice to Developer(which may be by telephonic notice to Developer or the construction foreman)to inspect the work being performed at the Property in connection with the initial development of the Project but shall not be obligated to do so and City shall not be liable for any failure to disclose any information discovered by City (or that could or should have been discovered by any City inspection). 3.7 Local, State and Federal Laws. Developer shall carry out the construction of the Improvements on the Property in conformity with all applicable federal, state and local laws, including all applicable federal and state occupation, safety and health standards. 3.8 City and Other Governmental City Permits and Approvals. Before commencement of construction or development of any work of improvement on the Property, Developer shall(at Developer's expense) secure, or cause to be secured, the permits described on Exhibit"B". 3.9 No Discrimination During Construction. Developer, for itself and its successors and assigns, agrees that it shall not discriminate against any employee or applicant for employment because of age, sex, marital status, race, handicap, color, religion, creed, ancestry, or national origin in the construction of the Improvements. 3.10 Taxes,Assessments,Encumbrances and Liens. Developer shall pay when due all real property taxes and assessments assessed or levied on portions of the Property from time to time owned by Developer, commencing immediately after the Closing. 3.11 No Agency Created. In performing this Agreement, Developer is an independent contractor and not the agent of the City. The City is not an agent of Developer. The City shall not have any responsibility whatsoever for payment to any contractor or supplier of Developer or its contractors. Developer shall not have any responsibility whatsoever for payment to any contractor or supplier of the City. -15- 2 5 3.12 Certificate of Completion. Upon Developer's completion of the construction of the Project, Developer will apply to the City for a Certificate of Completion. The City's issuance of the Certificate of Completion shall constitute the acknowledgement of the City that Developer has complied in all respects with its development obligations (and only the development obligations) set forth in this Article 3. Promptly following the City's issuance of a certificate of occupancy for the Project, and provided that Developer is then in full compliance with all of its obligations under Article 3 of this Agreement, the City Manager shall promptly execute, acknowledge and deliver the Certificate of Completion,which shall be recorded in the Official Records of Ventura County and shall include, in form reasonably acceptable to Developer, an express termination or reconveyance of the City's right to reversion under Section 6.2.2(ii) of this Agreement and the Grant Deed. If the Developer is not in compliance with its obligations under this Article 3, the City Manager may promptly specify the nature of such non-compliance by written notice to Developer. 4. LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS. 4.1 Restriction on Transfer of Developer's Rights and Obligations. 4.1.1 Prior to issuance of a Certificate of Completion for the Project and the opening of the Project for business, Developer shall not sell, assign, transfer, mortgage, lease (except for space leases conditioned upon Project completion), hypothecate, or convey (collectively, a"Transfer")the.Property or any part thereof or any of Developer's rights or obligations hereunder, without the City's prior written consent, which consent may be granted or withheld in the City's sole and absolute discretion, except for the execution of one or more deeds of trust and related instruments securing Developer's construction loan, a conveyance of the Property resulting from the foreclosure thereof(or a deed in lieu of such a foreclosure) or any Transfer whereby John Chester, Molly Chester, Paul Gurinas or Jessica Gurinas remain in direct or indirect control over the Developer and the Project. Developer acknowledges that the identity of Developer is of particular concern to the City, and it is because of Developer's identity that the City has entered into this Agreement with Developer. Except for any Transferee approved by the City pursuant to this Section 4.1, and except for any Holder(defined in Section 4.2) that has taken possession of the Property,no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement. No transfer or assignment of Developer's interest hereunder without the City's prior written approval shall be deemed to release Developer from the obligations of Developer hereunder. 4.1.2 Subject to Section 4.2 below, after the issuance of a Certificate of Completion for the entire Project, and the opening of the Project for business, Developer shall have the right to Transfer the Property to any party (a"Transferee") provided that: 4.1.2.1 the Transferee (and/or its management company or affiliates, if any) has the experience, quality, character, trade record, financial ability and reputation, as determined by City in its reasonable judgment, to own the Project and to cause it to be managed and operated(whether directly or through an agreement approved by the City in accordance with this Agreement) in compliance with this Agreement; and -16- 2 6 4.1.2.2 the Transferee assumes in writing all obligations of Developer set forth in this Agreement(except those pursuant to Articles 2 and 3, which shall be deemed satisfied upon the Close of Escrow and the issuance of the Certificate of Completion, respectively). In the event that Developer desires to Transfer the Property pursuant to this Section 4.1.2, Developer will so notify the City, and will provide the City with all pertinent information regarding the Transferee. The City will approve or disapprove in writing, the Transferee(in its reasonable judgment)within thirty (30) days after receipt of written notice of Developer's intention to make the Transfer. Upon the completion of any Transfer to a Transferee approved by the City as provided in this Section 4.1.2, the Transferee shall assume all of Developer's rights and obligations under this Agreement, and Developer shall be released from all further liabilities and obligations under this Agreement. 4.2 Holders of Deeds of Trust. Notwithstanding any provisions of Section 4.2 to the contrary, Developer shall have the right to encumber its interest in the Property and the Project pursuant to one or more deeds of trust from an institutional lender approved by the City(which approval shall not unreasonably be withheld or delayed), for the purpose of securing loans of funds to be used for financing the direct and indirect costs of the Projeet(including Property development costs, reasonable and customary developer fees, loan fees and costs, and other normal and customary project costs), or for refinancing said construction financing with permanent financing, or for subsequent financings. Any institutional lender of record holding any such deed of trust, whose name and address shall have been provided by Developer to City referred to herein as a"Holder." The City shall provide the Holder within ten(10)business days from a written request therefor with an estoppel certificate relating executed by the City Manager in a form and substance reasonably required by any Holder relating to this Agreement and other matters reasonably required by Holder. 