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HomeMy WebLinkAboutAgenda Packet - November 17, 2008 - CC M cp�iFoa�`� AGENDA REGULAR MEETING OF THE CITY COUNCIL, AND THE REDEVELOPMENT AGENCY AZUSA AUDITORIUM MONDAY,NOVEMBER 17, 2008 213 EAST FOOTHILL BOULEVARD 6:30 P.M. AZUSA CITY COUNCIL JOSEPH R. ROCHA MAYOR KEITH HANKS ANGEL CARRILLO COUNCILMEMBER MAYOR PRO-TEM URIEL E. MACIAS ROBERT GONZALES COUNCILMEMBER COUNCILMEMBER NOTICE TO THE PUBLIC Copies of staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available forpublic inspection at the City Library. Persons who wish to speak during the Public Participation portion of the Agenda, shallfi/l out a card requesting to speak and shall submit if to the City Clerkprior to the start ofthe City Council meeting. When called, each person may address any item on or off the agenda during the public participation. CLOSED SESSION 1. CONFERENCE WITH LABOR NEGOTIATOR (Gov. Code Sec. 54957.61 Agency Negotiators: City Manager Delach and Assistant City Manager Makshanoff Organizations Executive Contracts 2. REAL PROPERTY NEGOTIATIONS (Gov. Code See. 54956 8) Agency Negotiators: City Manager Delach and Assistant City Manager Makshanoff Under Negotiation: Price and Terms of Payment BLOCK 36 Address: 152 E. Foothill Boulevard, Azusa, CA 91702 Negotiating Parties: Bank of America& City of Azusa Redevelopment Agency Address: 100 E. Foothill Boulevard, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Address: 614— 640 N. Azusa Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency BLOCK 37 Address: 634 N. San Gabriel Avenue, Azusa, CA 91702 Negotiating Parties: Soon Kwon I Address: 624—630 N. San Gabriel Avenue, Azusa, CA 91702 Negotiating Parties: JK Partnership Address: 622 N. San Gabriel Avenue,Azusa, CA 91702 Negotiating Parties: John A. Gonzalez and Christine A. Miller Address: 604 N. San Gabriel Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Address: 600 N. San Gabriel Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency DOWNTOWN NORTH DALTON PROPERTIES Property Address: 303 E. Foothill Boulevard, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Property Address: 716 N. Dalton Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Property Address: 726 N. Dalton Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Property Address: 728 N. Dalton Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Property Address: Parking Lot (APN 8608-028-901, 903 & 905, Azusa,CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Property Address: MTA Site (APN 8608-028-908), Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency DOWNTOWN NORTH A-2 & A-3 PROJECT Address: 858 N. Azusa Avenue, Azusa, CA 91702 Negotiating Parties: Howard J. and Janet J. Choi Address: 832 N. Azusa Avenue, Azusa, CA 91702 Negotiating Parties: Alexios & Tashia Vagenas Address: 826 N. Azusa Avenue, Azusa, CA 91702 11/17/08 PAGE TWO r✓ A. PUBLIC PARTICIPATION (Person/Group shall be allowed to speak without interruption up to f ve(5)minutes maximum time, subject to compliance with applicable meeting rules. Questions to the speaker or responses to the speaker's questions or comments shall be handled after the speaker has completed his/her comments. Public Participation will be limited to sixty (60) minutes time.) B. REPORTS, UPDATES, AND ANNOUNCEMENTS FROM STAFF/COUNCIL 1. Mayor Rocha—Request for sponsorship in the amount of$100 each for two students of Azusa High Drama Club to go to New York in August 2009. 2. Request for proclamation to Mr. James and Mrs. Marge Wall for the many years of service to the City as precinct workers and for sharing their home as a polling place. 3. Request for certificate of appreciation to Criterion Catalysts & Technologies in Azusa, CA for their contribution of$6,400 to the Azusa City Library for use with the Library's new bookmobile service and operation. C. SCHEDULED ITEMS / 1. (PUBLIC HEARING-ORDINANCE AMENDING CHAPTER 30 AZUSA MUNICIPAL CODE AND ADOPTION OF THE 2008 FIRE CODE OF THE LOS ANGELES COUNTY CODE. RECOMMEND,ACTION: Open the Public Hearing;receive testimony,close the Hearing. Waive further reading and adopt Ordinance No. 08-011, amending Chapter 30 of the Azusa Municipal Code adopting by reference the 2008 Fire Code of the Los Angeles County Code. 2 UBLIC HEARING — EXPENDITURE PLAN — STATE AWARDED GRANT FUNDS. RECOMMENDED ACTION: Hold a Public Hearing to include appropriati0ns of funds to be received from the State Citizens' Option for Public Safety(COPS) Program and approve the proposed expenditure plan and purchases in one City Council action. The anticipated funding from this program is$100,000. The proposed expenditure plan is detailed and also includes $6,781 in carryover funds from FY 07/08. D. CONSENT CALENDAR The Consent Calendar adopting the printed recommended actions will be enacted with one vote. If Councilmembers or Staff wish to address any item on the Consent Calendar individually, it will be considered under SPECIAL CALL ITEMS. 1. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF NOVEMBER 3, 2008. RECOMMENDED ACTION: Approve Minutes as written. 2. HUMAN RESOURCES ACTION ITEMS. RECOMMENDED ACTION: Approve Personnel Action Requests in accordance with Section 3.3 of the City of Azusa Civil Service Rules and applicable Memorandum of Understanding(s). 11/17/08 PAGE FOUR Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Address: 830 N. Azusa Avenue, Azusa, CA 91702 Negotiating Parties: Donna M. Matson Address: 812 N. Azusa Avenue, Azusa, CA 91702 Negotiating Parties: John R. & Lillian O. Cortez, Cortez Family Trust Address: 801 N. Alameda Avenue, Azusa, CA 91702 Negotiating Parties: John R. &Lillian O. Cortez, Cortez Family Trust, Address: 810 N. Alameda Avenue, Azusa, CA 91702 Negotiating Parties: 810 Alameda, LLC Address: 803 N. Dalton Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Address: 805 N. Dalton Avenue, Azusa, CA 91702 Negotiating Parties: City of Azusa and City of Azusa Redevelopment Agency Address: 809 N. Dalton Avenue, Azusa, CA 91702 Negotiating Parties: Raygoza, Jose M. and Mateos, Sandra G. ATLANTIS GARDEN Property Address: 600 East. 6t' Street. (APN 8612-001-017), Azusa, CA 91702 Negotiating Parties: Morgan Stanley MTG 2006-13ARX Trust Property Address: 630 Glenfinnan (APN 8612-001-060),Azusa,CA 91702 Negotiating Parties: Mario &Nerelys Acosta Property Address: 629 Glenfinnan (APN 8612-001-014),Azusa, CA 91702 Negotiating Parties: Edgardo and Neneth S. Arce Property Address: 627 East Lime Avenue (APN 8612-001-039), Azusa,CA 91702 Negotiating Parties: Augustine A. Juarez Property Address: 858 N Azusa Ave Unit B Negotiating Parties: Alvarado Insurance Property Address: 858 N Azusa Ave Unit C Negotiating Parties: J&J Haircuts Any person wishing to comment on any of the Closed Session items listed above may do so now. 7:30 P.M.- REGULAR MEETING OF THE CITY COUNCIL. • Call to Order • Pledge to the Flag • Invocation— Pastor Samuel Martinez of Christian Faith Center of the Valley 11/17/08 PAGE THREE F. AGENCY CONSENT CALENDAR The Consent Calendar adopting the printed recommended actions will be enacted with one vote. If Boardmembers or Staff wish to address any item on the Consent Calendar individually, it will be considered under SPECL4L CALL ITEMS. 1. APPROVAL OF MINUTES OF THE REGULAR MEETING OF NOVEMBER 3, 2008. RECOMMENDED ACTION: Approve Minutes as written. 2. NOTICE OF COMPLETION FOR THE BLOCK 36 OFF-SITE UTILITIES PROJECT #505700. RECOMMENDED ACTION: Approve change orders to the BNB Engineering,Inc. contract for the Off- Site Utilities Project in the amount of$148,523.20 and accept the Redevelopment-funded Block 36 Off-Site Utilities Project improvements as complete,authorize staff to file the Notice of Completion with the County Recorder and release retention. 3. WARRANTS. RESOLUTION AUTHORIZING PAYMENT OF WARRANTS BY THE AGENCY. RECOMMENDED ACTION: Adopt Resolution No. 08-R48. . 4. CONSIDERATION OF MODIFICATION TO THE DOWNPAYMENT ASSISTANCE PROGRAM REGULATIONS ALLOWING PURCHASE OF AFFORDABILITY COVENANTS. RECOMMENDED ACTION: Adopt the revised Down Payment Assistance Program ("DPAP") guidelines to allow for the purchase of affordability covenants from builders and or developers. G. ORDINANCES/SPECL4,L RESOLUTIONS 1. ORDINANCE AMENDING CHAPTER 46 OF THE AZUSA MUNICIPAL CODE BY ADDING DIVISION 1 REGARDING PAYMENT OF SPECIAL REWARDS. RECOMMENDED ACTION: Waive further reading and adopt Ordinance No. 08-012. H. ADJOURNMENT 1. Adjourn. UPCOMING MEETINGS: November 24, 2008,Utility Board Meeting— 6:30 p.m. (Azusa Light and Water Conference Room) December 1, 2008, City Council Meeting— 6:30 p.m. (Auditorium) December 15, 2008, City Council Meeting—6:30 p.m. (Auditorium) In compliance with Government Code Section 54957.5, agenda materials are available for inspection by members of the public at the following locations: Azusa City Clerk's Office-213 E. Foothill Boulevard,Azusa City Library- 729 N.Dalton Avenue,and Azusa Police DepartmentLobby- 725 N.Alameda,Azusa, California. In compliance with the Americans with Disabilities Act, ifyou need special assistance to participate in a city meeting,please contact the City Clerk at 626-812-5229. Notification three(3) working days prior to the meeting when special services are needed will assist staff in assuring that reasonable arrangements can be made to provide access to the meeting. 11/17/08 PAGE SIX 3. AUTHORIZE NOTICE OF COMPLETION FOR CONSTRUCTION OF PICNIC SHELTER SECURITY LIGHTING AT MEMORIAL PARK IN THE AMOUNT OF $9,120.00. RECOMMENDED ACTION: Approve the Notice of Completion for construction of picnic shelter lighting at Memorial Park in the amount of$9,120.00 and authorize staff to file the Notice of Completion with the Los Angeles County Clerk. 4. EXCHANGE AGREEMENT- CONVERSION OF SURFACE TRANSPORTATION PROGRAM LOCAL (STP-L) FUNDS TO FLEXIBLE LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY(LACTMA)FUNDS. RECOMMENDED ACTION:Execute the Exchange Agreement and assignment of Federal Surface Transportation Program - Local (STP-L) funds. 5. SALARY AND BENEFITS FOR NON-REPRESENTED EMPLOYEES. RECOMMENDED ACTION: Adopt Resolution No. 08-C 107, approving that non-represented employees shall be entitled to receive those benefits and salary adjustments provided for in the effective Memoranda of Understanding for the bargaining units with which they have been affiliated by the City, as approved by the City Council from time to time. 6. AMENDMENT OF THE 2008/09 CAPITAL IMPROVEMENT PLAN — AGENCY. FUNDED PROJECTS.RECOMMENDED ACTION: Adopt Resolution No.08-C 108,amending 2008/09 Capital Improvement Plan to add three infrastructure projects which will aid the ongoing development activities in the downtown. The Capital Improvement Plan will also be amended and reflect the Redevelopment Agency of the City of Azusa as the funding source for the proposed projects. 7. WARRANTS. RESOLUTION AUTHORIZING PAYMENT OF WARRANTS BY THE CITY. RECOMMENDED ACTION: Adopt Resolution No. 08-C109. CONVENE JOINTLY WITH THE REDEVELOPMENT AGENCY TO CONSIDER THE FOLLOWING: E. JOINT CITY/AGENCY ITEM. 1. JOINT PUBLIC HEARING _ ON DISPOSITION AND DEVELOPMENT AGREEMENT WITH TARGET CORPORATION FOR THE DEVELOPMENT OF A TARGET STORE AT 809 NORTH AZUSA AVENUE. RECOMMENDED ACTION: a. Waive further reading and adopt Resolution No. 08-C110,(Council)accepting the summary of costs and findings of the 33433 Summary Report prepared by Tierra West Advisors, Inc., and the estimated reuse valuation of the subject property pursuant to the California Health and Safety Code Section 33433 for the sale of approximately 180,338 square feet of land to Target Corporation, making certain findings and approving the Disposition and Development Agreement; and b. Waive further reading and adopt Resolution No. 08-R47, (Agency) approving a Disposition and Development Agreement with Target Corporation ("Target'). 11/17/08 PAGE FIVE r PUBLIC HEARING ITEM TO: THE HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL c� FROM:. KURT CHRISTIANSEN,�DIRECTOR OF ECONOMIC AND COMMUNITY DEVELOPMENT qL�. VIA: F. M. DELACH, CITY MANAGER �W DATE: NOVEMBER 17, 2008 r ' SUBJECT: ORDINANCE AMENDING CHAPTER 30 AZUSA MUNICIPAL CODE AND ADOPTION OF THE 2008 FIRE CODE OF THE LOS ANGELES COUNTY CODE RECOMMENDATION It is recommended that the City Council conduct the Public Hearing, waive further reading, and adopt the ordinance amending chapter 30 of the Azusa Municipal Code adopting by reference the 2008 Fire Code of the Los Angeles County Code. BACKGROUND Section 30-36 of the Azusa Municipal Code was last updated in 1971 and adopts by reference the "Fire Code of the County of Los Angeles" as the Fire Code for the City of Azusa. This Section is vague and does not specify which edition of the Los Angeles County Fire Code is enforceable within the City of Azusa. The attached ordinance amends Chapter 30 of the Azusa Municipal Code and adopts by reference the 2008 Fire Code of the Los Angeles County Code. The 2008 Los Angeles County Fire Code incorporates the new 2007 Edition of the California Fire Code with local amendments. As with previous editions of the Los Angeles County Fire Code, the 2008 edition contains amendments that are more restrictive than those found in the California Fire Code. Most of these amendments are carried over from previous editions of the Los Angeles County Fire Code. There are new amendments within the 2008 Los Angeles County Fire Code that require more restrictive building standards within the Very High Fire Severity Zones than the California Fire Code. Some.amendments that will impact the City of Azusa include: • Fuel modification, landscape, and irrigation plans and plan check fees are required in Very High Fire Severity Zones for new sub-divisions, new construction, or remodeling, modification or reconstruction of an existing structure where such remodeling, modification or reconstruction increases the area of the existing structure by more than fifty (50) percent (%) in any twelve (12) month period. The Honorable Mayor and Members of the City Council Subject:Ordinance Amending Ch.30 November 17,2008 Page 2 • Fire sprinklers systems are required for all new occupancies located in a Fire Hazard Severity Zone and in the San Gabriel Mountains South-face Areas when the project site is located more than three miles from an existing or planned Los Angeles County Fire Station capable of supporting fire fighting resources. • Fire sprinklers systems are required for existing occupancies located in a Fire Hazard Severity Zone and in the San Gabriel Mountains South-face Areas that are remodeled modified, or reconstructed, and such remodeling, modification or reconstruction increases the area of the existing occupancy by more than fifty (50) percent (%) in any twelve (12) month period and the total floor area exceeds four thousand nine hundred and ninety nine (4,999) square feet. • Ignition resistant standards required by Chapter 7A of the California Building Code for new construction in High Fire Severity Zones are applicable to all new construction and any addition, alteration or repairs to an existing building located in, or moved into the High Fire Severity Zone. Adoption of the 2008 Fire Code of the Los Angeles County Code will not only provides a greater level of protection necessary due to our local geographic, geologic and climatically conditions, but will allow for a more uniform and effective application of the code throughout the Consolidated Fire Protection District of Los Angeles County. FISCAL IMPACT There is no additional fiscal impact to the City. ATTACHMENT Ordinance adopting 2008 Fire Code of the Los Angeles County Code. ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA ADOPTING BY REFERENCE THE 2008 FIRE CODE OF THE LOS ANGELES COUNTY CODE AND AMENDING AZUSA MUNICIPAL CODE SECTION 30-36 AND ADDING SECTION 30-37. WHEREAS, pursuant to California Government Code Section 50022.9 the Azusa Municipal Code adopted by reference the Los Angeles County Fire Code; and WHEREAS, the Los Angeles County Board of Supervisors has adopted Ordinance No. 2007-0112 amending Title 32 of the Los Angeles County Code by adopting and incorporating therein by reference the 2007 Edition of the California Fire Code published by the California Building Standards Commission; and WHEREAS, pursuant to California Government Code Section 50022.7 the City is authorized to adopt by reference any amendments to a previously adopted code; and WHEREAS, at least one copy of the 2008 Fire Code of the Los Angeles County Code adopted by reference by this Ordinance shall be filed in the office of the City Clerk of the City of Azusa, and is certified as a full, true and complete copy thereof by the City Clerk, in accordance with the requirements of California Government Code Section 50022.6; and WHEREAS, a duly noticed public hearing, as required by California Government Code section 50022.3 was conducted prior to the adoption of this Ordinance; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA CALIFORNIA, DOES ORDAIN AS FOLLOWS: SECTION 1. Section 30-36 of Chapter 30, Article 2 of the Azusa Municipal Code is hereby amended to read as follows: "30-36. Adoption. Subject to the changes and amendments as may be set forth in this article, that certain code entitled "2008 Fire Code of the Los Angeles County Code," which has been filed in the office of the city clerk, which is referred to and by this reference expressly incorporated in this article, is adopted and by reference made a part of this article as fully and for all intents and purposes as though set forth in this article at length. If there is any inconsistency between any provisions of such Fire Code and other provisions of this Municipal Code, such other provisions of this Municipal Code shall prevail." SECTION 2. In accordance with California Government Code Section 50022.4 the City of Azusa specifically adopts the following penalty provisions provided in the "2007 Fire Code of the Los Angeles County Code": "317.9 Prosecution. A person who violates Sections 317.2, 317.3.2, or 317.10 may be prosecuted and punished whether proceeding pursuant to Sections 317.3 - 317.8, inclusive, have been had or not. Proceedings pursuant to Sections 317.3, - 317.8, inclusive, are not a condition precedent to prosecution for violation of Sections 317.2, 317.3.2, or 317.10. 319 Administrative Penalty. 319.1 Administrative penalty - imposition. An administrative penalty may be imposed on all parcels found to be in violation of Sections 317.2.2, 317.2.3, 317.10, or 503.2.1 of this code relating to clearance of brush and combustible growth, roadway clearance, and vertical clearance on fire access roads. 319.2 Administrative penalty - enforcement. An administrative penalty will be imposed and enforced upon .failure of the responsible party to comply with written abatement instructions and timeframes contained on the Official Inspection Report Form (County of Los Angeles Fire Department FORM 4108) issued by the fire department. 319.3 Declared parcel. A declared parcel is a parcel which contains noxious weeds and other flammable vegetation that are a fire hazard and which constitutes a public nuisance which must be abated as declared in an annual resolution of the board of supervisors. An owner of a declared parcel will be mailed a declaration card specifying the abatement actions required of the owner. The declaration card constitutes the first official notice to the owner. A physical inspection of the declared parcel is conducted by the fire department to determine compliance with the declaration card. After the physical inspection, if the fire department determines that the owner has not complied with the declaration card, then such noncompliance constitutes the first violation of the fire code. The owner will be given notice of such first violation of the fire code. This notice constitutes the second official notice to the owner. The second official notice shall also inform the owner that an administrative penalty may be imposed on the declared parcel if not properly cleared. An owner's failure to comply with the second official notice constitutes the second violation of the fire code. 319.4 Undeclared parcel. An undeclared parcel is a parcel not contained in the annual resolution of the board of supervisors described in Section 319.3. 319.5 Inspection - notice of violations. After a physical inspection, if the fire department determines that an undeclared parcel is not in compliance with the fire code, the owner will be given notice of such violation of the fire code. This notice of violation constitutes the first official notice. An owner's failure to comply with the first official notice constitutes the first violation of the fire code. After a first violation, a physical inspection of an undeclared parcel will be conducted by the fire department to determine compliance with the fire code. After the physical inspection, if the fire department determines that an undeclared parcel is not in compliance with the fire code, the owner will be given notice of the second violation of the fire code. This notice constitutes the second official notice to the owner. This second official notice shall also inform the owner that an administrative penalty may be imposed on an undeclared parcel if not cleared. An owner's failure to comply with the second notice constitutes the second violation of the fire code. 319.6 Administrative penalty - amount. The administrative penalty for a first violation as described in Section 319.3 or 319.5 is $0. The administrative penalty for a second violation as described in Section 319.3 or 319.5 is $200. 319.7 Administrative penalty - collection. The administrative penalty will be collected by the fire department through direct invoice. The fire department shall notify the owner of the imposition and amount of the administrative penalty. 319.8 Administrative penalty - administrative review and appeal. The imposition of the administrative penalty may be appealed in writing utilizing the claim resolution form provided with the invoice. The claim resolution form must be filed with the brush clearance unit of the fire department within 30 days of the date of invoice. Brush clearance unit personnel will attempt to resolve the claim, and provide a written response to the claimant within 30 working days of receipt of the claim. if unable to resolve the claim, brush clearance unit personnel will forward the claim to the brush clearance section manager. The brush clearance section manager will review the claim and provide a final administrative order or decision in writing within 30 working days of the receipt of the claim. The brush clearance section manager will make the final decision of the fire department on the claim. Any person contesting the final administrative order or decision of the fire department may seek further review pursuant to section 53069.4 of the California Government Code. Any administrative penalty imposed shall be cancelled or refunded as provided in sections 14920 - 14921 of the State Health and Safety Code, or any successor statute of similar import. 4901.2. Penalties for Infractions. Every violation determined to be an infraction is punishable by a fine not to exceed $100 for the first violation, $200 for the second, $500 for the third, and $500 for each additional violation of the same ordinance within one year. Each such violation is a separate offense for each and every day during any portion of which such violation is committed or allowed to continue. For the purposes of this section a forfeiture of bail shall be equivalent to a conviction. 109.3 Violation penalties. Persons who shall violate a provision of this code or shall fail to comply with any of the requirements thereof, or who shall erect, alter, repair, or do work in violation of the approved construction documents or director of the fire code official, or of a permit or certificate used under provisions off this code, shall be guilty of a misdemeanor unless such violation is declared to be an infraction by Chapter 49 of this code, punishable by a fine of not more than $5000 or by imprisonment not 6 months, or both such fine and imprisonment. Each day that a violation continues after due notice has been served shall be deemed a separate offense. Each such violation is a separate offense for each and every day during any portion of which such violation is committed. For the purposes of this section a forfeiture of bail shall be equivalent to a conviction. SECTION 205. Appendix Chapter 1 Section 103.4.8 is hereby renumbered and amended to read as follows: 109.4 Responsibility. Any person who personally or through another willfully, negligently, or in violation of law sets a fire, allows a fire to be set, or allows a fire kindled or attended by him to escape from his control, allows any hazardous material to be handled, stored, or transported in a manner not in accordance with this code or nationally recognized standards, allows any hazardous materials to escape from his control, neglects to properly comply with any written notice of the chief fire code official, or willfully or negligently allows the continuation of a violation of this code and amendments thereto is liable for the expense of fighting the fire or for all costs associated with the control and mitigation of a hazardous materials incident, or for the expenses incurred while obtaining compliance with the written order of the fire code official, or for the expenses incurred in obtaining compliance with the written order of the chief fire code official, or for the expenses incurred in obtaining compliance with the continuing violation of this code, and such expenses shall be a charge against that person." SECTION 3. Section 30-37 of Chapter 30, Article 2 of the Azusa Municipal Code is herby added to read as follows: "30-37. Reference to California Building Code. This section shall apply to the entire Los Angeles County Fire Code. Any reference to the Los Angeles County Building Code referred to therein shall mean the "2007 California Building Code." SECTION 4. CEQA. The City Council hereby finds and determines that it can be seen with certainty that there is no possibility that this Ordinance may have a significant adverse effect on the environment. This Ordinance would set forth new construction code requirements, which are required to be implemented by state law, and any specific development projects that would be subject to the requirements of these new regulations, would require separate environmental review. Thus, the adoption of this Ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA") pursuant to Section 15061(b) (3) of the CEQA Guidelines. Staff is directed to file a Notice of Exemption with the Los Angeles County Clerk's office within five (5) working days of project approval. SECTION 5. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase added by this Ordinance, or any part thereof, is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more subsections, subdivisions, paragraphs, sentences, clauses or phrases are declared unconstitutional, invalid or ineffective. SECTION 6. Certfication/Summary. The City Clerk shall certify the passage of this Ordinance and shall, within fifteen (15) days after the passage and adoption thereof, cause the same to be published as required by law, in a local weekly newspaper of general circulation and which is hereby designated for that purpose. Alternatively, the City Clerk may cause a summary of this Ordinance to be prepared and published as provided by California Government Code Section 36933(c)(1). The summary shall be published in a local weekly newspaper of general circulation and a certified copy of the full text of this Ordinance shall be posted in the Office of the City Clerk at least five (5) days prior to the City Council meeting at which this Ordinance is to be adopted. Within fifteen (15) days after.the adoption of this Ordinance, the City Clerk shall cause a summary to be published in a local weekly newspaper of general circulation with the names of those City Council members voting for and against this Ordinance and shall post in the Office of the City Clerk a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance. SECTION 7. Effective Date. This Ordinance shall be in full force and effect thirty (30) days after its passage. PASSED, APPROVED AND ADOPTED this._day of 2008. Joseph R. Rocha Mayor Attest: Vera Mendoza City Clerk Approved as to Form: Best Best& Krieger LLP City Attorney � I el, PUBLIC HEARING TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT B. GARCIA, CHIEF OF POLICE VIA: F.M. DELACH, CITY MANAGER DATE: NOVEMBER 17, 2008 SUBJECT: EXPENDITURE PLAN— STATE AWARDED GRANT FUNDS RECOMMENDATION It is recommended that the City Council hold a Public Hearing to include appropriations of funds to be received from the State Citizens' Option for Public Safety.(COPS) Program and approve the proposed expenditure plan and purchases in one City Council action. The anticipated funding from this program is $100,000. The proposed expenditure plan is detailed below and also includes $6,781 in carryover funds from F/Y 07/08. BACKGROUND The following expenditures are recommended: State COPS Total Awarded F/Y 08/09: $100,000 FAST Helicopter Services Program $40,000.00 Handheld Radios $21,035.00 Vehicle Lease $14,065.00 Policy Manual Updates/Training $14,000.00 Dispatch Climate Control Modules $9,200.00 ALEA Western Safety Seminar $1,200.00 Overhead Expense $500.00 Total $100,000.00 Carryover from F/Y 07/08: Handheld Radios $6,781.00 1 The exact amounts in each category are subject to change due to fluctuations in pricing. All funds shall be expended for supplemental front line law enforcement services only, as provided by law and mandated by grant guidelines. Helicopter Services The City has agreed to continue its participation in the regional helicopter program. This participation will cost $37,500 for helicopter services from the City of El Monte, as well as $300 for training and $2,200 for the purchase of a helmet, flight suit and miscellaneous supplies. Vehicle Lease The Department will continue to lease three vehicles for the patrol lieutenants through Enterprise Fleet Services at a cost of$14,065. Handheld Radios In September, 2008 Council approved the purchase of 33 digital handheld radios to replace existing obsolete equipment using General Funds. The Department now plans to use $21,035 in 08/09 COPS funds to purchase additional radios. These funds, as well as the 07/08 COPS carryover monies of $6,781, will enable the Police Department to continue to replace its aging inventory with current, updated equipment. Policy Manual Updates and Training The Azusa Police Department has completed its transition from an obsolete policy manual to the Lexipol-based police policy manual. The Lexipol product corresponds with the Department's vision for a more professional and accountable police agency. The cost for the continued modifications, revisions and training from Lexipol LLC is $14,000 annually and has been expanded to include full time non-swom employees. Climate Control Modules The climate control system for the Dispatch work stations will replace antiquated space heaters, allowing employees to control their work station's climate individually. The cost for four stations is $9,200. ALEA (Airborne Law Enforcement Association) Western Safety Seminar Training to support, promote and advance the safe and effective utilization of aircraft by law enforcement agencies through networking, advocacy and educational programs will be attended by two officers at a cost of$1,200. Overhead Expenses The COPS Grant stipulates that overhead (administrative) expenses are allowable in the amount of.5% ($500). 2 FISCAL IMPACT The proposed expenditures will be funded solely by grant awarded funds and will not utilize any general funds. Prepared by: Captain Sam Gonzalez Cynthia Haebe 3 i r 1 OF 92 U a C�GFU0.�T CITY OF AZUSA' MINUTES OF THE CITY COUNCIL ` REGULAR MEETING MONDAY,NOVEMBER 3,2008—6:30 P.M. The City Council of the City of Azusa met in regular session at the above date and time in the Azusa Auditorium,located at 213 East Foothill Boulevard,Azusa,CA,91702. t l CLOSED SESSION - Closed Sess The City Council recessed to Closed Session at 6:33 p.m.to discuss the following: Recess City Attorney Carvalho advised that with regard to the Real Property Negotiations at 150 W. 91°,Street City Attorney additional discussion would be held regarding Pending Litigation Government Section 54956.9,(a) Comments Redevelopment Agency of the city of Azusa v.E&T Foods,Inc.dba King Ranch Market(LASC Case No. 08U02021,relating to the same property. Conf w/labor 1. CONFERENCE WITH LABOR NEGOTIATOR(Gov.Code See.54957.6) Negotiator Agency Negotiators: Administrative Services Director-Chief Financial Officer Kreimeier Organizations ACEA,AMMA,and APMA Real Prop 2. REAL PROPERTY NEGOTIATIONS(Gov.Code See.54956.8) - Negotiations Agency Negotiators: -City Manager Delach and Assistant City Manager Makshanoff 830 N Azusa Under Negotiation: Price and Terms of Payment T 812N,Azusa Address: Negotiator: 1 � 801 N.Alameda N a. 830 .Azusa Avenue,Azusa,CA 91702, Donna M.Matson 17511 Arrow b. 812 N.Azusa Avenue,Azusa,CA 91702 John R.&Lillian O.Cortez,Cortez Family Trust 150 W.9'"St c. Sol N.Alameda Avenue,Azusa,CA 91702 John R_&Lillian O.Cortez,Cortez Family Trust d. 17511 E.Arrow Hwy,Azusa,CA 91702 Fowler Family Trust -` e. 150 W.9'"iStreet,Azusa,CA 91702 King Ranch Market;Aner Igelsias,Business 4 Owner The City Council reconvened at 7:30 p.m.City Attorney Carvalho advised that there was reportable action Reconvened with regard to the Real Property Negotiation at 150 W. 9'"Street and the Pending Litigation of Unlawful City Attorney Detainer action. She stated that the City Council,by unanimous vote,directed the City Attorney's office to Comments accept an offer that was made by King Ranch Market as follows: that hie market be able to remain open Accept offer and offered a stipulated judgment,which the Council would accept if they cavy out their promise to vacate by King Ranch the property by January 12,2009,and to pay the City and Agency the sum of 575,000 of the holdover rent. Market She detailed the history of the property and process of the.lease agreement with Ranch Market and the Unlawful Detainer when they failed to comply with the agreement. �\ Mayor Rocha called the meeting to order. \Call to Order t- Mr.Richard Carpenter led in the Salute to the Flag. Flag Salute INVOCATION was given by President Richard A. Walker of the Church of Jesus Christ of Latter-Day Invocation Saints. ROLL CALL Roll Call PRESENT: COUNCILMEMBERS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA ABSENT: COUNCH,MEMBERS: NONE r' ALSO PRESENT:. r Also Present City Attorney Carvalho,City Manager Delach,Assistant City Manager Makshanoff, Police Chief Garcia, Economic and Community Development Director Christianson, Assistant Community Development „Director McNamara,Director of Public Works/Assistant City Manager Haes, Public Information Officer - ..Y Quiroz,Building Official Keyes,Administrative Services Director-Chief Financial Officer Kreimeier,City Clerk Mendoza,Deputy City Clerk Toscano. i'i PUBLIC PARTICIPATION Pub Part R.Me a Mr. Ralph Megan, Reprvsenmtive of King Ranch Market expressed his appreciation on behalf of gn employees of the market for allowing them to work during the holidays. King Ranch Mkt Mr. Miles Rosedale;representing the Canyon City Foundation addressed Council detailing the history of M.Rosedale the Foundation,,its purpose and successes, the established website, and distribution of grants. The Cyn City Found following grant recipients addressed Council expressing appreciation for the grants and summarized their Mitt,Andrews, projects:. Ms. Karen Mitt - Neighborhood Homework House, Mr. Tom Andrews of Azusa - Keeping Heflin and History Alive Project, Mr. Harry Heflin - Youth Conference, Julie Pusztai - Neighborhood Wellness Pusztai. Center. Mr. Mike Lee stated the following: urged all to vote tomorrow, expressed his opinion regarding the M.Lee candidates; announced the City Election on March 3, 2009; congratulated Councilmember Macias for Comments �+ attaining the rank of Ensign;support to Home Kitchen,and urged all to support Azusa businesses. - f J ' Ms. Stephanie Mills asked that ordinance regarding the prohibition of tarps in front,side and back yards be S.Mills reconsidered to state that if tarps can't be seen from the side and back of the house they should be allowed Comments / and if they are worn and tattered they should be removed. Mr.Ted Garcia congratulated Councilmember Macias on his commission in the Navy for attaining the rank T.Garcia �- of Ensign and stated that he is an asset to the Council;he expressed his views on individuals that speak at Comments meetings and expresser s opinion regarding the candidates for the election. Mr.Frank Allen addressed Council urging all to get out and vote and expressed his opinion regarding what F.Allen he would-be voting" - - Comments Mr. Jorge Rosales addressed Council with the following questions: if the Pension Obligation Bonds J.Rosales weren't soldfhow much money would have to be paid to Calpers in ten years;what is the primary reason Comments for reloca{ng the utilities.on Block 36 for the construction of the underground parking structure; and will the Tari Allocations Bonds repay a loan from the City to the Agency and the money borrowed from the f LLoo�wlto Mod Funds. F ./4.Olivia Ordaz , on behalf of her husband, Sergeant First class Edgar Ordaz, addressed Council O.Ordaz expressing her appreciation to Mayor Rocha and Councilmember Gonzales for visiting their home when Presentation to _ her husband was on leave and for the special treatment they give military personnel. She presented Mayor Mayor Rocha with a Certificate of Appreciation from the United States Army, signed by the Secretary of the Amy.11 Ivlr.Dennis Willut addressed Council with concerns that Charter Communication is destroying property at D.Willut 741 and 743 Soldano,i.e.cable damage, sprinklers and grass and requested a moratorium. He also talked Comments about locks placed on meters and utility boxes to which residents were not provided with keys;he request a committee be established to look into the problem. City Manager Delach responded to questions posed stating that the bond proceeds will assist in paying off City Mgr loans to the City and Utility; the loans for the housing bonds is not going to be paid back with bond Response proceeds but Redevelopment tax increment; underground utilities for Block 36 were moved out of the to questions alleyway to allow for more developable land; and the savings from the Pension Obligation Bonds is estimated at 30-50 thousand dollars per year. REPORTS.UPDATES COUNCIL BUSINESS AND ANNOUNCEMENTS-STAFF RptslUpdams Mayor Pro-Tem Carrillo expressed congratulations to Councilmember Macias on his new commission is Carrillo the U.S.Navy and urged all to get out and vote. Comments Councilmember Macias congratulated recipients of the Canyon City Foundation Grants and urged all to Macias y vote. Comments 1 Councilmember Gonzales congratulated Councilmember Macias on his new commission,urged all to vote; Gonzales thanked the Veterans who have given so much for the opportunity to vote. Comments 11103/08 PAGE TWO Councilmember Hanks congratulated Councilmember Macias and Mayor Rocha for their achievements; Hanks urged all to vote Not on Proposition 7 and Measure R as they will affect the City adversely and expressed Comments his personal opinion regarding Proposition 8. Mayor Rocha invited all to the Veterans Day Observation on Tuesday,November 111h at 1 la.m.at the City Rocha Hall Flag Pole; he announced the 1P° Annual Food Drive to begin on November 21" through Friday Comments December 19'", food will be distributed to the five local Food Banks; he announced that on Saturday, December 6ih, the Veterans Committee will be sending candy to servicemen stationed in Iraq and Afghanistan, candy can be taken to the Office of the City Clerk;he announced the Foreclosure Workshop to be held on Wednesday,November l2'"at 6:30 p.m.at the Azusa Senior;and urged all to vote. SCHEDULED ITEMS Sched Items Building Official Keyes presented the proposed ordinance amending chapter 30 of the Azusa Municipal R. Keyes Code and adopt 2008 Fire Code of Los Angeles County. He stated that the most significant change to the 2008 Fire Code AMC is construction within the high fire security zone. Prop Ord Councilmember Hanks offered an Ordinance for first reading entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA ADOPTING 1"Rdg Ord BY REFERENCE THE 2008 FIRE CODE OF THE LOS ANGELES COUNTY CODE AND Fire Code AMENDING AZUSA MUNICIPAL CODE SECTION 30-36 AND ADDING SECTION 30-37. Moved by Councilmember Hanks seconded by Mayor-Pro-Tem Carrillo and unanimously carried to waive Introduced PH set further reading and introduce the ordinance and to set the public hearing for November 17,2008. for 11/17/08 Councilmember Gonzales offered an Ordinance for first reading entitled: . AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA,CALIFORNIA,AMENDING 1"Rdg Ord CHAPTER 46 OF THE AZUSA MUNICIPAL CODE BY ADDING DIVISION 1 REGARDING Amend Chapter PAYMENT OF SPECIAL REWARDS. 46 Special Rewards Moved by Councilmember Gonzales, seconded by Councilmember Macias,and unanimously carried to waive further reading and introduce the ordinance. Councilmember Macias offered a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,CALIFORNIA,OFFERING A Res.08-C102. SPECIAL REWARD IN THE AMOUNT OF TEN THOUSAND DOLLARS ($10,000) LEADING TO $10,000 Reward THE ARREST AND CONVICTION OF THE PERSON WHOSE WILLFUL MISCONDUCT Pauline Squires RESULTED IN THE DEATH OF PAULINE SQUIRES AND SERIOUS INJURY TO MICHAEL &Michael BRAIER - Braier Moved by Councilmember Macias, seconded by Councilmember Gonzales, to waive further reading and adopt. Resolution passed and adopted by the following vote of the Council: AYES: COUNCILMEMBERS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE COUNCIL APPOINTMENT TO THE CANYON CITY FOUNDATION. City Manager Delach addressed Canyon City the matter requested that Council Members submit nominations to his office by November 13,2008,at 12 Foundation noon,and that Executive Assistant to the City Manager Craven will send Council dates for consideration Council of the interviews. Moved by Mayor Pro-Tem Carrillo, seconded by Councilmember Gonzales and appointee unanimously carried to accept City Managers request to submit nominations and hold interviews for nominees for Canyon City Foundation Council appointees. Councilmember Hanks offered a Resolution entitled: THE CITY OF AZUSA,CALIFORNIA,APPROVING AN EMERGENCY PAY POLICY FOR EXEMPT Res.08-0103. EMPLOYEES WORKING OVERTIME IN RESPONSE TO A MAJOR DISASTER OR MAJOR Approving EMERGENCY DECLARED BY THE PRESIDENT OF THE UNITED STATES. Emergency Pay Policy Moved by Councilmember Hanks, seconded by Councilmember Macias, to waive further reading and Employees adopt. Resolution passed and adopted by the following vote of the Council: AYES: COUNCB.MEMBERS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE 11/03/08 PAGE THREE - c THE FOLLOWING ITEM WAS MOVED FROM THE CONSENT CALENDAR. Consent Item PENSION OBLIGATION BONDS. Administrative Services Director-Chief Financial Officer Kreimeier Pension presented the Pension Obligation Bonds detailing the process for the issuance of the bonds and responding Obligation Bonds to questions posed. Councilmembers congratulated Mr.Kreimeier and staff for the work accomplished. A.Kreimeier Councilinember Hanks offered a Resolution entitled: - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, - SUPPLEMENTING A RESOLUTION OF THE CITY COUNCIL ADOPTED JUNE 2, 2008, Res.08-0104 PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF CITY OF AZUSA TAXABLE Bond Purchase PENSION OBLIGATION BONDS, AND RATIFYING ACTION TAKEN ON JUNE 2, 2008, Agmt,Sunni APPROVING THE FORMS OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN Authorizing INDENTURE, BOND PURCHASE AGREEMENT AND OFFICIAL STATEMENT AND Issuance POB AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH Moved by Councilmember Hanks, seconded by Councilmember Gonzales, to waive further reading and adopt. Resolution passed and adopted by the following vote of the Council: AYES: COUNCILMEMBERS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE The CONSENT CALENDAR consisting of Items D-1 through D-10 was approved by motion of Councilmember Macias, seconded by Councilmember Gonzales, and unanimously carried with the Consent Cal exception of items D-5,6,7,and 9,which was considered under the Special Call portion of the Agenda. Approved I. The minutes of the regular meeting of October 20,2008,were approved as written. Min appvd 2. Human Resources Action Items were approved as follows: Merit Increase and/or Regular Appointments: G.Acosta and E.Atencio. HR Action 3. The City Treasurer's Report as of September 30,2008,was received and filed. Items Trews Rpt 4. Approval was given for the purchase of panels,storage,and work surfaces for reconfiguration of the West wind I.T. area in accordance with Azusa Municipal Code Section 2-518 section B, supplies purchase of and equipment bidding and contracting, informal or alternative purchasing procedure and panels,storage appropriate the required funds from the City's Public Works Endowment Fund to provide for the &work surfaces project and the contract was awarded to the lowest bidder D&R Office Works in the amount of &agmt w/D&R $14,168.73. Office Work 5. SPECIAL CALL ITEM. 6. SPECIAL CALL ITEM. 7. SPECIAL CALL ITEM. 8. PENSION OBLIGATION BONDS ITEM MOVED TO SCHEDULED ITEMS. - 9. SPECIAL CALL ITEM. 10. The following resolution was adopted and entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA ALLOWING CERTAIN 08-C105 CLAIMS AND DEMANDS AND SPECIFYING THE FUNDS OUT OF WHICH THE SAME Warrants ARE TO BE PAID SPECIAL CALL ITEMS Spec Call Items Councilmember Macias addressed employee contracts thanking staff and Association Representatives for Macias working together in coming to a consensus on the agreements. Mayor Rocha addressed the employees Rocha contracts requesting that AMMA and APMA contracts include language as ACEA with regard to Comments bereavement leave as follows: "Bereavement leave for close personal relationships other than listed Add'I language relationships may be approved by the Department Head and Director of Human Resources." Moved by approved Councilmember Macias, seconded by Councilmember Gonzales and unanimously carriedtoinclude the language. Moved by Councilmember Macias, seconded by Councilmember Gonzales and unanimously carried that ACEA the Azusa Classified Employee Association(ACEA)contract dated July 1,2008 through June 30,2010,be Contract approved. 