4.3 Rights of Holders. The City shall deliver a copy of any notice or demand to Developer concerning any breach or default by Developer under this Agreement to each Holder who has previously made a written request to the City for special notice hereunder. Any notice of breach or default by Developer shall not be effective against any such Holder unless given to such Holder. Such Holder shall have the right at its option to cure or remedy any such default and to add the cost thereof to the secured debt and the lien of its security interest. If such breach or default can only be remedied or cured by such Holder upon obtaining possession, such Holder may remedy or cure such breach or default within a reasonable period of time after obtaining possession, provided such Holder seeks possession with diligence through a receiver or foreclosure. Such Holder shall not undertake or continue the construction or completion of the Improvements beyond the extent necessary to conserve or complete the Improvements or otherwise to protect its security interest. Any Holder completing the Improvements must assume all rights and obligations of Developer under this Agreement arising from and after the date Holder takes title and position of the Improvements and shall then be entitled, upon written request made to the City, to a Certificate of Completion from the City. 4.4 Noninterference with Holders. The provisions of this Agreement do not limit the right of Holders (a) to foreclose or otherwise enforce any mortgage, deed of trust, or other security instrument encumbering all or any portion of the Property, and the Improvements -17- 2 7 thereon, (b)to pursue any remedies for the enforcement of any pledge or lien encumbering such portions of the Property, or(c)to accept, or cause its nominee or assignee to accept, a deed or other conveyance in lieu of foreclosure or other realization. In the event of(i) a foreclosure sale under any such mortgage, deed of trust or other lien or encumbrance, (ii) a sale pursuant to any power of sale contained in any such mortgage or deed of trust, or(iii) a deed or other conveyance in lieu of any such sale,the purchaser or purchasers and their successors and assigns, and such portions of the Property shall be, and shall continue to be, subject to all of the conditions, restrictions and covenants of all documents and instruments recorded pursuant to this Agreement, including, without limitation,the restrictions set forth in the grant deed on such property from the City to Developer. The City agrees to execute such further documentation regarding the rights of any Holder as is customary with respect to construction or permanent financing, as the case may be, to the extent that such documentation is reasonably requested by any Holder and is reasonably approved by the City, including a subordination of City's reversion/repurchase rights. 4.5 Right of City to Cure. In the event of a default or breach by the Developer of a loan by a Holder prior to the delivery an Occupancy Certificate,the City may, upon prior written notice to the Developer, cure the default,prior to the completion of any foreclosure. In such event the City shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the City in curing the default. The City shall also be entitled to a lien upon the Property or any portion thereof to the extent of such costs and disbursements. The City agrees that such lien shall be subject and subordinate to any lien in favor of a Holder, and the City shall execute from time to time any and all documentation reasonably requested by the Developer to effect such subordination. 5. USE AND OPERATION OF THE PROPERTY. 5.1 Maintenance by Developer. The Developer shall maintain the Project in good repair and working order, and in a neat, clean and orderly condition, including the walkways, driveways, and landscaping, and from time to time make all necessary and proper repairs, renewals, and replacements. In the event that there arises at any time prior to the expiration of such period a condition in contravention of the above maintenance standard, then the City shall notify the Developer in writing of such condition, giving the Developer thirty(30) days from receipt of such notice to cure said condition. In the event the Developer fails to cure or commence to cure the condition within the time allowed,the City shall have the right to perform all acts necessary to cure such a condition, or to take other recourse at law or in equity the City may then have and to receive from the Developer the City's actual and reasonable costs in taking such action. The parties hereto further mutually understand and agree that the rights conferred upon the City expressly include the right to enforce or establish a lien or other encumbrance against the Property, but such lien shall be subject and subordinate to previously recorded liens and encumbrances, the lien of a deed of trust held by any Holder, and all amendments and modifications thereof. The foregoing provisions shall be a covenant running with the Property and will be enforceable by the City, its successors and assigns. 5.2 Use and Operation Covenant. Developer hereby covenants and agrees that the Improvements shall be used and operated for a minimum of two years after the issuance of the Certificate of Completion, as described in Section 3.1, subject to Force Majeure. -18- 28 5.3 Developer's Right to Purchase the Option Property. In addition to the Developer's right to purchase the Property, until sixty(60) calendar months following the date of this Agreement ("Option Period"), Developer may exercise an option to acquire the Option Property from the City for its then-fair market value, as determined by an appraisal obtained by City at Developer's cost. Developer shall exercise such option by giving written notice to the City not later than the expiration of the Option Period together with an earnest money deposit equal to Ten Thousand and No/100 Dollars ($10,000.00) of the purchase price to a nationally- recognized title company selected by City, and the parties shall open escrow with such company. If Developer agrees in writing that Developer will not exercise its option but will allow City to negotiate with a third party during the Option Period to sell the Option Property, and such sale transaction is not consummated within the Option Period, then Developer's option shall again apply to the Option Property until the end of the Option Period. The Option Property shall be delivered to Developer in its then"as is"condition subject only to the title exceptions in the preliminary report obtained and reviewed by Developer under Section 2.4 and the easements (if any) described in the last paragraph of Section 2.4. If such option is timely exercised, Developer shall then deliver a complete project proposal to City within four(4) months, for City staff review and good faith preliminary staff approval, it being understood that staff may disapprove if the proposed project is not of the same or greater quality as the Project or is not compatible with the Project. Developer may revise the proposal to address staff concerns, but if such preliminary staff approval is not given within three (3) months,Developer shall have no further rights under this Section. If such staff approval is given, Developer shall thereafter have four(4)months to submit and obtain a deemed complete application for a planned development permit. If such application is timely deemed complete, City staff shall obtain the appraisal update at Developer's cost, and then the parties shall negotiate in good faith a disposition and development agreement, similar to and consistent with this Agreement, for the Option Property and the proposed project thereon(with similar conditions to closing and similar provisions regarding assignment), and upon City's compliance with CEQA and the City Council's approval of such agreement and the permit, the parties will enter into such agreement. If the City Council does not approve such agreement or permit within four months after the application is deemed complete, then Developer shall have no further rights under this Section. The closing of such purchase of the Option Property shall occur within sixty(60) days after the date of such agreement, with the City providing an ALTA Policy to Developer with coverage in the amount of the purchase price for the Option Property (and City paying for the standard coverage portion only and not for extended coverage, the documentary transfer taxes and half of the escrow fees). Developer may not assign its option hereunder except to an entity owned or controlled directly or indirectly by Developer or any its principals, unless such assignment is made in connection with a conveyance, mortgage or other transfer of the Property, and such assignee accepts such assignment and agrees to assume the obligations of Developer with respect thereto from after the date of such assignment. In the event of such assignment, Developer shall be required to deliver to the City(i) a copy of the executed assignment and assumption agreement between Developer and assignee, and(ii) copies of the organization documents of the assignee showing the ownership and control of the assignee. If City receives written interest in and proposal for development of the Option Property during the last four(4) years of the Option Period, City may notify Developer in writing with reasonable evidence of such interest and proposal, in which case Developer must exercise its Option within sixty (60) days thereafter or shall be deemed to have waived its option. -19- 2 9 5.4 Assessment Districts. Developer agrees to cast affirmative ballots for the formation of one or more assessment districts and levying of assessments and any proposed assessment increases for existing assessment districts for the maintenance of parks, landscaping, and lighting and electricity costs, if requested by the City Council. 5.5 Fee Protest Waiver. Developer agrees that the fees and payments due to the City in its governmental capacity in connection with the Project shall be made without reservation, and Developer expressly waives the right to payment of any such fees under protest pursuant to California Government Code Section 66020 and statutes amendatory or supplementary thereto. Developer further agrees that such fees are not public improvement fees collected pursuant to Government Code Section 66006 and statutes amendatory or supplementary thereto. 5.6 Historical Trees. Developer acknowledges that High Street is home to a historical grove of California Pepper Trees and that the trees are maintained pursuant to an adopted Pepper Tree Maintenance Plan(Maintenance Plan). Developer agrees to retain historic trees that are located completely on the Property in accordance with the Maintenance Plan, and as directed by the City. 5.7 Streetlights. City hereby notifies Developer that streetlights adjacent to the Project, are currently owned by Southern California Edison (SCE), but may be owned by the City in the future. The streetlights may be subject to relocation or removal dependent upon future development or improvement of the High Street streetscape as determined by the City. 6. DEFAULT, REMEDIES AND TERMINATION. 6.1 Defaults. Subject to the provisions of Section 6.7 hereof, the occurrence of any or all of the following shall constitute a default("Default") under this Agreement: 6.1.1 The failure of either party to perform its obligations on a timely basis as contained in the Schedule of Performance (as extended by Force Majeure Delays), or any breach of this Agreement by any Party involving the payment of money,the amount of which is not in good faith dispute, and the continuance of such breach for a period of ten(10) days after the non- defaulting Party has given written notice to the defaulting Party; 6.1.2 Except as otherwise provided in Section 6.1.1 hereof, a breach of any term of this Agreement by any Party, other than the payment of money, and failure of such Party to cure such breach within thirty(30) days after the non-defaulting Party has given written notice to the defaulting Party; provided, however, if such breach is not reasonably curable within such thirty(30) day period, then such Party shall be deemed in Default only if such Party does not commence to cure such breach within such thirty(30) day period and thereafter fails to diligently prosecute such breach to completion; 6.1.3 Developer's Transfer, or the occurrence of any involuntary Transfer, of the Property or any part thereof or interest therein, or any rights or obligations of Developer under this Agreement, in violation of this Agreement; 6.1.4 Developer's failure or refusal to keep in force and effect any material permit or approval with respect to construction of the Project, and Developer's failure to cure -20- 3 0 such breach within thirty (30) calendar days after notice from the City of Developer's breach; provided, however, if such breach is not reasonably curable within such thirty(30)day period, then Developer shall be deemed in Default only if Developer does not commence to cure such breach within such thirty (30) day period and thereafter fails to diligently prosecute such breach to completion; or 6.1.5 Filing of a petition in bankruptcy by or against any Party or appointment of a receiver or trustee of any property of any Party, or an assignment by any Party for the benefit of creditors, or adjudication that such Party is insolvent by a court, and the failure of such Party to cause such petition, appointment, or assignment to be removed or discharged within 90 days. 6.2 Remedies. 6.2.1 Remedies for Default Prior to the Close of Escrow. In the event of a Default by any Party prior to the Close of Escrow, the non-defaulting Party shall have the right to terminate this Agreement (provided it is not in Default of its obligation under this Agreement), by delivering written notice thereof to the defaulting Party and to Escrow Holder. If the Default was caused by Developer, then the City's remedies shall be subject to Section 2.2. If the Default was caused by the City, then Developer may seek any available remedies at law or equity, including but not limited to, the right to receive damages(excluding damages for lost profits or consequential damages) or to pursue an action for specific performance. 6.2.2 Remedies for Default After the Close of Escrow; Reversion Rights. In the event of a Default by any Party after the Close of Escrow, a non-defaulting party shall be entitled to the following remedies, as applicable: (i) A defaulting Party shall be liable to the non-defaulting Party for all damages, costs and losses incurred by the non-defaulting Party, and the non-defaulting Party may seek against the defaulting Party any available remedies at law or equity, including but not limited to the right to receive damages (but not damages for lost profits or consequential damages) or to pursue an action for specific performance; and (ii) Prior to the issuance of the Certification of Completion, the City shall have the right as its sole remedy the reversion provided for below in this Section 6.2.2 if Developer fails to (i)timely complete grading as described in the Schedule of Performance; (ii) timely complete the Improvements to the point that they qualify for an Occupancy Certificate as described in the Schedule of Performance, in each case subject to extension by Force Majeure Delays (each, a"Reversion Event"). Upon a Reversion Event, the City may notify Developer in writing of the Reversion Event, and if Developer does not then complete the uncompleted improvements giving rise to the Reversion Event within thirty(30) days,then City may reenter and take possession of the Property, with all Improvements thereon, and revest in the City title to the Property theretofore conveyed to the Developer(or its successors in interest), and take any and all actions necessary to commence and complete the enforcement of its reversionary interest, and the Developer shall -21- 31 promptly take all actions and execute all documents necessary to revert title to the Property to the City free and clear of all liens and encumbrances created by or with the consent of Developer. (iii) Upon re-vesting in the City of title to the Property or any portion thereof as provided in this Section, the City shall use good faith efforts to resell the Property in a commercially reasonable manner and to a qualified and responsible party or parties (as determined by the City) who will assume the obligation of making or completing the Project(or another project acceptable to City) in a manner satisfactory to the City. Upon such resale of the Property or any portion thereof, the proceeds thereof payable to the City shall be applied as follows: 1. First to reimburse the City for all reasonable out of pocket costs and expenses incurred by the City and payable to unrelated third parties in connection with the reversion and resale of the Property or any portion thereof(less any net income derived by the City from operation or use of any part of the Property); all taxes, installments of assessments payable prior to resale, and applicable water, sewer, electricity and similar charges and liability and casualty insurance costs with respect to the Property or application portion thereof(or, in the event the Property or any portion thereof is exempt from taxation or assessment or such charges during the period of ownership by the City, an amount equal to the taxes,assessments, orcharges that would have been payable if the Property or any portion thereof was not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or any portion thereof in connection with the re-vesting of title in the City or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults, or acts of the Developer, its successors or transferees; all CEQA and other costs incurred by City in connection with its review and approval of any new project on the Property proposed by the Purchaser; and expenditures made or obligations incurred by City with respect to the completion of the Project or any part thereof on the Property; and,any amounts otherwise owing the City under this Agreement by the Developer and its successors or transferee. 