11/03/08 PAGE FOUR { Moved by Councilmember Macias, seconded by Councilmember Gonzales and unanimously carried that AMMA the Azusa Middle Management Association (AMMA) contract dated August 1, 2008 through July 31, Contract (. 2010,be approved. Moved by Councilmember Macias, seconded by Councilmember Gonzales and unanimously carried that APMA the Azusa Police Management Association(APMA)contract dated August 1,2008 through July 31,2010, Contract be approved. Mayor Rocha addressed the Foothill Boulevard Cooperative Street Improvement Project Agreement asking Rocha if the cost estimate included conshuction with all the inspections,engineering and project management. Comment Director of Public Works/Assistant City Manager Haes responded stating that the cost is the Engineers Dir Pub Wks estimate for the construction of the street including all of Irwindale time for review of the project. Response Moved by.Couucilmember Hanks,seconded by Mayor Pro-Tem Carrillo and unanimously carried that the Foothill Blvd Foothill Boulevard Cooperative Street Improvement Project Agreement with the City of Irwindale to St hnpvmt reconstruct Foothill Boulevard from the Westerly city boundary to Todd Avenue,be approved. Project Agmt THE CITY COUNCIL RECESSED AND THE REDEVELOPMENT AGENCY CONVENED AT Cncl Recess 9:00 P.M. THE CITY COUNCIL AND THE AZUSA PUBLIC FINANCING AUTHORITY CRA Convene CONVENED JOINTLY WITH THE REDEVELOPMENT AGENCY AT 9:08 P.M. JOINT ITEM: CITY COUNCIL, REDEVELOPMENT AGENCY AND AZUSA PUBLIC Convene Jntly FINANCING AUTHORITY. Cncl,CRA,APFA AUTHORIZATION TO ISSUE TAX ALLOCATION BONDS TO FINANCE PROPERTY Tax Allocation ACQUISITION, PUBLIC IMPROVEMENTS, AND PUBLIC FACILITIES RESOLUTIONS OF THE Bonds CITY, AZUSA REDEVELOPMENT AGENCY AND AZUSA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND DELIVERY OF ITS AZUSA'S 2008 TAX ALLOCATION BONDS, APPROVING TWO INDENTURES OF TRUST, TWO PRELIMINARY OFFICIAL STATEMENTS, AND A BOND PURCHASE CONTRACT, AND AUTHORIZING OFFICIAL ACTIONS AND EXECUTION OF DOCUMENTS RELATED THERETO. City Manager/Executive Director Delach addressed the issue announcing that the City received an A- City Mgr rating which will result in a savings of 2.5 million dollars for the life of the bonds and is equivalent to an Comments A+rating for the refunded bonds which is part of this process. _ Administrative Services Director-Chief Financial Officer Kreimeier presented the Tax Allocation Bonds ASD-CFO from the Azusa Redevelopment Agency to repay the General Fund,Light and Water Fund and to provide Kreimeier for some infrastructure in the downtown area; he detailed how the escrow funds will be issued, invested Presented and the additional tax increment funds. He talked about the housing component, for acquiring less Bonds desirable housing, multi-family, which developers will build new multifamily housing. Discussion was held regarding the need for affordable housing in the City. Director Macias offered a Resolution entitled: A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA APPROVING Res.08-1146 THE ISSUANCE OF ITS AMENDED AND RESTATED MERGED CENTRAL BUSINESS DISTRICT Appvg issuance AND WEST END REDEVELOPMENT PROJECT AREA TAX ALLOCATION BONDS,APPROVING Amended, TRUST INDENTURES,AN OFFICIAL STATEMENT,A PURCHASE AGREEMENT, SETTING THE Restated Tax MAXIMUM FINAL TERMS OF THE SALE OF THE BONDS AND MAKING CERTAIN Allocation Bonds DETERMINATIONS RELATING THERETO. Moved by Director Macias, seconded by Director Carrillo to waive further reading and adopt. Resolution passed and adopted by the following vote of the Agency Board Members: AYES: DIRECTORS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA -NOES: DIRECTORS: NONE ABSENT: DIRECTORS: NONE Board Member Gonzales offered a Resolution entitled: A RESOLUTION OF THE AZUSA PUBLIC FINANCING AUTHORITY, APPROVING THE Res.08-P4 PURCHASE AND RESALE OF BONDS OF THE REDEVELOPMENT AGENCY OF THE CITY OF Appvg Purchase AZUSA, APPROVING A FORM OF PURCHASE AGREEMENT CERTAIN OTHER MATTERS and Resale Bonds RELATING THERETO. _ of CRA and form of Purchase Abram 11/03/08 PAGE FIVE I r. Moved by Board Member Gonzales, seconded by Board Member Hanks to waive further reading and adopt. Resolution passed and adopted by the following vote of the Authority Bond Members: AYES: BOARD MEMBERS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA NOES: BOARD MEMBERS: NONE ABSENT: BOARD MEMBERS: - NONE Councilmember Hanks offered a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,CALIFORNIA, APPROVING Res.08-0106, THE FINANCING OF AMENDED AND RESTATED MERGED CENTRAL BUSINESS DISTRICT Appvg Financing AND WEST END REDEVELOPMENT PROJECT AREA BY THE REDEVELOPMENT AGENCY OF of the Amended THE CITY OF AZUSA AND OTHER MATTERS RELATING THERETO. & Restated Merged CBD & Moved by Councilmember Hanks, seconded by Councilmember Gonzales to waive further reading and West End adopt. Resolution passed and adopted by the following vote of the Council: AYES: COUNCILMEMBERS: GONZALES,CARRILLO,MACIAS,HANKS,ROCHA NOES: COUNCB.MEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE THE REDEVELOPMENT AGENCY AND AZUSA PUBLIC FINANCING ADJOURNED AND CRA&APFA THE CITY COUNCIL RECONVENED AT 9:22 P.M. Adjourn Cncl Convened Moved by Councilmember Gonzales, seconded by Mayor Pr Tem Carrillo and unanimously carried to Adjourn adjourn. UPCOMING MEETINGS: Upcoming Meetings November 17,2008,City Council Meeting-6:30 p.m.(Auditorium) November 24,2008,Utility Board Meeting-6:30 p.m.(Azusa Light and Water Conference Room) December 1,2008,City Council Meeting-6:30 p.m.(Auditorium) December 15,2008,City Council Meeting-6:30 p.m.(Auditorium) . TIME OF ADJOURNMENT: 9:23 P.M. CITY CLERK NEXT RESOLUTION NO.2008-C107. NEXT ORDINANCE NO.2008-011. - 11/03/08 PAGE SIX CONSENT CALENDAR TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: KERMIT FRANCIS, INTERIM DIRECTOR OF HUMAN RESOURCES/PERSONNEL OFFICER VIA: F.M. DELACH,CITY MANAGER DATE: NOVEMBER 17,2008 SUBJECT: HUMAN RESOURCES ACTION ITEMS RECOMMENDATION It is recommended that the City Council approve the following Personnel Action Requests in accordance with the City of Azusa Civil Service Rules and applicable Memorandum of Understanding(s). BACKGROUND On November 10, 2008, the Personnel Board confirmed the following Department Head recommendation regarding the following Personnel Action requests. A MERIT INCREASE AND/OR REGULAR APPOINTMENT DEPARTMENT NAME"� CLASSIFICATION, ACTION/EFF " . ° RANGE%STEP ' t DATEBASE M[ SALARY- n UTL Robert Ryan Welder/Water Distribution Reg. Appt/Merit 5190/3 Wrla I Inc $4,966.50 09/04/2008 FISCAL IMPACT There is no fiscal impact,as positions listed are funded in approved department budgets. CONSENT CALENDAR TO: THE HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: JOE JACOBS, DIRECTOR OF RECREATION AND FAMILY SERVICES VIA: F. M. DELACH, CITY MANAGER DATE: NOVEMBER 17, 2008 SUBJECT: AUTHORIZE NOTICE OF COMPLETION FOR CONSTRUCTION OF PICNIC SHELTER SECURITY LIGHTING AT MEMORIAL PARK IN THE AMOUNT OF $9,120.00 RECOMMENDATION: It is recommended that City Council approve the Notice of Completion for construction of picnic shelter lighting at Memorial Park in the amount of$9,120.00 and authorize staff to file the Notice of Completion with the Los Angeles County Clerk. BACKGROUND: This Project #4100913 was approved by City Council as part of the 2008-2009 CIP Budget. Three bids were secured for the lighting project and were as follows: 1. Cheek Electric, Inc. $9,120.00 2. Astro Electric $9,440.00 3. Commericial Electric Systems $11,178.00 FISCAL IMPACT: The Shelter Lighting Project was complete on time and on budget. Funds were held in account#19-80-000-410- 7120/4100913 specifically for this purpose. 08-140 Attachment: Notice of Completion RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: r NAME Azusa City Clerk STREET ADDRESS 213 E. Foothill Blvd. an,STATE d Azusa, CA 91702 ZIP CODE L NOTICE OF COMPLETION Notice pursuant to Civil Code Section 3093, must be filed within 10 days after completion. (See reverse side for Complete requirements.) Notice is hereby given that: 1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described: 2. The full name of the owner is The City of Azusa 3. The full address of the owner is 213 E. Foothill Blvd.,Azusa,CA 91702 Azusa 91702 4. The nature of the interest or estate of the owner is: In fee. (IF OTNERT FEE.MU-IN FEE-AND INSERT.FOR U PU._MRp V3R UNDER CONTRACT OF PURCH -,OR'LF U-) 5. The full names and full addresses of all persons,if any,who hold title with the undersigned as joint tenants or as tenants in common are: NAMES ADDRESSES 6. The full names and full addresses of the predecessors in interest of the undersigned, if the property was transferred subsequent to the commencement of the work or improvements herein referred to: - NAMES - ADDRESSES 7. A work of improvement on the property hereinafter described was completed on October 29,2008, 8. The name of the contractor, if any, for such work of improvement was: Cheek Electric. Inc.. (IF NO CONTRAC}OR FOR WORK OF IMPKW W ASA WHOM.INSERT'NONE' (Mn OF CO CTI 9. The property on which said work of improvement was completed is in the City of Azusa County of Los Angeles,State of CA;and is described as follows: Picnic Shelter Security Lighting Construction 10. The street address of said property 320 N.Orange Place, Azusa Joe Rocha, Mayor Dated: 11/17/0 _ (2GNXMREOFOWNLRORQOpP DMn OFFICEROFOWNERNAMEDINPNUGRAPH20RHI NrNr) VERIFICATION I, the undersigned, say: 1 am the completion; the declarant of the foregoing notice of I have read said notice of completion and know the content thereof;the same is true of my own knowledge. I declare under penalty of perjury that the foregoing is true and correct. Executed on ,at IOTTI (STATE (PERSONK SIGNATURE OF iH[INDMpOA1.WH0 6$WFgPJNG r11AT THE CONLWTS OF THE NOTCE OF Cp.1PL£iION pRE TRUE.) CONSENT CALENDAR TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: TITO HAES, PUBLIC WORKS DIRECTORIASSISTANT CITY MANAGER VIA: F.M. DELACH, CITY MANAGER DATE: NOVEMBER 17, 2008 SUBJECT: EXCHANGE AGREEMENT — CONVERSION OF SURFACE TRANSPORTATION PROGRAM LOCAL (STP-L) FUNDS TO FLEXIBLE LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY (LACTMA) FUNDS RECOMMENDATION Staff recommends that the City Council execute the attached Exchange Agreement and assignment of Federal Surface Transportation Program— Local (STP-L) funds. BACKGROUND The Los Angeles County Metropolitan Transportation Authority (LACMTA) is offering for the first time an opportunity to exchange STP-L funds for flexible LACMTA funds. The program is geared at helping smaller populated agencies use up their STP-L balances. The City of Azusa has an available STP-L fund balance of $934,150. There are many agencies that are not able to use STP-L funds because of all the restrictions attached to the federal funds, primarily projects must be on the functionally classified system of streets and roads (e.g., Azusa Ave., Foothill Blvd. and Arrow Hwy.). In addition, agencies do not have trained staff to fulfill the E-76 process; the E-76 is a request to the Federal Highway Administration (FHWA) to authorize funds for the project. The obligation process for these funds is lengthy and administratively costly due to the federal regulations and standards relating to procurement of federally funded projects. LACMTA's flexible funds eliminate the federal requirements attached to the STP-L funds. The flexible funds are like cash, funds can be used on any transportation project regardless of its classification, the E-76 process is eliminated, and the funds are transferred to the City's bank account electronically all at once without the City invoicing. Furthermore, any federal regulations and standards relating to procurement and other project delivery issues that might apply may be substituted with applicable state and local regulations, standards and policies. Upon execution of the agreement, LACMTA will make an electronic disbursement in the amount of $915,467 to the City of Azusa, which includes a 2% processing and administrative fee payable to LACMTA. Staff has determined an exchange of the City's unspent STP-L fund balance to flexible LACMTA funds is beneficial and in the best interest of the City. FISCAL IMPACT If approved, the cost to convert the STP-L funds to more flexible funds is the 2% LACMTA administrative fee of$18,683. Attachments: LACMTA Exchange Agreement EXCHANGE AGREEMENT AND ASSIGNMENT OF FEDERAL SURFACE TRANSPORTATION PROGRAM—LOCAL FUNDS This Exchange Agreement and Assignment of Federal Surface Transportation Program — Local Funds ("AGREEMENT"), is made and entered into as of November 17, 2008, by and between City of Azusa (the "CITY") and the Los Angeles County Metropolitan Transportation Authority ("LACMTA"). RECITALS: A. CITY is eligible for and has available Federal Surface Transportation Program-Local funds (the "STP-L Funds"). B. CITY desires to exchange $ 934,150 of CITY's STP-L Funds for a like amount of LACMTA STP-L Local Transportation Funds (the "LACMTA Funds"). C. LACMTA is willing to exchange $934,150 in LACMTA Funds for a like amount of CITY's STP-L Funds subject to the terms and conditions contained herein. D. An exchange of CITY's STP-L Funds with LACMTA Funds is beneficial to and in the general interest of CITY and LACMTA. NOW THEREFORE, in consideration of the mutual benefits to be derived by CITY and LACMTA and of the promises contained herein, it is hereby agreed as follows: AGREEMENT: 1. CITY hereby assigns to LACMTA $ 934,150 of CITY'S STP-L Funds. LACMTA shall be authorized to deduct such amount from CITY's STP-L Fund balance. This assignment shall be automatically effective upon full execution of this AGREEMENT without the necessity of the execution, delivery or recording of any further instrument whatsoever. Notwithstanding the foregoing, at LACMTA's request, CITY shall execute and deliver such documents and instruments as maybe required to evidence such assignment of STP-L Funds. 2. LACMTA hereby accepts CITY's assignment of CITY's STP-L Funds for use on Federal-aid-eligible project(s),to be determined by LACMTA in its sole and absolute discretion. 3. Upon receipt of(i) a fully executed AGREEMENT, (ii) CITY's written certification of the amount of CITY's STP-L Fund Balance, as defined herein, which CITY's STP-L Fund Balance shows that CITY has sufficient STP-L funds to meet its obligations hereunder, and (iii) LACMTA's deduction of the CITY's STP-L Funds as provided in paragraph 1 above, LACMTA shall pay CITY $ 915,467 of LACMTA Funds which includes the deduction for the processing fee described in paragraph 5 below . For purposes of this AGREEMENT, the CITY's STP-L Fund Balance shall mean the amount of funds contained in CITY's STP-L Fund account as of the date this AGREEMENT is fully executed plus CITY's FY2009 apportionment share of STP- 1 a L Funds. If the STP-L Fund Balance is insufficient to satisfy CITY's exchange obligations hereunder, CITY hereby authorizes LACMTA to deduct from CITY's future STP-L Funds until LACMTA has in the aggregate received the amount of CITY's STP-L Funds specified in paragraph 1 above. 4. LACMTA will make all disbursements electronically unless an exception is requested in writing. CITY must complete an Automated Clearing House (ACH) form as provided in Exhibit A. Disbursements via ACH will be made at no cost to CITY. 5. CITY shall pay LACMTA a two (2) percent processing and administrative fee ("Processing Fee") in connection with the exchange contemplated by this AGREEMENT. The Processing Fee shall be assessed against the total amount of LACMTA Funds payable to CITY. The CITY hereby authorizes LACMTA to deduct the Processing Fee from the amount LACMTA is to pay CITY hereunder. 6. CITY shall expend the LACMTA Funds on STP-L Eligible Projects within three (3) years from the date this Agreement is fully executed. For purposes of this Agreement, STP-L Eligible Projects shall mean any transportation capital improvements that would normally qualify for the STP-L program, provided however, any federal regulations and standards relating to procurement and other project delivery issues that might apply may be substituted with applicable state and local regulations, standards and policies; and "expend" as used in this section shall mean that the LACMTA Funds have been encumbered by an awarded contract. 7. LACMTA, and/or its designee, shall have the right to conduct audits of CITY'S use of the LACMTA Funds to determine compliance with terms and conditions of this AGREEMENT. CITY shall establish and maintain proper accounting procedures and cash management records and documents in accordance with Generally Accepted Accounting Principles (GAAP). CITY shall reimburse LACMTA for any expenditure not in compliance with this AGREEMENT. CITY's records shall include, without limitation, any supporting evidence deemed necessary by LACMTA to substantiate CITY's use of LACMTA Funds. These records must be retained by CITY for three years following CITY's last use of the LACMTA Funds. 8. The term of this AGREEMENT shall commence on the date this AGREEMENT is fully executed and, shall terminate once the CITY has expended all the LACMTA Funds and all LACMTA audit and reporting requirements have been satisfied. 9. CITY shall fully indemnify, defend and hold LACMTA and its officers, agents and employees harmless from and against any liability and expenses, including, without limitation, defend costs, any costs or liability on account of bodily injury, death or personal injury of any person or for damages of any nature whatsoever arising out of(i) a breach of CITY's obligations under this AGREEMENT; or (ii) any act or omission of CITY or its officers, agents, employees, contractors or subcontractors in the use of the LACMTA Funds. 10. LACMTA shall fully indemnify, defend and hold CITY and its officers, agents and employees harmless from and against any liability and expenses, including, without limitation, defend costs, any costs or liability on account of bodily injury, death or personal injury of any 2 r, person or for damages to or loss of risk of property, any environmental obligations, any legal fees and any claims for damages of any nature whatsoever arising out of (i) a breach of LACMTA's obligations under this AGREEMENT; or(ii) any act or omission of LACMTA or its officers, agents, employees, contractors or subcontractors in the use of CITY'S STP-L Funds. 11. This AGREEMENT may be amended or modified only by mutual written consent of LACMTA and CITY. 12. Any correspondence, communication, or contact concerning this AGREEMENT shall be directed to the following: CITY: City of Azusa 213 East Foothill Blvd. Azusa, CA 91702 Attn: Israel Del Toro LACMTA: Los Angeles County Metropolitan Transportation Authority One Gateway Plaza Los Angeles, California 90012 Attn: Frank Flores 13. This AGREEMENT shall be interpreted and governed by the laws of the State of California. 14. This AGREEMENT constitutes the entire understanding between the parties with respect to the subject matter herein. / 3 IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed by their respective officers as of the date stated below. CITY: City of Azusa By: Joseph R. Rocha Mayor Date: LACMTA: Los Angeles County Metropolitan Transportation Authority By: ROGERSNOBLE DATE Chief Executive Officer Approved as to form: Raymond G. Fortner, Jr. County Counsel By: DEPUTY 4 9 CONSENT CALENDAR TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: KURT CHRISTIANSEN, AICP, COMMUNITY/ECONOMIC DEVELOPMENT DIRECTOR VIA: F.M. DELACH, CITY MANAGED DATE: NOVEMBER 17, 2008 SUBJECT: AMENDMENT OF THE 2008/09 CAPITAL IMPROVEMENT PLAN— AGENCY FUNDED PROJECTS RECOMMENDATION It is recommended that the City Council adopt the attached resolution amending the 2008/2009 Capital Improvement Plan to add three infrastructure projects which will aid the ongoing development activities in the downtown. The Capital Improvement Plan will also be amended to reflect the Redevelopment Agency of the City of Azusa as the funding source for the proposed projects. BACKGROUND In an effort to better facilitate redevelopment activities in the downtown, three infrastructure projects have been identified which will be of assistance to promoting the overall growth and continued vitality of the downtown. The three projects are; 1) traffic signal modification, plans, signing and striping at 9'h Street and San Gabriel Avenue; 2) traffic signal modification, plans, signing and striping at Foothill Boulevard and Azusa Avenue; and 3) traffic signal modification, plans, signing and striping at I" Street and Azusa Avenue. The Agency had previously intended to incorporate the proposed projects in the 2009/10 Capital Improvement Plan, however, given the current contemplated developments and timing, the Agency would like to undertake design and engineering of the improvements during the 2008/09 Capital Improvement Plan. The total projected cost of the three projects is estimated at $225,000. Of this, the Agency presumes to expend approximately $50,000 during the 2008/09 Capital Improvement Plan period. FISCAL IMPACT . Approval of the proposed Capital Improvement Plan modifications will require the expenditure of $225,000 of Agency funds with approximately $50,000 being expended during the 2008/09 Capital Improvement Plan period. Resolution No A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA APPROVING APPROPRIATION AMENDMENTS FOR FISCAL YEAR 2008/09 PURSUANT TO SECTION 2-450 OF THE AZUSA MUNICIPAL CODE WHEREAS, on June 16, 2008, the Agency Members passed Resolution No..08- R25, adopting the Budget and approving the appropriations for the Redevelopment Agency of the City of Azusa for fiscal year commencing July 1, 2008 and ending June 30, 2009; WHEREAS, Section 2-450 of the Azusa Municipal Code provides for the amendment of said Budget, when required for the operation of the Agency; and WHEREAS, certain appropriation amendments are in fact, required as -summarized below and detailed in "Exhibit A" Appropriations Amendment: Appropriation Amendment Summary: Appropriation of$225,000, to fund various infrastructure improvements NOW THEREFORE BE IT RESOLVED that the Agency Members of the Redevelopment Agency of the City of Azusa do hereby approve the Budget Amendment attached as "Exhibit A", and order the same to be recorded in the Agency's books of account and henceforth to be a part of said Budget as if adopted with the original thereof. ADOPTED AND APPROVED this 17th day of November, 2008. Chairman: I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Agency Members of the Redevelopment Agency of the City of Azusa at a regular meeting thereof on the 17`h day of November, 2008, by the following vote of Agency Members: AYES: AGENCY MEMBERS: NOES: AGENCY MEMBERS: ABSTAIN: AGENCY MEMBERS: ABSENT: AGENCY MEMBERS: Secretary: OF- y Zy � U cr - C'9UFORN�P JOINT CITY/AGENCY PUBLIC HEARING ITEM TO: THE HONORABLE MAYOR/CHAIRPERSON AND COUNCIL/AGENCY MEMBERS ,I-Ir, FROM: KURT E. CHRISTIANSEN, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR A�� VIA: F.M. DELACH, CITY MANAGER/EXECUTIVE DIRECTOR IUAO DATE: NOVEMBER 17, 2008 ��11 SUBJECT: DISPOSITION AND DEVELOPMENT AGREEMENT WITH TARGET CORPORATION FOR THE DEVELOPMENT OF A TARGET STORE AT 809 NORTH AZUSA AVENUE RECOMMENDATION It is recommended that: 1)The City Council adopt a resolution accepting the summary of costs and findings of the 33433 Summary Report prepared by Tierra West Advisors,Inc.,and the estimated reuse valuation of the subject property pursuant to the California Health and Safety Code Section 33433 for the sale of approximately 180,338 square feet of land to Target Corporation, making certain findings and approving the Disposition and Development Agreement; and 2) The Agency Board Adopt the Redevelopment Agency Resolution Approving a Disposition and Development Agreement with Target Corporation ("Target'). BACKGROUND On February 6, 2007, the Agency entered into a Letter of Intent with Target Corporation for the development of a Target at 809 North Azusa Avenue. The proposed Target was to be an "urban style" Target designed to serve as downtown department store anchor. On July 23, 2008, the Planning Commission found that the sale of the Target Site is in conformance with the General Plan. On September 2, 2008 the City Council held the second reading of the zoning ordinances and adopted the resolutions approving the Target development project. THE PROJECT The proposed project is a two-story, 159,000 square foot,Target Department Store with 420 parking spaces on the ground floor. The ground-floor parking area is enclosed by arched building supports with access to the parking lot from Azusa Avenue,Ninth Street and San Gabriel Avenue. There will bean eating area in Honorable Chairperson&Agency Board November 17,2008 Target DDA _ .v` Page 2 of 6 the front of the store with large windows looking out onto Azusa Avenue. The exterior walls of the building are articulated with varying building heights, second floor setbacks and decorative architectural details,to create a structure that will complement the existing eclectic mix of buildings types in this area. The exterior will be further accented with vine pockets and vine trellises/plantings,as well as with landscaped balconies, windows and billboard-style displays on the building walls along Azusa Avenue, Ninth Street and San Gabriel Avenue. The project will include the narrowing of San Gabriel Avenue by one drive lane to add a row of diagonal parking along the west side of the property. The sidewalk on the southeast corner of Ninth Street and San Gabriel Avenue will be expanded to shelter the diagonal parking area,and the new diagonal parking spaces will be interspersed with specifically-designed planting areas jutting out among the parking spaces. Pedestrian-oriented streetscape amenities, such as decorative benches, trash receptacles and lighted tree grates will be provided along the sidewalks on Azusa Avenue,Ninth Street and San Gabriel Avenue. The decorative lampposts and lighted sidewalk bollards, as well as the river rock pedestals currently found on Azusa Avenue, will also extend along the south side of Ninth Street and along the San Gabriel side of the project, to continue the existing "Downtown Streetscape Design". The Target Department Store hours of operation are Monday—Saturday from 8:00 a.m. to 10:00 p.m. and Sunday 8:00 a.m. to 9:00 p.m. Truck deliveries will occur between 4:00 a.m. and 12:00 midnight. The . store will be closed on Thanksgiving Day, Christmas Day and Easter Sunday. GENERAL PLAN AND EIR An Initial Study was prepared and noticed for this project in accordance with CEQA guidelines. As a result of the Initial Study review of the proposed project,it was determined that an Environmental Impact Report (EIR)was necessary due to several foreseeable effects of constructing a large retail store adjacent to existing residences, located at the perimeter of the downtown area. A Draft Environmental Impact Report (DEIR) was prepared. To assist in the preparation of the DEIR, a number of technical studies were prepared including a Traffic Study,Noise Study, Wind& Climate Study and Phase I&Phase 11 Environmental Site Assessments and Soil Sampling Reports. These reports are included in the Technical Appendix document for the DEIR. The following subject areas were identified as having no impact, less than significant impacts or impacts that can be mitigated to a less-than-significant level: Aesthetics;Biological Resources; Geology,Soils and Seismicity; Hazards and Hazardous Materials; Land Use and Planning; Noise and Vibration; Population, Housing and Employment; Public Services; Traffic and Parking; Utilities and Service Systems. The subject area that was found to have impacts that are significant and unavoidable is Air Quality. Specifically, the air quality analysis determined that emissions from long-term motor vehicle traffic associated with the proposed project operation would exceed regional air quality standards for nitrogen oxides (NOx) and carbon monoxide (CO). The EIR for this project was certified on August 4, 2008. The Notice of Determination was subsequently filed on August 8, 2008 and posted with the County from August 8, 2008 to September 8, 2008. Honorable Chairperson&Agency Board November 17,2008 v Target DDA - Page 3 of 6 The project is located within the Downtown Transit Village District. The General Plan Land Use designation for the site is "Commercial/Residential Mixed Use"which permits residential densities of up to 27 units per acre,and commercial building intensities of up to 1.5 FAR(floor area ratio). Completion of the project serves a public use since it is consistent with the following City of Azusa General Plan Goals and Policies: Land Use: Districts GOAL 4 Azusa will have a thriving and well balanced business sector located within three pedestrian oriented districts that provide dining, retail, office, and entertainment experiences, and one industrial/technology district thatprovides "tech-driven"manufacturing, warehousing, andother industrial uses along with supporting commercial uses. The project will result in the construction of a new commercial downtown department store,which will help to revitalize the Downtown Transit Village District. A goal of the project will be to provide a"distinctive" experience. An outdoor plaza and other similar uses on the second floor will be encouraged to "activate" public spaces. The building and site layout will link buildings,public facilities, and parking facilities with each other through the use of walkways and sidewalks and other amenities that contribute to pedestrian oriented activities. The project will contribute to the maintenance of a distinctive and pleasant physical environment through public streetscape and street amenities. The retail project emphasizes a tax generating use that is active each day of the week. Land Use: Commercial and Mixed Use GOAL 5 Allow for and encourage the intensification of commercial uses in the corridors and in the districts to provide economic stability and to provide residents with essential goods and services. The intensification of commercial uses in the Downtown will be achieved through the application of the Development Code standards, which reduce the amount of parking, and minimize setbacks. The structure has been sited and designed to enhance pedestrian activity along the sidewalks,by incorporating furniture and foliage along the street frontage that stimulate pedestrian activity. ECONOMIC DEVELOPMENT GOALS AND POLICIES GOAL 1 Build and maintain a strong, diverse economy in Azusa. The development of a downtown department store in the Downtown District is consistent with an overall strategy to use land resources efficiently.The project builds on the city's amenities and assets,including the historic character of the Downtown,the diversity of the housing stock,and the proximity of the future Gold Line station. GOAL 9 Create a diverse and balanced revenue base with long-term value, avoiding excess reliance on a single revenue source. Honorable Chairperson&Agency Board November 17,2008 - - Target DDA - Page 4 of 6 The project will help build a high-quality retail base that can hold value over time and adapt to changing circumstances. It will help promote a quality housing stock that will appreciate in value over time.The project promotes business development that can support the city's property tax base and generate sales tax revenues. GOAL 10 Strengthen the retail and commercial base. The addition of approximately 159,000 square feet of retail space will help to enhance the identity of the Downtown and strengthen retail and commercial base. The project will help promote Azusa's competitiveness at the sub-regional level. The quality of the project will help to attract more new development by demonstrating the City's commitment to ensuring high-quality public amenities in the retail districts, including high-quality streetscapes. GOAL 11 Create a unique place with high quality of life for all its residents. The nature and design of the project is expected to promote quality of life for its own sake as well as making it part of an economic development strategy. By making the Downtown Transit Village a unique place anchored by a department store like Target, the project will help build long-term value in the community. 33433 SUMMARY REPORT&REUSE ANALYSIS The State of California Health & Safety Code ("H & S Code") section 33433 requires that before any redevelopment agency sells a property acquired with tax increment revenue,the agency shall make available to the public a summary of the agreement("Summary Report"), which will include the estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale or lease. The Summary Report shall specify the purchase price or present value of the lease payments that the lessor will be required to make during the term of the lease. If the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use consistent with the redevelopment plan,then the agency shall provide as part of the summary an explanation of the reasons for the difference (the "Reuse Analysis"). The Developer will acquire the Site from the Agency at above the current appraised value and the Agency will not provide any financial assistance to the Developer in connection with any part of the development of the Site including the construction or installation of the Target store. The Agency purchased the subject Site for a total of approximately$10,432,000,and expects to incur additional costs of approximately$900,000 to demolish existing improvements and remediate soil contamination present on the Site. The Agency will convey the Site to the Developer for $7,000,000, currently $700,000 over the appraised value of the Site. The attached Summary Report,prepared pursuant to Section 33433 of California Redevelopment Law,and an Estimated Reuse Valuation were prepared by Tierra West Advisors,Inc.,and made available for public inspection as required by California Redevelopment Law, along with a copy of the DDA. The 33433 Summary Report analyzes the project's financial structure,costs,revenues,effect on blight and contribution to the objectives set forth in the Redevelopment.Plan for the Merged Central Business District and West End Redevelopment Project Area. Honorable Chairperson&Agency Board November 17,2008 Target DDA Page 5 of 6 The findings of the Summary Report state in relation to the proposed use, development costs, covenants, conditions and restrictions and estimated sales revenue are presented in the Reuse Analysis(Exhibit B to the 33433 Summary Report). The following represents the conclusions of the attached Reuse Analysis; The development revenues,values, and costs allow the Developer to acquire the Site for$7 million, $700,000 above the current appraised value. • At the anticipated sales prices, rents, and values, no Agency assistance is necessary to develop a Target store on the Site. Approval of this DDA will include adoption of the findings set forth in the 33433 Report that the Project will benefit the Project Area, assist in the elimination of blight and is consistent with the Implementation Plan for the Project. The Project provides for the elimination of blight by the redevelopment of blighted parcels,the development of a mixed use project within the downtown and by attracting retail businesses to the downtown. The Project is also consistent with the Merged Central Business District and West End Redevelopment Project Area Implementation Plan, which encourages retail/entertainment activity in the downtown, and the consideration to the Agency is not less than the fair reuse value as detailed in the attached Health and Safety Code Section 33433 Report. DISPOSITION & DEVELOPMENT AGREEMENT (DDA) The Redevelopment Agency of the City of Azusa has been working to redevelop downtown Azusa and has negotiated a Disposition and Development Agreement with Target Corporation for the development of a Target store that would serve to anchor downtown revitalization efforts in Azusa.The draft DDA has been finalized and incorporates Project details and Project deal points.If approved,Target has indicated that they plan to commence construction in the first quarter of 2009. This DDA will guarantee that the Target Corporation will operate this store for a minimum of fifteen years, through an operating covenant. FISCAL IMPACT The DDA provides that the Redevelopment Agency will receive$7,000,000 for the property. The total land acquisition costs to the Agency inclusive of demolition and remediation is $11,332,000. The attached 33433 Summary Report further details the financial impacts of the Project. Most notably, the Project is anticipated to generate in excess of$18,900,000 in gross tax increment revenue over the forthcoming 28 fiscal years. In addition to the gross tax increment revenue, it is anticipated that the Target Store will generate in excess of$500,000 of annual sales tax revenue. Attachments: 1. 33433 Summary Report and Reuse Analysis 2. Target Project EIR—document available for review, on city website at http://www.ci.azusa.ca.us/documentcenterii.asp, Azusa Library and City Clerk's Office 3. Disposition and Development Agreement by and among the Redevelopment Agency of the City of Azusa a Public Body, and Target Corporation. 4. A Resolution Of The City Council Of The City Of Azusa,California,accepting the summary of costs and findings of the 33433 Summary Report and the Estimated Reuse Valuation pursuant to Honorable Chairperson&Agency Board November 17,2008 Target DDA Page 6 of 6 the California Health and Safety Code Section 33433 for the sale of approximately 180,338 square feet of land to Target Corporation,making certain findings and approving the Disposition and Development Agreement; and 5. A Resolution Of The Governing Board Of The Redevelopment Agency Of The City Of Azusa, California, Approving A Disposition and Development Agreement By And Between The Redevelopment Agency Of The City Of Azusa and Target Corporation,For The Merged Central Business District and West End Redevelopment Project a I SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA. AND TARGET CORPORATION THIS SUMMARY REPORT HAS BEEN PREPARED FOR CONSIDERATION AT A PUBLIC HEARING AS REQUIRED BY CALIFORNIA REDEVELOPMENT LAW SECTION 33431 AND IN A FORMAT PROVIDED FOR BY SECTION 33433 REGARDING THE CONVEYANCE OF FOUR (4) PROPERTIES FROM THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA TO TARGET CORPORATION, A MINNESOTA CORPORATION, FOR THE DEVELOPMENT OF A TARGET STORE ON APPROXIMATELY 180,338 SQUARE FEET OF COMMERCIAL LAND. INTRODUCTION The Redevelopment Agency of the City of Azusa ("Agency") is entering into a Disposition and Development Agreement ("DDA") with Target Corporation ("Developer") to convey fee simple title of approximately 180,338 square feet of.land to the Developer ("Site"). The Site is located within the Agency's Merged Central Business District and West End Redevelopment Project Area ("Project Area"). The DDA will result in the development of an approximately 159,000 square foot Target store with 420 parking spaces ("Project"), located within the Project Area. The Site under consideration is as follows: • Assessor Parcel Nos. 8608 024 900, 8608 024 902, 8608 024 903, and 8608 024 904 • The Site is generally bounded by Azusa Avenue on the west, Ninth Street on the north, San Gabriel Avenue on the east and Metro Transit Authority rail road right-of-way on the south. The Site is to be conveyed to the Developer to provide greater retail opportunities within the City's Transit Village area of the Downtown District which is intended to provide for transit oriented development centered on the Metro Gold Line Foothill Extension. In addition, it will provide an anchor at the north end of the Downtown District. The Project will entail the following: • The development of a 159,000 Target department store with 420 parking spaces and approximately 12,500 square feet of stock and receiving area on the ground floor. The Project meets the goals and objectives of the Project Area, and will assist in eliminating blight in the Project Area, all in conformity with the Redevelopment Plan for the Project Area. The proposed DDA is provided as Exhibit A to this Summary Report for public review pursuant to Section 33433 of the California Community Redevelopment Law. This Summary Report is based upon information contained within the DDA. It is organized into the following sections: I. Salient Points of the Agreement: This section includes a description of the Project, and the major responsibilities imposed on the Developer and the Agency by the DDA. IL Cost of the Agreement to the Agency: This section details the total net cost to the Agency associated with implementing the DDA. 2 III. Estimated Value of the Interests to be Conveyed Determined at the Highest and Best Use Permitted Under the Redevelopment Plan: This section estimates the value of the interests to be conveyed determined at the highest and best use permitted under the Redevelopment Plan and the existing zoning code for the City of Azusa ("City'). IV. Economic Analysis of Proposed Project: This section summarizes the valuation estimate for the site based on the required use, and with the conditions and covenants and development costs required by the DDA. . V. Blight Elimination: This section describes the existing blighting conditions on the development site, and explains how the DDA will assist in alleviating the blighting influence. This Report and the DDA are to be made available for public inspection prior to the approval of the DDA. 1. SALIENT POINTS OF THE AGREEMENT A. Project Description The Site is currently comprised of 4 parcels totaling approximately 4.1 acres owned by the Agency and is generally bounded by Azusa Avenue on the east, Ninth Street on the north, San Gabriel Avenue on the west and the Metro Gold Line Foothill Extension right- of-way on the south. The Site is currently developed with 47,646 square feet of buildings along with paved parking areas. The Site contains minimal landscaping in the surface parking area. The surrounding area is a combination of commercial, industrial and residential uses. The Agency will sell the Site to the Developer for the development of a Target store. The project is a two-level, 159,000 square foot, Target department store with 420 parking spaces and approximately 12,500 square feet of stock and receiving area on the . ground floor. The enclosed parking area on the ground floor will have access from Azusa Avenue, Ninth Street and San Gabriel Avenue. The second-floor sales area entrance will be located in the southeast comer of the building and will be accessed by escalator located on a two-level open air entry plaza. An eating area will be located in the front of the store with large windows looking out onto Azusa Avenue. The total Site is approximately 4.1 acres and consists of the Agency-owned properties with commercial improvements on them. The Agency will clear the Site and sell it to the Developer for $7,000,000. In addition, the DDA will require the Developer to operate a 3 Target store on the Site for a minimum of 15 years and it is estimated that the City of Azusa will collect approximately $500,000 a year in sales taxes from the operation of the Target store. The DDA provides for the Developer to develop the Site as a Target Store, as detailed in Scope of Development, Exhibit B to the DDA and generally depicted in the conceptual site plan attached to the DDA as Exhibit A-2. B. Developer Conditions The DDA requires the Developer to complete the following activities among others; 1. The Developer's obligation to purchase the Conveyance Property (as defined in the DDA) from the Agency on the Escrow Closing Date shall be subject to satisfaction or waiver of the following conditions: (a) The Developer agrees to accept the title to and conveyance of the Property, pursuant to Section 2.3 of the DDA; (b) The Developer delivers its Due Diligence Investigation Conclusion Notice to both the Agency and the Escrow Holder, prior to the expiration of the Due Diligence Period pursuant to Section 2.4 of the DDA and all objections to Title have been resolved to mutual satisfaction of Developer and Agency; (c) Entitlements required to construct the improvements described on the Scope of Development have been obtained as identified in 2.5.2 of the DDA, and the time period for appeal of issuance has expired without contest or, if any appeal is filed, such appeal is resolved to the satisfaction of Developer; (d) Developer has confirmed to its reasonable satisfaction that the anticipated fees and exactions required to construct the improvements described on the Scope of Development are acceptable to Developer in its reasonable discretion; (e) Developer has confirmed to its satisfaction that, subject to the closing of the transaction contemplated by the DDA, if Developer were to apply for a building permit for,the construction of the improvements contemplated in the Scope of Development as of the Escrow Closing Date and pay all required fees, and provided that the plans for such improvements complied with all applicable building codes, it could, as a matter of right, obtain such building permit without further act; q (f) Developer has confirmed to its satisfaction that as of the Escrow Closing Date, it has the immediate right to connect with operating service available.with respect to all utilities, including electricity, telephone, gas, water (fire and domestic), storm and sanitary sewer, upon payment of usual and customary connection fees; (g) Developer has confirmed to its satisfaction that the Property has or will have adequate ingress and egress for vehicular traffic from adjacent public streets to meet the unique needs of the Developer's business operation. The Developer may determine the adequacy of access based on the plans approved pursuant to Section 2.5 of the DDA or assumes or estimates will have been implemented as of the date it projects for the opening of its retail business on the Property; (h) The City Planning Commission finds, pursuant to Government Code Section 65402, that the Project is consistent with the City's General Plan; (i) The Title Company is unconditionally committed to issue the Title Policy to the Developer, at the Close of Escrow; (j) The Agency deposits all of the items into the Escrow required by Section 3.4 of the DDA; (k) The Agency has performed all obligations required under the DDA in all material respects on or before the Escrow Closing Date; (1) The Developer approves the Escrow Holder's final estimated, closing/settlement statement; and (m) The representations, warranties and covenants of the Agency set forth in ARTICLE VII of the DDA are true and correct in all material respects on the Effective Date and on the Escrow Closing Date. C. Agency Conditions The DDA requires the Agency to complete the following conditions among others; 1. The Agency's obligation to sell the Property to the Developer on or before the Escrow Closing Date shall be subject to the satisfaction or waiver of each of the following conditions precedent, which can only be waived in writing by the Agency: (a) The Developer deposited the Earnest Money Deposit into Escrow, pursuant to Section 2.2.1 of the DDA; 5 C (b) The Developer agrees to accept the title to and conveyance of the Property, pursuant to Section 2.3 of the DDA; (c) The Developer has delivered its Due Diligence Investigation Conclusion Notice to both the Agency and the Escrow Holder, prior to the expiration of the Due Diligence Period pursuant to Section 2.4 of the DDA and all objections to Title have been addressed to mutual satisfaction of Developer and Agency; (d) The Developer deposits all of the items into Escrow required by Section 3.3 of the DDA; (e) The Agency approves the Escrow Holder's final estimated closing/settlement statement; (f) The City Planning Commission finds, pursuant to Government Code Section 65402, that the Project is consistent with the City's General Plan; (g) The Developer submits to the Agency, at least five (5) days prior to the Escrow Closing Date, evidence satisfactory to the Agency, in the Agency's sole and absolute discretion, that the Developer has obtained all Governmental Agency approvals necessary for the development of the Project on the Property; (h) The Developer submits to the Agency, at least five (5) days prior to the Escrow Closing Date, evidence satisfactory to the Agency, in the Agency's sole and absolute discretion, that the Developer has obtained a commitment from the Developer's CEC to fund the construction and opening of the Target Store consistent with the Schedule of Performance; (i) The Developer submits to the Agency, at lease five (5) days prior to the Escrow Closing Date, evidence satisfactory to the Agency, in the Agency's sole and absolute discretion, that Developer has contracted with a licensed California general contractor experienced in the construction and installation of projects similar in size and complexity to Project and contractor is contractual committed to constructing the Project pursuant to the Schedule of Performance; Q) The Developer performs all of its material obligations required to be performed by the Developer under this Agreement prior to Close of Escrow; and (k) The representations, warranties and covenants of the Developer set forth in ARTICLE VII of the DDA are true and correct in all material respects on the Effective Date and on the Escrow Closing Date. 6 J II. COST OF THE AGREEMENT TO THE AGENCY The Agency purchased the subject Site for a total of approximately $10,432,000, and received a $200,000 credit from the seller for remediation of the Site. Additionally, the Agency expects to incur an additional $700,000 to demolish existing improvements and remediate soil contamination present on the Site. The proposed DDA between the Agency and Developer provides for acquisition of the Site by the Developer and development of a Target store. The DDA provides that the Site will be conveyed to the Developer for $7,000,000. The Developer and the Agency agree that the Agency shall not provide any financial assistance to the Developer in connection with the construction or installation of the Project. The Developer shall be solely responsible for paying for the costs of all design work, construction, labor, materials, fees, permit, application, surety bond and other expenses associated with the Project. The Developer shall pay any and all fees pertaining to the review and approval of the Project by each Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required by each Governmental Agency or utility service provider pertinent to the construction or installation of the Project on the Property, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review and disclosure documents and design review documents. The Developer shall obtain any and all necessary governmental approvals, prior to the commencement of applicable portions of construction and installation of the Project. III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN Pursuant to Section 33433 of the California Health and Safety Code, this section presents an analysis of the fair market value of the Conveyance Property at the highest and best use. Under current market conditions it is assumed that a commercial retail project would be the highest and best use of the site. In appraisal terminology, the highest and best use can be defined as the legal use.(i.e., uses allowed under the Redevelopment Plan) that will yield the highest value to the land. Therefore, the definition of highest and best use is based solely on the value created and not on whether it enhances or carries out the redevelopment goals and policies established by the Agency. 7 The Agency's total acquisition cost for the Site is estimated at $10,432;000 including land, carry and transaction costs, or approximately $58 per square foot of land. City zoning and general plan designation would allow for a commercial project at a density of up to a 2.0 floor_ area ratio ("FAR"). Recent land transactions in the area indicate property values ranging from $30 to $39 per square foot of land. The property has been professionally appraised at $33.8 per square foot or approximately $6,100,000. IV. ECONOMIC ANALYSIS OF PROPOSED PROJECT The Agency utilized the services of Tierra West Advisors to review the Developer's proposal and conduct an independent analysis of the Project. The following financial information is based on the analysis performed by Tierra West Advisors. Table A attached to this Report detail the findings cited below regarding the Agency's estimated revenue projections from property tax increment. COST OF AGREEMENT TO THE AGENCY Cost of Site Assembly Acquisition of Four(4) Project Parcels $10,432,000 Estimated demolition and remediation costs $700,000 Total $11,132,000 Cost Per Square Feet $62 FINANCIAL BENEFITS TO THE AGENCY FROM AGREEMENT Purchase Price to be paid by Developer $7,000,000 Projected Tax Increment Revenue over Next 28 Years (Table A) $18,990,505 Net Present Value (@ 6%) of Tax Increment Revenues Projected over Next 28 Years $8,265,662 Total Revenue to Agency $15,265,662 1. Estimated Value of the Interest to be Conveyed, Determined upon the Proposed Sale and the Development Pursuant to the Proposed DDA. The terms of the Agreement provide that the Agency will sell the Site to the Developer for $7 million. A Reuse Analysis conducted by the Tierra West Advisors of the Project in relation to the proposed use, development costs, covenants, conditions and restrictions and estimated sales revenue are presented in the attached Reuse Analysis (Exhibit B). Based upon the attached Reuse Analysis, the Developer should pay no less than the current appraised value of $6.1 million. The DDA provides for the transfer of the Site 8 from the Agency to the Developer for a purchase price of $7 million, $900,000 more than the current appraised value of the Site. V. BLIGHT ELIMINATION The Site is currently located within the Project Area, which is considered to be both physically and economically blighted as documented in the Agency's Five-Year Implementation Plan 2005-2009, including physical obsolescence, incompatible land use, impaired investments, and economic decay. The sale to the Developer will provide the economic relief necessary to enable development of the Site and elimination of blighting conditions in the Project Area. Development of the proposed Project on the Site will take property which is not being utilized to its highest and best use, and convert in to a first-class retail development occupied by a national tenant. The new development will meet the requirements of the current General Plan, Municipal Code and Development Code for the City of Azusa. The development activity will create jobs during the development period and, once developed, will provide permanent jobs for the management and ongoing maintenance of the development. The Project will provide a development that is consistent with the Redevelopment Plan and adds economic return to the City. Public Hearing Pursuant to Section 33433 of the California Redevelopment Law, the City Council will consider the conveyance of the Site at a public hearing on November 17, 2008. A copy of the hearing notice is attached as Exhibit C. 9 TABLE A REDEVELOPMENT AGENCY OF THE CITY OF AZUSA TARGET Tau Increment P 'ectiorls land Sak - A22eaeEVatue Velue'Ne Rv. Gmss Tl Rvusmg Sm. Gmss N., Tetal ShWnw7 Nen Year (W2%in0abr) Vabe Total Value - In real Value Revenue Adde Fund Mu5ing Stat pas) RedlevebpnleM Base Yc 2,140,30 ufurY pass T6m Pay enls pa7nents Fond 5% 21% 14% 201-10 2,100,30 49,112,]]) 51,261,123 49,112,79 599,176 119,15 4]9,341 119,835 2010.11 51,261,133 51261,13] 49,112.)!/ 491,118 %226 392,902 98,226 119,035 299,341 2011-12 52,2136,345 52,2%;305 50,137,999 %226 291,67 501,%0 100,2]6 401,101 10,2)6 100,76 31,028 2012-13 53,332,12 0 53,332,072 51,183.74 511,837 102,367 403,4]0 102,367 201}14 54,398)14 0 54,3911,714 52,250,368 51$%0 IM,51 410,13 14501 102.36] b>,ffi 2014-15 55,486,688 0 55,4%,606 53,338,342 533,383 106,69} 12670) 106,6)} 1,828 104,501 313,502 201516 56,5%,112 0 %,5%,422 54,418,0)6 - 544,01 108,896 035,585 100,095 3,6W 1 2 w 316,202 2016-17 5),]20,350 1R,5% 322,9% 0 5)728,350 55,500,001 555,%0 111,180 µ,6q0 111,160 5,591 116,]54 33},0% 201]-113 56,082,91) 0 58,802,91] 56,730,571 %>,J0 113,,6 053,0]] 113,469 7,533 2018-19 60,060,5]5 0 60,060,5]5 57,912,229 5)9,112 115,814 163,298 115,834 8,512 121'01 )32,8)4 3019-10 61,261,187 0 61261,)8 125,]36 33),%1 59,t13,µ 591,131 118,227 2}2,91 1%;22] - 11,530 12875] 30,151 2030.31 62,407,023 0 62,487,023 80,338,6, 13397 410,67 082,)1 40,61) 13,%8 2021-22 63,)36,]63 p 63,736)63 61,5%,I1> 1312% 348,µ 2022-23 65,011,498 615,%1 49,17 492,71 123,17 15,686 190, 959,003 0 65011,198 WAMS2 '628,W2 125726 502,%5 125,726 17,829 143,5% %9,319 1fIri21 %311728 -0 %,311726 64,163,302 641,634 128,327 513,)07 128,337 30,012 2024-25 67,637,963 p 67,637,963 65,09,61] 100,)41 360,9% 651,6% 130,979 523,917 1)0,9}9 '22,242 153,221 370,6% 2025-26 %,%0,)22 .p %,990,)22 %842,3]5 686031 1]3,15 -52,)39 133,%5 24,515 2026-2) 70,370,537 0 )0,310,531 66222,191 158,199 3)6,510 12.122 1J6,µ 54578 t36,µ 26,833 163,2)/ 382,51 2027-28 11,77,94 0 7177,94 1,629,6.] 6%,296 139,259 55],0)7 139259 29,19] 2016-29 )3213,5% 0 )3213,5% ]1,065,160 )10,652 142,130 560,521 143,1)0 ]1,609 168,4% 300,580 2020-1 74,67,76 0 )26)7,76 )2,539,030 173739 294782 2030.31 725294 125859 %0,235 145,059 30,%9 119,128 101,100 76,1}1,332 0 )61)1,312 )482$9% 7402E 10,D1fi 592,180 148,046 36578 2031-32 7,694,]59 0 77,691,)59 75,546,413 755,483 181,624 40],51 151,13 604,371 151,13 39,137 190,230 414,141 2032x3 )9,248,650 0 )9.248,654 7,106)1 71803 154,201 616,802 154,201 41,748 2033-34 80,&{3,627 0 80,83362) 78,685,301 786A 159,3)1 195.%9 420,851 20)0.35 629,482 15),1]1 41,011 201,)01 427701 81.150,299 0 82,450,299 %,301,91 010 160,601 602016 11,601 4,12)- 1,611 11,511 232,871 2035-36 8,19,305 0 U,p1,3J5 01,950,959 819,510 183,%2 655608 163,902 49,897 2026-3) 05)81,281 1.817 215,806 4)9,962 0 85,]81.291 83632,915 036,329 167266 %9,061 167 256 52 723 1,802 221,8)2 417,191 2037-W 13),1%91) 0 0),496,917 85,346571 053,06 170,697 682,)89 170,697 55,605 1,922 Tvlak 218.224 050.%5 E 1810,505 S 3,798,101 $ 1,448082 $ 10,864,1]0 NPV fi% - f 0265.%2 f 1,65,132 0,978,)7 10 SUMMARY REPORT EXHIBIT B REUSE ANALYSIS 12 Tierra West Advisors F c_( �+s26 ( /7es- 488 F E-into urtf r awzstadciu a com Heal Fsratr and HeJevelopment Consuliimts wv.,a[icrraue>tadr ie�:.com MEMORANDUM TO: KURT CHRISTIANSEN,AICP,ECONOMIC/COMMUNITY DEVELOPMENT DIRECTOR FROM: JOSE OMETEOTL, DIRECTOR REGARDING: REUSE ANALYSIS, TARGET STORE The Azusa Redevelopment Agency ("Agency") is considering the sale of the area commonly: known as the Ranch Market Site ("Site") to Target Corporation, a Minnesota corporation ("Developer"). The Site consists of Assessor Parcel Nos. 8608 024 900 8608 024 > 902, 8608 024 903, and 8608 024 904 and generally bounded by Azusa Avenue on the west, 9`h Street on the north, San Gabriel Avenue on the east and Metro Transit Authority rail road right-of-way on the south. The Site would be sold to the Developer for the development of a 159,000 Target store with 420 parking spaces ("Project'). The agreement between the Agency and the Developer will be memorialized through a Disposition and Development Agreement ("DDA"), which will document the terms of the sale, and the conditions the Agency will impose on the..Project. The State of California Health & Safety Code ("H & S Code") section 33433 requires that before any redevelopment agency sells a property acquired with tax increment revenue, the agency shall make available to the public a summary of the agreement ("Summary Report"), which will include the estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale or lease. The Summary Report shall specify the purchase price or present value of the lease payments which the lessor will be required to make during the term of the lease. If the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use consistent with the redevelopment plan, then the agency shall provide as part of the summary an explanation of the reasons for the difference (the "Reuse Analysis"). This report provides this explanation. Project Description The Site is currently comprised of 4 parcels totaling approximately 4.1 acres owned by the Agency and is generally bounded by Azusa Avenue on the east, Ninth Street on the north, San Gabriel Avenue on the west and the Metro Gold Line Foothill Extension right-of-way on the South. The Site is currently developed with 47,646 square feet of buildings along with paved 1 of 5 1 T626-66�-12?4 Tierra West Advisors F c26-%46-:453 E info(qti:,rawescad�°ismsmm Real Estate and R develops nt Consultants A+•mtitnaw"Stadvisom.com parking areas. The Site contains minimal landscaping in the surface parking area. The surrounding area is a combination of commercial, industrial and residential uses. The Agency will sell the Site to the Developer for the development of a Target store. The project is a two-level, 159,000 square foot, Target department store with 420 parking spaces and approximately 12,500 square feet of stock and receiving area on the ground floor. The enclosed parking area on the ground floor will have access from Azusa Avenue, Ninth Street and San Gabriel Avenue. The second-floor sales area entrance will be located in the southeast corner of the building and will be accessed by escalator located on a two-level open air entry plaza. An eating area will be located in the front of the store with large windows looking out onto Azusa Avenue. Analysis The Developer will acquire the Site from the Agency at above the current appraised value and the Agency will not provide any financial assistance to the Developer in connection with any part of the development of the Site including the construction or installation of the Target store. The Agency purchased the subject Site for a total of approximately $10,432,000 and received a $200,000 credit from the seller for future remediation costs, and expects to incur additional costs of approximately $700,000 to demolish existing improvements and remediate soil contamination present on the Site. The Agency will convey the Site to the Developer for $7,000,000, currently $900,000 over the appraised value of$6.1 million. Tierra West has produced the following financial projections which indicate the following: PROFORMA TARGET FINANCIAL PROFORMA( Revenue Estimates) Commercial Rental Income Retail Space 158,633 Sf $25.80 /Sf/year $4,092,731 No Vacancies 0.0% of Gross Income 0 $4,092,731 Operating Expenses 10.0% of Gross Effective Income (409,273) Total Expenses (409,273) Net Operating Income $3,683,458 Cap Rate 7.5% Total Commercial Value $49,112,777 Total Project Revenue $49,112,777 (Less) Development Casts43, 3 , 14,1 Project Surplus/Feasibility Gap $5,381,103 2of5 Tierra West Advisors T 66-706 F 6X �u( lh3 E info alierracus[a h nrtcom Real Fsiate and Redcvek?pmum CemuluMt: wn? On the revenue side of the projections, Tierra West is projecting a Gross Effective Income of approximately $4.1 million as a result of an average $25.80 annual lease rate per square feet or a monthly $2.15 per square foot rent. The development will consist of a single retail building with receiving docks, escalators, and parking on the ground level with access to the second level retail level through escalators and elevators, as such Tierra West is estimating the Gross Effective Income at 10% of the gross income given the higher that average maintenance costs, resulting in an Net Operating Income of approximately $3.7 million. Tierra West has surveyed comparable commercial projects in the area and finds that a capitalization rate of 7.5% is consistent with the current economic trends of the area and results in a project value of approximately $49 million. In addition, development costs, attached to this report as Exhibit A, are estimated at approximately $43.7 million which result in a project surplus of $5.4 million. Given the financial estimates of the Project, Tierra West finds that the Developer does not necessitate the assistance of the Agency for any part of the Project. The cost of the land acquisition to the Agency was $10,432,000 or $58 per square.foot, additionally, the Agency received $200,000 credit from the seller for future remediation of the Site and expects to spend $700,000 for demolition and remediation for a total of $11,132,000. The net cost to the Agency after conveying the land to the Developer for $7,000,000, would be $4,132,000 million or $20 per square foot. Additionally, it is important to point out that given the current economic environment and the depreciation of land values throughout the area, the Developer will pay less than what the Agency originally paid to acquire the Site, but over the appraised value of $6.1 million. The Agency, will therefore, have a profit of$900,000 for the sale of the land to the Developer. It is possible that given the current credit crisis the sale of the Site to a national retailer will allow the Agency the recapture as much of the funds spent in the most efficient and expedient manner. Conclusion • The development revenues, values, and costs allow the Developer to acquire the Site for $7 million, $900,000 above the current appraised value. • At the anticipated sales prices, rents, and values, no Agency assistance is necessary to develop a Target store on the Site. If you, have any questions we will make ourselves available for discussion. Thank you for the opportunity to review this Project on your behalf. 3of5 T626-66x12'_4 . Tierra West Advisors F 62G-?9F-54S3 E iat'i:`rnierramtstedu isnrs.crnn Real Estate anti Redevelopacnt Consultant +'wu..tizrra�ecstadciwr.wm EXfIIBIT A TIERRA WEST PROJECTIONS OF DEVELOPER'S COSTS SEE FOLLOWING PAGE 4 of 5 Tierra West Advisors T 616-7`' 5-1224 F c_� v ss E l❑f).rYl R2Wt5fAdt 150r5.COp1 RCaI Estme and RC-0e%�eleproeni Cntuulrr�^K: �xHw[i r�.xestadt iaocs:cam TARGET PROFORMA - _._ (Development Costs) Site Size(in acres): Site Size(in square feet): 180,338 Commercial Square Feet 158,633 Commercial-FAR PROJECTCOST - SF/UNITS/SP PER SFlUNIT/SP TOTAL ACQUISITION COSTS - - - 180,338 $0.00 $7,000,000 TOTAL ACQUISITION COSTS $7,000, 00 CONSTRUCTION: SITE COSTS(including landscaping) 180,338 .$2.99 $539,623 BUILDING SHELL COST - 158,633 $135.00 $21,415,455 TENANT IMPROVEMENT ALLOWANCE 158,633 $15.00 $2,379,495 TOTAL CONSTRUCTION - $24,334,573 TOTAL LAND&CONSTRUCTION $31,334,673 SOFT COSTS: %of hard $per Bldg. . . PROFESSIONAVcosts SQ FtTotal CONSULTANT FEES 8.0% $12.27 $1,946,766 PUBLIC PERMITS&FEES 13.0% - $19.94 $3 TESTING&INSPECTIONS 3,495 Allowance ,16,163,037 TAXES,INSURANCE, LEGAL&ACCOUNTING 2.0% $3.07 $486,691 MARKETING - LEASING COMMISSIONN Allce ,000 0.5% $0.61 $156,673 -Allowance $256 CONSTRUCTION MANAGEMENT owan $6.91 - $1,096,710 CONTINGENCY 5.0% $9.88 $1,566,729 TOTAL SOFT COSTS 32.0% $59:24 $9,397,101 FINANCING: - CONSTRUCTION FINANCING FINANCING FEES Allowance $3,000,000 TOTAL FINANCING 0.0% $0.013 $012.3°/ $18.91 $3,000,000 CONSTRUCTION COST $276 - $43,731,674 5of5 1 SUMMARY REPORT EXHIBIT C NOTICE OF JOINT PUBLIC HEARING 13 PUBLIC NOTICE OF JOINT PUBLIC HEARING BY THE CITY COUNCIL OF THE CITY OF AZUSA AND THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA TO CONSIDER THE PROPOSED DISPOSITION AND DEVELOPMENT OF CERTAIN REAL PROPERTY LOCATED AT 110 — 190 WEST 9T" STREET, 809 NORTH AZUSA AVENUE AND 800 N. SAN GABRIEL AVENUE, AZUSA OWNED BY THE AGENCY RELATING TO A PROPOSED TARGET STORE . ._ NOTICE IS HEREBY GIVEN that the City Council of the City of Azusa (the "City Council") and the Redevelopment Agency of the City of Azusa (the "Agency") will hold a joint public hearing on Monday, November 17, 2008 at the hour of 7:30 p.m., or as soon thereafter as the matter can be heard, in the Civic Auditorium, 213 E. Foothill Boulevard, Azusa, California pursuant to the California Community Redevelopment Law (Health and Safety Code, Section 33000 et. seq.) ("CRL") for the purpose of considering 1) the Agency's sale of certain real.property located at 110-190 West gthStreet, 809 North Azusa Ave, and 800 N. San Gabriel Ave (the "Property") to Target Corporation (the "Developer") and 2) the development of the Property by Developer as a Target Store pursuant to the terms and conditions of the proposed Disposition and Development Agreement (the "Agreement"). The proposed Disposition and Development Agreement will be (i) in accordance with the California Community Redevelopment Law, (ii) subject to and will set forth the terms and conditions of the proposed transfer and development of the Property, and (iii) subject to covenants, conditions and restrictions to be imposed on the Property, which is necessary to carry out the Redevelopment Agency's redevelopment goals pursuant to CRL. The project entails the construction of a 159,000 square foot Target Store ("Project"). The Project Site encompasses approximately 4.1 acres and is located on the Property. The Agency owns all of the property designated for the project. The Joint Public Hearing will be held to consider: 1. The proposed Agreement with the Developer. 2. A proposed resolution approving the proposed Agreement to be adopted after the conclusion of the Joint Public Hearing. 3. The review and approval of the Summary Report submitted pursuant to the CRL. The following documents are available for public inspection and copying during regular office hours (7:00 a.m. to 5:30 p.m., Monday through Thursday) at the office of the City Clerk, located at 213 E. Foothill Boulevard, Azusa, CA 91702-2550. 1. A copy of the proposed Agreement. 2. A Summary Report, prepared pursuant to CRL, which describes and specifies, inter alia: a. The cost to be incurred by the Agency under the proposed Agreement; b. The estimated value of the interest .to be conveyed to the Developer determined (i) at the highest uses permitted under the Merged Central Business District and West End Redevelopment Project Area Redevelopment Plan (the "Plan"), CRL, and the City's General Plan; and (ii) at the use and with the conditions, covenants, and development costs required by the Agreement; C. The interest to be paid by the Developer for the Property under the Agreement and an explanation, if necessary, of why the amount is less than the fair market value determined at the highest and best use consistent with, the Plan, CRL, and the City's General Plan; and d. An explanation of why the sale of the Property by the City and Agency to the Developer will assist in the elimination of blight. At any time before the date and time set forth above for the Joint Public Hearing by the City Council and the Agency, any written comments on or objections to the proposed Agreement may be filed with the City Clerk. Comments may also be submitted during such period on the Summary Report and other documents referred to in this Notice. In addition, all persons wishing to question, comment on, or be heard on such matters at the Joint Public Hearing will be given an opportunity to appear and be heard. If any person challenges any of the foregoing matters in court, that person may be limited to raising only those issues raised at the public hearing described in this notice, or in written correspondence delivered to the City Council or the Agency at, or prior to, the public hearing. Dated: November 17, 2008 Publish: (Newspaper), October 30, 2008 (Newspaper), November 6, 2008 Posted by: (Name, title) Date SUMMARY REPORT EXHIBIT A DRAFT DISPOSITION AND DEVELOPMENT AGREEMENT 11 1 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (TARGET STORE REDEVELOPMENT PROJECT) by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA a public body, corporate and politic, and TARGET CORPORATION a Minnesota Corporation [Dated as of November 6, 2008'for reference purposes only] ORANGEIEHULD47478.12 - - Redevelopment Agency of the City of Azusa 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (Target Store Redevelopment Project) THIS 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (Target Store Redevelopment Project) (this "Agreement") is dated as of ,2008, for reference purposes only, and is entered into by and between the Redevelopment Agency of the City of Azusa, a public body, corporate and politic, exercising governmental functions and powers, and organized and existing pursuant to the Community Redevelopment Law of the State of California, Health and Safety Code Sections 33000, et seq. (the "Agency" or"Seller") and Target Corporation, a Minnesota Corporation (the 'Developer" or "Buyer"). The Agency and the Developer are sometimes referred to in this Agreement, each individually, as a "Party," or collectively, as the "Parties." The Agency and the Developer enter into this Agreement with reference to the following recited facts (each a "Recital"): RECITALS A. The City of Azusa, California ("City"), approved and adopted the redevelopment plan ("Redevelopment Plan") for the redevelopment area known as the "Merged Central Business District Redevelopment Project Area" covering a certain geographic area within the City ("Project Area") pursuant to the provisions of Sections 33000 et seq. of the California Health and Safety Code ("Redevelopment Law"); and B. Agency is undertaking a program in the interest of health, safety, and general welfare of the people of the City pursuant to its authority under Redevelopment Law, for the redevelopment of blighted areas within the Project Area which are characterized by stagnant, improperly utilitized and unproductive land which requires redevelopment; and C. The Agency owns certain real property located in the Project Area at the southeast corner of the intersection of San Gabriel Avenue and 9th Street. Such real property is referred to herein as the "Property" legally described on Exhibit A-1; and D. The Developer desires to develop the Property, and certain other real property adjacent thereto, as an approximately 155,000 square foot retail building located above two levels of parking ("Project"), as generally depicted in the conceptual site plan on the Site Map attached to this Agreement as Exhibit "A-2" and incorporated herein by this reference; and E. On September 17, 2008, Developer's Capital Project Review Committee approved the construction of the Project; and F. The Agency desires to sell the Property to the Developer for the development of 1 ORANGETHULL\47478.12 - the Project and the Developer desires to purchase the Property from the Agency for the same purpose. NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES SET FORTH IN THIS AGREEMENT, THE AGENCY AND THE DEVELOPER AGREE, AS FOLLOWS: ARTICLE I DEFINITIONS Section 1.1 Defined Terms. In addition to the usage of certain words, terms or phrases that are defined in the initial paragraph or Recitals of this Agreement, the following words, terms and phrases are used in this Agreement, as follows, unless the particular context of usage of a word, term or phrase requires another interpretation: 1.1.1 "Affiliate" means and refers to any Person, directly or indirectly, controlling or Controlled by or under common Control with the Developer, whether by direct or indirect ownership of equity interests, by contract or otherwise. 1.1.2 "Agency Deed" means and refers to a grant deed in substantially the form of . Exhibit "D", to this Agreement, conveying all of the Agency's interest in the Property to the Developer. 1.1.3 "Agency Parties" means and refers, collectively, to the Agency, its governing body, elected officials, employees, agents and attorneys. 1.1.4 "Agency Party" means and refers, individually, to the Agency, its governing body, elected officials, employees, agents and attorneys. 1.1.5 "Agency's Title Notice Response" means and refers to the written response of the Agency to the Developer's Title Notice, in which the Agency either elects to (i) cause the removal from the Preliminary Title Commitment or, in the alternative, (ii) obtain title insurance in a form reasonably satisfactory to the Developer insuring against any matters disapproved in the Developer's Title Notice or (iii) after a good faith effort, elects not to take either action described in (i) or(ii). 1.1.6 "CEQA" means and refers to the California Environmental Quality Act, Public Resources Code Sections 21000, et seq. 1.1.7 "Certificate of Completion" means and refers to the written certification of the Agency that the Project is complete and in compliance with the terms and conditions of this Agreement, in substantially the form of Exhibit"F" to this Agreement. 2 ORANGEIEHU LL147478.12 2 1.1.8 "City" means and refers to the City of Azusa, California. 1.1.9 "Claims" For purposes of this Agreement means any and all claims, losses, costs, damages, expenses, liabilities, liens, actions, causes of action (whether in tort or contract, at law or in equity, or otherwise), charges, awards, assessments, fines; and penalties of any kind (including consultant and expert expenses, court costs, and reasonable attorneys fees of counsel retained by the Agency Parties, expert fees, costs of staff time, and investigation costs; of whatever kind or nature), and judgments related to the Property, including, but not limited to, Claims for: (1) injury to any person (including death at any time resulting from that injury); (2) loss of, injury or damage to, or destruction of property (including all loss of use resulting from that loss, injury, damage, or destruction) regardless of where located, including the property of the Agency Parties; (3) any workers' compensation; and (4) all economic losses and consequential or resulting damage of any kind. Claims shall exclude any costs or penalties related to a prevailing wage determination. Claims related to any prevailing wage determination shall be governed by Section 4.8 of this Agreement. 1.1.10 "Close of Escrow" means and refers to the recording of the Agency Deed in the Official Records of the Recorder of the County of Los Angeles, California, and completion of each of the actions set forth in Section 3.5 by the Escrow Holder for the Agency to sell the Property to the Developer and the Developer to purchase the Property from the Agency. The terms "Close of Escrow" includes the terms "Close" and "Closing." 1.1.11 "Control" means and refers to possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether by ownership of equity interests, by contract or otherwise. 1.1.12 "Controlling" and "Controlled" mean and refer to exercising or having Control. 1.1.13 "Developer's Title Notice" means and refers to a written notice from the Developer pursuant to Section 2.3.5. 1.1.14 "Developer's Title Notice Waiver" means and refers to a written notice from the Developer to the Agency waiving the Developer's previous disapproval in the Developer's Title Notice of specific matters shown in Schedule B of the Preliminary Title Commitment as exceptions to coverage under the proposed Title Policy for the Property. 1.1.15 "Due Diligence Investigations" means and refers to the Developer's due diligence investigations of the `Property to determine the suitability of the Property for development or operation of the Project, including, 1) whether the construction of the improvements contemplated by Developer will not require wetlands mitigation or extraordinary, excessive, or unusually costly construction techniques, and drainage of both surface and subsurface water can be accomplished by ordinary construction techniques not involving unusual or excessive costs; 2) Utility "will serve" letters have been issued indicating that all utilities, 3 ORANGE\EHULL\47478.12 including electricity, telephone, gas, water (fire and domestic), storm and sanitary sewer, are, or will be at the time of Closing operational on the Property or on the Property's side of abutting streets of size and capacity sufficient to serve the contemplated building and retail use and that the Property will be unconditionally entitled to connect into such utilities upon payment of only the usual and customary connection fees; and 3) Developer shall be satisfied with the results of its investigations, studies and preliminary economic evaluations of the Property, and with matters and conditions which have been disclosed by information delivered to Developer, either by Agency or at Agency direction. 1.1.16 "Due Diligence Investigation Conclusion Notice" means and refers to a written notice of the Developer delivered to both the Agency and the Escrow Holder, prior to the end of the Due Diligence Period, indicating the Developer's acceptance of the condition of the Property or indicating the Developer's rejection of the condition of the Property and refusal to accept a conveyance of fee title to the Property, describing in reasonable detail the actions that the Developer reasonably believes are indicated to allow the Developer to accept the condition of the Property. 1.1.17 "Due Diligence Period" means and refers to the time period of ninety (90) continuous days commencing on the day immediately following the Escrow Opening Date. 1.1.18 "Earnest Money Deposit" means and refers to the amount of Five Hundred Thousand dollars ($500,000.00), in cash or other immediately available funds. 1.1.19 "Effective Date" means and refers'to the first date on which the Agency is in receipt of four (4) counterpart originals of this Agreement executed by the authorized representative(s) of the Developer and this Agreement has been approved by the Agency governing body, executed by the authorized representative(s) of the Agency and delivered to the Developer. 1.1.20 "Environmental Claims" means and refers to any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attomey fees, disbursements and costs of attomeys, environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever directly or indirectly relating to or arising from any Environmental Matters existing or occurring during or arising from the Developer's Due Diligence Investigations, the Developer's ownership or occupancy of the Property or the Developer's construction or installation of the Project. 1.1.21 "Environmental Laws" means and refers to all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any governmental authority regulating, relating to, or imposing liability or standards of conduct concerning any Hazardous Substance (as defined in Section 1.1.35, or pertaining to occupational health or industrial hygiene (to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relating to any Hazardous Substance on, under, or about the Property), 4 ORANGEIEHULL\47478.12 occupational or environmental conditions on, under, or about the Property, as now or may, at any later time, be in effect, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 U.S.C. Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 U.S.C. Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 U.S.C. Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 U.S.C. Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 U.S.C. Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 U.S.C. Section 6901 et seq.] the Clean Air Act [42 U.S.C. Section 7401 et seq.]; the Safe Drinking Water Act [42 U.S.C. Section 300f et seq.]; the Solid Waste Disposal Act [42 U.S.C. Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 U.S.C. Section 101 et seq.]; the Emergency Planning and Community Right to Know Act [42 U.S.C. Section 11001 et seq.]; the Occupational Safety and Health Act [29 U.S.C. Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [Health and Safety Code Section 25280 et seq.]; the California Hazardous Substances Account. Act [Health and Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [Health and Safety Code Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of, or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation, now in effect or later enacted, that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relating to any Hazardous Substance on, under, or about the Property, or the regulation or protection of the environment and/or human health, including ambient air, soil, soil vapor, groundwater, surface water, or land use. 1.1.22 "Environmental Matters" means and refers to any of the following: (a) The presence of Hazardous Substance on, in, under, from or affecting all or any portion of the Property; (b) The storage, holding, handling, Release, threatened Release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Substance on, in, under, from or affecting the Property; (c) The violation of any law, rule, regulation,judgment, order, permit, license, agreement, covenant, restriction, requirement or the like by the Agency, its agents or contractors, relating to or governing in any way Hazardous Substances on, in, under, from or affecting the Property; (d) The failure of the Developer, its agents or contractors, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the like in connection with the Developer's activities on the Property; 5 ORANGEIEHULL147478.12 - (e) The implementation and enforcement by the Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, that Developer reasonably determines are necessary to protect against the Release, potential Release or discharge of any Hazardous Substance on, in, under, from or affecting the Property; (f) The failure of the Developer, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Substance existing, stored or generated on, in, under or from the Property; (g) Any investigation, inquiry, order, hearing, action or other proceeding by or before any Governmental Agency in connection with any Hazardous Substance on, in, under, from or affecting the Property or the Project or the violation of any Environmental Law relating to the Property. 1.1.23 "Escrow" means and refers to an escrow, as defined in Civil Code Section 1057, that is conducted by the Escrow Holder with respect to the Property, pursuant to this Agreement. 1.1.24 "Escrow Closing Date" means and refers to the earlier of: (1) the thirtieth (30th) business day following the Escrow Holder's receipt of written confirmation from both the Agency and the Developer of the satisfaction or waiver of all conditions precedent to the Close of Escrow or(2) February 20, 2009, whichever occurs earlier. 1.1.25 "Escrow Holder" means and refers to First American Title Insurance Company, 1900 Midwest Plaza West, 801 Nicollet Mall, Minneapolis, MN 55402-2504. 1.1.26 "Escrow Opening Date" means and refers to the first date on which a fully executed copy of this Agreement and the Earnest Money Deposit are deposited with the Escrow Holder. 1.1.27 "Event of Default" shall have the meaning ascribed to the term in Section 8.4. 1.1.28 "Executive Director" means and refers to the Executive Director of the Agency or his or her designee or successor in function 1.1.29 "Final Occupancy Date" means and refers to the day the Project is open to the public for business, as defined on the Schedule of Performance. 1.1.30 "FIRPTA Affidavit" means and refers to an affidavit complying with Section 1445 of the United States Internal Revenue Code. 6 ORANGETHULD47478.12 1.1.31 "Force Majuere" means and refers to events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to'act of any public or governmental agency or entity (provided that acts or failure to act of the City or Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the parry that claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender, if any, for the improvement of the Site or to satisfy any other condition of this Agreement relating to the redevelopment of the Site shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them that may have provided a basis for entering into this Agreement and that occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking that may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such parry under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. 593-W. 1.1.32 "Form 593" means and refers to a California Franchise Tax Board Form 1.1.33 "Governmental Agency" means and refers to any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city, or otherwise), including the City, pursuant to its general police power jurisdiction, whether now or later in existence with jurisdiction over the Property or the construction or installation of any portion of the Project on the Property. 1.1.34 "Governmental Requirements" means and refers to all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental Agency. 7 ORANGEIEHULL147478.12 - 1.1.35 "Hazardous Substance" means and refers to, without limitation, substances defined as a "Hazardous Substance," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Toxic Substances Control Act ("TSCA") [15 U.S.C. Sections 2601, et seq.]; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor authority, as a Hazardous Substance [40 CFR Part 302]; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code or, as a "Hazardous Substance" in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shall also include manure, asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 U.S.C. Section 1321 or listed pursuant to 33 U.S.C. Section 1317. 