2. Second, to reimburse the Developer, its successor or transferee,up to the amount equal to: (a) The reasonable cost payable to any unrelated third party and incurred by the Developer from its own funds (not loan funds) in connection with development of the Property or applicable portion thereof; less (b) the sum of any gains or income withdrawn or made by the Developer from the Property or applicable portion thereof, or the improvements thereon. 3. Third, any balance (if any) remaining after such reimbursements shall be retained by the City as its property. The rights established in this Section are to be interpreted in light of the fact that the City will convey the Property to the Developer for development, construction and operation of the Project and not for speculation in undeveloped Property or for construction of improvements for a purpose materially different from the Project. • -22- 3 2 6.3 No Speculation. The rights established in this Article are to be interpreted in light of the fact that the City will convey the Property to the Developer for the development, construction and operation of the Project and not for speculation in undeveloped Property or for construction of different improvements for a purpose materially different from than the Project. 6.4 No Personal Liability. No representative, agent, attorney, consultant, or employee of any party shall personally be liable to the other party or any successor in interest of a party, in the event of any Default or breach by a party, or for any amount which may become due to a party or any successor in interest, on any obligation under the terms of this Agreement. 6.5 Rights and Remedies are Cumulative. The rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by the non-defaulting Party;provided, however, that liquidated damages specified herein shall constitute the sole damages recoverable for the default giving rise to such liquidated damages. 6.6 Inaction Not a Waiver of Default. Any failures or delays by either Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such Party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. The acceptance by a Party of less than the full amount due from the other party shall not constitute a waiver of such Party's right to demand and receive the full amount due, unless such Party executes a specific accord and satisfaction. 6.7 Force Majeure. Following the Close of Escrow, and notwithstanding anything to the contrary in this Agreement, nonperformance shall be excused when performance is prevented or delayed by reason of any circumstances reasonably beyond the control of such party(a "Force Majeure Delay"), including without limitation strike, lockout, labor slowdown or other labor or industrial disturbance (whether or not on the part of the employees of either party hereto), civil disturbance, future order claiming jurisdiction, act of the public enemy,war,riot, sabotage,blockade, embargo, inability to secure customary materials, supplies or labor through ordinary sources, severe weather, lightning, earthquake, fire, storm,hurricane, tornado, flood, washout, explosion, or any other matter beyond the reasonable control of the party from whom performance is required except that any delay by the City in its governmental capacity shall not constitute a"Force Majeure Delay" unless it is a delay not caused in whole or in part by any incomplete or inaccurate or delayed submittal by Developer or any Developer delay in paying governmental fees. Any prevention, delay or stoppage due to any Force Majeure Delay shall excuse the performance of the party affected for a period of time equal to any such prevention, delay or stoppage (except the performance of obligations of either party to pay money to the other party or to close escrow),provided that the Party claiming the Force Majeure Delay notifies the other Party of the Force Majeure Delay within a reasonable time (not to exceed ten business days) after the commencement of the Force Majeure Delay. 6.8 Plans and Data. If this Agreement is terminated for any reason, then Developer shall deliver to the City, without cost or expense to the City, copies of any and all maps, architecture, engineering, subdivision approvals,permits, entitlements, rights, contracts,plans, -23- 3 3 drawings, studies, designs, reports, surveys, and data pertaining to the Project and its development(collectively, "Site Designs") which are in the possession of Developer, provided, in no event shall Developer be required to deliver any data that contains intellectual property belonging to Developer or any of its agents, employees, contractors or consultants, or any data that is protected by the attorney-client privilege. 7. INSURANCE; INDEMNITY. 7.1 Insurance. 7.1.1 From and after the Close of Escrow and for so long as title to the Property has not reverted to by the City, Developer shall obtain and maintain at no cost or expense to the City, with a reputable and financially responsible insurance company reasonably acceptable to the City, (i) after the opening of the Project for business, commercially reasonable casualty insurance for the Improvements in an amount not less than the replacement cost of the Improvements (subject to commercially reasonable deductibles)with a reasonable inflation rider; (ii) commercial broad form general liability insurance, insuring against claims and liability for bodily injury, death, or property damage arising from the construction, use, occupancy, condition, or operation of the Property,which liability insurance shall provide combined single limit protection of at least$5,000,000 and shall include a reasonable inflation rider, contractual liability coverage and products and completed operations coverage, and(iii) commercial automobile liability insurance of at least$1,000,000 combined single limit.. Such liability insurance policies shall name the City and its council members,board members, officers, agents and employees as additional insureds. 7.1.2 Before commencement of any demolition or construction work by Developer on any portion of the Property owned by Developer, Developer shall obtain and maintain in force until completion of such work(i) "all risk"builder's risk insurance, including coverage for vandalism and malicious mischief, in a form and amount and with a company reasonably acceptable to the City, and(ii)workers' compensation insurance covering all persons employed by Developer in connection with work on the Project, or any portion thereof During the construction of Improvements on any portion of the Property by Developer, such builder's risk insurance shall cover improvements in place and all material and equipment at the job site furnished under contract, but shall exclude contractors', subcontractors', and construction managers' tools and equipment and property owned by contractors' and subcontractors' employees. 7.1.3 Each architect and each engineer engaged by Developer shall provide professional liability insurance with a limit of liability of at least One Million Dollars ($1,000,000.00). 7.1.4 Developer shall also furnish or cause to be furnished to the City evidence satisfactory to the City that any contractor with whom it has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. -24- 3 4 7.1.5 With respect to each policy of insurance required above, Developer and each of Developer's general contractors, engineers and architects shall furnish to the City a certificate on the insurance carrier's form setting forth the general provisions of the insurance coverage promptly after written request by City showing the additional insureds. The certificate shall also be furnished by Developer prior to commencement of construction of any Improvements. 7.1.6 All such policies required by this Section shall contain(i) language to the effect that the policies cannot be cancelled or materially changed except after thirty(30) days' written notice by the insurer to the City, and(ii)a waiver of the insurer of all rights of subrogation against the City and the other additional insureds. All such insurance shall have deductibility limits which shall be commercially reasonable. 