1.1.36 "Maintenance Deficiency" shall have the meaning ascribed to the term in Section 5.6.2. 1.1.37 "Notice of Agreement" means and refers to the notice in substantially the form of Exhibit"E" to this Agreement to be recorded against the Property at the Close of Escrow to provide constructive record notice of the existence and application of this Agreement to the Property. 1.1.38 "Occupancy Date" means and refers to the date on which the City issues a final Certificate of Occupancy for the entire Project. 1.1.39 "Party" means and refers, individually, to either the Agency or the Developer, as applicable. 1.1.40 "Parties" means and refers, collectively, to the Agency and the Developer. 1.1.41 "PCO Report" means and refers to a preliminary change of ownership report required under California Revenue and Taxation Code Section 480.3. 1.1.42 "Permitted Encumbrance" means and refers to, subject to Agency's consent, which consent shall not be unreasonably withheld or delayed, at any time prior to the recordation of the Release of Operating Covenants pursuant to Section 5.2.3, any easement, mortgage, lien, deed of trust, or other encumbrance that Developer reasonably determines is necessary or beneficial for the development and/or operation of any improvements to the Property, commercial leases of any portion of the Property. 8 ORANGEEHULL\47478.12 - 1.1.43 "Permitted Exceptions" means and refers to (i) any and all items shown in Schedule B of the Preliminary Title Commitment as exceptions to coverage under the proposed Title Policy that the Developer does not disapprove, pursuant to Section 2.3, or that are otherwise accepted or consented to by the Developer; (ii) any exceptions from coverage under the proposed Title Policy resulting from the Developer's activities on the Property; (iii) any lien for non- delinquent property taxes and assessments; (iv) any applicable planning or zoning laws, ordinances or regulations; (v) this Agreement; (vi) the Agency Deed; and (vii) any other matter provided for in this Agreement. 1.1.44 "Permitted Transfer" means and refers to any of the following types of Transfers by the Developer, where the Person to which such Transfer is made, expressly assumes the obligations of the Developer under this Agreement in a written instrument satisfactory to the Agency: (a) Any Transfer of stock or equity of the Developer that does not change management or operational control of the Property or the Project; (b) Any Transfer of any interest in the Developer irrespective of the percentage of ownership (i) to any other owner of any interest in the Developer; or (ii) to any Affiliate, or(iii) to any other Person in which any holder of an interest (including any beneficial interest) in the Developer is a manager, officer or partner or in which any of the aforementioned is a shareholder, member or partner(including a beneficial Owner). 1.1.45 "Person" means and refers to any association, corporation, governmental entity or agency, individual,joint venture,joint-stock company, limited liability company, partnership, trust, unincorporated organization, or other entity of any kind. 1.1.46 "Pre-Closing Liquidated Damages Amount" means and refers to the amount of One Hundred Fifty Thousand Dollars ($150,000.00). 1.1.47 "Preliminary Title Commitment" means and refers to a preliminary title commitment defined in Section 2.3.1. 1.1.48 "Project" means and refers to those certain private, commercial . improvements that the Developer proposes to construct on the Property, including all required or associated on-site and off-site improvements, all hardscape and all landscaping, all as specifically described in the Scope of Development, and all to be developed in accordance with plans and specifications approved by the City and any conditions imposed by the City in its approval of the Developer's development application(s) related to the Project. 1.1.49 "Project Area" means and refers to the Merged Central Business District Redevelopment Project Area of the Agency. 1.1.50 "Project Completion Date" means and refers to the Final Occupancy Date. ORANGEIEHULU47478.12 9 1.1.51 "Property" means and refers to that certain real property specifically described in Exhibit "A-1" attached to this Agreement and incorporated into this Agreement by this reference. 1.1.52 "Property Transfer" means and refers to any "change in ownership," as defined in Revenue and Taxation Code Sections 60, et seq., of all or any portion of the Property. 1.1.53 "Purchase Price" shall mean and refer to the amount of Seven Million Dollars ($7,000,000.00) for Property acquisition and removal of the CBS/Outdoor billboard which will be removed by the Agency prior to the close of escrow. 1.1.54-"Record", "recorded", "recording", or "recordation" each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of Los Angeles, California. 1.1.55 "Release" means and refers to any spilling, leaking, pumping, pouring, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment, including the abandonment or discarding of barrels, drums, containers, tanks or other receptacles containing or previously containing any Hazardous Substance. 1.1.56 "Release of Operating Covenants" means and refers to the written certification that the provisions of Section 5.1 and 5.2 have been completed, in substantially the form of"P' to this Agreement. 1.1.57 "Remediation and Demolition Holdback Amount' means and refers to Nine Hundred Thousand dollars ($900,000.00) which shall be used to offset the cost of demolition, removal, remediation and disposal of arsenic, asbestos, VOCs, TPH, PCE's and lead containments. Any costs above this Remediation and Demolition Holdback Amount shall be the sole responsibility of the Developer. 1.1.58 Intentionally deleted. 1.1.59 "Schedule of Performance" means and refers to the schedule for the performance of certain actions by the Agency or the Developer, pursuant to the terms and conditions of this Agreement, attached to this Agreement as.Exhibit "C." 1.1.60 "Scope of Development' means and refers to the detailed description of the primary elements of the Project attached to this Agreement as Exhibit "B." 1.1.61 "Title Company" means and refers to First American Title Insurance Company, 1900 Midwest Plaza West, 801 Nicollet Mall, Minneapolis, MN 55402-2504. 1.1.62 "Title Policy" means and refers to a standard ALTA owners' policy of title insurance (form B-1970-revised 10/17/70, or the equivalent) issued by the Title Company, with 10 ORANGE\EHULL\47478.12 coverage in the full amount of the Purchase Price and insuring fee title to the Property vested in the Developer. 1.1.63 "Transfer" means and refers to any of the following: (a) Any total or partial sale, assignment, conveyance, trust, power, or transfer in any other mode or form, by the Developer of more than a 49% interest in the Developer's interest in this Agreement, the Property, or the Project or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in the Developer's interest in this Agreement, the Property or the Project; or (b) Any total or partial sale, assignment, conveyance, or transfer in any other mode or form, of or with respect to any interest in the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in any interest in the Developer; or (c) . Any merger, consolidation, sale or lease of all or substantially all of the assets of the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer; or (d) Any Property Transfer; or (e) The recordation of any deed of trust, mortgage, lien or similar encumbrance against all or any portion of the Property or the Project. 1.1.64 "Unavoidable Delay" means and refers to a delay in either Party performing any obligation under this Agreement, except payment of money and circumstances subject to Section 5.7, arising from or on account of any cause whatsoever beyond the Party's reasonable control, despite such Party's reasonable diligent efforts, including industry-wide strikes, labor troubles or other union activities (but only to the extent such actions affect similar persons at that time and do not result from an act or omission of the Party), casualty, war, acts of terrorism or riots. Unavoidable Delay shall not include delay caused by a Party's financial condition, illiquidity, or insolvency. 1.1.65 "Un-Permitted Encumbrance" means and refers to any mortgage, lien, deed of trust, easement or other encumbrance recorded or asserted against the Property that is not a Permitted Encumbrance. ARTICLE II PROPERTY DISPOSITION ORANGF,EHULL147478.12 11 Section 2.1 Purchase and Sale. The Agency shall sell the Property to the Developer and the Developer shall purchase the Property from the Agency pursuant to the terms and conditions of this Agreement. For the purposes of exchanging funds and documents to complete the sale from the Agency to the Developer and the purchase by the Developer from the Agency of the Property, pursuant to the terms and conditions of this Agreement, the Agency and the Developer agree to open the Escrow with the Escrow Holder. ARTICLE III of this Agreement constitutes the joint escrow instructions of the Parties to the Escrow Holder for the conduct of the Escrow for the sale of the Property. Section 2.2 Payment of Purchase Price. On the Escrow Closing Date, the Developer shall deposit the Purchase Price into the Escrow in immediately available funds, subject to credit to the Developer for the Earnest Money Deposit and other amounts to be paid by the Agency, if any, as provided in this Agreement. 2.2.1 Earnest Money Deposit. Concurrent with its opening of the Escrow, the Developer shall deposit the Earnest Money Deposit into the Escrow. Upon the Close of Escrow, the Earnest Money Deposit shall be credited to the Developer toward the Purchase Price. The Earnest Money Deposit shall be refundable to the Developer, except (i) upon the occurrence of an Event of Default prior to the Close of Escrow, in which case the Earnest Money Deposit shall be paid to the Agency pursuant to Section 8.3, and (ii) upon the Developer's acceptance of the Property in a Due Diligence Conclusion Notice pursuant to Section 2.4.4, at which time the Earnest Money Deposit shall be fully earned by the Agency and the Escrow Holder shall promptly pay the Earnest Money Deposit to the Agency. Section 2.3 Title and Survey Approval. 2.3.1 Preliminary Title Commitment. As soon as reasonably practicable but in no event more than thirty (3 0) days after the Escrow Opening Date, Agency shall obtain from the Title Company and shall deliver to Developer a commitment for an owner's policy of title insurance which is in compliance with the following requirements (the "Preliminary Title Commitment"): (a) is issued on the ALTA Form B-1970-revised 10/17/70, or the equivalent (b) provides for extended coverage over the standard printed exceptions (c) covers, as separate estates: (i) the Property (ii) all easements appurtenant to the Property, and identifies the same according to legal descriptions (once the Survey, as defined below, has been 12 ORANGETHULL\47478.12 obtained, the legal descriptions shall be updated to conform to those certified on the Survey) Date (d) contains an effective date subsequent to the date of the Escrow Opening (e) contains endorsements (unless prohibited by law) insuring (i) that all of the parcels comprising the Property are contiguous (if the Property is comprised of more than one parcel), (ii) that the Property is contiguous to any real estate containing easements appurtenant thereto, (iii) the zoning classification of the Property, (iv) that the Property abuts the public street(s) immediately adjacent thereto and has direct and valid access to each such public street, - (v) that the Property is as shown on the Survey (or revised Survey, as the case may be) approved by Developer pursuant to the terms of this Agreement, (vi) that the insured easements, covenants, benefits, restrictions and other rights (collectively, the "Rights") will not be forfeited upon non-payment of real estate taxes or assessments with respect to the property burdened by the Rights, (vii) that the Property complies with applicable subdivision laws and regulations, (viii) that the Property is a separate tax parcel for real estate and special assessment purposes, (ix) that there are no levied or pending assessments against the Property, (x) that the Developer may increase coverage under the subject policy within 5 years of the date of the policy, subject to matters attaching subsequent to the date of the policy and payment of applicable charges (after application of a reissue credit), and (xi) other matters as reasonably requested by Developer (f) obligates the Title Company to issue to Developer a title policy based thereon in an amount equal to the Purchase Price, ORANGETHULU47478-12 - 13 . 1 (g) includes legible copies of all documents, maps and plats set forth therein as affecting the Property and/or the easements appurtenant thereto. 2.3.2 Title Evidence. Agency hereby agrees to provide to the Title Company any abstracts of title covering the Property and/or any other form of title evidence it may have obtained, including any attorney's title opinion or any owner's title insurance policy. 2.3.3 Tax Bills. Concurrently with the delivery to Developer of the Preliminary Title Commitment, Agency shall deliver to Developer the most recent tax bills issued with respect to the Property, if any. 2.3.4 Survey. As soon as reasonably practicable but in no event more than thirty (30) days after Agency has delivered the Preliminary Title Commitment, Agency shall provide a current survey of the Property (the "Survey") prepared by a surveyor licensed by the state in which the Property is located. The Survey shall be prepared in accordance with the current standards for Land Title Surveys of the American Title Association and the American Congress on Surveying and Mapping and shall be certified to Developer, Agency and the Title Company. The Survey shall set forth the legal description(s) and street address(es) (if any) of the Property and all easements appurtenant thereto and shall include a vicinity map showing the location of major streets and/or highways. The Survey shall show all (i) improvements (including fences), (ii) easements encumbering and easements appurtenant to the Property (visible or recorded), including recording information concerning the documents creating any such easements, (iii) building lines, (iv) curb cuts, (v) sewage, water, electricity, gas and other utility facilities, together with points of connection, (vi) roads and other means of physical and record ingress and egress to and from the Property from public roads (including the dimensions of abutting streets), (vii) areas located within flood plains or conservation areas or designated as wetlands, and (viii) improvements on adjoining properties which are within five (5) feet of the property lines of the Property. 2.3.5 Developer's Title Notice. Within thirty (30) days after receipt of the Preliminary Title Commitment and the Survey in the respective forms specified in this Agreement, Developer shall deliver to Agency a written statement (the "Developer's Title Notice") containing any objections Developer may have to title, including the form of the Preliminary Title Commitment, the form of the Survey and/or any matters shown on the Preliminary Title Commitment and/or Survey. If such an objection statement is not delivered within said 30-day period, title to the Property through the date of the Preliminary Title Commitment and as shown on the Preliminary Title Commitment and the Survey shall be deemed approved by Developer. If such statement is so delivered, Agency shall within 30 days issue Agency's Title Notice Response whereby, as to each matter to which Developer has objected, Agency shall use its reasonable best efforts and due diligence to cure or remove the objection prior to Close of Escrow. The removal or cure of any such matter shall be evidenced by Agency providing an endorsement to the Preliminary Title Commitment and/or a revised Survey which shows such matter to be cured or removed and which is acceptable to Developer, in Developer's sole and absolute discretion. If any matter to which Developer has objected is not 14 ORANGE\EHULL A7478.12 cured or removed prior to Closing, Developer may elect, before Close of Escrow, to: (i) approve the Preliminary Title Commitment and Survey and accept title to the Property as it is, subject to the right to deduct from the Purchase Price funds necessary to satisfy outstanding mechanics, broker's, mortgage-related or judgment liens, any special assessments or deferred or delinquent real estate taxes, or (ii) terminate this Agreement. Upon any such termination, each Party shall be released from all duties and obligations under this Agreement, except as otherwise provided in this Agreement. 2.3.6 Title Policy. If this transaction proceeds to Closing, Agency will furnish to Developer, in.accordance with the terms of this Agreement, a title policy issued by the Title Company in the form required by the Preliminary Title Commitment approved by Developer. Section 2.4 Developer Due Diligence Investigations. 2.4.1 License and Indemnity Agreement. The Developer shall complete all of its Due Diligence Investigations within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost and expense pursuant to that certain License and Indemnity Agreement dated April 11, 2008 which is incorporated herein by reference. 2.4.2 No Waiver of Agency Obligations. Any investigation or inspection conducted by Developer or any agent or representative of Developer pursuant to this Agreement in order to verify the satisfaction of any condition precedent to Developer's obligations hereunder, or to determine whether Agency's representations and warranties are true and . accurate, shall not affect (or constitute a waiver by.Developer of) any of Agency's obligations, representations or warranties under this Agreement or Developer's right to rely thereon. 2.4.3 Due Diligence Investigation Conclusion Notice. Except as expressly provided herein the Developer shall rely solely and exclusively upon the results of its Due Diligence Investigations of the Property, including, without limitation, investigations regarding geotechnical soil conditions, compliance with applicable laws pertaining to the use of the Property by the Developer and any other matters relevant to the condition or suitability of the Property for the Project, as the Developer may deem necessary or appropriate. Except as set forth in Section 7.2, the Agency makes no representation or warranty to the Developer relating to the condition of the Property or suitability of the Property for any intended use or development by the Developer. If Developer delivers a Due Diligence Investigation Conclusion Notice rejecting the condition of the Property because of the presence of Hazardous Substances on or adjacent to the Property, the Agency or Developer may terminate this Agreement with no further liability or Agency and Developer may mutually agree, the Due Diligence Period shall be extended for an agreed upon time to allow the Agency to correct the deficiency. If the Due Diligence Period is extended under this Section, the Agency shall, at Agency's sole cost and expense, remove, remediate, transport, dispose and/or control all Hazardous Substances on or under the Property, or migrating to or from the Property (including any soil contaminated by one or more Hazardous Substances), all in accordance with a remediation management plan approved by Developer, such approval shall not be unreasonably withheld or denied, and all applicable regulatory 15 ORANGEIEHULL\47478.12 1 authorities (the "Remediation Management Plan"). Approval of a Remediation Management Plan by Developer and/or its consultant shall not constitute assumption of responsibility by Developer for the accuracy, sufficiency or propriety thereof, nor shall such approval constitute a representation or warranty by Developer that the same complies with, requirements of any goverrimental agency having jurisdiction thereover. Upon completion of the actions required by the Remedial Management Plan and any applicable regulatory authority, Agency shall provide written notice to Developer that the Due Diligence Period has re-commenced and provide at least one hundred twenty (120) days for the Developer to review the conditions on the Property. 2.4.4 As Is, Where Is, Condition. The Developer shall accept all conditions of the Property, without any liability of the Agency whatsoever, upon the Developer's acceptance of the condition of the Property indicated in its Due Diligence Investigation Conclusion Notice. The Developer's delivery of its Due Diligence Investigation Conclusion Notice indicating the Developer's acceptance of the condition of the Property shall evidence the Developer's unconditional and irrevocable acceptance of the Property in the Property's AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION, WITHOUT WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION and with full knowledge of the physical condition of the Property, the nature of the Agency's interest in and use of the Property, all zoning, other land use laws and other Governmental Requirements affecting the Property, and of the conditions, restrictions, encumbrances and all matters of record relating to the Property. The Developer's delivery of its Due Diligence Investigation Conclusion Notice indicating the Developer's unconditional acceptance of the condition of the Property shall constitute the Developer's representation and warranty to the Agency that the Developer has received assurances acceptable to the Developer by means independent of the Agency or any agent of the Agency of the truth of all facts material to the Developer's acquisition of the Property pursuant to this Agreement, and that the Property is being acquired by the Developer as a result of its own knowledge, inspection and investigation of the Property and not as a result of any representations made by the Agency or any employee, official, consultant or agent of the Agency relating to the condition of the Property, unless such statement or representation is expressly and specifically set forth in this Agreement. The Agency hereby expressly and specifically disclaims any express or implied warranties regarding the Property, except as set forth in Section 7.2. 2.4.5 Known Containments. Developer and Agency hereby acknowledge the existence of arsenic, asbestos, VOCs, TPH, PCEs and lead containments (individually or collectively, "Containments") in the existing structures. Agency and Developer agree that the Remediation and Demolition Holdback Amount is the estimated costs for the removal and proper disposal of the Containments. Developer shall remove the Containments on and/or under the Property during the course of its demolition. Pursuant to Section 3.7, Developer shall be entitled to offset the cost of removal and disposal of the Containments by drawing against the escrowed Remediation and Demolition Holdback Amount. Section 2.5 Developer to Obtain all Project Approvals. 16 ORANGE\EHULL\47478.12 2.5.1 Schedule of Entitlements. A schedule of all anticipated entitlements required for the construction of the Target Building and related improvements, including, but not limited to, the Approved Site Plan, subdivision or platting, any and all site permits are set forth on Exhibit "H" ('Entitlements"). Agency agrees to fully cooperate with Developer in approval and prosecution of any entitlements or permits necessary for the Project that are not included on Exhibit H. 2.5.2 Existing Project Entitlements. On August 4, 2008, the City Council certified Environmental Impact Report No. 2008011046. The City Council also approved the necessary entitlements for the Project as identified on the Schedule of Entitlements, attached hereto as Exhibit H. Developer or Developer's designee shall process any additional applications and petitions for permits, variances, platting and subdivision, and other forms of governmental approval deemed necessary by Developer for the development of the Property. 2.5.3 Governmental Requirements. The -Developer acknowledges that all plans and specifications and any changes to plans and specifications for the Project shall be subject to all Governmental Requirements. No action by the City or the Agency with reference to this Agreement or any related documents shall be deemed to constitute a waiver of any required City or Agency permit, approval or authorization regarding the Property, the Project, the Developer, any successor-in-interest of the Developer or any successor-in-interest to the Property. 2.5.4 Independent City Authority. The Parties acknowledge that approval of this Agreement by the City or the Agency shall not be binding on the City Council or the Planning Commission of the City regarding any additional approvals of the Project required by such bodies. The Developer obtains no right or entitlement to construct or install the Project on the Property or any portion of the Property by virtue of this Agreement, nor can the Developer or Agency guarantee that the City will issue the Entitlements. 2.5.5 No Financial Assistance. The Developer and the Agency agree that the Agency shall not provide any financial assistance to the Developer in connection with the construction or installation of the Project. The Developer shall be solely responsible for paying for the costs of all design work, construction, labor, materials, fees, permit, application, surety bond and other expenses associated with the Project. The Developer shall pay any and all fees pertaining to the review and approval of the Project by each Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required by each Governmental Agency or utility service provider pertinent to the construction or installation of the Project on the Property, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review and disclosure documents and design review documents. The Developer shall obtain any and all necessary governmental approvals, prior to the commencement of applicable portions of construction and installation of the Project. ORANGE\EHULL\47478.12 - 17 1 ARTICLE III JOINT ESCROW INSTRUCTIONS Section 3.1 Opening of Escrow. The Developer shall cause the Escrow to lie opened within five (5) business days following the Effective Date. Escrow Holder shall. promptly confirm in writing to each of the Parties the date of the Escrow Opening Date. This ARTICLE III shall constitute the joint escrow instructions of the Agency and the Developer to Escrow Holder for conduct of the Escrow. Section 3.2 Conditions to Close of Escrow. The conditions set forth below in this Section 3.2 shall be satisfied of waived by the respective benefited Party on or before the Escrow Closing Date or the Party benefited by any unsatisfied condition shall not be required to proceed to close the Escrow. 3.2.1 Developer's Conditions. The Developer's obligation to purchase the Property from the Agency on the Escrow Closing Date shall be subject to the satisfaction or waiver of each of the following conditions precedent, each of which can only be waived in writing by the Developer: (a) The Developer agrees to accept the title to and conveyance of the Property, pursuant to Section 2.3; (b) The Developer delivers its Due Diligence Investigation Conclusion Notice to both the Agency and the Escrow Holder, prior to the expiration of the Due Diligence Period pursuant to Section 2.4 and all objections to Title have been resolved to mutual satisfaction of Developer and Agency; (c) Entitlements required to construct the improvements described on the Scope of Development have been obtained as identified in 2.5.2, and the time period for appeal of issuance has expired without contest or, if any appeal is filed, such appeal is resolved to the satisfaction of Developer; (d) Developer has confirmed to its reasonable satisfaction that the anticipated fees and exactions required to construct the improvements described on the Scope of Development are acceptable to Developer in its reasonable discretion; (e) Developer has confirmed to its satisfaction that, subject to the closing of the transaction contemplated by this Agreement, if Developer were to apply for a building permit for the construction of the improvements contemplated in the Scope of Development as of the Escrow Closing Date and pay all required fees, and provided that the plans for such improvements complied with all applicable building codes, it could, as a matter of right, obtain such building permit without further act; 18 ORANGETHULLW7478.12 (f) Developer has confirmed to its satisfaction that as of the Escrow Closing. Date, it has the immediate right to connect with operating service available with respect to all utilities, including electricity, telephone, gas, water (fire and domestic), storm and sanitary sewer, upon payment of usual and customary connection fees; (g) Developer has confirmed to its satisfaction that the Property has or will have adequate ingress and egress for vehicular traffic from adjacent public streets to meet the unique needs of the Developer's business operation. The Developer may determine the adequacy of access based on the plans approved pursuant to Section 2.5 or assumes or estimates will have been implemented as of the date it projects for the opening of its retail business on the Property; (h) The City Planning Commission finds, pursuant to Government Code Section 65402,that the Project is consistent with the City's General Plan; (i) The Title Company is unconditionally committed to issue the Title Policy to the Developer, at the Close of Escrow; 3:4; (j) The Agency deposits all of the items into the Escrow required by Section (k) The Agency has performed all obligations required under this Agreement in all material respects on or before the Escrow Closing Date; (1) The Developer approves the Escrow Holder's final estimated closing/settlement statement; and (m) The representations, warranties and covenants of the Agency set forth in ARTICLE VII are true and correct in all material respects on the Effective Date and on the Escrow Closing Date. 3.2.2 Agency's Conditions. The Agency's obligation to sell the Property to the Developer on or before the Escrow Closing Date shall be subject to the satisfaction or waiver of each of the following conditions precedent, which can only be waived in writing by the Agency: (a) ' The Developer deposited the Earnest Money Deposit into Escrow, pursuant to Section 2.2.1; (b) The Developer agrees to accept the title to and conveyance of the Property, pursuant to Section 2.3; (c) The Developer has delivered its Due Diligence Investigation Conclusion Notice to both the Agency and the Escrow Holder, prior to the expiration of the Due 19 ORANGEIEHULL147478.12 1 Diligence Period pursuant to Section 2.4 and all objections to Title have been addressed to mutual satisfaction of Developer and Agency; (d) The Developer deposits all of the items into Escrow required by Section 3.3; (e) The Agency approves the Escrow Holder's final estimated closing/settlement statement; (f) The City Planning Commission finds, pursuant to Government Code Section 65402,that the Project is consistent with the City's General Plan; (g) The Developer submits to the Agency, at least five (5) days prior to the Escrow Closing Date, evidence satisfactory to the Agency, in the Agency's sole and absolute discretion, that the Developer has obtained all Governmental Agency approvals necessary for the development of the Project on the Property; (h) The Developer submits to the Agency, at least five (5) days prior to the Escrow Closing Date, evidence satisfactory to the Agency, in the Agency's sole and absolute discretion, that the Developer has obtained a commitment from the Developer's Capital Expenditure Committee to fund the construction and opening of the Target Store consistent with the Schedule of Performance; (i) The Developer submits to the Agency, at lease five (5) days prior to the Escrow Closing Date, evidence satisfactory to the Agency,,in the Agency's sole and absolute discretion, that Developer has contracted with a licensed California general contractor experienced in the construction and installation of projects similar in size and complexity to Project and contractor is contractual committed to constructing the Project pursuant to the Schedule of Performance; 0) The Developer performs all of its material obligations required to be performed by the Developer under this Agreement prior to Close of Escrow; and (k) The representations, warranties and covenants of the Developer set forth in ARTICLE VII are true and correct in all material respects on the Effective Date and on the Escrow Closing Date. Section 3.3 Developer's Escrow Deposits. Following satisfaction or waiver of each of the Developer's conditions to the Close of Escrow set forth in Section 3.2.1, and at least three (3) business days prior to the Escrow Closing Date scheduled by the Escrow Holder in a writing delivered to each of the Parties, unless another time frame is provided for herein, the Developer shall deposit the following funds and documents into the Escrow and, concurrently, provide a copy of each such document to the Agency: 20 ORANGE\EHULL\47478.12 3.3.1 Purchase Price. The Purchase Price, less the Earnest Money Deposit, plus any additional funds required to be deposited into the Escrow by the Developer under the terms of Section 2.2 of this Agreement to close the Escrow, all in immediately available funds; and 3.3.2 PCO Report. A PCO Report executed by the authorized representative(s) of the Developer; 3.3.3 Acceptance of Agency Deed. The Certificate of Acceptance of Agency Deed, in substantially the form attached to the Agency Deed, executed by the authorized representative(s) of the Developer in recordable form; 3.3.4 Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the Developer in recordable form; Section 3.4 Agency's Escrow Deposits. Following satisfaction or waiver of each of the Agency's conditions to Close of Escrow set forth in Section 3.2.2 and, at least, two (2) business days prior to the Escrow Closing Date scheduled by the Escrow Holder in a writing delivered to each of the Parties, the Agency shall deposit the following funds and documents into the Escrow and, concurrently, provide a copy of each such document to the Developer: 3.4.1 Agency Deed. The Agency Deed executed by the authorized representative(s) of the Agency in recordable form; 3.4.2 FIRPTA Affidavit. The FIRPTA Affidavit completed and executed by the authorized representative(s) of the Agency; 3.4.3 Notice of Agreement. The Notice of Agreement executed by the authorized _ representative(s) of the Agency in recordable form; and 3.4.4 Form 593. A Form 593 executed by the authorized representative(s) of the Agency. Section 3.5 Closing Procedure. When each of the Developer's Escrow deposits, as set forth in Section 3.3, and each of the Agency's Escrow deposits, as set forth in Section 3.4, are deposited into the Escrow, the Escrow Holder shall request confirmation from both the Agency and the Developer that each of their respective conditions to the Close of Escrow, as set forth in Section 3.2, are satisfied or waived. Upon the Escrow Holder's receipt of such confirmation from both the Agency and the Developer that each of their respective conditions to the Close of Escrow are either satisfied or waived, the Escrow Holder shall close the Escrow by doing all of the following: (a) Insertion of Dates. The Escrow Holder shall insert the Escrow Closing Date into the Notice of Agreement, as the date of such document, prior to the recordation of such document; and 21 ORANGEIEHULL147478.12 (b) Recordation of Documents. File the Agency Deed, with the Developer's certificate of acceptance attached, the Notice of Agreement with the Office of the Recorder of the County of Los Angeles, California, for recordation in the order set forth in Section 3.8; (c) Distribution of Recorded Documents. Distribute conformed copies of each recorded document to the Party or person designated for such distribution in Section 3.8; (d) PCO Report. File the PCO Report with the Office of the Recorder of the County of Los Angeles, California; (e) FIRPTA Affidavit. File the FIRPTA Affidavit with the United States Internal Revenue Service; (f) Form 593. File the Form 593 with the State of California Franchise Tax Board; (g) Title Policy. Obtain and deliver to the Developer the Title Policy; (h) Purchase Price. Deliver the Purchase Price to the Agency, less the Agency's share of the Escrow closing costs, and less any other charges to the account of the Agency, and return all remaining funds held by the Escrow Holder for the account of the Developer to the Developer, less the Developer's share of the Escrow closing costs, and less any other charges to the account of the Developer, and less the Remediation and Demolition Holdback Amount pursuant to Section 3.7 below; (i) Report to IRS. Following the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service, if such report is required pursuant to Section 6045(e) of the Internal Revenue Code, the Escrow Holder shall report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099-B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Section 6045(e). Upon the filing of such reporting form with the Internal Revenue Service, the Escrow Holder shall deliver a copy of the filed form to the Agency and the Developer. Section 3.6 Close of Escrow. Close of Escrow shall occur on or before the Escrow Closing Date. If for any reason the Close of Escrow has not occurred on or before the Escrow Closing Date, then any Party not then in default of this Agreement may cancel the Escrow and terminate this Agreement, without liability to the other Party or any other person for such cancellation and termination,,by delivering written notice of termination to both the other Party and the Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 3.11. Without limiting the right of either Party to cancel the Escrow and terminate this Agreement, pursuant to the preceding sentence, if the Escrow does not close on or before the Escrow Closing 22 0RANGETHULL147478.12 Date, and neither Party has exercised its contractual right to cancel the Escrow and terminate this Agreement before such time, then the Escrow shall close as soon as reasonably possible following the first date on which the Escrow Holder is in a position to close the Escrow, pursuant to the terms and conditions of this Agreement. Section 3.7 Remediation and Demolition Holdback. Escrow Holder is hereby authorized and instructed to withhold from the Purchase Price the Remediation and Demolition Holdback Amount and place said funds in an interest bearing account. Any disbursements from said account shall require written instruction from both Agency and Developer. 3.7.1 Developer's Written Estimate. Prior to commencing demolition and remediation work, Developer shall obtain a detailed written estimate of the work to be performed to safely and consistent with all applicable laws, rules, and regulations, remove and dispose of the Containments on the Site. The estimate shall be from a contractor licensed and qualified to perform such work. 3.7.2 Agency Approval of Estimate. Developer shall submit said estimate to the Agency. Agency shall have thirty (30) days to approve or object to the estimate. The preapproved estimate shall be provided by the Developer to Escrow Holder. If Agency fails to approve the estimate it shall be deemed approved and submitted to Escrow Holder. If Agency objects to the estimate, Agency and Developer shall meet within seven (7) days to negotiate acceptable process and costs. 3.7.3 Authorization of Contractor. Developer shall then authorize contractor to proceed with the work authorized by Section 3.7.2, above. Escrow Holder is thereafter authorized to disburse funds to Developer consistent with said approved estimate. If the estimate will be exceeded, Developer shall immediately upon discovery of the relevant information, contact the Agency. Agency and Developer shall work together to revise the estimate. Agency's obligations for remediation and demolition shall not exceed the Remediation and Holdback amount. 3.7.4 Excess Demolition and Remediation Funds. Within 10 days of payment to Developer of the final disbursement request for work authorized by Section 3.7.2, above, all funds remaining in the account, if any, shall be disbursed to the Agency. Section 3.8 Recordation and Distribution of Documents. Escrow Holder shall cause the following documents to be recorded in the official records of the Recorder of the County of Los Angeles, California, in the following order at the Close.of Escrow: (i) the Agency Deed, with the Developer's certificate of acceptance attached, (ii) the Notice of Agreement, and (iv) any other documents to be recorded through the Escrow upon the joint instructions of the Parties. The Escrow Holder shall deliver conformed copies of all documents recorded through the Escrow to the Agency and the Developer and any other person designated in the joint escrow instructions of the Parties to receive a conformed copy of each such document, each showing all recording information. 23 ORANGEIEHULL\47478.12 Section 3.9 Escrow Closing Costs, Taxes and Title Policy Premium: The Agency and the Developer shall each pay one-half(1/2) of the Escrow fees and such other costs as the Escrow Holder may charge for the conduct of the Escrow. The Escrow Holder shall notify the Developer and the Agency of the costs to be borne by each of them at the Close of Escrow by delivering the Escrow Holder's estimated closing/settlement statement to both the Agency and the Developer, at least, four (4) business days prior to the Escrow Closing Date. The Agency shall pay the premium charged by the Title Company for the Title Policy, exclusive of any endorsements or other supplements to the coverage of the Title Policy that may be requested by the Developer. The Developer shall pay any and all recording fees, documentary transfer taxes and any and all other charges, fees and taxes levied by a governmental authority relative to the conveyance of the Property through the Escrow and the cost of any endorsements or supplements to the coverage of the Title Policy requests by the Developer. Section 3.10 Escrow Cancellation Charges. If the Escrow fails to close due to the Agency's material default under this Agreement, the Agency shall pay all ordinary and reasonable cancellation charges relating to the Escrow and the Title Policy. If the Escrow fails to close due to the Developer's material default under this Agreement, the Developer shall pay all ordinary and reasonable cancellation charges relating to the Escrow and Title Policy. If the Escrow fails to close for any reason other than the material default of either the Developer or the Agency, the Developer and the Agency shall each pay one-half (1/2) of any ordinary and reasonable cancellation charges relating to the Escrow and the Title Policy. Section 3.11 Escrow Cancellation. If the Escrow is cancelled and this Agreement is terminated pursuant to a contractual right granted to a Parry in this Agreement to cancel the Escrow and terminate this Agreement, other than due to the default of another Party, the Parties shall do each of the following: 3.11.1 Cancellation Instructions. The Parties shall, within three (3) business days following receipt of the Escrow Holder's written request, execute any reasonable Escrow cancellation instructions requested by the Escrow Holder; 3.11.2 Return of Funds and Documents. Within ten (10) days following receipt by the Parties of a settlement statement from the Escrow Holder of cancellation charges regarding the Escrow and the Title Policy, if any: (i) the Developer or the Escrow Holder shall return to the Agency any documents previously delivered by the Agency to the Developer or the Escrow Holder regarding the Escrow, (ii) the Agency or the Escrow Holder shall return to the Developer all documents previously delivered by the Developer to the Agency or the Escrow Holder regarding the Escrow; and (iii) the Escrow Holder shall return to the Developer any funds deposited into the Escrow, except as otherwise provided in either Section 2.2.1 or Section 8.5, less the Developer's share of customary and reasonable Escrow and title order cancellation charges regarding the Escrow and the Title Policy, if any. 24 OR ANGESEHULLW7478.12 - - - ARTICLE IV PROJECT DEVELOPMENT Section 4.1 Construction Start and Completion of Project. Developer covenants to and for the exclusive benefit of the Agency that the Developer shall commence and complete the development of the Project on the Property, consistent with and within the time period for such action set forth in the Scope of Development, the Schedule of Performance and in conformity with this Agreement and the approved Entitlements. The Developer shall commence construction of the Project in accordance with the Schedule of Performance and, thereafter, shall diligently proceed to complete the construction of the Project, in a good and workmanlike manner, in accordance with the approved plans, specifications and conditions for the Project approved by each Governmental Agency and in accordance with the Schedule of Performance. On or before the Project Completion Date, the Developer shall: 4.1.1 Recordation of Notice of Completion. Record a Notice of Completion, in accordance with California Civil Code Section 3093, for the entirety of the Project; 4.1.2 . . Inspections. Cause the Project to be inspected by each Governmental Agency and correct any defects and deficiencies that may be disclosed by any such inspection; 4.1.3 Licenses, Permits and Authorizations. Cause all occupancy certificates and other licenses, permits and authorizations necessary for the operation and occupancy of the completed Project to be duly issued. The Covenants of this Section 4.1 shall run with the land of the Property, until the earlier of the Final Occupancy Date or the twentieth (20`h) anniversary of the date of the Close of Escrow. Section 4.2 Project Completion Date Extension. The Agency acting by and through its Executive Director may extend the Project Completion Date for up to an additional one hundred and eighty(180) days, in the aggregate. Section 4.3 Developer Changes to Project Plans and Specifications During Course of Construction. The Developer shall have the right, during the course of construction of the Project, to make "minor field changes," without seeking the approval of the Agency, if such changes do not affect the type of use to be conducted within all or any portion of a structure.. "Minor field changes" shall be defined as those changes from the approved construction drawings, plans and specifications that have no substantial effect on the Project and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this Section 4.3 shall be deemed to constitute a waiver of or change in any Governmental Requirements governing any such "minor field changes" or in any approvals by any Governmental Agency otherwise required for any such "minor field changes." 25 ORANGEIEHULU47478.12 . - - 1 Section 4.4 Compliance with Laws. Any and all work performed in connection with the construction or installation of the Project shall comply with all Governmental Requirements. Section 4.5 Schedule of Performance. All planning construction, installation and other development obligations and responsibilities of the Developer related to the Project shall be initiated and completed within the times specified in the Schedule of Performance, or within such reasonable extensions of such times granted by the Agency in writing or as otherwise provided for in this Agreement. After commencement of the work of improvement of the Project, the Developer shall diligently pursue the work of improvement consistent with all reasonable business practices. If Developer anticipates the work of improvement of the Project will cease or be suspended for a time period in excess of sixty (60) calendar days or Developer staff will be requesting a modification of the store opening date from the Capital Expenditure Committee, Developer shall promptly provide Agency with notice including the cause of the anticipated work stoppage or change in the store opening date. Developer shall only allow a work stoppage of greater than sixty (60) days upon the occurrence of a Force Majuere event. Section 4.6 Developer Attendance at Agency Meetings. The Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such person(s) can meaningfully respond to Agency or Agency staff questions regarding the progress of the Project, attend meetings (in person or by telephone or videoconference) with Agency staff or meetings of the Agency governing body, when requested to do so by Agency staff. Agency shall provide reasonable advance notice and shall coordinate with the Developer to schedule dates and times of any such meetings. Section 4.7 Agency Right to Inspect Project and Property. With a minimum of twenty-four (24) hours advance notice, officers, employees, agents and representatives of the Agency shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of construction of the Project. Any and all officers, employees, agents or representatives of the Agency who enter the Property shall identify themselves at the construction management office or, if none, to the apparent on-site construction supervisor on the Property, upon their entrance on to the Property, and shall at all times be accompanied by a representative of the Developer, while on the Property. The Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours, upon reasonable advance notice from the Agency. The Agency shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the Agency of the right of access to the Property provided in this Section 4.7, other than injury, property damage or liability arising from the negligence or willful misconduct of the Developer or its officers, agents or employees or the Developer's contractor. If in the Agency's reasonable judgment it is necessary, the Agency shall have the further right, from time to time, to retain a consultant or consultants, at Agency sole expense, to inspect the Project and verify compliance by the Developer with the provisions of this Agreement. The Developer acknowledges and agrees that any such Agency inspections are for 26 ORANGEIEHULL417478.12 the sole purpose of protecting the Agency's rights under this Agreement, are made solely for the Agency's benefit, that the Agency's inspections may be superficial and general in nature, and are for the purposes of informing the Agency of the progress.of the Project and the conformity of the Project with the terms and conditions of this Agreement, and that the Developer shall not be entitled to rely on any such inspection(s) as constituting the Agency's approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Agreement or otherwise. The Developer agrees to make its own regular inspections of the work of construction and installation of the Project to determine that the quality of the Project and all other requirements of the work of construction and installation of the Project are being performed in a manner satisfactory to the Developer. Section 4.8 Prevailing Wages. Developer and Agency acknowledge and agree that this Project is entirely Developer funded. Developer has purchased the Property from Agency at a cost equal to or greater than the fair market value of the Property. The Purchase Price was established based upon a variety of factors including but not limited to the value established by the Appraisal and reimbursement of certain relocation costs. Neither Developer or Agency have made any representations, express or implied, regarding whether laborers employed relative to the construction, installation or operation of the Project must be paid the prevailing per diem wage rate for their labor classification as determined by the state of California, pursuant to Labor Code Sections 1720, et seq. The Parties shall indemnify, defend and hold harmless each other against any prevailing •wage claims, actions, or determinations as it relates to or arising from this Agreement or the construction, installation or operation of all or any portion of this Project. Agency and Developer shall meet and confer to discuss a coordinated defense to any prevailing wage issue associated with, related to, or arising from this Project that either Party becomes aware of. Developer and Agency shall share equally in any and all costs, expenses, penalties, awards, or fines associated with or related to a prevailing wage claim associated with, related to, or arising from this Project or Agreement. These indemnity and joint defense obligations shall survive the issuance of the Certificate of Completion and the termination of this Agreement. Section 4.9 Certificate of Completion. 4.9.1 Developer's Request for Certificate of Completion. Following the completion of the Project, excluding any normal and minor building "punch-list" items to be completed by the Developer, and upon written request from the Developer for issuance of a Certificate of Completion, the Agency shall inspect the Project to determine whether or not the Project has been completed in compliance with this Agreement. If the Agency determines that the Project is complete and.in compliance with this Agreement, the Agency shall furnish the Developer with a Certificate of Completion for the Project. If the Agency determines that the Project is not in compliance with this Agreement, the Agency shall send written notice of each non-conformity to the Developer, pursuant to Section 4.9.3. 27 ORANGE\EHULL147478.12 4.9.2 Conclusive Determination. The Agency shall not unreasonably withhold or delay the issuance of a Certificate of Completion. A Certificate of Completion shall be evidence of the Agency's conclusive determination of satisfactory completion of the Project pursuant to the terms of this Agreement. After the recordation of a Certificate of Completion for the Project, any person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property improved with the Project shall not (because of such'ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement regarding construction or installation of the Project, except that such person shall be bound by any reservations,covenants, conditions, restrictions and other interests affecting the Property pursuant to this Agreement. 4.9.3 Agency's Duty to Respond to Request. If the Agency fails or refuses to issue a Certificate of Completion for the Project, following a written request from the Developer, the Agency shall, within fifteen (15) calendar days following the Agency's receipt of the Developer's written request or within three (3) calendar days after the next regular meeting of the Agency governing body, whichever date occurs later, provide the Developer with a written statement setting forth the reasons for the Agency's failure or refusal to issue a Certificate of Completion: The statement shall also contain the.Agency's opinion of the action(s) the Developer must take to obtain a Certificate of Completion from the Agency. If the reason for the Developer's failure to complete the Project is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by the Developer in a form reasonably acceptable to the Agency in an amount representing the fair value of the work on the Project remaining to be completed, as reasonably determined by the Agency. If the Agency fails to provide such written statement, within the specified time period, the Developer shall be deemed, conclusively and without further action of the Agency, to have satisfied the requirements of this Agreement with respect to the Project, as if a Certificate of Completion had been issued by the Agency pursuant to this Agreement. 4.9.4 Limitations. A Certificate of Completion shall not be deemed to constitute a Notice of Completion under Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants, restrictions or conditions contained in the Agency Deed or any other instruments recorded against the Property or set forth in this Agreement or otherwise. A Certificate of Completion is not evidence of the compliance of the Project with any Governmental Requirements. A Certificate of Completion shall not evidence the satisfaction of any obligation of the Developer to the Agency under this Agreement or otherwise, except the Developer's obligation to construct and install the Project. ARTICLE V SPECIAL REDEVELOPMENT COVENANTS OF THE DEVELOPER Section 5.1 Covenant to Maintain Property on Tax.Rolls for 15 Years. 28 ORANGEEHULL47478.12 5.1.1 Developer Covenant to Maintain on Tax Rolls. The Developer shall cause the entire Property to remain on the County of Los Angeles, California, secured real property tax rolls for the fifteen(15) calendar years following the Final Occupancy Date. 5.1.2 Developer Covenant to Pay Property Tax Bills. For the fifteen (15) year period following the Final Occupancy Date, the Developer, for itself and its successors and assigns, covenants and agrees to pay all property tax bills with respect to the Property and all improvements on or to the Property on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 during such time period and to timely pay all supplemental tax bills regarding the Property issued by the County of Los Angeles, California. Section 5.2 Covenant to Operate Property and Agency Right to Terminate/Recapture Property. 5.2.1 Commercial/Retail Uses. Developer, for itself and its successors and assigns, covenants and agrees to operate the Property for commercial/retail use operated by Target Corporation for the fifteen (15) calendar years following the Final Occupancy Date. 5.2.2 Developer Covenant to Operate. Should Target cease to operate a building on the Property for commercial/retail use operated by Target Corporation for any period of time or should the building be vacant for a period in excess of one year, except in the event of casualty, remodel or Force Majeure, during the first fifteen (15) calendar years following the Final Occupancy Date, or should Developer notify the Agency in writing of its desire to subdivide or sublet the Property, the Agency shall have the right, at its sole option, to exercise the rights or remedies provided for in this Agreement, available at law, or to reenter and take possession of the Property with all improvements thereon, and to terminate and revest in the Agency the estate theretofore conveyed to the Developer as provided in Section 8.3. Section 5.3 Covenants Running with the Land/Release of Covenants. 5.3.1 Covenants Run With Land. The covenants of Section 5.1 and 5.2 shall run with the land of the Property and bind successive owners of the Property. 5.3.2 Release of Operating Covenants. Upon satisfaction of the covenants in Section 5.1 and 5.2 Developer may request and Agency shall execute and record.the Release of Operating Covenants, as follows: (a) At anytime fifteen (15) years after the Final Occupancy Date, and upon written request from the Developer for issuance of a Release of Operating Covenants, the Agency shall determine whether or not the covenants set forth under Section 5.1 and 5.2 have been completed in compliance with this Agreement. If the Agency determines that the covenants have been satisfied, the Agency shall furnish the Developer with a Release of Operating Covenants for the Project. If the Agency determines that the Project is not in 29 ORANGE\EHULL\47478.12 - compliance with this Agreement, the Agency shall send written notice of each non- conformity to the Developer. (b) The Agency shall not unreasonably withhold or delay the issuance of a Release of Operating Covenants. A Release of Operating Covenants shall be evidence of the Agency's conclusive determination of satisfactory completion of the covenants pursuant to Section 5.1 and 5.2 of this Agreement. After the recordation of a Release of Operating Covenants for the Project, any person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property improved with the Project shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement with respect to such covenants, except that such person shall be bound by any other reservations, covenants, conditions, restrictions and other interests affecting the Property pursuant to this Agreement. (c) If the Agency fails or refuses to issue a Release of Operating Covenants, following a written request from the Developer, the Agency shall, within forty-five (45) calendar days following the Agency's receipt of the Developer's written request or within three (3) calendar days after the next regular meeting of the Agency governing body, whichever date occurs later, provide the Developer with a written statement setting forth the reasons for the Agency's failure or refusal to issue a Release of Operating Covenants. The statement shall also contain the Agency's opinion of the action(s)the Developer must take to obtain a Release of Operating Covenants from the Agency. If the Agency fails to provide such written statement, within the specified time period, the Developer shall be deemed, conclusively and without further action of the Agency, to have satisfied the requirements of Section 5.1 and 5.2 of this Agreement, as if a Release of Operating Covenants had been issued by the Agency pursuant to this Agreement. Section 5.4 Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor-in-interest to all or any portion of the Property, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference .to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property. The covenant of this Section 5.4 shall be a covenant running with the land of the Property and binding on successive owners of the Property, in perpetuity. Section 5.5 Form of Non-discrimination and Non-segregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor-in- interest to all or any portion of the Property, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of all or any portion of the Property on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining 30 ORANGE\EHULL\47478.12 to the Property shall contain or be subject to substantially the following non-discrimination or non-segregation covenants: 5.5.1 In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale,lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 5.5.2 In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased." 5.5.3 In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub- lessees, sub-tenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 5.5.4 Covenants Run With Land. The covenants of this Section 5.4 and 5.5 shall be covenants running with the land of the Property and binding on successive owners of the Property in perpetuity. Section 5.6 Maintenance Condition of the Property. The Developer for itself, its successors and assigns, covenants and agrees that: 5.6.1 Maintenance Standard. The entirety of the Property shall be maintained by the Developer in good condition and repair and a neat, clean and orderly condition, ordinary wear and tear excepted, including, without limitation, maintenance, repair, reconstruction and replacement of any and all asphalt, concrete, landscaping, utility systems, irrigation systems, _ 31 ORANGE\EHULL\47478.12 drainage facilities or systems, grading, subsidence, retaining walls or similar support structures, foundations, signage, ornamentation, and all other improvements on or to the Property, now existing or made in the future by or with the consent of the Developer, as necessary to maintain the appearance and character of the Property. The Property shall be maintained to a level and in A manner consistent with standard industry practice for a commercial development of this nature. The Developer's obligation to maintain the Property described in this Section is referred to in this Agreement as the "Maintenance Standard." The Developer may contract with a maintenance contractor to provide for performance of all or part of the duties and obligations of the Developer with respect to the maintenance of the Property; provided, however, that the Developer shall remain responsible and liable for the maintenance of the Property, at all times. 5.6.2 Maintenance Deficiency. If, at any time following the Close of Escrow, there is an occurrence of an adverse condition on any area of the Property in contravention of the Maintenance Standard (each such occurrence being a "Maintenance Deficiency"), then the Agency may notify the Store Team Lead of the Target Store and the persons identified in Section 9.4.2 in writing of the Maintenance Deficiency. If the Store Team Lead fails to commence and diligently pursue a cure or respond in writing with a description of the plan (including a schedule of performance) to cure the Maintenance Deficiency within ten (10) days of the Agency providing said notice of the Maintenance Deficiency, the Agency will notify Developer in writing ("Second Notice") of the Maintenance Deficiency by resending the written notice as provided in Section 9.4.2. If Developer fails to commence and diligently pursue a cure or respond in writing with a description of the plan (including a schedule of performance) to cure the Maintenance Deficiency within twenty (20) days of its receipt of the Second Notice, the Agency may conduct a public hearing, following transmittal of written notice of the hearing to the Developer, at least, ten (10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency exists, whether Developer's description of the plan to cure are reasonable and timely and whether the Developer has failed to comply with the provisions of this 5.6. If, upon the conclusion of the public hearing, the Agency finds that a Maintenance Deficiency exists and remains uncured and/or the Developer's proposed plan to cure are not reasonable or untimely, the Agency shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the Agency to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Property pursuant to this 5.6.2 that is not paid within thirty (30) calendar days after written demand for payment from the Agency, shall accrue interest at the rate of ten percent (10%) per annum, until paid. 5.6.3 Graffiti. Graffiti,.as defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint that has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti is not removed within forty- 32 ORANGE\EHULL\47478.12 , eight (48) hours following the time of the discovery of the graffiti, the Agency shall have the right to enter the Property and remove the graffiti, without.notice to the Developer. Any sum expended by the Agency for the removal of graffiti from the Property pursuant to this Section 5.6.3, shall be limited to an amount not to exceed Five Hundred Dollars ($500) per entry by the Agency. Notwithstanding the foregoing, if the graffiti is discovered between 6 p.m. on Friday and midnight on Sunday, Developer shall have forty-eight (48) hours from 8 a.m. on the immediately following Monday to remove the graffiti. If any amount becoming due to the Agency under this Section 5.6.3 is not paid within thirty (30) calendar days after written demand to the Developer from the Agency, such amount shall accrue interest at the rate of ten percent (10%)per annum, until paid in full. 5.6.4 Security.Interest. If, after the public hearing set forth in Section 5.6.2, the Agency finds a Maintenance Deficiency, the Agency may, Developer hereby grants to Agency a security interest in the Property with the power to, establish and enforce a lien against the Property, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure the obligations of the Developer and it successors under 5.6.2, including the reasonable attorneys' fees and costs of the Agency associated with the abatement of a Maintenance Deficiency. The recordation of the Notice of Agreement shall provide record notice of such security interest in favor of the Agency. 5.6.5 Term of Maintenance Covenant. The provisions of this Section 5.6, shall be a covenant running with the land of the Property and binding successive owners of the Property for a period of twenty (20) years following the date of the Close of Escrow and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 5.6 shall be deemed to preclude the Developer from making any alteration, addition, or other change to any improvement or landscaping on the Property that complies with applicable zoning and building regulations of the City. Section 5.7 Developer Covenant to Defend Agreement. The Developer acknowledges that the Agency is a "public entity" and/or a "public Agency" as defined under applicable California law. Therefore, the Agency must satisfy the requirements of certain California statutes relating to the actions of public entities, including, without limitation, CEQA. Also, as a public body, the Agency's action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus.' The Developer assumes the risk of delays and damages that may result to the Developer from any third-parry legal actions related to the Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the Agency is determined to have occurred. If a third-party files a legal action regarding the Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the Agency may terminate this Agreement on thirty (30) days advance written notice to the Developer of the Agency's intent to terminate this Agreement, referencing this Section 5.7, without any further obligation to perform the terms of this Agreement and without any liability to the Developer resulting from such termination, unless the Developer unconditionally agrees to indemnify and 33 ORANGE\EHULL\47478.12 - defend the Agency, with legal counsel acceptable to the Agency, against such third-party legal action, within thirty (30) calendar days following receipt of the Agency's notice of intent to terminate this Agreement, including without limitation paying all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such agreement between the Agency and the Developer must be in a separate writing and reasonably acceptable to the Agency in both form and substance. Nothing contained in this Section 5.7 shall be deemed or construed to be an express or implied admission that the Agency may be liable to the Developer or any other person for damages or other relief alleged from any alleged or established failure of the Agency to comply with any statute, including, without limitation, CEQA. Section 5.8 Environmental Indemnity of the Agency by the Developer. 5.8.1 Indemnity. The Developer agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with, counsel selected by the Developer and approved by the Agency) each and every Agency Party from and against any and all Environmental Claims that may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, any Agency Party. 5.8.2 Cost and Expenses. The Developer shall pay to the Agency all costs and expenses including, without limitation, reasonable attorneys fees and costs, incurred by the Agency in connection with enforcement of the aforementioned environmental indemnity. 5.8.3 Payments. All obligations of the Developer under the environmental indemnity given in this Section 5.8 are payable on demand from the Agency. Any amount due and payable under this Section 5.8 to the Agency that is not paid within thirty (30) calendar days after written demand from the Agency for payment of such amount, with an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of ten percent (10%) per annum or the maximum rate allowed by California law, whichever is less. The Developer shall also pay to the Agency all costs and expenses, including, without limitation, reasonable attorneys fees and costs, incurred by the Agency in connection with the environmental indemnity given in this Section 5.8 or the enforcement of such environmental indemnity. The environmental indemnity given by the Developer in this Section 5.8 will survive expiration or earlier termination of this Agreement, until all Environmental Claims against the Agency Parties are completely barred by applicable statutes of limitation. Section 5.9 Insurance. The Developer, to protect the Agency Parties against any and all claims and liability for death, injury, loss and damage resulting from the Developer's actions in connection with this Agreement, the Property and the Project, shall secure and maintain the insurance coverage, described in and required by this Section 5.9, until the Occupancy Date, subject to.the provisions of Section 5.9.9, without limiting any insurance coverage required to be obtained or maintained by the Developer pursuant to any other document associated with this Agreement. The Agency,shall have no obligation under this Agreement, until the Developer 34 ORANGEIEHULL147478.12 provides the required policies and/or certificates to the Agency evidencing the insurance required by this Section 5.9 and the Agency approves such evidence of insurance. The Developer shall maintain the following insurance coverage infull force and effect, until the Occupancy Date, subject to Section 5.9.9: 5.9.1 Workers' Compensation Insurance. The Developer shall submit written proof that the Developer is insured against liability for workers' compensation in accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code: "I. am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of the Agreement." 5.9.2 Property Casualty Insurance. Insurance coverage insuring the Property and the Project against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value of the Property and the Project, with a deductible amount not to exceed One Million Dollars ($1,000,000.00), providing all of the following coverage: (a) Against damage or loss by flood, if the Property is located in an area identified by the United States Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as the Agency may require; (b) A Builder's All Risk policy, with extended coverage, with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the Project, without gaps or lapsed coverage, for any completed portion of the Project; and (c) Against damage or loss by earthquake, in an amount and with a deductible satisfactory to the Agency, if and to the extent such insurance is then customarily required by Lenders holding security interests in property comparable to, and in the general vicinity of, the Property. 5.9.3 Commercial General Liability Insurance. Commercial General Liability Insurance coverage, including, but not limited to, premises-operations, contractual liability (specifically covering all indemnity and defense obligations of the Developer pursuant to this 35 ORANGETHULL147478.12 Agreement), products-completed operations hazards, personal injury (including bodily injury and death), and broad form property damage for liability arising out of the construction and installation of the Project and/or the Developer's operation of the Property and/or the Project. The commercial general liability insurance coverage shall have minimum limits for bodily injury and property damage liability of TWO MILLION DOLLARS ($2,000,000.00) each occurrence and/or FOUR MILLION DOLLARS ($4,000,000.00) aggregate. 5.9.4 Automobile Liability Insurance. Automobile Liability Insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used by the Developer, with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000.00) each occurrence and TWO MILLION DOLLARS ($2,000,000.00) aggregate. Such insurance shall be provided by a business or commercial vehicle policy. 5.9.5 Professional Errors and Omissions Insurance. If the Developer hires a consultant to provide design services, such as architectural or engineering.services in connection with all or any portion of the Project, the Developer shall require each such consultant to provide professional liability (errors and omissions) insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000.00). 5.9.6 Contractor's Insurance. During the construction or the installation of the Project, the Developer shall require that each contractor performing work on the Project maintain the following insurance coverage, at all times during the performance of such work: (a) Unless provided by Developer, each general contractor shall maintain Builder's Risk Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to One Hundred Percent (100%) of the full insurable value of the Proj ect. (b) Each general contractor and each sub-contractor shall maintain Commercial General Liability Insurance coverage with limits of not less than TWO MILLION DOLLARS ($2,000,000.00) per occurrence and FOUR MILLION DOLLARS ($4,000,000.00) aggregate to protect the Developer during the construction and installation of the Project from claims involving bodily injury and/or death and damage to the property of others. (c) Each general contractor and each sub-contractor shall maintain Automobile Liability Insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non- owned vehicles used in the performance of the contractor's obligations with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000.00) each occurrence and TWO MILLION DOLLARS ($2,000,000.00) 36 ORANGETHULL417478.12 aggregate. Such automobile liability insurance shall be provided by a business or commercial vehicle policy. (d) Each general contractor and each sub-contractor performing work of construction or installation of the Project shall provide workers' compensation coverage for all of such general contractor's or such sub-contractor's employees, unless the general contractor's or sub-contractor's employees are covered by workers' compensation insurance provided by the Developer. If any class of employees engaged in work or services performed in connection with the Project, is not covered by Labor Code Section 3700, the Developer shall provide and/or require each general contractor or sub- contractor to provide adequate workers' compensation insurance covering such employees. 5.9.7 Liability Insurance. The Commercial General Liability Insurance coverage required in Section 5.9.3 and Section 5.9.6(b), shall include an endorsement naming the Agency Parties, as additional insured for liability arising out of or relates to this Agreement or the construction or installation of the Project. 5.9.8 Survival. If any of the insurance coverage required under this Agreement is written on a claims-made basis, such insurance policy shall provide an extended reporting period continuing through the fifth (5th) anniversary of the Occupancy Date. The requirements of this sub-section 5.9.8 shall survive any expiration or termination of this Agreement and the recordation of the Agency Deed and a Certificate of Completion for the Project. 5.9.9 Duty to Maintain Insurance. Subject to Section 5.9.11 all of the insurance coverage required under this Section 5.9 shall be maintained by the Developer or its contractors, as required by the terms of this Agreement, and shall not be reduced, modified, or canceled without, at least, thirty (30) calendar days prior written notice to the Agency. Also, phrases such as "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall not be included in the cancellation wording of any certificates of insurance or any coverage for the Agency Parties. The Developer shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy. 5.9.10 Non-Assessable. All insurance obtained and maintained by the Developer in satisfaction of the requirements of this Agreement shall be fully paid for and non-assessable. 5.9.11 Failure to Maintain Insurance. Failure by the.Developer to maintain all insurance coverage required by this Section 5.9 in effect, as required in this Section 5.9, shall be an Event of Default by the Developer. Alternatively, the Agency may, at its sole option, purchase any such required insurance coverage and the Agency shall be entitled to immediate payment from the Developer of any premiums and associated costs paid by the Agency for such insurance coverage. Any election by the Agency to purchase or not to purchase insurance otherwise required by the terms of this Agreement to be carried by the Developer shall not 37 ORANGEIEHULLA7478.12 I relieve the Developer of its obligation to obtain and maintain any insurance coverage required by this Agreement. Section 5.10 Survival of Special Redevelopment Covenants. Each of the special redevelopment covenants set forth in this Article 5 shall be a covenant running with the land of the Property and binding on successive owners of the Property; provided, however, that the covenants set forth in Sections 5.1 and 5.2 shall run with the land and be binding on successive owners of the Property only until such time as they are released pursuant to the terms of Section 5.3 of this Agreement. Each such special redevelopment covenant shall survive the Close of Escrow, execution and recordation of the Agency Deed and issuance and recordation of a Certificate of Completion, Certificate of Occupancy and any other document related to conveyance of the Property or, construction or installation of the Project, for the time period specifically set forth in each such special redevelopment covenant. ARTICLE VI ENCUMBRANCES Section 6.1 Rights of Agency Regarding Permitted Encumbrances. It is not anticipated that Developer will seek financing from a lender to purchase the Property or construct the Project. However, the Developer shall promptly notify the Agency of any mortgage, deed of trust or other financing, refinancing, encumbrance or lien asserted against or attached to all or any portion of the Property, prior to the Release of Operating Covenants, whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency, prior to suit being filed to foreclose any such mechanic's lien. Section 6.2 No Un-Permitted Encumbrances. Prior to the Release of Operating Covenants pursuant to Section 5.3.2, the Developer shall not record and shall not allow to be recorded against all or any portion of the Property or the Project any mortgage, trust deed, deed of trust, encumbrance or lien that is not a Permitted Encumbrance. The Developer shall remove or shall have removed any Un-Permitted Encumbrance made or recorded against all or any portion of the Property or the Project or shall assure the satisfaction of any such Un-Permitted Encumbrance to the satisfaction of the Agency. The covenants of the Developer set forth in this Section 6.2 regarding the placement of encumbrances on the Property shall run with the land of the Property and bind successive owners of the Property, until recordation of the Release of Operating Covenants. Section 6.3 Agency Right to Discharge Un-Permitted Encumbrances. After sixty (60) calendar days prior written notice to the Developer, the Agency shall have the right, but not the obligation, to satisfy or remove any Un-Permitted Encumbrance against the Property or the Project and receive reimbursement from the Developer for any amounts paid or incurred in satisfying or removing any such Un-Permitted Encumbrance, upon demand. Nothing in this Section 6.3 though, shall require the Developer to pay or make provisions for the payment of any 38 ORANGE\EHULL147478.12 tax, assessment, lien or charge that the Developer is in the process of contesting the validity or amount thereof, in good faith, and so long as such contest shall not subject all or any portion of the Property to forfeiture or sale. Agency's rights under this Section 6.3 shall terminate upon the recordation of the Release of Operating Covenants. ARTICLE VII REPRESENTATIONS AND WARRANTIES Section 7.1 Representations and Warranties by the Developer. The Developer makes the following representations, covenants and warranties, as of the Effective Date, and acknowledges that the execution of this Agreement by the Agency is made in material reliance by the Agency on such covenants, representations and warranties of the Developer: 7.1.1 Agreement Fully Enforceable. The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement, such that this Agreement is valid and enforceable against the Developer in accordance with its terms and each instrument to be executed by the Developer pursuant to or in connection with this Agreement will, when executed, be valid and enforceable against the Developer in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution, delivery or performance of this Agreement by the Developer. 7.1.2 Changed Facts or Circumstances. If the Developer becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer's knowledge and/or belief as of a certain date, the Developer will give immediate written notice of such changed fact or circumstance to the Agency. Section 7.2 Representations and Warranties by the Agency. 7.2.1 General Representations and Warranties. Agency warrants and represents to Developer that to the best of Agency's actual knowledge the following statements are now true and accurate: (a) Agency has good, marketable and insurable record title to the Property. (b) The Property is not subject to any mechanics' liens, nor are there any third parties in or entitled to possession or use thereof. There are no management agreements, maintenance or service contracts, non-governmental use restrictions or other agreements relating to the Property which are unrecorded and which. would be binding on the Property or the Developer. 39 ORANGE\EHULL\47478.12 (c) Agency has not received any notice, nor is it aware of any pending action to take all or any portion of the Property, nor has Agency agreed or committed to dedicate any part of the Property. (d) The Property has free and full access to and from all adjoining streets, roads and highways, and there is no pending or threatened action which would limit or impair such access. (e) The Property has not been classified under any designation authorized by law to obtain a special low ad valorem tax rate or receive either an abatement or deferment of ad valorem taxes which, in such case, will result in additional, catch-up ad valorem taxes in the'future in order to recover the amounts previously abated or deferred. There are no minimum value, minimum tax or other agreements with respect to the Property which would restrict Developer's right to contest the value or taxes attributable to the Property. The Property is not subject to any special assessments, an assessment district or any other governmental or quasi-governmental financing for the payment of any on or off-site improvements. (f) The Property is not in violation of any local governmental rule, ordinance, regulation or building code, nor is there a pending or threatened investigation regarding a possible violation of any of the foregoing. (g) Agency has not received any notice nor is it aware of any litigation or administrative proceeding pending or threatened (including the expiration of any appeal period with respect thereto) relating to the Property or its use which may adversely affect the validity of any license, permit or other governmental determination or authorization necessary to development and operation of the Property. (h) Agency is not a "foreign person" as contemplated by Section 1445 of the Internal Revenue Code. Neither Agency nor any of its affiliates is a person or entity with whom U.S. persons or entities are restricted or prohibited from doing business under any laws, orders, statutes, regulations or other governmental action relating to terrorism or money laundering (including Executive Order No. 13224.effective September 24, 2001, and regulations of the Office of Foreign Asset Control of the Department of the Treasury) (each, a "Blocked Person"), and, to the best of Agency's knowledge, neither Agency nor any of its affiliates engages in any dealings or transactions with any Blocked Person or is otherwise associated with a Blocked Person. (i) Agency has the full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by Agency pursuant hereto, and all required actions and approvals therefor have been duly taken and obtained. The individuals signing this Agreement and all other documents executed or to be executed pursuant hereto on behalf of Agency are and shall be duly authorized to sign the same on Agency's behalf and to bind Agency thereto. 