7.2 Indemnity. From and after the execution of this Agreement, Developer hereby agrees to indemnify, defend, protect, and hold harmless the City and any and all agents, employees, representatives, council members, board members, consultants, and officers of the City, from and against all losses, liabilities, claims,damages (including foreseeable or unforeseeable consequential damages),penalties, fines, forfeitures, costs and expenses (including all reasonable out of pocket litigation costs and reasonable attorneys' fees)and demands of any nature whatsoever, related directly or indirectly to,or arising out of or in connection with: (i) the development and construction by Developer of the Improvements on the Property or the use, ownership,management, occupancy, or possession of the Property during Developer's period of ownership of the Property; (ii) any Default by Developer hereunder; or (iii) any of Developer's activities on the Property(or the activities of Developer's agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on the Property), regardless of whether such losses and liabilities shall accrue or are discovered before or after termination or expiration of this Agreement, except to the extent such losses or liabilities are caused by the negligence or willful misconduct of the City or any agent, employee, contractor of consultant of the City; and (iv) if so elected by Developer, all legal challenges to this Agreement or the Improvements; provided that if Developer elects not to defend, indemnify, protect or hold harmless the City with respect to any such legal challenge, then Developer shall reimburse City within ten(10) days after written demand from time to time for: (i)the legal fees and costs incurred by City in defending such legal challenge up to $10,000, plus; (ii) legal fees and costs awarded in any such legal challenge to the plaintiffs for attorneys' fees and costs not to exceed $10,000, and Developer shall have no further obligations under this Section 7.2 (iv). The City may in its discretion, and at its own cost, participate in the defense of any legal action naming the City. The provisions of this Section 7.2 shall survive the Close of Escrow or the termination of this Agreement. The City is under no obligation to defend any legal challenges or other claims. -25- 3 5 8. REPRESENTATIONS AND WARRANTIES. 8.1 Developer Representations. Developer represents and warrants to the City as of the date of this Agreement and as of the Close of Escrow that: (i) Developer is a limited liability company validly existing and in good standing under the laws of the State of California. (ii) Developer has duly authorized the execution and performance of this Agreement and the execution and performance of all of the closing documents set forth herein. (iii) Developer's execution and performance of this Agreement and the closing documents will not violate any provision of the Developer's operating agreement or any deed of trust, lease, contract,agreement, instrument, order,judgment or decree by which Developer is bound. (iv) The Developer has not engaged a broker with respect to the purchase of the Property contemplated herein, other than Timothy P. Foutz of NAI Capital (whose commissions and charges will be paid by Developer pursuant to a separate written agreement between such broker and Developer and not through Escrow). (v) The Developer has received and reviewed the documents and disclosures described on Exhibit"E". 8.2 City Representations. The City hereby represents and warrants to the Developer that: (i) City is a municipal corporation in good standing under the laws of the State of California. (ii) City has duly authorized the execution and performance of this Agreement and the execution and performance of all of the closing documents set forth herein. (iii) All actions have been appropriately taken by the City and all other governmental authorities for the City to have fee title to the Property, for this Agreement to be binding upon the City and to permit the City's timely performance of its obligations under this Agreement. (iv) City's execution and performance of this Agreement and the closing documents will not violate any provision of any governing document, contract, instrument, order, judgment, resolution,ordinance or decree by which City is bound. (v) the City has not engaged a broker with respect to the sale of the Property as contemplated herein and does not pay fees for referrals or real estate commissions or similar fees. The representations and warranties in this Article 8 shall survive the Closing and recording of the grant deed and any other closing documents. -26- 3 6 9. GENERAL PROVISIONS. 9.1 Notices. All notices and demands shall be given in writing by certified mail, postage prepaid,and return receipt requested, or by reputable overnight messenger. Notices shall be considered given upon the earlier of(a) one business day following deposit or delivery with a nationally recognized overnight courier delivery charges prepaid, or (b) upon delivery or attempted delivery as shown on the return receipt if sent by certified mail. Notices shall be addressed as provided below for the respective Party; provided that if any Party gives notice in writing of a change of name or address, notices to such Party shall thereafter be given as demanded in that notice: City: City of Moorpark 799 Moorpark Avenue Moorpark, California 93021 Attn: City Manager Developer: Apricot Lane Market Holdings, LLC do Apricot Lane Farms 10700 Broadway Road Moorpark, California 93021 Attn: John Chester 9.2 Construction. The Parties agree that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. 9.3 Interpretation. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words"person" and"party" include corporation,partnership, firm, trust, or association where ever the context so requires. Unless otherwise required by a specific provision of this Agreement, time hereunder is to be computed by excluding the first day and including the last day. If the date for performance falls on a Saturday, Sunday, or legal holiday,the date for performance shall be extended to the next business day. All references in this Agreement to a number of days in which either party shall have to consent approve or perform shall mean calendar days unless specifically stated to be business days. 9.4 Time of the Essence. Time is of the essence of this Agreement. 9.5 Warranty Against Payment of Consideration for Agreement. Developer warrants that it has not paid or given, and will not pay or give,to any third person, any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, engineers and attorneys. 9.6 Attorneys' Fees. If any Party brings an action to enforce the terms hereof or declare its rights hereunder, the prevailing Party in any such action shall be entitled to its -27- 3 7 reasonable attorneys' fees to be paid by the losing Party as fixed by the court. If either Party is made a party to any litigation instituted by or against the other party("Defending Party"), then the Defending Party shall indemnify and defend the other Party from and against, and save them harmless from, all costs, expenses (including reasonable attorneys' fees), claims, liabilities, damages and losses incurred by the other Party in connection with such litigation provided, however, that in no event shall the Defending Party be obligated to pay any damages awarded to any person or entity that result from the negligence or willful misconduct of the other Party, or that of its agents, employees or contractors. 9.7 Entire Agreement Waivers and Amendments. This Agreement, together with all attachments and exhibits hereto, and all agreements and documents executed pursuant hereto, constitutes the entire understanding and agreement of the Parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to the subject matter hereof No subsequent agreement, representation or promise made by either Party hereto, or by or to any employee, officer, agent or representative of either Party, shall be of any effect unless it is in writing and executed by the Party to be bound thereby. No person is authorized to make, and by execution hereof Developer and the City acknowledge that no person has made, any representation, warranty, guaranty or promise except as expressly set forth herein; and no agreement, statement, representation or promise made by any such person which is not contained herein shall be valid or binding on Developer or the City. 9.8 Severability. Each and every provision of this Agreement is, and shall be construed to be, a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall to any extent be held to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected hereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. 