40 ORANGEIEHULL147478.12 (j) This Agreement and all documents to be executed pursuant hereto by Agency are and shall be binding upon and enforceable against Agency in accordance with their respective terms, and the transaction contemplated hereby will not result in a breach of, or constitute a default or permit acceleration and maturity under, any indenture, mortgage, deed of trust, loan agreement or other agreement to which Agency or the Property is subject or by which Agency or the Property is bound. (k) Agency has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Agency's creditors, (iii) suffered the appointment of a receiver to take possession of all or substantially all of Agency's assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Agency's assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally. 7.2.2 Environmental Representations and Warranties. Agency represents and warrants to Developer that to the best of the Agency's actual knowledge the following statements are now true and accurate: (a) There are no Hazardous Substances located on, in, or under the Property, except as disclosed in the documents listed on Exhibit G.2. (b) Neither as of this date nor at any time prior to the date hereof, has there been a Release of any Hazardous Substances in, on or under the Property, except as disclosed in the documents listed on Exhibit G.2. (c) Since taking possession of the Property, Agency has never used or allowed the Property to be used for the use, storage, generation, manufacture, treatment, transportation, handling or disposal of any Hazardous Substances, nor, to the best of Agency's actual knowledge, has the Property ever been used for the use, storage, generation, manufacture, treatment, transportation, handling or disposal of any Hazardous Substances, except as disclosed in the documents listed on Exhibit G.2. (d) Any permits or licenses necessary or required to store, use or manufacture any Hazardous Substances within or on the Property have been obtained, are being complied with, and are in full force and effect. (e) Agency's activities on the Property comply with all applicable Environmental Laws. (f) There is no, nor, to the best of Agency's actual knowledge, has there ever been any investigation, administrative proceeding, litigation, regulatory hearing or other action proposed, threatened or pending, relating to the Property and alleging non- compliance with or liability under any Environmental Law; nor is the Property listed on 41 ORANGETHULL�47478.12 CERCLIS or any comparable state list of hazardous waste sites identified for investigation or remediation. (g) Agency has disclosed to Developer all assessments, studies, sampling results, evaluations and other reports commissioned by or for Agency or within Agency's possession or control relating to the environmental condition of the Property. In addition, Agency has disclosed to Developer all known current real estate tax benefits and/or rebates accruing in connection with the environmental condition of the Property. (h) There are not now and were not at any time during which Agency had any interest in the Property, nor to the best of Agency's actual knowledge, have there ever been, any above-ground or underground storage tanks located in, on or under the Property, except as disclosed in the documents listed on Exhibit G.2. (i) To the best of Agency's actual knowledge, storage tanks removed from the Property before Agency had any interest in the Property, and all contaminated soil in connection with said tanks, if any, were removed in accordance with applicable Environmental Laws. (j) To the best of Agency's actual knowledge, storage tanks removed from the Property at a time during which Agency or Agency's Affiliates had any interest in the Property, and all contaminated soil in connection with said tanks, if any, were removed in accordance with applicable Environmental Laws. (k) If disclosed in the documents listed on Exhibit G.2, any storage tanks located above or under the Property have been properly registered with all appropriate regulatory and governmental bodies and are otherwise in compliance with applicable federal, state and local statutes, regulations, ordinances and other regulatory requirements, and Agency has delivered to Developer copies of all such tank registrations, quantity (or volume) reconciliation records, tightness test results and cathodic protection test results within Agency's possession or control. ARTICLE VIII DEFAULTS, REMEDIES AND TERMINATION Section 8.1 Defaults - General. Subject to any extensions of time provided for in this Agreement, unexcused and uncured failure or delay by either Party to perform any term or provision of this Agreement shall constitute an "Event of Default" under this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt of written notice from the non- defaulting Party specifying such default, and shall diligently and continuously prosecute such cure, correction or remedy to completion such Party shall not be deemed to be in default under this Agreement; provided, however, that where any other time limit for the completion of such 42 ORANGE\EHULL\47478.12 cure, correction or remedy is specifically set forth in this Agreement, then solely within such specified time limit, which shall be instead of and not in addition to the time period otherwise provided in this Section 8.1. 8.1.1 Written Notice. The non-defaulting Party shall give written notice of default to the Party in default, specifying the default complained of by the non-defaulting Parry. Except as required to protect against further damages, the non-defaulting Party may not institute proceedings against the party in default until at least thirty (30) days after giving such notice unless another process is expressly set forth herein, and then may only institute such proceedings if any such default remains uncured. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. 8.1.2 No Waiver. Except as otherwise provided in this Agreement, any failure or delays by either Party in asserting any of its rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either Party in asserting any of its rights and/or remedies shall not deprive either Party of its right to institute and maintain any action or proceeding that such Party may deem necessary to protect, assert or enforce any such rights or remedies. Section 8.2 Legal Actions. 8.2.1 Institution of Legal Actions. Either Party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy, including specific performance, available to that Party under this Agreement. Such legal actions must be instituted in the Superior Court of the State of California in and for the County of Los Angeles,California, in any other appropriate court within the County of Los Angeles, California, or in the United States District Court for the Los Angeles District of California. 8.2.2 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to such laws' conflicts of laws principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in the City of Azusa, County of Los Angeles, California. Section 8.3 Agency Right of to Recapture Property (a) In the event of Default as set forth in Sections 8.5.2(a)(ii) and 8.5.3(a)(ii) of this Agreement, the Agency hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq., exercisable by the Agency, in its sole and absolute discretion, to reenter and take possession of the Property with all improvements thereon, and to terminate and revest in the Agency the estate theretofore conveyed to the Developer pursuant to this Agreement ("Right of Recapture"). Should the Agency intend to exercise its Right of Recapture, the Agency shall provide Developer with written notice ("Written Recapture Notice") of its intent to terminate/recapture the Property. The Written Recapture Notice shall be . 43 ORANGEIEHULLW7478.12 - in substantially the form provided in Exhibit J. Provided, however, that prior to the Agency's exercising its Right of Recapture, the Agency Governing Board and the City Council shall hold a joint public hearing (with reasonable notice to and an opportunity to be heard by the Developer which shall be provided in the Written Recapture Notice) on the decision to exercise its Right of Recapture, and consideration of the reasons therefore and alternatives to such action by the Agency, including, without limitation, opportunities available to continue or mutually renegotiate terms of this Agreement with the Developer. If, after the joint public hearing, the Agency chooses to exercise its Right of Recapture, the Agency shall provide the Developer with a written determination of its decision to exercise the Right of Recapture ('Written Recapture Determination"). Such Written Recapture Determination shall identify the event or violation triggering the Agency's exercise of its Right of Recapture. (b) Upon receipt of the Agency's Written Recapture Determination, the Developer, or its successors or assigns, shall convey fee title to the Property and all improvements on the Property to the Agency by grant deed, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. The Developer shall have the right to remove any and all moveable goods, inventory and fixtures from the Property. Such conveyance shall be duly acknowledged by the Developer and a notary in a manner suitable for recordation. The Agency may enforce its rights pursuant to this Section 8.3 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. (c) Within thirty (30) days after receipt of Agency's Written Recapture Notice in accordance with Section 8.3, Developer and Agency shall each select an appraiser and advise the other party of the name, address and telephone number of selected appraiser. The two (2) appraisers shall consult with each other and shall select a third appraiser within fifteen (15) days of the designation of Developer's and Agency's appraisers. If the two (2) appraisers cannot agree upon a third appraiser, then either party shall have the right to request appointment of such third appraiser by any judge of the local or state court having jurisdiction over the Property, and the non-requesting party shall not raise any question as to such judge's full power and jurisdiction to entertain the application and make the appointment. Each person designated to participate in the appraisal of the Property shall (i) be a real estate professional specializing in the valuation of retail commercial property sales and leasing, with emphasis (if possible) on projects containing 50,000 square feet of Floor Area or more, in the metropolitan area where the Project is located, (ii) have at least five (5) years experience as an appraiser, (iii) be a member of the American Institute of Real Estate Appraisers, and (iv) have no material, financial or other business interest in common with a party to this Agreement. The appraisers shall determine the price at which the Property could be sold to a person who desires, but is not required to sell, and by a person who desires, but who is not required to buy, after due consideration of all the elements reasonably affecting value other than the Right of Recapture set forth herein. The appraiser shall consider at least the following factors: the existing governmental regulations, including applicable land use designations; the condition of the building improvements; the location of the land and access thereto; and use restrictions and other covenants of record which 44 ORANGMEHULL47478.12 either limit or enhance the enjoyment of the Property. Developer shall cause a current title report covering the Property to be delivered contemporaneously to each appraiser within forty (40) days of Developer's receipt of the Written Recapture Notice , such report to be issued by the Escrow Agent. Each Party's appraiser shall submit its appraisal to its client within thirty (30) days following receipt of the title report. The third appraiser shall submit its appraisal of the Property to the Executive Director of the Agency in a sealed envelope within thirty (30) days following receipt of the title report. Agency and Developer shall meet on the last day for the submission of the appraisals (or if such day is not a business day, then on the first business day thereafter) at a mutually convenient time at the Agency's offices located at 213 East Foothill Blvd in Azusa, California. Each party shall disclose its appraiser's valuation. If 90% of the higher valuation is equal to or less than the lower valuation, the two valuations shall be added together and the total divided by two; the result shall be the Appraised Value of the Property. If the Fair Market Value is not determined by the method set forth in the preceding sentence,.then the envelope received from the third appraiser shall be opened and that valuation disclosed. The third appraiser's valuation, and the appraiser's valuation which is closest by dollar amount to the third appraiser's valuation shall be added together and the total divided by two; the result shall be the Appraised Value of the Property. The determination of the Fair Market Value of the Property shall be final and binding upon the parties, absent fraud or gross error. Agency and Developer shall each bear the fees and expenses of their own appraiser and one-half of the fees and expenses of the third appraiser. (d) IMMEDIATELY FOLLOWING THE DEVELOPER'S RECEIPT OF THE WRITTEN RECAPTURE DETERMINATION, THE AGENCY, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY PORTION OF THE PROPERTY AND ANY IMPROVEMENTS (NOT INCLUDING ANY MOVEABLE GOODS, INVENTORY AND/OR FIXTURES WHICH SHALL REMAIN THE PROPERTY OF THE DEVELOPER) ON OR TO THE PROPERTY, WITHOUT FURTHER NOTICE OR COMPENSATION TO THE DEVELOPER, EXCEPT AS PROVIDED IN SECTION 8.3(e). (i) Developer shall have ninety (90) days from the date title revests with the Agency pursuant to Section 8.3 ("Wind-up Period") to remove all goods, inventory and/or fixtures ("Inventory") from the Property. (ii) During the Wind-up Period, Agency grants to Developer, its agents, employees, and independent contractors a non-exclusive license and temporary right of entry upon the Property for the purpose of removing said Inventory as provided for in Section 8.3(d). (iii) Developer, on behalf of itself, its successors and assigns, shall defend (with counsel reasonably acceptable to Agency), indemnify, and hold harmless Agency and its officials, agents, attorneys, employees, and contractors from and against all claims and actions of any nature ORAN GETHU LL\47478.!2 whatsoever arising out of or related to Developer's license and temporary entry on to the Property during the Wind-up Period. Developer shall not be responsible for and this indemnity shall not apply to any acts, omissions, or errors directly or indirectly caused by the Agency related to this license or temporary entry on to the Property during the Wind-up Period. (iv) Developer shall ensure the Property or improvements thereon are not damaged by Developer, its agents, employees, or contractors during the removal of Inventory. Developer shall repair any damage done to the Property or improvements thereon by Developer, its agents, employees, or contractors during the Wind-up Period. (e) At the time of reconveyance, the Agency will provide compensation to Developer based upon the appraised value of the Property with improvements at the time of recapture, as determined by the procedure set forth in Section 8.3(c). (f) The rights of the Agency under this Section 8.3 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (i) Any Permitted Encumbrance; or (ii) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Property. Section 8.4 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this Agreement 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 or different times, of any other rights or remedies for the same default or any other default by the other Party. Section 8.5 Events of Default. 8.5.1 Defaults Prior to Close of Escrow. (a) DEFAULT BY DEVELOPER/PRE-CLOSING LIQUIDATED DAMAGES TO THE AGENCY. UPON THE OCCURRENCE OF A DEFAULT BY THE DEVELOPER UNDER SECTION 8.1 OF THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE AGENCY MAY CANCEL THE ESCROW, PURSUANT TO SECTION 3.10, AND TERMINATE THIS AGREEMENT. UPON CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT, THE AGENCY SHALL BE RELIEVED OF ANY OBLIGATION OF THE AGENCY UNDER THIS AGREEMENT TO SELL OR CONVEY THE 46 ORANGE\EHULL\47478.12 - PROPERTY TO THE DEVELOPER. ANY SUCH ESCROW CANCELLATION AND TERMINATION OF THIS AGREEMENT SHALL BE WITHOUT ANY LIABILITY OF THE AGENCY TO THE DEVELOPER OR ANY OTHER PERSON ARISING FROM SUCH ACTION. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY THE AGENCY, IN THE EVENT OF A CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES THE AGENCY WOULD SUFFER, IN THE EVENT OF A CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE AGENCY AND THE DEVELOPER AGREE THAT A REASONABLE ESTIMATE OF THE AGENCY'S DAMAGES IN SUCH EVENT IS THE PRE-CLOSING LIQUIDATED DAMAGES AMOUNT AS DEFINED IN SECTION - 1.1.46 OF THIS AGREEMENT. THEREFORE, UPON THE CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT BY THE AGENCY DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW, THE ESCROW HOLDER SHALL IMMEDIATELY CANCEL THE ESCROW AND PAY THE PRE-CLOSING LIQUIDATED DAMAGES AMOUNT TO THE AGENCY FROM THE EARNEST MONEY DEPOSIT, WITHIN FIVE (5) DAYS FOLLOWING ESCROW CANCELLATION. IF THE EARNEST MONEY DEPOSIT HAS PREVIOUSLY BEEN DISBURSED PURSUANT TO THIS AGREEMENT, DEVELOPER SHALL WITHIN FIVE (5) DAYS FOLLOWING NOTICE FROM ESCROW HOLDER, PAY TO AGENCY THE PRE-CLOSING LIQUIDATED DAMAGES AMOUNT. RECEIPT OF THE PRE-CLOSING LIQUIDATED DAMAGES AMOUNT SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY UPON THE CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW AND THE AGENCY WAIVES ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE DEVELOPER ARISING FROM AN EVENT OF DEFAULT BY THE AGENCY PRIOR TO THE CLOSE OF ESCROW. THE AGENCY ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 8.5.2, WHICH CIVIL CODE SECTION READS AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF 47 ORANGEUTULL�47478.12 1 EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. BY INITIALING BELOW, THE AGENCY KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 8.5.1. Initials of Authorized Initials of Authorized Agency Representative Developer Representative (b) DEFAULT BY AGENCY/DEVELOPER'S RIGHT TO SPECIFIC PERFORMANCE AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW. UPON THE OCCURRENCE OF A DEFAULT BY THE AGENCY UNDER SECTION 8.1 THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW, DEVELOPER MAY, AT ITS SOLE OPTION, EITHER: (A) MAINTAIN AN ACTION AGAINST THE AGENCY FOR SPECIFIC PERFORMANCE OF ANY TERM OR PROVISION OF THIS AGREEMENT OR (B) TERMINATE THIS AGREEMENT AND INSTITUTE AN ACTION FOR DAMAGES TO RECOVER ANY AMOUNTS ACTUALLY EXPENDED BY THE DEVELOPER IN REASONABLE RELIANCE ON THIS AGREEMENT, PRIOR TO THE DATE OF THE OCCURRENCE OF THE EVENT OF DEFAULT BY THE AGENCY, UP TO THE NOT TO EXCEED AMOUNT OF ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000.00). THE DEVELOPER WAIVES ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE AGENCY ARISING FROM AN EVENT OF DEFAULT BY THE AGENCY PRIOR TO THE CLOSE OF ESCROW. SPECIFIC PERFORMANCE AND THE MONETARY DAMAGES PROVIDED FOR IN THIS SECTION 8.5.2 ARE MUTUALLY EXCLUSIVE REMEDIES. IN THE EVENT THAT THE DEVELOPER OBTAINS A JUDGMENT AS A RESULT OF AN EVENT OF DEFAULT BY AGENCY, SUCH JUDGMENT MAY BE FOR SPECIFIC PERFORMANCE OR MONETARY DAMAGES IN ACCORDANCE WITH THIS SECTION, BUT NOT BOTH. THE DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 8.5.2, WHICH CIVIL CODE SECTION READS AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE 48 ORANGE\EHULL\47478.12 - MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 8.5.2. Initials of Authorized Developer Representative 8.5.2 Defaults After Close of Escrow and Prior to Issuance of Completion of Construction Notice. (a) Default by Developer. (i) If Developer is in Default pursuant to Section 8.1 of this Agreement, the Agency may pursue any and all remedies available to Agency at law, in equity or as otherwise provided herein, except that the Right of Recapture shall only be an available remedy pursuant to Section 8.3 of this Agreement. (ii) If Developer is in Default pursuant to Section 8.1 of this Agreement and such Default is of a provision of Sections 4.1, 5.1, or 5.2 of this Agreement, then the Agency may pursue its Right of Recapture, pursuant to Section 8.3 of this Agreement (b) Default by Agency. If Agency is in Default pursuant to Section 8.1 of this Agreement, the Developer may pursue any and all remedies available to Agency at law, in equity, or as otherwise provided herein. 8.5.3 Default After Completion of Construction and Prior to Release of Operating Covenants. (a) Default by Developer. (i) If Developer is in Default pursuant to Section 8.1 of this Agreement, the Agency may pursue any and all remedies available to Agency at law, in equity or as otherwise provided herein, except that the Right of Recapture shall only be an available remedy pursuant to Section 8.3 of this Agreement. (ii) , If Developer is in Default pursuant to Section 8.1 of this Agreement and such Default is of a provision of Sections 5.1 or 5.2 of this Agreement, then the Agency may pursue its Right of Recapture, pursuant to Section 8.3 of this Agreement. 49 ORANGE\EHULL\47478.12 (b) Default by Agency. If Agency is in Default pursuant to Section 8.1 of this Agreement, the Developer may pursue any and all remedies available to Agency at law, in equity, or as otherwise provided herein. 8.5.4 Default After Release of Operating Covenants. (a) Default by Developer. If Developer is in Default pursuant to Section 8.1 of this Agreement, the Agency may pursue any and all remedies available to Agency at law, in equity or as otherwise provided herein. The Agency shall have no Right of Recapture after the Release of the Operating Covenants. (b) Default by Agency. If Agency is in Default pursuant to Section 8.1 of this Agreement, the Developer may pursue any and all remedies available to Agency at law, in equity, or as otherwise provided herein. Section 8.6 Developer Indemnification of the Agency. 8.6.1 Indemnity. In addition to any other specific indemnification or defense obligations of the Developer set forth in this Agreement and to the fullest extent permitted by law, the Developer agrees to indemnify, defend (upon written request by the Agency and with counsel reasonably acceptable to the Agency) and hold harmless each and all of the Agency Parties from and against all Claims that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part by: (a) Any act, omission, fault or negligence, whether active or passive, of the Developer or the Developer's officers, agents, employees, independent contractors or subcontractors of any tier, relating in any manner to this Agreement or any work to be performed by any such person related to this Agreement, the Property, or the Project; or (b) Any authority or obligation exercised or undertaken by the Developer under or pursuant to this Agreement; or (c) Any breach or default in performance of any obligation of the Developer under this Agreement. 8.6.2 Strict Liability. The indemnification obligation of the Developer shall apply regardless of whether liability without fault or strict liability is imposed or sought to be imposed on one or more of the Agency Parties. The indemnification obligations of the Developer shall not apply to the extent that a final judgment of a court of competent jurisdiction establishes that a Claim against Agency Party was proximately caused by the negligence or willful misconduct of that Agency Party. In such event, however, the Developer's indemnification obligations to all other Agency Parties shall be unaffected. 50 ORANGEEHULU47478.12 8.6.3 Independent of Insurance Obligations. The Developer's indemnification obligations pursuant to this Section 8.6 shall not be construed or interpreted as in any way restricting, limiting, or modifying the Developer's insurance or other obligations under this Agreement and is independent of the Developer's insurance and other obligations under this Agreement. The Developer's compliance with its insurance obligations and otherobligations under this Agreement shall not in any way restrict, limit, or modify the Developer's indemnification obligations under this Agreement. 8.6.4 Attorney Fees. The Agency Parties shall be entitled to recover their reasonable attorney fees and actual costs incurred in enforcing the Developer's indemnification obligations pursuant to this Section 8.6. 8.6.5 Survival of Indemnification and Defense Obligations. The Developer's indemnification and defense obligations pursuant to this Section 8.6 shall survive the expiration or earlier termination of this Agreement, until all Claims against any of the Agency Parties involving any of the indemnified matters are fully, finally, and absolutely and completely barred by the applicable statutes of limitations. 8.6.6 Independent Duty to Defend. The Developer's duty to defend the Agency Parties is separate and independent of the Developer's duty toindemnify the Agency Parties. The duty to defend includes Claims for which the Agency Parties may be liable without fault or strictly liable. The duty to defend applies regardless of whether the issues of negligence, liability, fault, default, or other obligation on the part of the Developer or the Agency Parties have been determined. The duty to defend applies immediately, regardless of whether the Agency Parties have paid any sums or incurred.any detriment arising out of or relating (directly or indirectly) to any Claims. It is the express intention of the Developer and the Agency that the Agency Parties be entitled to obtain summary adjudication or summary judgment regarding the Developer's duty to defend the Agency Parties at any stage of any Claim or suit within the scope of this Section 8.6. ARTICLE IX GENERAL PROVISIONS Section 9.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference. Section 9.2 Parties to the Agreement. The Parties to this Agreement are the Agency and the Developer. The City is not a Party to this Agreement. Section 9.3 Restrictions Assignment or Transfer. 51 ORANGETHULL417478.12 - `v 9.3.1 Qualifications and Identity of Developer. The Developer acknowledges that the qualifications and identity of the Developer are of particular importance to the Agency. The Developer further recognizes and acknowledges that the Agency has relied and is relying on the specific qualifications and identity of the Developer in entering into this Agreement with the Developer and, as a consequence, Transfers are permitted only as expressly provided in this Agreement. 9.3.2 Transfer Prior to Occupancy Date. Except as provided in Section 1.1.63, this Agreement may be terminated by the Agency, without liability to the Developer or any other Person, or the Agency may exercise any other remedy available to the Agency under the terms of this Agreement, prior to the Occupancy Date, if there is any Transfer, whether voluntary or involuntary (other than such changes occasioned by the death or incapacity of any individual) that has not been approved in writing by the Agency, prior to the time, of such Transfer, provided, however, that (i) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following its receipt of such written notice to commence and, thereafter, diligently and continuously proceed to cure the default of the Developer and submit evidence of the initiation and satisfactory completion of such cure to the Agency, in a form and substance reasonably satisfactory to the Agency. 9.3.3 Prior Written Approval. Except as permitted in this Section 9.3 or with respect to a Permitted Encumbrance, prior to the Occupancy Date, the Developer shall not cause or allow any Transfer, without the prior written approval of the Agency. The Developer recognizes that the qualifications and identity of the Developer are of particular concern to the Agency and that a Transfer is for all practical purposes a transfer or disposition of the responsibilities of the Developer with respect to this Agreement, the Property and/or the Project and, therefore, Transfers are only allowed in accordance with the provisions of this Section 9.3 and as Permitted Encumbrances. 9.3.4 No Unpermitted Transfer. Except as expressly permitted in this Agreement, the Developer represents to the Agency that it has not made and agrees that it will not create or suffer to be made or created, any Transfer, either voluntarily, involuntarily or by operation of law, without the prior written approval of the Agency, until after the Occupancy Date. Any Transfer made in contravention of this Section 9.3 shall be voidable at the election of the Agency and, if voided, shall be deemed to be an Event of Default by the Developer, whether or not the Developer knew of or participated in such Transfer. 9.3.5 Notice of Permitted Transfer. The Developer is not required to give the Agency advance notice of a Permitted Transfer. Additionally, the Agency may, in its reasonable discretion, approve in writing any other Transfer requested by the Developer, provided the proposed transferee can satisfactorily demonstrate successful experience in the development, ownership, operation, and management of a commercial retail development of the same type as the Project and expressly assumes in writing all of the obligations of the Developer under this Agreement. All instruments and other legal documents proposed to effect any proposed Transfer 52 ORANGE\EHuLLW 7478.12 shall be submitted to the Agency for review, .at least, thirty-five (35) calendar days prior to the Transfer, and the written approval or disapproval of the Agency shall be provided to the Developer, within thirty (30) calendar days following the Agency's receipt of the Developer's request. Section 9.4 Notices,Demands and Communications Between the Parties. 9.4.1 Delivery of Notices. Any and all notices, demands or communications submitted by either Party to the other Party pursuant to or as required by this Agreement shall be proper, if in writing and transmitted to the principal office of the Agency or the Developer, as applicable, as designated in Section 9.4.2 by one or more of the following methods: (i) messenger for immediate personal delivery, (ii) a nationally recognized overnight delivery service or (iii) registered or certified United States Mail, postage prepaid, return receipt requested, . Such written notices, demands or communications may be sent in the same manner to such other addresses as. either Party may from time to time designate. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service or three (3) calendar days after it is placed in the United States Mail, as provided in this Section 9.4.1. Rejection, other refusal to accept or the inability to deliver a notice, demand or communication because of a changed address of which no notice was given, shall be deemed receipt of the notice, demand or communication. 9.4.2 Designated Addresses. The following are the authorized addresses for the submission of notices, demands or communications to the Parties: To the Developer: Target Corporation Property Development Attention Real Estate - Existing Stores/Purchase Agreement/Azusa, CA 1000 Nicollet Mall, TPN— 12 Minneapolis, MN 55403 Facsimile: (612) 761-3735 With courtesy copy to: Target Corporation 1000 Nicollet Mall, TPS—3155 Minneapolis, MN 55403 Facsimile: (612) 696-8309 Attention: Michelle L. Gierke To the Agency: Redevelopment Agency of the City Azusa 213 East Foothill Boulevard Azusa, California 91702 Attention: Executive Director 53 ORANGEIEHULL\47478.12 Facsimile: (626)334-5464 With courtesy copy to: Best Best & Krieger, LLP 5 Park Plaza, Suite 1500 Irvine, CA 92614 Attention: Elizabeth Wagner Hull Facsimile: (949)260-0972 Section 9.5 Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement, the Property or the development or operation of the Project shall participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 9.6 Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, any third party-any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 9.6, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. Section 9.7 Non-liability of Agency Officials and Employees. No Agency Party shall be personally liable to the Developer, or any successor in interest of the Developer, in the event of any default or breach by the Agency under this Agreement or for any amount that may become due to the Developer or to its successor, or on any obligations under the terms or conditions of this Agreement, except as may arise from the gross negligence or willful acts of such Agency Party. Section 9.8 Calculation of Time Periods. Unless otherwise specified, all references to time periods in this Agreement measured in days shall be to calendar days, all references to time periods in this Agreement measured in months shall be to consecutive calendar months and all references to time periods in this Agreement measured in years shall be to consecutive calendar years. Any reference to business days in this Agreement shall mean and refer to business days of the Agency. Section 9.9 Agency Attorney Fees and Costs. For the purposes of this Agreement, all references to reasonable attorneys' fees and costs in reference to the Agency are intended to include the salaries, benefits and costs of the City Attorney, as Agency General Counsel, and the lawyers employed in the Office of the City Attorney. Section 9.10 Unavoidable Delay; Extension of Time of Performance. Subject to specific provisions of this Agreement, performance by either Party under this Agreement shall not be deemed, or considered to be in default, where any such default is due to an Unavoidable Delay. Any Party claiming Unavoidable Delay shall notify the other Party: (a) within ten (10) 54 ORANGETHULL\47478.l2 days after such Party knows of any such Unavoidable Delay; and (b) within five (5) days after such Unavoidable Delay ceases to exist. To be effective, any notice of an Unavoidable Delay must describe the Unavoidable Delay in reasonable detail: The extension of time for an Unavoidable Delay shall commence on the date of receipt of written notice of the occurrence of the Unavoidable Delay by the Party not requesting an extension of time to perform due to such Unavoidable Delay and shall continue until the end of the condition causing the Unavoidable _ Delay. The Party seeking to be excused from performance shall exercise its best efforts to cure. the condition causing the Unavoidable Delay, within a reasonable time. Each Party expressly agrees that adverse changes in economic conditions, of either Party specifically or the economy generally, or changes in market conditions or demand or changes in the economic assumptions of either of them that may have provided a basis for entering into this Agreement shall not operate to excuse or delay the performance of each and every one of each Party's obligations and covenants arising under this Agreement. Both Parties expressly assume the risk of such adverse economic or market changes, whether or not foreseeable, as of the Effective Date. Section 9.11 Inspection of Books and Records. The Agency shall have the right at all reasonable times, at the Agency's cost and expense, to inspect the books and records of the Developer pertaining to the Remediation and Demolition Holdback Amount. The Developer shall also have the right at all reasonable times, at the Developer's sole cost and expense, to inspect the books and records of the Agency pertaining to the Remediation and Demolition Holdback Amount. The Developer will use commercially reasonable efforts to cause all of the Developer's contractors, subcontractors and materialmen to cooperate with the Agency to enable such examination as it relates to the cost of the remediation work offset by the Remediation and Demolition Holdback Amount. Section 9.12 Real Estate Commissions. Agency warrants to Developer that Agency has not taken any action in connection with this transaction which would result in any real estate broker's fee, finder's fee, or other fee being due or payable to any party. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees that may arise from or be related to this Agreement. The Developer shall pay any fees or commissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals. Developer warrants to Agency that Developer has not taken any action in connection with this transaction which would result in any real estate broker's fee, finders fee, or other fee being due and payable to any party other than ADJG, Inc. dba Pacific Retail Partners (the "Broker"). Developer agrees to pay at Closing any and all fee due to Broker in connection with this transaction. Section 9.13 Binding on Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors and assigns. Section 9.14 Entire Agreement. 55 ORANGETHULD47478.12 9.14.1 One Instrument. This Agreement shall be executed in four (4) counterpart originals, each of which shall be deemed to be an original, .but all of which together shall constitute one and the same instrument. This Agreement includes pages and exhibits, that constitute the entire understanding and Agreement of the Parties regarding the Property,the Project and the other subjects addressed in this Agreement. 9.14.2 Fully Integrated. This Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements between the Parties with respect to the Property, the Project and the other subjects addressed in this Agreement. 9.14.3 No Merger. None of the terms, covenants, restrictions, agreements or conditions set forth in this Agreement.shall be deemed to be merged with any deed conveying title to the Property, and this Agreement shall continue in full force and effect before and after any such conveyances. 9.14.4 Writing Required. All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representative(s) of both.the Agency and the Developer. Section 9.15 Survival of Indemnity Obligations. All general and specific indemnity and defense obligations of the Parties set forth in this Agreement shall survive the expiration or termination of this Agreement, the execution or recordation of the Agency Deed and/or the issuance and recordation of the Certificate of Completion for the Project. [Signatures on following pages] 56 ORANGETHULD47478.12 - SIGNATURE PAGE TO . 2008 DISPOSITION AND DEVELOPMENT AGREEMENT IN WITNESS WHEREOF, the Agency and the Developer have executed this 20 Disposition and Development Agreement ( . ) by and through the signatures of their duly authorized representative(s) set forth below: DEVELOPER: a Dated: By: Name: Its: Dated: By: Name: Its: AGENCY: a Dated: By: Name: Its: [Signatures continued on following pages] 57 ORANGETHULL147478.12 - RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Attention: SPACE ABOVE FOR RECORDER'S USE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA AGENCY DEED PART ONE For valuable consideration, the receipt of which is hereby acknowledged, the Redevelopment Agency of the City of Azusa, a public body, corporate and politic (the "Agency"), hereby grants to Target Corporation, a Minnesota Corporation (the "Grantee"), that certain real property legally described in Exhibit "A-1" attached to and by this reference incorporated into this Agency Deed (the "Property"). PART TWO The grant of the Property by the Agency to the Grantee in Part One is subject to the following community redevelopment terms, conditions, covenants and restrictions: Section 1. Conveyance Subject to Terms of a Disposition and Development Agreement. The Property is conveyed subject to that certain 2008 Disposition and Development Agreement (Target Store Redevelopment Project), dated as of 2008, by and between the Agency and the Grantee (the "Agreement"). The provisions of the Agreement are incorporated into this Agency Deed by this reference and are deemed to be a part of this Agency Deed, as though fully set forth in this Agency Deed. The Agreement contains certain community redevelopment covenants running with the land of the Property and other agreements between the Developer and the Agency affecting the Property, including, without limitation, covenants to construct and operate a retail store and maintain the property on the tax rolls, including a right of the Agency to recapture the property under certain circumstances, and on- going obligations to maintain the property, all as set forth in the Agreement. Section 2. Condition of Property. The Grantee acknowledges and agrees that the Property is granted by the Agency to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS CONDITION," as of the date of recordation of this Agency Deed, with no . ORANGEIEHULLW478.12 EXHIBIT "D" FORM OF AGENCY DEED [To be attached behind this cover page] ORANGE\EHULL147478.12 Developer shall provide Agency with quarterly reports to advise Agency of construction progress Developer obtains certificate of Within one year of commencement of September 15, occupancy for Improvements construction of Improvements. 2010 ("Occupancy Date") Grand Opening to Public ("Final Within 25 days after Occupancy Date. October 10, Occupancy Date") 2010 Agency issues Certificate of Upon request of Developer pursuant to November 1, Completion Section 4.8 of the DDA 2010 Exhibit"C" Schedule of Performance ORANI GEEHULL47478.12 EXHIBIT "C" SCHEDULE OF PERFORMANCE A. Days shall be calendar days, unless otherwise specified. B. Where the action/task is to be performed by the City, the Agency shall exercise its reasonable efforts to obtain performance by the City. C. All specific dates set forth in parentheses in this schedule are estimates only and not binding on the Parties. D. In the event of any conflict between this schedule and the Agreement, the terms and provisions of the Agreement shall control. E. All defined terms indicated by initial capitalization used in this schedule shall have the meanings ascribed to the same terns in the Agreement. EVENT TIME EST. DATE Developer signs DDA Before Agency consideration Agency signs DDA Within 10 days of approval by Agency Escrow Opening Within 5 business days of execution December 1, by Agency 2008 Due Diligence Period 90 days following the Escrow Opening. Escrow Closing Date The earlier of(1) 30 business days FebruaryM, following the Escrow Holder's receipt 2009 of written confirmation from Developer and Agency of satisfaction or waiver of all conditions precedent to Close of Escrow or(2) February 20, 2009. Developer obtains building permit for Within six months of the Escrow August 15, Improvements Closing Date. 2009 Within one month of receipt of Developer commences construction of building permit for Improvements. September 15, Improvements 2009 Exhibit "C" Schedule of Performance ORANGEIEHULL147478.12 area and would include two elevators, a freezer and cooler, restrooms, night and day maintenance storage areas, an electronics stock area, and the main stock area. The main stock area would extend southward, covering the truck loading dock spaces located below. As previously mentioned, elevators would facilitate the transport of merchandise to and from the loading dock area located on the ground floor, and the storage area located directly above on the second level. Exhibit"B" Scope of Development ORANGE\EHULL\47478.12 - In addition, landscaped islands would be installed adjacent to the new angled on-street parking spaces along San Gabriel Avenue at 9th Street, on either side of the vehicular entrance to the proposed project, and adjacent to the truck entrance to the loading dock area. The six existing angled on-street,parking spaces located adjacent to the project site along Azusa Avenue would remain with the proposed project. However, these six parking spaces along with the existing landscaped islands and street furniture would be re-striped and reconfigured due to the construction of the vehicular entrance and truck exit proposed along Azusa Avenue. On the southeastern portion of the project site, the lobby, including the escalators, shopping cart escalators, two elevators, stairs, and shopping cart storage, would be located adjacent to the intersection of Azusa Avenue and the Metro Gold Line Foothill Extension right-of-way. A system would be installed to control the removal of shopping carts from the project site. Escalators and stairs would vertically circulate customers from the ground floor lobby and parking area to the second floor retail sales area. An exterior storage area would be located beneath the escalators and stairs. A truck loading dock would be located on the southwestem portion of the project site, south of the ground floor parking area and west of the lobby and escalators, near the intersection of San Gabriel Avenue and the Metro Gold Line Foothill Extension right-of-way. The truck loading dock would be separated from the lobby and from the view of San Gabriel Avenue residences by walls, which would prevent views of truck loading dock operations. The truck loading dock includes spaces for five trucks to unload merchandise. The truck loading dock would include two elevators, elevator and mechanical machine rooms, compactorlbailer, stocking, marking, and receiving areas. The elevators would facilitate the transport of merchandise to and from the loading dock and storage area located above. Second Floor The second floor would extend 40 to 47 feet in height due to the natural topography of the project site. The northern portion of the building would reach 40 feet in height while the southern portion of the building would reach 47 feet in height. The second floor would span a majority of the project site and include a lobby, the retail sales area, various customer and employee services, and a large storage are, totaling approximately 153,000 square feet. Customers would take the escalators, elevators, or stairs from the ground floor lobby to the second floor lobby. Several feet north of the second floor lobby would be the doors to enter the retail sales area. The retail sales area would be the largest use on the second floor. Customer and employee services would be located along the eastern portion of the retail sales area and would include cash registers/merchandise check-out, guest services, photo processing, restrooms, a cash office, a pharmacy, employee conference rooms, a training room, an employee lounge and locker room, and numerous storage and electrical rooms. Several of the employee service areas would be separated from the retail sales,area. In addition, a section of the retail sales area would be allocated for sit-down dining, although no food preparation facilities are proposed. The large storage area extends to 47 feet in height and is located only on the southwestern portion of the proposed building. The large storage area would be separated from the retail sales Exhibit'B" Scope of Development ORANGE\EHULL\47478.12 EXHIBIT "B" SCOPE OF DEVELOPMENT The Project shall consist of the following minimum elements: • Two-story Target retail store on an a over 180,533-square-foot site • 168,000 square feet of new building space or new floor area • 420 parking spaces on the ground floor for employees and retail customers • Main retail sales area on the second floor • Storage space on the second floor • Truck loading dock on the south side of the new building, accessed from San Gabriel and Azusa Avenues • Vehicular entrances on San Gabriel and Azusa Avenues and 9th Street • Main pedestrian entrance adjacent to Azusa Avenue, with escalators to the main retail sales area on the second floor All of the existing commercial and industrial uses on the project site would be demolished with the proposed project. A new 168,000-square-foot Target retail store spanning the majority of the project site would be constructed. The new building would reach two stories in height. The northern portion of the building would reach 40 feet in height while the southern portion of the building would reach 47 feet in height. The Target sign tower on the southeastern corner of the building, above the main store entrance, would reach 69 feet in height. The new building would consist of parking uses on the ground floor with retail sales and storage uses located above. An estimated 150- 200 persons would be employed by the proposed project. Approximately 71 persons are currently employed on the project site; therefore, the project site would include 129 net new employees. Store operating hours are expected to be from 8:00 a.m. to 10:00 p.m., Mondays through Saturdays, and 8:00 a.m. to 9:00 p.m. on Sundays. On holidays, .store- operating hours would be 8:00 a.m. to 11:00 p.m. The store would be closed on Easter Sunday, Thanksgiving Day, and Christmas Day. Ground Floor The ground floor would extend approximately 14 feet in height and span a majority of the project site. The ground floor of the proposed project would include customer and employee parking, a lobby, and a loading dock for truck deliveries, totaling approximately 15,000 square feet. The proposed 420 parking spaces, including nine Americans with Disabilities Act (ADA) accessible parking spaces, would occupy the majority of the ground floor area. The proposed parking stall size is approximately 9 feet by 18 feet. Approximately 21-angled on-street parking spaces would be provided along San Gabriel Avenue, adjacent to the project site. The installation of these parking spaces would result in the removal of one through traffic lane along San Gabriel Avenue. Exhibit'B" Scope of Development ORANGE\EHULL147478.12 EXHIBIT "A-2" SITE PLAN [To be attached behind this cover page] Exhibit"A-2" Site Plan ORANGE\EHULL\47478.12 . EXHIBIT "A-1" LEGAL DESCRIPTION OF THE PROPERTY THAT PORTION OF THE"A.T. & S.F."RAILROAD RIGHT-OF-WAY IN THE CITY OF AZUSA, STATE OF CALIFORNIA, AS SHOWN ON PARCEL MAP RECORDED IN BOOK 4 PAGE 77 OF PARCEL MAPS, RECORDS OF LOS ANGELES COUNTY, FORMERLY IDENTIFIED AS "L.A. & S.B.R.R." ON MAP OF AZUSA, RECORDED IN BOOK 15, PAGES 93 THROUGH 96, INCLUSIVE OF MISCELLANEOUS RECORDS OF SAID COUNTY,DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF AZUSA AVENUE (80 FEET WIDE) WITH THE CENTERLINE OF THE RAILS AS SHOWN ON SAID PARCEL MAP; THENCE NORTH ALONG SAID CENTERLINE OF AZUSA AVENUE, 53.36 FEET TO A LINE PARALLEL WITH AND 50 FEET NORTHWESTERLY, MEASURED AT RIGHT ANGLES, FROM SAID CENTERLINE OF RAILS; THENCE SOUTH 69 DEGREES 33 MINUTES 50 SECONDS WEST ALONG SAID PARALLEL LINE, 42.69 FEET TO THE WEST LINE OF AZUSA AVENUE, BEING THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE CONTINUING SOUTH 69 DEGREES 33 MINUTES 50 SECONDS WEST ALONG SAID PARALLEL LINE,320.14 FEET TO THE EAST LINE OF SAN GABRIEL AVENUE(100 FEET WIDE); THENCE NORTH ALONG SAID EAST LINE OF SAN GABRIEL AVENUE, 53.36 FEET TO A LINE PARALLEL WITH SAID CENTERLINE OF RAILS AND 100 FEET NORTHWESTERLY, MEASURED AT RIGHT ANGELS,FROM SAID CENTERLINE OF RAILS; THENCE NORTH 69 DEGREES 33 MINUTES 50 SECONDS EAST, ALONG SAID PARALLEL LINE, 320.14 FEET TO SAID WEST LINE OF AZUSA AVENUE; THENCE SOUTH, ALONG SAID WEST LINE OF AZUSA AVENUE, 53.36 FEET TO THE TRUE POINT OF BEGINNING. [APN 8608-024-900] PORTION OF THE RANCHO AZUSA FINALLY CONFIRMED TO HENRY DALTON TRACT, PER MAP RECORDED IN BOOK 2, PAGES 106 THROUGH 107 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER,COUNTY OF LOS ANGELES,CALIFORNIA. [APN 8608-024-902] LOT I, PER MAP RECORDED IN BOOK 4, PAGE 77 OF PARCELS MAPS, IN THE OFFICE OF THE COUNTY RECORDER,COUNTY OF LOS ANGELES, CALIFORNIA. ]APN 8608-024-9031 LOTS 43, 44, AND 45, BLOCK 21, AZUSA, AND A PORTION OF VACATED ALLEY, PER MAP RECORDED IN BOOK 15, PAGES 93 THROUGH 96 OF MISCELLANEOUS RECORDS; AND A PORTION OF THE RANCHO AZUSA FINALLY CONFIRMED TO HENRY DALTON TRACT, PER MAP RECORDED IN BOOK 2, PAGES 106 THROUGH 107 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY _ RECORDER,COUNTY OF LOS ANGELES,CALIFORNIA. (APN 8608-024-9041 Exhibit"A-1" Legal Description of the Property ORANGEIEHULU47478.12 4 4 ATTEST: By: Agency Secretary APPROVED AS TO FORM: BEST BEST & KRIEGER LLP By: Agency Counsel 58 ORANGEIEHULL147478.12 _ } i I HEREBY CERTIFY that the foregoing resolution was duly adopted by the . Redevelopment Agency of the City of Azusa at a regular meeting held on the 17'h day of November, 2008. AYES: AGENCY MEMBERS: NOES: AGENCY MEMBERS: ABSTAIN: AGENCY MEMBERS: ABSENT: AGENCY MEMBERS: .Agency Secretary 3 i S WHEREAS, following a joint public hearing on November 17, 2008, the City Council made the requisite findings set forth in Section 33433 with respect to the disposition of the Property; and WHEREAS, the Agency is the lead agency concerning the Project pursuant to the California Environmental Quality Act ("CEQA") and the State CEQA Guidelines; and WHEREAS, the City staff has reviewed the General Plan and Development Code Environmental Impact Report ("EIR") prepared by the City as well as the Target Project EIR ("Target EIR") certified on August 4, 2008 for this Project in particular and has determined that the EIR and the Target EIR adequately evaluated the impacts of the development of the Project and the impacts of the proposed development in the Project Area. NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the Redevelopment Agency of the City of Azusa as.follows: Section 1. The Governing Board hereby directs Agency staff to file a Notice of Determination with the Los Angeles County Clerk's office within three (3) calendar days of the adoption of this Resolution. Section 2. The Governing Board approves the Agreement together with non-substantive changes and amendments as may be approved by both the Executive Director and Agency Counsel. Section 3. The Governing Board hereby authorizes and directs the Executive Director to take any action and execute any documents necessary to implement the Agreement. Section 4. The Agency Secretary shall certify to the passage and adoption of this resolution and the same shall thereupon take effect and be in force immediately upon its adoption. APPROVED AND ADOPTED this 17'"day of November, 2008. Chair of the Redevelopment Agency of the City of Azusa ATTEST: Agency Secretary 2 1 RESOLUTION NO. A RESOLUTION OF THE GOVERNING BOARD OF THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA AND TARGET CORPORATION WHEREAS, pursuant to the California Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) ("CRL"), the City Council of the City of Azusa ("City") approved and adopted a Redevelopment Plan ("Redevelopment Plan") for the redevelopment Project Area known as the Merged Central Business District and West End Redevelopment Project Area("Project Area"); and WHEREAS, the Governing Board (`Board) of the Redevelopment Agency of the City of- Azusa ("Agency") is engaged in activities to implement the Redevelopment Plan for the Project Area pursuant to the provisions of the CRL; and WHEREAS, the Agency has negotiated the terms of that certain 2008 Disposition and Development Agreement (Target Project) ("Agreement") with Target Corporation ("Developer") for the disposition and development of certain real property ("Property") as a Target store ("Project") including approximately 159,000 square feet of commercial space as set forth in the Agreement; and WHEREAS, the Agency has prepared, and the City Council has reviewed and considered, a summary pursuant to CRL Section 33433 ("Summary") setting forth: (1) the cost of the Agreement to the Agency; (2) the estimated value of the interest to be conveyed; and (3) an explanation of how the acquisition and conveyance of the Property will assist in the elimination of blight within the Project Area and has made the Summary available for public inspection in accordance with CRL Section 33433; and WHEREAS, a copy of the Agreement is on file at the City's Redevelopment Department; and WHEREAS, pursuant to CRL Section 33433, on October 30, 2008 and November 6, 2008, the City caused notice of a joint public hearing of the City Council and the Agency's Governing Board to be published in The Herald, a newspaper of general circulation within the Agency's territorial jurisdiction; and WHEREAS, pursuant to CRL Section 33433, the Agency may, with the consent of the City Council, approve the sale of the Property to the Developer for development of the Project in accordance with the Agreement if the City Council makes certain findings following a noticed public hearing; and WHEREAS, pursuant to provisions of CRL Section 33433, the City Council and the Agency's Governing Board held a duly noticed joint public hearing on the proposed Project and on the proposed Agreement; and 1 z APPROVED AND ADOPTED this 17th day of November, 2008. Mayor of the City of Azusa ATTEST: City Clerk I HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council of the City of Azusa at a regular meeting held on the 17th day of November, 2008. AYES: NOES: ABSTAIN: ABSENT: City Clerk of the City of Azusa 3 f accordance with the Agreement if the City Council makes certain findings following a noticed public hearing; and WHEREAS, pursuant to provisions of CRL Section 33433, the City Council and the Agency's Governing Board held a duly noticed joint public hearing on the proposed Project and on the proposed Agreement; and WHEREAS, the City is the responsible agency concerning the Project pursuant to the California Environmental Quality Act ("CEQA") and the State CEQA Guidelines; and WHEREAS, the City staff has reviewed the General Plan and Development Code Environmental Impact Report ("EIR") prepared by the City as well as the Target Project EIR ("Target EIR") certified on August 4, 2008 for this Project in particular and has determined that the EIR and the Target EIR adequately evaluated the impacts of the development of the Project and the impacts of the proposed development in the Project Area. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Azusa as follows: Section 1. The City Council hereby directs City staff to file a Notice of Determination with the Los Angeles County Clerk's office within three (3) calendar days of the adoption of this Resolution. Section 2. The City Council hereby finds and determines that the disposition and development of the Property will assist in the elimination of blight for the reasons set forth in the Summary. Section 3. The City Council hereby finds and determines that the development of the Property pursuant to the Agreement is consistent with the Implementation Plan adopted for the Project Area pursuant to Section 33490. Section 4. The City Council hereby finds and determines the consideration paid by the Developer to the Agency for the Property is not less than the fair re-use with the covenants, conditions and development costs authorized by the sale for reasons set forth in the Summary. Section 5. The City Council hereby approves the Agreement together with non- substantive changes and amendments as may be approved by the City Manager and the City Attorney. Section 6. The City Council hereby authorizes and directs the City Manager and the City Attorney to take any action and execute any documents necessary to implement the Agreement. Section 7. The City Clerk shall certify to the passage and adoption of this resolution and the same shall thereupon take effect and be in force immediately upon its adoption. 2 r S RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA AND TARGET CORPORATION, AND MAKING CERTAIN FINDINGS PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 33433 IN CONNECTION THEREWITH WHEREAS, pursuant to the California Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) ("CRL"), the City Council of the City of Azusa ("City") ("City Council") approved and adopted a Redevelopment Plan ("Redevelopment Plan") for the redevelopment Project Area known as the Merged Central Business District and West End Redevelopment Project Area("Project Area"); and WHEREAS, the Governing Board (`Board) of the Redevelopment Agency of the City of Azusa ("Agency") is engaged in activities to implement the Redevelopment Plan for the Project Area pursuant to the provisions of the CRL; and WHEREAS, the Agency has negotiated the terms of that certain 2008 Disposition and Development Agreement (Target Project) ("Agreement") with Target Corporation ("Developer") for the disposition and development of certain real property ("Property") as a Target store ("Project") including approximately 159,000 square feet of commercial space as set forth in the Agreement; and WHEREAS, pursuant to Government Code Section 65402, the Planning Commission of the City has determined that the Project is in conformance with the City's General Plan; and WHEREAS, the Agency has prepared, and the City Council has reviewed and considered, a summary report pursuant to CRL Section 33433 ("Summary") setting forth: (1) the cost of the Agreement to the Agency; (2) the estimated value of the interest to be conveyed; and (3) an explanation of how the acquisition and conveyance of the Property will assist in the elimination of blight within the Project Area, and has made the Summary available for public inspection in accordance with CRL Section 33433; and WHEREAS, a copy of the Agreement is on file at the City's Redevelopment Department; and WHEREAS, pursuant to CRL Section 33433, on October 30, 2008 and November 6, 2008, the City caused notice of a joint public hearing of the City Council and the Agency's Governing Board to be published in The Herald, a newspaper of general circulation within the Agency's territorial jurisdiction; and WHEREAS, pursuant to CRL Section 33433, the Agency may, with the consent of the City Council, approve the sale of the Property to the Developer for development of the Project in 1 9.14.3 No Merger..............................................................................................................56 9.14.4 Writing Required. ..................................................................................................56 SECTION 9.15 SURVIVAL OF INDEMNITY OBLIGATIONS.........................................................56 ORANGEEHULL%47478.12 S SECTION 8.6 DEVELOPER INDEMNIFICATION OF THE AGENCY. ...............................................50 8.6.1 Indemnity...................................................................................................................50 8.6.2 Strict Liability....................................................:.......................................................50 8.6.3 Independent of Insurance Obligations. ......................................................................51 8.6.4 Attorney Fees.............................................................................................................51 8.6.5 Survival of Indemnification and Defense Obligations...............................................51 8.6.6 Independent Duty to Defend......................................................................................51 ARTICLE IX GENERAL PROVISIONS .....................................................................................51 SECTION 9.1 INCORPORATION OF RECITALS............................................................................51 SECTION 9.2 PARTIES TO THE AGREEMENT. ............................................................................51 SECTION 9.3 RESTRICTIONS ASSIGNMENT OR TRANSFER........................................................51 9.3.1 Qualifications and Identity of Developer...................................................................52 9.3.2 Transfer Prior to Occupancy Date. ............................................................................52 9.3.3 Prior Written Approval. .............................................................................................52 9.3.4 No Unpermitted Transfer......................................................................................:.::.52 9.3.5 Notice of Permitted Transfer. ....................................................................................52 SECTION 9.4 NOTICES,DEMANDS AND COMMUNICATIONS BETWEEN THE PARTIES................53 9.4.1 Delivery of Notices....................................................................................................53 9.4.2 Designated Addresses. ...........................................................................................:...53 SECTION 9.5 CONFLICT OF INTEREST.......................................................................................54 SECTION 9.6 WARRANTY AGAINST PAYMENT OF CONSIDERATION FOR AGREEMENT.............54 SECTION 9.7 NON-LIABILITY OF AGENCY OFFICIALS AND EMPLOYEES...................................54 SECTION 9.8 CALCULATION OF TIME PERIODS. .......................................................................54 SECTION 9.9 AGENCY ATTORNEY FEES AND COSTS................................................................54 SECTION'9.10 UNAVOIDABLE DELAY; EXTENSION OF TIME OF PERFORMANCE. ....x...............54 SECTION 9.11 INSPECTION OF BOOKS AND RECORDS. ...........................................................55 SECTION 9.12 REAL ESTATE COMMISSIONS. .........................................................................55 SECTION 9.13 BINDING ON SUCCESSORS AND ASSIGNS.........................................................55 SECTION 9.14 ENTIRE AGREEMENT.......................................................................................55 9.14.1 One Instrument.......................................................................................................56 9.14.2 Fully Integrated..........................................................................................:...........56 ORANGE\EHULL\47478.12 - - - I 5.9.9 Duty to Maintain Insurance. ...................................................................................:..37 5.9.10 Non-Assessable......................................................................................................37 5.9.11 Failure to Maintain Insurance. ...............................................................................37 SECTION 5.10 SURVIVAL OF SPECIAL REDEVELOPMENT COVENANTS...................................38 ARTICLE VI ENCUMBRANCES ...................................................................................:.......:::.38 SECTION 6.1 RIGHTS OF AGENCY REGARDING PERMITTED ENCUMBRANCES..........................38 SECTION 6.2 NO UN-PERMITTED ENCUMBRANCES. ................................................................38 SECTION 6.3 AGENCY RIGHT TO DISCHARGE UN-PERMITTED ENCUMBRANCES. ....................38 ARTICLE VII REPRESENTATIONS AND WARRANTIES .....................................................39 SECTION 7.1 REPRESENTATIONS AND WARRANTIES BY THE DEVELOPER................................39 7.1.1 Agreement Fully Enforceable....................................................................................39 7.1.2 Changed Facts or Circumstances...............................................................................39 SECTION 7.2 REPRESENTATIONS AND WARRANTIES BY THE AGENCY.....................................39 7.2.1 General Representations and Warranties...................................................................39 7.2.2 Environmental Representations and Warranties........................................................41 ARTICLE VIII DEFAULTS, REMEDIES AND TERMINATION.............................................42 SECTION 8.1 DEFAULTS-GENERAL. .......................................................................................42 8.1.1 Written Notice............................................................................................................43 8.1.2 No Waiver......................................................................:...........................................43 SECTION 8.2 LEGAL ACTIONS..................................................................................................43 8.2.1 Institution of Legal Actions. ......................................................................................43 8.2.2 Applicable Law..........................................................................................................43 SECTION 8.3 LIMITED AGENCY RIGHT OF TO RECAPTURE PROPERTY.....................................43 SECTION 8.4 RIGHTS AND REMEDIES ARE CUMULATIVE. ........................................................46 SECTION 8.5 EVENTS OF DEFAULT. .........................................................................................46 8.5.1 Defaults Prior to Close of Esc_row. ............................................................................46 8.5.2 Defaults After Close of Escrow and Prior to Issuance of Completion of Construction...........................................................................................................................49 8.5.3 Default After Completion of Construction and Prior to Release of Operating Covenants...............................................................................................................................49 8.5.4 Default After Release of Operating Covenants. ........................................................50 ORANGE\EHULL\47478.12 S 5.2.1 Commercial/Retail Uses. ...........................................................................................29 5.2.2 Developer Covenant to Operate.................................................................................29 SECTION 5.3 COVENANTS RUNNING WITH THE LAND/RELEASE OF COVENANTS.....................29 5.3.1 Covenants Run With Land.................................................................:.......................29 5.3.2 Release of Operating Covenants. ...................... .........................................................29 SECTION 5.4 OBLIGATION TO REFRAIN FROM DISCRIMINATION..............................................30 SECTION 5.5 FORM OF NON-DISCRIMINATION AND NON-SEGREGATION CLAUSES. .................30 5.5.1 In deeds:.....................................................................................................................31 5.5.2 In leases:.....................................................................................................................31 5.5.3 In contracts:.................................................................................................................31 5.5.4 Covenants Run With Land.............................. . . . ........................................................31 ISI SECTION 5.6 MAINTENANCE CONDITION OF THE PROPERTY. ..................................................31 5.6.1 Maintenance Standard................................................................................................31 5.6.2 Maintenance Deficiency. ...........................................................................................32 5.6.3 Graffiti....................................................................................... ............32 5.6.4 Security Interest. ........................................................................................................33 5.6.5 Term of Maintenance Covenant.............:...................................................................33 SECTION 5.7 DEVELOPER COVENANT TO DEFEND AGREEMENT..............................................33 SECTION 5.8 ENVIRONMENTAL INDEMNITY OF THE AGENCY BY THE DEVELOPER. .................34 5.8.1 Indemnity...................................................................................................................34 5.8.2 Cost and Expenses. ....................................................................................................34 5.8.3 Payments.....................:..............................................................................................34 SECTION5.9 INSURANCE. ........................................................................................................34 5.9.1 Workers' Compensation Insurance............................................................................35 5.9.2 Property Casualty Insurance. .....................................................................................35 5.9.3 Commercial General Liability Insurance...................................................................35 5.9.4 Automobile Liability Insurance. ................................................................................36 5.9.5 Professional Errors and Omissions Insurance............................................................36 5.9.6 Contractor's Insurance...............................................................................................36 5.9.7 Liability Insurance. ....................................................................................................37 5.9.8 Survival......................................................................................................................37 ORANGETHULL147478.12 i 3.7.3 Authorization of Contractor.......................................................................................23 SECTION 3.8 RECORDATION AND DISTRIBUTION OF DOCUMENTS...........................................23 SECTION 3.9 ESCROW CLOSING COSTS,TAXES AND TITLE POLICY PREMIUM.........................24 SECTION 3.10 ESCROW CANCELLATION CHARGES................................................................24 SECTION 3.11 -ESCROW CANCELLATION. ...............................................................:...............24 3.11.1 Cancellation Instructions. ......................................................................................24 3.11.2 Return of Funds and Documents............................................................................24 ARTICLE IV PROJECT DEVELOPMENT.................................................................................25 SECTION 4.1 CONSTRUCTION START AND COMPLETION OF PROJECT. .....................................25 4.1.1 Recordation of Notice of Completion........................................................................25 4.1.2 Inspections. ......:.........................................................................................................25 4.1.3 Licenses, Permits and Authorizations........................................................................25 SECTION 4.2 PROJECT COMPLETION DATE EXTENSION. ..........................................................25 SECTION 4.3 DEVELOPER CHANGES TO PROJECT PLANS AND SPECIFICATIONS DURING COURSEOF CONSTRUCTION........................................................................................................25 SECTION 4.4 COMPLIANCE WITH LAWS...................................................................................26 SECTION 4.5 SCHEDULE OF PERFORMANCE.............................................................................26 SECTION 4.6 DEVELOPER ATTENDANCE AT AGENCY MEETINGS.............................................26 SECTION 4.7 AGENCY RIGHT TO INSPECT PROJECT AND PROPERTY........................................26 SECTION 4.8 PREVAILING WAGES. ..........................................................................................27 SECTION 4.9 CERTIFICATE OF COMPLETION............................................................................27 4.9.1 Developer's Request for Certificate of Completion...................................................27 4.9.2 Conclusive Determination. ...............................................:........................................28 4.9.3 Agency's Duty to Respond to Request.......................................................................28 4.9.4 Limitations.................................................................................................................28 ARTICLE V SPECIAL REDEVELOPMENT COVENANTS OF THE DEVELOPER .............28 SECTION 5.1 COVENANT TO MAINTAIN PROPERTY ON TAX ROLLS FOR 15 YEARS. ................28 5.1.1 Developer Covenant to Maintain on Tax Rolls. ........................................................29 5.1.2 Developer Covenent to Pay Property Tax Bills.........................................................29 SECTION 5.2 COVENANT TO OPERATE PROPERTY AND AGENCY RIGHT TO TERMINATE/RECAPTURE PROPERTY...........................................................................................29 ORANGEIEHULL147478.12 2.4.1 License and Indemnity Agreement. ...........................................................................15 2.4.2 No Waiver of Agency Obligations. ...........................................................................15 2.4.3 Due Diligence Investigation Conclusion Notice........................................................15 2.4.4 As Is, Where Is, Condition..........................................................................................16 2.4.5 Known Containments.................................................................................................16 SECTION 2.5 DEVELOPER TO OBTAIN ALL PROJECT APPROVALS.............................................16 2.5.1 Schedule of Entitlements. ......................... .17 ................................................... 2.5.2 Existing Project Entitlements.....................................................................................17 2.5.3 Governmental Requirements. ....................................................................................17 2.5.4 Independent City Authority. ......................................................................................17 2.5.5 No Financial Assistance.............................................................................................17 ARTICLE III JOINT ESCROW INSTRUCTIONS.............................. .18 ....................................... SECTION 3.1 OPENING OF ESCROW..........................................................................................18 SECTION 3.2 CONDITIONS TO CLOSE OF ESCROW.......................................................:............18 3.2.1 Developer's Conditions..............................................................................................18 3.2.2 Agency's Conditions. .................................................................................................19 SECTION 3.3 DEVELOPER'S ESCROW DEPOSITS. ......................................................................20 3.3.1 Purchase Price............................................................................................................21 3.3.2 PCO Report..............................................:.................................................................21 3.3.3 Acceptance of Agency Deed......................................................................................21 3.3.4 Notice of Agreement..................................................................................................21 SECTION 3.4 AGENCY'S ESCROW DEPOSITS.............................................................................21 3.4.1 Agency Deed..............................................................................................................21 3.4.2 FIRPTA Affidavit......................................................................................................21 3.4.3 Notice of Agreement..................................................................................................21 3.4.4 Form 593..................................................................................:.................................21 SECTION 3.5 CLOSING PROCEDURE. ........................................................................................21 SECTION 3.6 CLOSE OF ESCROW..............................................................................................22 SECTION 3.7 REMEDIATION AND DEMOLITIONHOLDBACK. ....................................................23 3.7.1 Developer's Written Estimate. ...................................................................................23 3.7.2 Agency Approval of Estimate....................................................................................23 ORANGEIEHULL\47478.12 - i ff 1.1.47 "Preliminary Title Commitment"....................................:........................................9 1.1.48 "Project"...................................................................................................................9 1.1.49 "Project Area" .........................................................................:................................9 1.1.50 "Project Completion Date" ......................................................................................9 1.1.51 "Property' ......................:................................................................:......................10 1.1.52 "Property Transfer"................................................................................................10 1.1.53 "Purchase Price"..................................................................................................:..10 1.1.54 "Record", "recorded", "recording", or "recordation"........................... 10 .................. 1.1.55 "Release"................................................................................................................10 1.1.56 "Release of Operating Covenants" ..............................................:.........................10 1.1.57 "Remediation and Demolition Holdback Amount"...............................................10 1.1.58 Intentionally deleted...............................................................................................10 1.1.59 "Schedule of Performance"....................................................................................10 1.1.60 "Scope of Development"........................................................................................10 1.1.61 "Title Company.. ...........................................:........................................................10 1.1.62 "Title Policy.. .........................................................................................................10 1.1.63 "Transfer"...............................................................................................................11 1.1.64 "Unavoidable Delay.. .............................................................................................11 1.1.65 "Un-Permitted Encumbrance" ...............................................................................11 ARTICLE II PROPERTY DISPOSITION....................................................................................11 SECTION 2.1 PURCHASE AND SALE..........................................................................................12 SECTION 2.2 PAYMENT OF PURCHASE PRICE...........................................................................12 2.2.1 Earnest Money Deposit..............................................................................................12 SECTION 2.3 TITLE AND SURVEY APPROVAL...........................................................................12 2.3.1 Preliminary Title Commitment..................................................................................12 2.3.2 Title Evidence............................................................................................................14 2.3.3 Tax Bills.....................................................................................................................14 2.3.4 Survey. .......................................................................................................................14 2.3.5 Developer's Title Notice. ...........................................................................................14 2.3.6 Title Policy.....................................................................................:...........................15 SECTION 2.4 DEVELOPER DUE DILIGENCE INVESTIGATIONS...................................................15 ORANGEIEHULL417478.12 1.1.16 "Due Diligence Investigation Conclusion Notice" ..................................................4 1.1.17 "Due Diligence Period"............................................................................................4 1.1.18 "Earnest Money Deposit" ........................................................................................4 1.1.19 "Effective Date" .................................:.. .................................:.................................4 1.1.20 "Environmental Claims"..........................................................................................4 1.1.21 "Environmental Laws".............................................................................................4 1.1.22 "Environmental Matters" .........................................................................................5 1.1.23 "Escrow" ..................................................................................................................6 1.1.24 "Escrow Closing Date" ............................................................................................6 1.1.25 "Escrow Holder" ......................................................................................................6 1.1.26 "Escrow Opening Date"...........................................................................................6 1.1.27 "Event of Default"...:................................................................................................6 1.1.28 "Executive Director"................................................................................................6 1.1.29 "Final Occupancy Date"..........................................................................................6 1.1.30 „FIRPTA Affidavit".....................................................................:...........................6 1.1.31 "Force Majuere.........................................................................................................7 1.1.32 "Form 593"...............................................................................................................7 1.1.33 "Governmental Agency'•..........................................................................................7 1.1.34 "Governmental Requirements" ................................................................................7 1.1.35 '.'Hazardous Substance"............................................................................................8 1.1.36 "Maintenance Deficiency.........................................................................................8 1.1.37 "Notice of Agreement" ............................................................................................8 1.1.38 "Occupancy Date"....................................................................................................8 1.1.39 •Party"......................................................................................................................8 1.1.40 "Parties" ...................................................................................................................8 1.1.41 "PCO Report"...........................................................................................................8 1.1.42 "Permitted Encumbrance"........................................................................................8 1.1.43 "Permitted Exceptions"............................................................................................9 1.1.44 "Permitted Transfer" ................................................................................................9 1.1.45 "Person" ....................................................................................................................9 1.1.46 "Pre-Closing Liquidated Damages Amount"...........................................................9 ORANGEIEHULL147478.12 5 i TABLE OF CONTENTS 2008 DISPOSITION AND DEVELOPMENT AGREEMENT......................................................1 (TARGET STORE REDEVELOPMENT PROJECT)....................................................................1 BYAND BETWEEN..................................................................:...................................................1 THE..................................................................................................................................................1 REDEVELOPMENT AGENCY OF THE CITY OF AZUSA....................................................:...1 A PUBLIC BODY, CORPORATE AND POLITIC. ......................................................................1 AND.:..........................:...............:.........................:..........................................................................1 TARGETCORPORATION ..........................................................:..........................:......................1 A MINNESOTA CORPORATION......................................:.............................................:............1 [DATED AS OF 2008 FOR REFERENCE PURPOSES ONLY] ............................1 ARTICLEI DEFINITIONS ..................................................................:..................:......................2 SECTION1.1 DEFINED TERMS....................................................................................................2 1.1.1 "Affiliate"...........................................:..:.........:...................:........................................2 1.1.2 "Agency Deed" ............................................................................................................2 1.1.3 "Agency Parties"..........................................................................................................2 1.1.4 "Agency Party" ............................................................................................................2 1.1.5 "Agency's Title Notice Response"..............................................................................2 1.1.6 CEQA.. ................................................................................................................ 1.1.7 "Certificate of Completion" .........................................................................................2 1.1.8 "City" ...........................................................................................................................3 1.1.9 "Claims"...............................................:....................:..................................................3 1.1.10 "Close of Escrow"....................................................................................................3 1.1.11 "Control" ..................................................................................................................3 1.1.12 "Controlling" and "Controlled"................................................................................3 1.1.13 "Developer's Title Notice".......................................................................................3 1.1.14 "Developer's Title Notice Waiver" ..........................:...............................................3 1.1.15 "Due Diligence Investigations".....................................................:..........................3 ORANGEEHULD47478.12 of the Agreement, the Agency, its employees and agents shall have the right to reenter and take possession of all or any portion of the property and any improvements on or to the property, without further notice or compensation to the developer. At the time of reconveyance, the Developer will have the right to remove any and all moveable goods, inventory and/or fixtures, and the Agency will provide compensation to Developer as provided for in the Agreement. Sincerely, Signature Block cc: Michelle L. Gierke, Target Corporation Elizabeth Wagner Hull, Best Best &Krieger, LLP Exhibit'7" ORANGEIEHULU47478.12 Form of Written Recapture Notice APPROPRIATE LETTERHEAD Date Target Corporation Property Development Attention: Real Estate—Existing Stores/Purchase Agreement/Azusa, CA 1000 Nicollet Mall, TPN— 12 Minneapolis, MN 55403 Facsimile: (612) 761-3735 Re: Target Store Redevelopment Project: Written Recapture Notice Dear Sir/Madam: Section 8.3 of the 2008 Disposition and Development Agreement (Target Store Redevelopment Project) by and between Redevelopment Agency of the City of Azusa ("Agency") and Target Corporation ("Developer"), dated ("Agreement") provides that if Developer is in violation of the covenants in Section 4.1, 5.1, or 5.2 of the Agreement Agency has the right, at its sole option, to reenter and take possession of the Property with all improvements thereon, and to terminate and revest in the Agency the property conveyed pursuant to the Agreement ("Right of Recapture"). Agency has made an initial determination that Developer is in violation of one or more of the above mentioned covenants. Agency hereby provides Developer with written notice ("Written Recapture Notice") of the intent to terminate/recapture the Property as provided for in Section 8.3 of the Agreement. The Agency Governing Board and the City Council will hold a joint public hearing on to discuss this matter. At that public hearing Developer will have an opportunity to be heard on the decision to exercise the Right of Recapture. If the Agency determines, after the joint public hearing, to exercise its Right of Recapture, it will provide Developer with a written determination ("Written Recapture Determination") of its decision regarding whether to exercise the Right of Recapture following the public hearing, including the identification of the event or violation triggering the Agency's exercise of its Right of Recapture. Upon receipt of the Written Recapture Determination of the Agency's intent to recapture the Property, Developer shall convey fee title to the Property and all improvements on or to the Property to the Agency by grant deed, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Pursuant to Section 8.3 Exhibit"J" Form of Written Recapture Notice ORANGEEHULL47418.12 EXHIBIT 6°J" FORM OF WRITTEN RECAPTURE NOTICE [To be attached behind this cover page] Exhibit"J" Form of Release of Operating Covenants ORANGE\EHULL\47478.12 . WHEREAS, the Agency has conclusively determined that the obligations of the Developer under Sections 5.1 and 5.2 of the Agreement have been satisfactorily completed. NOW THEREFORE, 1. As provided in the Agreement, the Agency does hereby certify that the obligations of the Developer under Sections 5.1 and 5.2 of the Agreement have been fully performed and satisfactorily completed. 