9.9 Headings. All section headings and subheadings are inserted for convenience only and shall have no effect on the construction or interpretation of this Agreement. 9.10 No Third Party Beneficiaries. This Agreement is made and entered into for the sole benefit of the Parties, and there are no third party beneficiaries of this Agreement. No other person shall have any right of action based upon any provision of this Agreement. 9.11 Governing Law; Jurisdiction; Service of Process. This Agreement and the rights of the Parties shall be governed by California law. The Parties consent to the exclusive jurisdiction of the California Superior Court for the County of Ventura. If any legal action is commenced by Developer against the City, or by City against Developer, service of process on the City shall be made by personal service upon the City Manager or secretary of the City, or in such other manner as may be provided by law. If any legal action is commenced by City against Developer, service of process on Developer shall be made by personal service on John Chester, or in such other manner as may be provided by law. Developer agrees, for the benefit of the City, that it shall designate an agent for service of process in the State of California in the manner prescribed by law. -28- 3 8 9.12 Survival. The provisions hereof shall not merge into, but rather shall survive, any conveyance hereunder(including, without limitation, the delivery and recordation of the Grant Deed) and the delivery of all consideration. 9.13 Estoppel Certificates. Upon written request of Developer or any Holder, City shall within fifteen business (15) days of the date of such request, execute and deliver to Developer, a written statement: certifying, to the City's actual knowledge, that (a)this Agreement in full force and effect, if such is the case, and has not been modified or amended, except as shall be stated; and (b) that no default by Developer exists under this Agreement. 9.14 City Actions. In addition to any provisions of this Agreement that gives the City Manager the authority to make decisions and grant approvals, the City hereby authorizes the City Manager to deliver such approvals, consents as are contemplated by this Agreement, waive requirements under this Agreement, and modify this Agreement, on behalf of the City provided that the applicable approval, consent, waiver or modification is not substantial (i.e., does not change the fundamental business transaction between the Developer and the City, as determined by the City Manager in his reasonable discretion). 9.15 Counterparts. This Agreement may be executed-in one or more counterparts, each of which shall be deemed as original but all of which together shall constitute one and the same instrument. 9.16 Governmental Powers Reserved. The City is entering into this Agreement in its proprietary capacity only. Nothing in this Agreement is intended or shall be construed to waive, diminish or modify the City's governmental powers, rights or obligations. -29- 3 9 IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of the day and year first above written. DEVELOPER: CITY: APRICOT LANE MARKET HOLDINGS, CITY OF MOORPARK LLC, a California limited liability company By: MPG MANAGEMENT, LLC By: its Manager Steven Kueny, City Manager By: Paul A. Gurinas, its Manager ATTEST: Maureen Benson, City Clerk APPROVED AS TO FORM: By: Kevin Ennis City Attorney -30- 4 0 EXHIBIT "A-1" LEGAL DESCRIPTION OF PROPERTY (Attached) Exhibit A-1 1 41 EXHIBIT "A-2" DIAGRAM OF OPTION PROPERTY Exhibit A-2 1 42 EXHIBIT "B" SCHEDULE OF PERFORMANCE This Schedule of Performance requires the submission of plans or other documents at specific times. Some of the submissions are not described in the text of the Agreement. Such plans or other documents, as submitted, must be complete and adequate for review by the City or other applicable governmental entity when submitted. Prior to the time set forth for each particular submission, the Developer shall consult with City staff informally as necessary concerning such submission in order to assure that such submission will be complete and in a proper form within the time for submission set forth herein. Action Date/Deadline Items 1 —4 Relate to Developer Actions and Requirements Prior to the Close of Escrow 1. Opening of Escrow. The Parties shall Within five (5) business days following the open escrow with the Escrow Holder. Parties' execution of the DDA. 2. Developer Deposit. The Developer shall Within ten(10) business days after the City's deposit the Developer Deposit with execution and delivery of this Agreement. Escrow Holder. 3. Project Budget and Construction Contract. Prior to the Close of Escrow. The Developer shall submit the Project Budget and a construction contract with the Contractor for the construction of the Improvements. 4. Insurance. The Developer shall submit Prior to the Close of Escrow. evidence of insurance to the City. Items 6—8 Relate to the Conveyance of the Property and Developer Actions and Requirements After the Close of Escrow, and are subject to extension by Force Majeure Delays (as defined in Section 6.7 above) 5. Close of Escrow. The Developer shall No earlier than June 15,2017 and no later than purchase the Property from the City (and June 22, 2017. shall concurrently close the Construction Loan, if any). 6. Demolition Permit and Grading Permit. The demolition and excavation permit will not be issued until the grading permit has been issued and building plans have been submitted to City for review and all applicable fees have been paid. 7. Completion of Grading. Developer shall Six(6)months after Close of Escrow. complete the grading for the Project. 8. Qualification for Certificate of Two calendar years after Close of Escrow. Exhibit B 1 43 Action Date/Deadline Occupancy. The Project shall qualify for an Occupancy Certificate (defined in Section 3.1). Exhibit B 2 44 EXHIBIT "C" SCOPE OF DEVELOPMENT The project contemplated by CPD 2016-01 (defined in Recital B). Exhibit C 1 45 EXHIBIT "D" FORM OF GRANT DEED Recording Requested by and when recorded return to, and mail tax statements to: Apricot Lane Market Holdings, LLC c/o Apricot Lane Farms 10700 Broadway Road Moorpark, California 93021 Attn: John Chester Exempt from Recording Fees Pursuant to Government Code Section 27383 APN(s): Documentary transfer tax is $ based on the full value of the property conveyed. GRANT DEED The undersigned grantor(s)declare(s): FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the CITY OF MOORPARK ("Grantor") hereby GRANTS to APRICOT LANE MARKET HOLDINGS, LLC, a California limited liability company ("Grantee") the Property (the "Property") located in the City of Moorpark, County of Ventura, State of California described on Exhibit "A" attached hereto any incorporated herein by this reference. SUBJECT TO, all matters of record and all title matters visible upon inspection. 1. This grant of the Property is subject to the terms of a Disposition and Development Agreement entered into by and between Grantor and Grantee dated as of May 10, 2017 (the "Agreement") the terms of which are incorporated herein by reference (and which include maintenance covenants, as well as the matters described in Section 2-5 below). A copy of the Agreement is available for public inspection at the offices of the Grantor at 799 Moorpark Avenue, Moorpark, California 93021. 2. As provided in, and subject to the provisions contained in, Section 6.2.2 of the Agreement, the Grantor shall have the right, at its option, to reenter and take possession of the Property hereby conveyed, with all improvements thereon and to terminate and revest in Grantor the Property hereby conveyed to the Grantee (which shall be binding on Grantee and any successors in interest). 3. The Grantee covenants, for itself and its successors and assigns,that there shall be no sale, transfer, assignment, conveyance, lease, pledge or encumbrance of the DDA, or the Property and the Improvements thereon or any part thereof, or of other ownership interest in the Grantee in violation of the DDA, which contains restrictions on the assignment of the DDA and the transfer of the Property. Exhibit D 1 46 5. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof, that upon the date of this Grant Deed and during construction and thereafter, the Developer shall devote the Site to the uses specified in this DDA for the periods of time specified therein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to the DDA and all applicable provisions of the Moorpark Municipal Code. The foregoing covenants shall run with the land. Developer further covenants and agrees that the Improvements shall not be used by any bail bond, thrift/second hand stores, check cashing, gold purchasing, body piercing/tattoos or adult businesses for perpetuity as defined in Title 17 of the City of Moorpark Municipal Code. 6. Grantee shall not subdivide the Property. 7. All covenants contained in this Grant Deed shall run with the Property and shall be binding for the benefit of Grantor and its successors and assigns and such covenants shall run in favor of the Grantor and for the entire period during which the covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any Property adjacent to the Property or interest in such adjacent Property or any other Property. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies available under the Agreement or at law or in equity. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors and assigns. IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of the date set forth below. Dated: , 2017 CITY: CITY OF MOORPARK By: Print Name: Title: ATTEST: Maureen Benson, City Clerk Exhibit D 2 47 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of Ventura ) On , 2017, before me, (insert name and title of the officer) 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 certify 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. Signature (Seal) Exhibit D 3 48 EXHIBIT "E" LIST OF DOCUMENTS DELIVERED TO DEVELOPER; OTHER DISCLOSURES 1. The existing building on the Property is partially on VCTC (SCRRA)property, and Developer will need to pay for costs of SCRRA-required permits and flagmen. 2. VCTC/SCRRA permits will be required for certain activities on the VCTC property. 3. No Phase I or Phase II has been completed by City for 4,500 square feet of the Property added late in the negotiations. 4. Pre-Demolition Asbestos and Lead Paint Survey dated February 7, 2017 prepared by SCG(Old Granary Building). 5. Pre-Demolition Asbestos and Lead Survey dated February 8, 2017 by SCG (Maria's Restaurant Building). 6. The appraisal prepared at the direction of the City establishing the Purchase Price. 7. The report prepared at the direction of the City concerning the owls at the Property. 1 49 ATTACHMENT 2 SUMMARY REPORT PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 52201 ON THE PROPOSED CONVEYANCE OF REAL PROPERTY PURSUANT TO A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MOORPARK AND APRICOT LANE MARKET HOLDINGS, LLC. This summary report has been prepared by the City of Moorpark ( the "City") with respect to the Disposition and Development Agreement (the "DDA") between the City and Apricot Lane Market Holdings, LLC, a limited liability corporation (the "Developer"). The DDA pertains to the development of one two-story commercial building and one single-story commercial building totaling approximately 16,865 square feet. The majority of the square footage (approximately 13,636 sq. ft.) will be occupied by a restaurant/market place. The use would be a market, professional kitchen, and restaurant use showcasing food and other products made utilizing the unique produce and meats farmed at Apricot Lane Farms. The second structure would house a bar/tasting room and brewery space for a local brewery. The two referenced buildings and related improvements, defined in the DDA will be subject to the conditions of approval of Commercial Planned Development (CPD) Permit No.2016-01 ("CPD 2016- 01"). 1) Cost of the Agreement: Overall the Agreement is not anticipated to produce a net cost to the City. On the contrary, the City projects that the overall net revenues, interest earnings and land sale proceeds, resulting from its property management, and site disposition are anticipated to be approximately $312,800. This conclusion is based upon the following data: a) Land Acquisition Costs: The property was originally acquired by the former Redevelopment Agency (the "Former Agency") in 1993. As part of the dissolution process, the Successor Agency prepared a Long Range Property Management Plan ("LRPMP") addressing the disposition of real properties acquired by the Former Agency. Pursuant to the LRPMP, as approved by the California State Department of Finance, the 2.14 acre property (approximately 95,396 sq. ft) was conveyed to the City, upon the City's payment of $470,000 as compensation to the taxing entities. The site to be sold to Developer consists of 51% of the property area. Therefore, on a pro-rated basis the Agency has incurred approximately $239,700 of costs related to acquiring the portion of the site to be sold to Developer. b) Clearance Costs: The proposed DDA obligates the Developer to demolish and clear the structures currently located on the site. Therefore, the City will not incur any costs for clearance. c) Relocation Costs: The City has not incurred any relocation costs for the property. 50 Summary Report Page 2 d) Improvement Costs: The City has not incurred any improvement costs. e) Finance Costs: None. f) Other costs: The City has or will incur costs of approximately $60,000 for this agreement related to property appraisals, creation of the parcel map and legal fees relevant to the sale of this property. 2) Estimated Value of the Interest to be conveyed or leased, determined at highest and best use permitted under the general plan or zoning: In order to determine the estimated value of the interest to be conveyed, the City engaged Riggs and Riggs, Inc. ("Appraiser") as an expert, third party real estate appraiser. On February 24, 2017, the Appraiser completed an updated real estate appraisal on the property to be purchased by Developer. The appraisal is on file with the City. Based upon their analysis, it is the Appraiser's opinion that the estimated value of the Property at its highest and best use permitted by the general plan and zoning equals a total of $612,500 or $12.50/sq. ft. It is important to state that in determining this value, the Appraiser assumed that the site improvements had been demolished. The Appraiser also assumed the site was free from environmental contamination. Pursuant to the DDA, the Developer will purchase the site for $612,500, which is equal to'its full fair market value. 3) Estimated Value of the Interest to be conveyed or leased with the conditions, covenants and development costs required by the sale or lease: Pursuant to the DDA, the Developer will purchase the site for $612,500 which is equal to its full fair market value. 4) Economic Benefit of the Project: a) Development agreement will increase property tax revenues to all property tax collecting entities resulting in an increase of at least 15 percent of total property tax resulting from the project at full implementation when compared to the year prior to the property being acquired by the government entity: At a conservative value of $300 per square foot of finished building area, the completed Project is anticipated to add approximately $5,059,500 of assessed value to the property tax rolls. Based on this additional assessed value estimate, it is anticipated that the Project will generate approximately $50,595 of additional gross tax increment revenue to all 51 Summary Report Page 3 property tax collecting entities during its first taxable year. The tax base for the property the year prior to the property being acquired by the City of Moorpark was $0. The City can demonstrate that the Project will result in significantly more than a 15% increase in property tax revenues to all property tax collecting entities. 52 ATTACHMENT 3 RESOLUTION NO. 2017- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, APPROVING THE EXECUTION AND DELIVERY OF A DISPOSITION AND DEVELOPMENT AGREEMENT FOR THE SALE OF A PORTION OF PROPERTY LOCATED AT 192 HIGH STREET, MAKING FINDINGS PURSUANT TO GOVERNMENT CODE SECTION 52201 REGARDING THE CREATION OF ECONOMIC OPPORTUNITY FOR THE CITY, AND FINDING THE PROJECT CATEGORICALLY EXEMPT FROM CEQA WHEREAS, the City of Moorpark (the "City") owns property located at 192 High Street in the City (the "Property"); and WHEREAS, Apricot Lane Market Holdings, LLC, a limited liability corporation (the "Developer"), desires to purchase and develop a portion of the Property; and WHEREAS, the Developer has agreed to purchase and develop the Property in accordance to the terms of a Disposition and Development Agreement (the "DDA") to be entered into by and between the City and the Developer; and WHEREAS, pursuant to the DDA, it is contemplated that the Developer will build one two-story commercial building and one single-story commercial building totaling approximately 16,865 square feet Property (the "Project"); and WHEREAS, it is further contemplated that the Project will consist of: (i) an approximately 13,636 sq. ft. restaurant/market place, including a market, professional kitchen, and restaurant, showcasing food and other products made utilizing the unique produce and meats from Apricot Lane Farms' main farm facility located in Moorpark; and (ii) a bar/tasting room and brewery space for a local brewery in the second building; and WHEREAS, the Project will include improvements and subject to the conditions of approval of Commercial Planned Development Permit No. 2016-01, as previously approved by the City Council; and WHEREAS, based on the analysis by an appraiser engaged by the City, the appraised value of the Property, at its highest and best use permitted by the general plan and zoning equals $612,500 (or $12.50 per sq. ft.); and WHEREAS, the Developer has agreed to pay $612,500 as the purchase price for the Property pursuant to the terms of the DDA; and WHEREAS, the City desires to proceed with the sale of the Property pursuant to the term of the DDA; and 12853-0001\2065577v3.doc 53 Resolution No. 2017- Page 2 WHEREAS, the City finds that the sale of the Property is in furtherance of the creation of economic opportunity for the City; and WHEREAS, Government Code Section 52201 authorizes the City to dispose of a City-owned property for the creation of economic opportunity, if the City Council holds a public hearing (the "Hearing") and making certain findings pursuant to Government Code Section 52201; and WHEREAS, the City held the Hearing on this date regarding the disposition of the Property pursuant to the DDA; and WHEREAS, pursuant to Government Code Section 52201(a), the City did the following before the Hearing: (i) caused a notice of the Hearing to be published in a newspaper of general circulation in the community at least once per week for at least two successive weeks, as specified in Section 6066; and (ii) made available the report required by Government Code Section 52201(a)(2) (the "Report") for public inspection no later than the time of publication of the first notice of the Hearing; and WHEREAS, the Report contained (i) a copy of the DDA, and (ii) a summary describing all of the following: (A) the cost of the DDA to the City, (B) the estimated value of the Property to be conveyed, determined at the highest and best uses permitted under the general plan or zoning, (C) the estimated value of the Property to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale, (D) the purchase price to be paid by the Developer, and (E) an explanation of why the sale of the Property will assist in the creation of economic opportunity; WHEREAS, the City's Community Development Director has determined that the Project is categorically exempt from environmental review under the California Environmental Quality Act (CEQA) because it qualifies as a project under the Class 32 categorical exemption for "In-Fill Development Projects" (State CEQA Guidelines Section 15332). Specifically, staff has determined that there is substantial evidence that the project is consistent with the General Plan and zoning designation for the property. The site is designated in the General Plan for commercial uses and on the Zoning Map for commercial uses and the proposed restaurant/market and brewing space are permitted or conditionally permitted uses in those designations and zones. The site is located within the City and on a site that is 1.12 acres in size surrounded by other commercial uses to the north, east and west and a railroad line to the south. This site is currently developed with structures and because of that previous development and the condition of the property, the site has no value as habitat for endangered, rare or threatened species. The approval would not result in significant effects relating to traffic, noise, air quality, or water quality due to the type of commercial uses in proximity of the site and the site's location in an urban area. Lastly, the site is already adequately served by all required utilities and public services that area accessible to the site from High Street that abuts the northern boundary of the Property. 12853-0001\2065577v3.doc 2 5 4 Resolution No. 2017- Page 3 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The above recitals are true and correct and are a substantive part of this Resolution. SECTION 2. The City Council hereby finds and determines, based on the Report and other information presented to the City Council as follows: (A) The disposition of the Property pursuant to the DDA is in furtherance of the creation of economic opportunity, in that The Project, as contemplated by the DDA, is expected to increase property tax revenues to all applicable property tax collecting entities. Upon full implementation of the DDA, it is expected that there will be an at least 15 percent increase of total property tax revenues, when compared to the year prior to the Property being acquired by the City; and (B) The consideration to be received by the City for the sale of the Property (in the amount $612,500, the purchase price to be paid by the Developer) is also not less than the fair market, value of the Property at its highest and best use; and (C) The consideration to be received by the City for the sale of the Property (in the amount $612,500, the purchase price to be paid by the Developer) is also not less than the fair reuse value of the Property at the use and with the covenants and conditions and development costs authorized by the DDA. • SECTION 3. The City Council has reviewed the City staff determination that the Project is categorically exempt from environmental review under the California Environmental Quality Act (CEQA) because it qualifies as a project under the Class 32 categorical exemption for "In-Fill Development Projects" (State CEQA Guidelines Section 15332). The City Council finds, in the exercise of its independent judgment, and based on all the evidence in the record of the proceeding, including the staff report that accompanies this item, that there is substantial evidence that the project qualifies for this Class 32 Exemption. Specifically, the proposed use of the Property is consistent with the General Plan and zoning designations of the Property. The site is designated in the General Plan for commercial uses and on the Zoning Map for commercial uses and the proposed restaurant/market and brewing space are permitted or conditionally permitted uses in those designations and zones. The site is located within the City and on a site that is 1.12 acres in size surrounded by other commercial uses to the north, east and west and a railroad line to the south. This site is currently developed with structures and because of that previous development and the condition of the property, the site has no value as habitat for endangered, rare or threatened species. The 12853-0001\2065577v3.doc 3 5 5 Resolution No. 2017- Page 4 approval would not result in significant effects relating to traffic, noise, air quality, or water quality due to the type of commercial uses in proximity of the site and the site's location in an urban area. Lastly, the site is already adequately served by all required utilities and public services that area accessible to the site from High Street that abuts the northern boundary of the Property. Finally, the City Council finds there is no substantial evidence of an unusual circumstance involving the Project that precludes the use of the Class 32 Exemption for this Project SECTION 4. The DDA, in the form on file at the City Clerk, is hereby approved. The Mayor (or in the Mayor's absence, the Mayor Pro Tem), is hereby authorized to execute and deliver, for and in the name of the City, the DDA. SECTION 5. The officers and staff of the City are hereby authorized and directed, jointly and severally, to execute such documents and do any and all things which they may deem necessary or advisable to effectuate this Resolution and the DDA and any such actions previously taken by such officers and staff are hereby ratified and confirmed. SECTION 6. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. PASSED AND ADOPTED this 10th day of May, 2017. Janice S. Parvin, Mayor ATTEST: Maureen Benson, City Clerk 12853-0001\2065577v3.doc 4 5 6