2. The conditions and all rights and obligations under Sections 5.1 and 5.2 of the Agreement are terminated with respect to the Property. 3. After recordation of this Release of Operating Covenants, any person or entity then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the Property will not (because of such ownership, purchase lease, or acquisition) incur any obligation or liability under the Agreement, except that such party shall be bound by any and all of the covenants, conditions, and restrictions, provisions or limitations set forth in the Grant Deed, dated 2009. 4. The Recitals above are incorporated in full as part of the substantive text of this Release of Operating Covenants. IN WITNESS WHEREOF, the Agency has executed this release this day of 20 . REDEVELOPMENT AGENCY OF THE Azusa, a public body corporate and politic By: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: Agency Counsel Exhibit' ' Form of Release of Operating Covenants ORANGETHULU47478.12 Form of Release of Operating Covenants WHEN RECORDED RETURN TO THE AREA ABOVE IS RESERVED FOR RECORDER'S USE No recording fee required; this document exempt from fee pursuant to Section 6103 of the California Government Code RELEASE OF OPERATING COVENANTS WHEREAS, on or about 200_ the Redevelopment Agency of the City of Azusa, a public body corporate and politic, hereinafter referred to as "Agency," and Target Corporation, a Minnesota corporation, hereinafter referred to as "Developer," entered into that certain Disposition and Development Agreement (the "Agreement"), dated 2008, providing for the development of certain real property (the "Property") situated in the City of Azusa, California; WHEREAS, the Agreement requires that the Agency furnish Developer with a Release of Operating Covenants upon completion of its obligation to (1) maintain the Property on the tax rolls for the fifteen year period following the Final Occupancy Date (as that term is defined in the Agreement pursuant to Section 5.1 of the Agreement) and (ii) to operate the Improvements (as that term is defined in the Agreement) on the Property as a commercial/retail use operated by Target Corporation for a period of fifteen years following the Final Occupancy Date pursuant to Section 5.2 of the Agreement, and that said Release be in such form as to permit recordation in the County Recorder's Office; WHEREAS, this Release shall be conclusive determination of satisfactory completion of the Developer's obligations under Sections 5.1 and 5.2 of the Agreement, as required by the Agreement; and Exhibit"I" Form of Release of Operating Covenants ORANGEIEHULLW7478.12 EXHIBIT "I" FORM OF RELEASE OF OPERATING COVENANTS [To be attached behind this cover page] Exhibit"I" Form of Release of Operating Covenants ORANGE\EHULL\47478.12 EXHIBIT "H" SCHEDULE OF ENTITLEMENTS 1. Tentative Tract Map 070189 to consolidate four lots into one for development, approved by City Council on August 4, 2008; 2. An Overlay Zone that amends development standards for the subject property (ZCA 228 & Z-2008-01), adopted by City Council on September 2, 2008; 3. Use Permit to allow to allow a large retail department store in the DTV—Downtown Transit Village zone (UP 2008-08), approved by City Council on August 4, 2008; 4. Use Permit to allow the sale of beer and wine for off-site consumption within the retail store (UP-2008-03), approved by City Council on August 4, 2008; and 5. Design Review to allow construction of a 159,000. square foot retail department store (DR 2007-65), approved by City Council on August 4, 2008. Exhibit"H" Schedule of Entitlements ORANGEEHULL147478.12 , Environmental Documents provided to Developer on receipt of which is acknowledged. REPORT NAME: DATED: AUTHOR: Phase I Environmental Assessment Report 10/2006 SCS Engineers (110-190 W. 9th Street) Soil Vapor Survey 11/30/06 SCS Engineers (110-190 W. 9th Street) 12/01/06 Phase I Environmental Assessment Report 10/2006 SCS Engineers (800 & 802 N. San Gabriel Avenue) Phase I Environmental Assessment Report 10/2006 SCS Engineers (809 N. Azusa) Soil Sampling Assessment Report 1/2007 SCS Engineers (809 N. Azusa) Additional Arsenic Soil Assessment Report 3/2007 SCS Engineers (800 & 802 N. San Gabriel Avenue) Soil Sampling Assessment Report 1/2007 SCS Engineers (110-190 W. 9th Street) Soil Vapor & Soil Sampling Assessment Report 1/2007 SCS Enginners (800 & 802 N. San Gabriel Avenue) Soil Vapor Survey 11/30/06 SCS Engineers (110-190 W. 9th Street) 12/01/06 Exhibit"G" Environmental Disclosures ORANGETHULL\47478.12 EXHIBIT "G" ENVIRONMENTAL DISCLOSURES [To be attached behind this cover page] Exhibit"G" Environmental Disclosures ORANGE\EHULL\47478.12 EXHIBIT "A-I" TO CERTIFICATE OF COMPLETION Leal Description of Property [To be attached behind this cover page] Exhibit"F" Form of Certificate of Completion ORANGE\EHULLW 7478.12 Chairperson Secretary Exhibit"F" Form of Certificate of Completion ORANGETHULL447478.12 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Name: Address: Address: (Space above for Recorder's Use Only) REDEVELOPMENT AGENCY OF THE CITY OF AZUSA CERTIFICATE OF COMPLETION (Target Store Redevelopment Project) We, Chairperson and , Secretary of the Redevelopment Agency of the City of Azusa(the "Agency") certify that: By its Resolution No. _, adopted and approved the Agency resolved: Section 1. The (the "Project") required to be constructed in accordance with that certain 2008 Disposition and Development Agreement (Target Store Redevelopment Project) (the "Agreement") dated 2008, by and between the Agency and Target Corporation, a Minnesota Corporation (the "Developer"), on that certain real property specifically described in the legal description(s) attached to this Certificate of Completion as Exhibit "A4" (the "Property"), is complete in accordance with the provisions of the Agreement. Section 2. This Certificate of Completion constitutes conclusive evidence of the Agency's determination of the Developer's satisfaction of its obligation under the Agreement to construct and install the Project on the Property, and the covenants set forth in Article 4, including but not limited to Section 4.1, of the Agreement are hereby terminated, released and have no further force of effect., Notwithstanding any provision of this Certificate of Completion, the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement, including but not limited to Section 4.8, and the Deed(s) by which the Property was conveyed to the Developer by the Agency under the Agreement. The Agreement is an official record of the Agency and a copy of the Agreement may be inspected in the office of the Secretary of the Agency located at 213 East Foothill Blvd., Azusa, California, during the regular business hours of the Agency. DATED AND ISSUED this_day of Exhibit"F" Form of Certificate of Completion ORANGEIEHULL147478.12 EXHIBIT "F" FORM OF CERTIFICATE OF COMPLETION [To be attached behind this cover page] Exhibit"F" Form of Certificate of Completion ORANGEIEHULL47478.12 - EXHIBIT "A-1" TO NOTICE OF AGREEMENT Propertv Legal Description [To be attached behind this cover page] Exhibit"E" Form of Notice of Agreement ORANGE\EHULL147478.12 IN WITNESS WHEREOF, the Agency and the Developer have executed this 20 Disposition and Development Agreement (_ ) by and through the signatures of their duly authorized representative(s) set forth below: DEVELOPER: a Dated: By: Name: Its: Dated: By. Name: Its: AGENCY: a Dated: By. Name: Its: ATTEST: By: Agency Secretary APPROVED AS TO FORM: BEST BEST & KRIEGER LLP By: Agency Counsel [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] Exhibit`B" - Form of Notice of Agreement ORANGEIEHULLW 7478.12 RECORDING REQUESTED BY AND ) WHEN RECORDED MAIL TO: ) (Space Above Line For Use By Recorder) [Recordation of this Document Is Exempt From Fees Payable to the Recorder Under Government Code Section 27383] REDEVELOPMENT AGENCY OF THE CITY OF AZUSA Notice of Agreement 2008 Disposition and Development Agreement (Target Store Redevelopment Project) TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of ' 20, Target Corporation, a Minnesota Corporation (the "Developer"), and the Redevelopment Agency of the City of Azusa, a public body, corporate and politic (the "Agency"), entered into an agreement entitled "2008 Disposition and Development Agreement Target Store Redevelopment Project" (the "Agreement"). A copy of the Agreement is on file with the Secretary of the Agency and is available for inspection and copying by interested persons as a public record of the Agency at the Agency's offices located at 213 East Foothill Blvd., Azusa, California, during the regular business hours of the Agency. The Agreement affects the real property described in Exhibit "A-1" attached to this Notice of Agreement (the "Property"). The meaning of defined terms, indicated by initial capitalization, used in this Notice of Agreement shall be the same as the meaning ascribed to such terms in the Agreement. PLEASE TAKE FURTHER NOTICE that the Agreement contains certain community redevelopment covenants running with the land of the Property and other agreements between the Developer and the Agency affecting the Property, including, without limitation, covenants to construct and operate a commercial/retail use operated by Target Corporation and maintain the property on the tax rolls, including a right of the Agency to recapture the property under certain circumstances, and on-going obligations to maintain the property and to refrain from discrimination and segregation, all as set forth in the Agreement. Exhibit"E" Form of Notice of Agreement ORANGE\ERULL�47478.12 EXHIBIT "E" FORM OF NOTICE OF AGREEMENT [Attached behind this cover page] Exhibit"E" ORANGE\EHULL\47478.12 Form of Notice of Agreement CERTIFICATE OF ACCEPTANCE OF AGENCY DEED AND COMMUNITY REDEVELOPMENT COVENANTS The undersigned hereby acknowledges acceptance by TARGET CORPORATION, a Minnesota Corporation, the Grantee in the within Agency Deed, of the delivery of the subject Property described in the within Agency Deed from the Redevelopment Agency of the City of Azusa, subject to all of the community redevelopment covenants expressly set forth or incorporated in the within Agency Deed. GRANTEE TARGET CORPORATION, A MINNESOTA CORPORATION By: Name: Its: [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] Exhibit"D" Form Of Agency Deed ORANGE\EHULL\47478.12 EXHIBIT "1" TO AGENCY DEED Property Legal Description AGENCY DEED-EXHIBIT"1%PROPERTY LEGAL DESCRIPTION ORANGEIEHULL47478.12 2 AGENCY Redevelopment Agency of the City of Azusa By Executive Director [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] 0RANGDEHULU47475.12 occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased." 9.15.3 In contracts. "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex; marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, .location, number, use, or occupancy, of tenants, lessees, sub-lessees, sub-tenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument." Section 6. Covenants Run with the Land of the Property. Each of the covenants and agreements contained in this Agency Deed touch and concern the Property and each of them is expressly declared to be a community redevelopment covenant that runs with the land for the benefit of the Agency or the City of Azusa, as the successor public agency to the Agency, and such covenants run with the land in favor of the Agency for the entire period that such covenants are in full force and effect, regardless of whether the Agency is or remains an owner of any land or interest in land to which such covenants relate. The Agency, in the event of any breach of any such covenants, has the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in the Agreement or by law. The covenants contained in this Agency Deed are for the benefit of and are enforceable only by the Agency or the City of Azusa, as the successor public agency to the Agency, and shall survive the close of Escrow, execution and recordation of this Agency Deed and the issuance and recordation of each and every Certificate of Completion, for the time period set forth for each covenant in Section 1 above. Section 7. Costs and Attorneys' Fees for Enforcement Proceeding. If legal proceedings are initiated to enforce the rights, duties or obligations of any of the covenants set forth in this Agency Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable attorney fees and costs from the other party in addition to any other damages or relief obtained in such proceedings. Section 8. Effect of Unlawful Provision; Severability. In the event that any provision of this Agency Deed is held to be invalid or unlawful by a final judgment of a court of competent jurisdiction, such invalidity shall not affect the validity of any other provision of this Agency Deed. IN WITNESS WHEREOF, the Agency has caused this Agency Deed to be executed by its authorized representative(s) on this_day of 2008. ORANGE\EHULL\47478.12 r warranties, expressed or implied, as to the environmental or other physical condition of the Property, the presence or absence of any patent or latent environmental or other physical condition on or in the Property, or any other matters affecting the Property. Section 3. Prohibited Uses. The Grantee covenants and agrees for itself, its successors and assigns that the following uses on the Property are prohibited: bars or businesses with "on-sale" alcoholic beverage sale licenses (other than as part of a hotel or restaurant), coin laundries or laundromats (other than as may be provided at a hotel), used clothing stores, used appliance stores, used furniture stores or rummage stores, churches or other religious institutions, massage parlors, or so-called adult book or adult entertainment establishments. Section 4. Obligation to Refrain from Discrimination. The Grantee covenants and agrees for itself, its successors, its assigns and every successor-in-interest to the Property, or any portion thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Grantee, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property. Section 5. Form of Non-discrimination and Non-segregation Clauses. The Grantee covenants and agrees for itself, its successors, its assigns, and every successor-in-interest to the Property, or any portion thereof, that the Grantee, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the Property shall contain or be subject to substantially the following non- discrimination or non-segregation covenants: 9.15.1 In deeds. "The Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, _ nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 9.15.2 In leases. "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming-under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, ORANGETHULL147478.12 - - _ AGENCY AGENDA ITEM TO: CHAIRMAN AND MEMBERS OF THE REDEVELOPMENT AGENCY BOARD FROM: KURT E. CHRISTIANSEN, AICP V C` . ECONOMIC/COMMUNITY DEVELOPMENT DIRECTOR VIA: F.M. DELACH, CITY MANAGER DATE: NOVEMBER 17,2008 SUBJECT: CONSIDERATION OF MODIFICATION TO THE DOWNPAYMENT ASSISTANCE PROGRAM REGULATIONS ALLOWING THE PURCHASE OF AFFORDABILITY COVENANTS RECOMMENDATION It is recommended that the Redevelopment Agency Board of the City of Azusa("Agency")adopt the revised Down Payment Assistance Program("DPAP")guidelines to allow for the purchase of affordability covenants from builders and/or developers. EXECUTIVE SUMMARY Approval of proposed action would allow Agency Staff to purchase affordability covenants with DPAP funds. Additional funds will not be expended, since affordability covenants will be purchased in lieu of down payment loans. BACKGROUND In an effort to increase the supply of affordable homeownership opportunities available to low-and moderate-income households in the City of Azusa("Cit)");Agency adopted the DPAP on September of 2007. The program provides deferred non-interest bearing down payment loans to qualified low-and moderate-income households. The program is funded through the Redevelopment Agency 20% Low/Mod Housing Set-Aside Funds. The purpose of the DPAP is to provide Azusa residents, in particular those members of the community that contribute to the vitality of the City,the opportunity to purchase an affordable home within the City. The goal of the DPAP is to provide assistance to approximately five(5)households in each program year via a deferred loan for up to $140,000. Borrowers must be first-time homebuyers, defined as someone who has not had an ownership interest in a property during the last five (5)years. Priority will be given to eligible borrowers who live or work in the City of Azusa for a Chairman and Members of the Redevelopment Agency Board November 17,2008 Doam Payment Assistance Program—Program Modifications . Page 2 of 2 minimum of twelve (12) contiguous months prior to applying for the program. Program guidelines comply with Health and Safety Code Section 50052.5, which states that lower income households cannot spend more than 30% of the annual income on housing expenses. Moderate income households cannot spend more than 35% of their annual income on housing expenses. Agency Staff is now proposing to purchase 45-Year Affordability Covenants("covenants")with DPAP Funds from Builders/Developers for the benefit of approved DPAP applicants. No additional funds would be expended, since the covenants would be purchased in-lieu of a down payment loan.A down payment loan would not be needed since the covenants require that the home be sold at an affordable price. The maximum price which the Agency will pay for a covenant will be$140,000, consistent with current DPAP guidelines. The purchase of covenants reduces the sales price of a home, lowers the property tax paid by the property owner, and thus makes the total housing cost more affordable to the DPAP participant. Agency Staff recommends approval of proposed action to increase the tools at the Agencies' disposal to increase the supply of affordable homes in the City. FISCAL IMPACT There is no fiscal impact with the proposed modifications. .Attachment: Revised Down Payment Assistance Program Guidelines x Redevelopment Agency of the City of Azusa yOF,g2 Down Payment Assistance UP, First-Time Homebuyer Program (DPAP) .. 213 East Foothill Boulevard c�tra�P* Azusa, CA 91702 626-812-5299 Getting Started To get started, pick up your application at the Redevelopment Agency, and a copy of the approved lenders who can process your loan application. The approved lender you select will submit to the Agency a pre-screened certificate to certify that you qualify for the program, along with your completed application. An Agency Loan Review Committee will review all completed applications that have an accompanying pre-screened certificate, and make a final determination regarding the approval or denial of your application. Program Overview The program is designed to assist credit worthy applicants who wish to purchase their first home within the City ofAzusa. Program Guidelines 2008 HCD Income Limits for Los Angeles County , Number of Persons in Household Income Category 1 1 2 =:T4_ 4 5 6 7 8 Lower(30%of AMI) $ 42,450 $ 48,500 $ 54,600 $ 60,650 $ 65,500 $ 70,350 $ 75,200 $ 80,050 Moderate(120%of AMI) $ 50,300 5 57.400 $ 64,600 $ 71,800 $ 77,500 $ 83,300 $ 89,000 $ 94,800 • An applicant must qualify as either lower income or moderate income. The applicant's household income cannot exceed 2008 HCD income limits for Los Angeles county (see table above). Lower income borrowers cannot spend more than 30% of their gross annual income on their total housing expenses, and moderate income borrowers cannot spend more than 35% of their gross annual income on their total housing expenses. • Should funding be available, lower income applicants must secure a second mortgage from Los Angeles County Community Development Commission (LACDC) HOP program. The City of Azusa will grant a third mortgage to lower income applicants, if approved. • Maximum sales price/value of the property cannot exceed $437,000 for condominium and $570,000 for single family residence. • Single family homes, condominiums, and town homes are eligible for purchase under the Down Payment Assistance Pro.ram Application 11/13/2008 program. Multiple family residences, such as duplexes and triplexes do not qualify for the DPAP. • Down payment mortgage loans are provided on first-come, first-served basis to qualified first-time homebuyers. • Up to $120,000 for regular applicants and $140,000 for community pillars, in the form of a second or third mortgage (loan deferred for 45 years) can be provided by the Agency for down payment assistance. • 5%borrower contribution is required(3% from Ca1HFA is allowed). • Adjustable interest rate loans are not allowed under this program. • Applicants must be first-time buyers, defined as: someone who has not had an ownership interest in a property during the last five (5) years. • Priority will be given to applicants who qualify as "Community Pillar", and/or as an "Azusa Resident". o Community Pillars are defined as follows: • Full-Time, Credentialed K-12 Teachers, Counselors, Vice-Principals and Principals ■ Full-Time, K-12 Teachers; Counselors, Vice-Principals and Principals of Azusa Private Schools • Full-Time, Registered Nurses and Licensed Vocational Nurses • Full-Time Police Officers • Adjunct Professors of Azusa Pacific University and Citrus College ■ Full-Time Firefighters • Individuals who have graduated from an accredited Four Year College Three (3) Years Prior to their Loan Application. o Azusa residents are defined as follows: Borrowers who live or work in the City of Azusa for a minimum of one year prior to applying for the assistance. ' • The City's equity share will be repaid by the borrower if any of the following occur within 45 years of the loan origination: (1) the borrower sells the property; (2) the borrower transfers title/ownership of the property to a non-family member; (3) the borrower no longer occupies the property as their primary residence; (4) the borrower refinances their first deed of trust without the City's approval. • Rooms or any part of the home can not be subleased at any time during the 45-years that the City second loan remains in place. • Borrowers will be required to attend eight (8) hours of Home Buyer Education at an approved provider facility. • Once an applicant has been approved for a DPAP loan, the Agency may use DPAP Program funds, in lieu of lending the Program Participant funds for the purchase price, to,purchase a 45-Year Affordability Covenant directly from Builders and or Developers, for up to $120,000. The DPAP Program Participant that purchases an Affordable Home, which was bought via an Affordability Covenant, will execute a note, a deed of trust, and a regulatory agreement to secure the Affordability Covenant. All other DPAP program guidelines apply to Program Participants that purchase Affordable Homes, purchased via an Affordability Covenant. Down Payment Assistance Program Application 11/13/2008 • The home should meet the following occupancy guidelines: Housindelines, Minimum No. of Maximum No. of No. of Bedrooms Persons in Persons in Household Household Studio 1 1 1 Bedroom 1 2 2 Bedrooms 1 4 3 Bedrooms 2 6 4 Bedrooms 3 8 5 Bedrooms 4 10 6 Bedrooms 5 12 Application Process Overview • Applications will be reviewed and funded on a first-come, first-served basis. • Applicants will be reviewed by an Agency Loan Review Committee, and they will provide a conditional approval/denial letter via mail approximately 2 weeks after receipt of completed application and pre-screened certificate. • The City is required to conduct property inspections for the purpose of identifying local and state code violations, including compliance with health quality standards. Under its Municipal Code, the City requires an inspection whenever a property is sold or transferred. If the inspection results in the identification of one or more code violations, those violations must be repaired or remedied within the agency's prescribed time frame. Failure to abide by this time frame will often result in the issuance of fines. Therefore, the City reserves the right to deny a previously approved loan if a home selected contains major code violations (including but not limited to illegal and unpermitted additions). • A copy of escrow instructions must be provided to the City at the time the initial City inspection is requested. • All City-required repairs must be completed prior to the funding of the City loan. • 45-60 day escrows are encouraged to accommodate the completion of any City-required repairs. • Agency Loan Review Committee will only review completed applications with pre-screened certificates when funding is available. If program funds are depleted, and a completed application is received by the Agency along with a pre-screened certificate, then a waiting list will be created, and applications will be reviewed according to the waiting list once funding becomes available*. *City Council approval will be required to re-fund this program once initial funds are depleted. Down Payment Assistance Program Apptication II 11/13/2008 Application Checklist In order to assist the City of Azusa staff in reviewing and processing your application as quickly as possible, we will require the following information. Please return the following items: 1. Signed application including the following attachments: • Exhibit A (Current Monthly Income Chart) • Exhibit B (Household Composition Sheet) • Exhibit C (Sample Lead-Based Paint Purchase Contract Verbiage) • Exhibit D (Federal Income Tax Return Filing Statement, If Applicable) • Exhibit E (Authorization To Receive And Review A Copy Of Your Credit Report) • Exhibit F (Equity Share Disclosure) • Exhibit G (Monitoring Disclosure) 2. COPY of last three (3) years' federal income tax return, with W-2s for all family members 3. COPY of three (3) most recent paycheck stubs. Self-employed must provide a year-to-date profit and loss statement from a certified public accountant. 4. COPY of three (3) most recent savings account statements and six (6) most recent checking accounts statements for all accounts (all pages) demonstrating evidence of your 5% minimum contribution. 5. COPY of purchase and sales agreement and/or escrow instructions (if any) 6. COPY of first mortgage loan approval commitment letter 7. COPY of final divorce decree (if applicable) 8. COPY of other income documentation (supply a copy of the award letter or a copy of the check or direct deposit bank statement): • Child Support (If Child Support Has Been Ordered But Never Or Periodically Received Please Provide Proof From The District Attorney Office) • Alimony • Social Security, SSI • Retirement • Disability • AFDC • Proof Of Income For All Persons Living In Household • Interest On Savings/Income Earning Accounts. 9. Include copy of a credit report (if applicable) 10. COPY of your 8 hours of Home Buyer Education Class 11. ORIGINAL pre-screened certificate from an approved lender (See Exhibit n ***************************************IMPORTANT************************** * Please submit your original application with all the exhibits &photocopies of items 2 through 8. The city cannot be responsible for returning or safeguarding original personal documents for items 2 through 8. Down Payment Assistance Program Application 11/13/2008 DoWn Payment Homebuyer ogApplication Application Received Application #: Approved: Denied: Comments: Date: Time: Applicant n on Applicant Name: Primary Number: Social Security Number: Date Of Birth: Co-Applicant Name: Primary Number: Social Security Number: Date Of Birth: Home Address: Mailing Address (If Different): Marital Status: ❑ Married ❑ Single ❑ Divorced ❑ Legal Separation ❑ Widow Applicant Current Employer: Work Number: Employer's Address: Co-Applicant Current Employer: Work Number: Employer's Address: Down Payment Assistance Program Application 11/13/2008 Down Payment Homebuyer'Program pp Balance: Balance: Monthly Payment: Checking Acct: $ Credit Card: Savings Acct: $ Credit Card: 401 Acct: $ Credit Card: Life Insurance $ Credit Card: Cash Value: Ira Acct: $ Student Loan: Pension Acct: $ Student Loan: Other: $ Auto Loan: Other: $ Auto Loan: Other $ Other: Total: $ Total: Other Assets ' 'Other Liabilities Balance: Balance: Monthly Payment: Stocks: $ Other: Bonds: $ Other: Life Insurance $ Other: Business Owned: $ Other: Total: Total: Have you or any other person listed on this application purchased or had ownership interest in residential real estate within the last five years? Are all debts listed above? Are any of your debts past due? Have you or the co-applicant filed for bankruptcy in the last 3 years? Uwe have attached: ❑ First Mortgage Approval Letter ❑ HOP Reservation Letter ❑ Escrow Instructions ❑ Purchase & Sale Agreement Down Payment Assistance Program Application 11/13/2008 . li Payment imelbu�er I rogram Application By signing below you: 1) Are aware that your application must be submitted to the Redevelopment Agency of the City of Azusa along with a pre-screened certificate from an approved lender to be considered for a loan. 2) Are aware and understand that the City reserves the right to reverse any loan approval based on additional information discovered that proves the applicant is not eligible for assistance. 3) Certify that the information contained in this application including all exhibits is true and complete as of the date below. 4) Agree that this application is the property of the City and need not be returned to you. 5) Authorize the City to verify the accuracy and completeness of all information above from any source the city chooses. 6) Certify that you have not had ownership'interest in a residential unit within the last five years. IF ANY INFORMATION IS WITHHELD, FALSIFIED, OR WILLFULLY MISREPRESENTED, THE CITY RESERVES THE RIGHT TO REFUSE FUNDING, OR TO CALL THE LOAN DUE IMMEDIATELY UPON DEMAND. ACCEPTANCE OF THIS APPLICATION BY THE CITY DOES NOT MEAN YOU HAVE BEEN APPROVED FOR A LOAN. THE CITY WILL NOTIFY YOU IN WRITING IF YOU HAVE BEEN APPROVED OR DENIED FOR A LOAN. IF YOU ARE MARRIED AND APPLYING FOR CREDIT IN YOUR NAME ALONE, THIS AUTHORIZATION EXTENDS TO VERIFY INFORMATION ABOUT YOUR SPOUSE. Applicant Signature Date Co-applicant Signature Date All financial information provided is confidential and shall not be a part of public record. For more information call: Redevelopment. Agency of the City of Azusa Sandra Benavidez: 626-812-5299 Down Payment Assistance Program Application 11/13/2008 . . TTJ as List-411 Sources Of Household Income) Source Applicant Co-Applicant Other Household Total Monthly Members 18 Or IDCOm¢ Older Salary/Base Pay Overtime.Pay Commissions Fees Tips $ $ $ $ Interest And Or/Dividends Bonus $ $ $ $ Rental Income Social Security/Pension/Retirement Alimony/Child Support Welfare Other Other Total Monthly Household Income: $ Down Payment Assistance Program Application 11/13/2008 i OUSEHOLD COMPORT1,0N ist Name Relationship Age Social Security Number Applicant Please check the racial group which describes your household(optional): ❑ White ❑ African American ❑ Native American ❑ Asian ❑ Latino ❑ Other: ❑ Alaska native ❑ Native Hawaiian or other Pacific Islander Does anyone live with you now who are not listed above? ❑Yes ❑ No Does anyone plan to live with you in the future who are not listed above? ❑Yes ❑ No Please explain any yes answers to the questions above: The information provided above is true and complete to the best of my/our knowledge and belief. I/we consent to the disclosure of income and financial information from my/our employer and financial reference for purposes of income and asset verification related to my/our application. Applicant Date Co-applicant Date Down Payment Assistance Program Application 11/13/2008 Sample Lead-Based .ge This contract is contingent upon a risk assessment or inspection of the property for the presence of lead-based paint and/or lead-based paint hazards at the purchaser's expense until 9 p.m. on the tenth calendar-day after ratification. This ending date is: . [Insert date 10 days after contract ratification or a date mutually agreed upon]. This contingency will terminate at the above predetermined deadline unless the purchaser (or purchaser's agent) delivers to the seller (or seller's agent) a written contract addendum listing the specific existing deficiencies and corrections needed, together with a copy of the inspection and/or risk assessment report. The seller may, at the seller's option, within days after delivery of the addendum, elect in writing whether to correct the condition(s) prior to settlement. If the seller will correct the condition, the seller shall furnish the purchaser with certification from a risk assessor or inspector demonstrating that the condition has been remedied before the date of the settlement. If the seller does not elect to make the repairs, or if the seller makes a counteroffer, the purchaser shall have days to respond to the counter-offer or remove this contingency and take the property in "as is" condition or this contract shall become void. The purchaser may remove this contingency at any time without cause. Seller name: Date: Seller name: Date: Purchaser: Date: Purchaser: Date: Property Address: Down Payment Assistance Program Application 11/13/2008 XH1 ' , Federal (Subinit only if,applicable) Please complete the following if you did not file a federal income tax return for any of the last 3 years. I/we, (Print Your Name), did not file a federal income tax return for the following years: for one of the following reasons: 1. I/we were instructed by the internal revenue services that my/our income was not sufficient to file a federal income tax return. Please indicate the year: 2. I did not work, I was Please indicate the year(s): 3. Other: I/we, the above-named applicant(s), by signing below, hereby acknowledge, under penalty of perjury, and assert that the statement herein is true and correct, and that any false statement will be just cause for the City of Azusa to request the full repayment of any loan assistance provided through the program. Appticant/Household Member Signature Date Applicant/Household Member Signature Date Appticant/Household Member Signature Date Applicant/Household Member Signature Date Down Payment Assistance Program Application 11/13/2008 i Of Ybut.Credit Repori Program applicants and household members over the age of 18: Please complete the following for all persons 18 years of age and older who are living and will be living in the home purchased through the City of Azusa's First-time Down Payment Assistance Program. All persons in the household must obtain a social security number prior to being considered for assistance through the City of Azusa's First-time Down Payment Assistance Program. Please complete all names as shown on your social security card. 1. I/we hereby authorize the Redevelopment Agency of the City of Azusa to exchange information regarding my credit application for a down payment assistance/first-time homebuyer program loan, including any report from a credit reporting agency; and 2. Uwe hereby authorize the City of Azusa or its authorized representatives to obtain a credit report and/or title report in conjunction with my/our application for assistance through the city of Azusa's down payment assistance/first-time homebuyer program Name: Social Security Number: Signature: Date: Name: Social Security Number: Signature: Date: Name: Social Security Number: Signature: Date: Down Payment Assistance Program Application 11/132008 EXHI0 0 1 P 1 I/we hereby agree and understand that the agency will share a portion of the net profit I/we could make in a subsequent sales, based on the original assistance from the agency divided by the senior first trust deed loan amount of the home, net of any additional assistance provided by other agencies. The note will be due and payable upon the sale of the property, if the property is no longer occupied as my/our primary residence, an unapproved refinance or change of ownership to a non- family member before expiration of the 45 year term.An example of this equity share, as it would apply to a low-income program participant, is as follows: DPAP Equity Share Calculation Purchase �m Purchase Price $385,000 Closing Costs $15,000 Total Acquisition Cost 1$400,000 Financin ' - First Loan $260,750 Agency DPAP Loan $120,000 Borrower Contribution $19,250 Total Funding $400,000 E u' Share Calcula#ion, - Amount of Borrower's First Loan $260,750 Amount of Agency DPAP Loan $120,000 Percentage of Agency Assistance 46% ltquity hareppon Resale _ _ Sales Price $600,000 Equity $215,000 Agency's Share @46% $98,900 Borrower's Share @ 54% $116,100 Applicant/Household Member Signature Date Co-A Gcant/I3ousehold Member Signature Date ■ Down Pavment Assistance Program Application 11/13/2008 1 0 ' P I I/we hereby agree and understand that the agency will monitor annually to ensure the home has remained our primary residence. We will be required to mail to the agency a copy of our hazard insurance policy, home telephone bill, a copy of our property tax bill, and a copy of our Azusa light and water utility bill, in July of each year. In addition, the City or the Agency will monitor the general upkeep of the home purchased with Agency assistance. We agree to keep the home in good condition, with no excessive weeds, debris or chipped paint. Applicant/Household Member Signature Date Co-Applicant/Household Member Signature Date Down Payment Assistance Program Application 11/13/2008 _ Exhibit H: Homebuyer Education Providers Please note that some of the organizations listed below may charge a fee. L.A. Partners Patriotic Hall Seminars 1816 S. Figueroa Street Los Angeles, CA 90012 Seminar Registration: (323) 890-7190 L.A. Neighborhood Housing Services (LANHS) Provides a 12-hour Homebuyer Education Seminar 3926 Wilshire Boulevard, Suite 200 Los Angeles, CA 90010 Seminar Registration: (888) 895-2647 General: (213) 381-2862 Inglewood Neighborhood Housing Service (INHS) 335 E. Manchester Boulevard Inglewood, CA 90301 (310) 674-3756 West Angeles Community Development Corporation (WACDC) Provides a 12-hour Homebuyer Education Seminar 6028 S. Crenshaw Blvd. Los Angeles, CA 90043 (323) 751-3440, Extension 29 for homebuyer seminars Consumer Credit Counseling Service of Los Angeles 5628 E. Slauson Avenue Commerce, CA 90040 (323) 869-5157 www.cccsla.or for seminar schedule information Mothers of East Los Angeles (MELA) 3354 Olympic Blvd. Los Angeles, CA 90023 (323) 266-8832 Community Financial Resource Center 4060 S. Figueroa Street Los Angeles, CA 90037 (323) 233-1900 Down Payment Assistance Program Application - 11/13/2008 Exhibit I: Approved Lenders Coldwell Banker David Steven Company 631 N. Azusa Avenue Azusa, CA 91702 Tel: (626)334-9300 www.homenloan.com GEM Mortgage . Rainier (Ray) Sunga A Division of Golden Empire Mortgage, Inc. 664 Shoppers Lane, Suite A Covina, CA 91723 626-967-3236 626-221-2860 Provident Bank Mortgage Anthony Olague, 1200 East Route 66, 4102 Glendora, Ca 91740 Tel: (626) 963-8456 Wells Fargo Home Mortgage 4590 MacArthur Blvd#125 Newport Beach, CA 92660 Phone: (949) 809-2560 Down Payment Assistance Program Application 11/13/2008 e Guild Mortgage Company Patty Machun 9160 Gramercy Drive San Diego, CA 92123 (858) 560-6330 Down Payment Assistance Program Application 11/13/2008 J • , I ORDINANCE NO. 2008 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, AMENDING CHAPTER 46 OF THE AZUSA MUNICIPAL CODE BY ADDING DIVISION 1 REGARDING PAYMENT OF SPECIAL REWARDS WHEREAS, California Government Code section 53069.5 authorizes local agencies to offer and pay rewards for information leading to the identification and apprehension of any person whose willful misconduct results in injury or death to any person, or who willfully damages or destroys any property; and WHEREAS, California Government Code section 53069.7 authorizes local agencies to offer and pay rewards to any person who aids local peace officers or furnishes information leading to the arrest and conviction of any person who assaults, or inflicts serious bodily harm to a peace officer of the local agency, or kills a peace officer of the local agency, while that officer is acting in the line of duty; and WHEREAS, the City Council previously exercised this authority by adopting Ordinance No. 06-02, which allows payment of rewards regarding the arrest and conviction of persons guilty of damaging property through spraying graffiti; and WHEREAS, the City Council desires to further exercise this authority granted by Sections 53069.5 and 53069.7 to establish a system for offering and payment of special rewards for the actions described above. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Division 1 — Payment of Special Rewards is hereby added to Chapter 46, Article I of the Azusa Municipal Code and new Section 46-1 is added to read as follows: "DIVISION 1. PAYMENT OF SPECIAL REWARDS Sec. 46-1. Definitions. The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Peace Officer means a peace officer as defined in State of California Penal Code sections 830 and 830.1, engaged in the performance of his or her duties, whom the suspect knew or reasonably should have known was a peace officer. Reward means an authorized payment of monetary compensation to a person or persons for: 1 ORANGE\NSTUSRS\317�0.5 a (1) Information received by the City leading to the determination of the identity and apprehension of any person whose willful misconduct results in injury or death to any person, or who willfully damages or destroys any property; or (2) Coming to the aid of a City of Azusa peace officer, or for the furnishing of information to the City leading to the arrest and conviction of any person or persons who killed, assaulted with a deadly weapon, or inflicted serious bodily harm upon a peace officer of the City while that officer was acting in the line of duty." Section 2. New Section 46-2 of Article I of Chapter 46 of the Azusa Municipal Code is hereby added to read as follows: "Sec. 46-2. Liability for Amount of Reward. Any person whose willful misconduct has resulted in injury or death to' any student or any person employed by or performing volunteer services for the City or who has willfully damaged or destroyed any property of the City or any property of any other local agency or state or federal agency located within the boundaries of the City shall be liable for the amount of any reward paid pursuant to this chapter and if he or she is an unemancipated minor, his or her parent or guardian shall also be liable for the amount. Section 3. New Section 46-3 of Article I of Chapter 46 of the Azusa Municipal Code is hereby added to read as follows: "Sec. 46-3. Reward Offer Procedures. (a) The City Council, at its sole discretion, may offer a reward, as that term is described in Section 46-1, upon adoption of a resolution which: (1) describes the specific circumstances that prompted the offering of a reward, (2) specifies the amount of the reward, (3) specifies the time period during which the offer of reward shall be in effect, and (4) directs the City Clerk to advertise the offer of reward. (b). The City Clerk, upon the City Council's approval of the resolution to offer a reward, shall cause notices and/or advertisements to be posted on the. City's Internet website and duly published in at least one newspaper of general circulation in the City, setting forth the City's reward offer in a manner designed to provide immediate City- wide notoriety to the offer. All notices and advertisements of a reward shall set forth the conditions and limitations of the offer." Section 4. New Section 46-4 of Article I of Chapter 46 of the Azusa Municipal Code is hereby added to read as follows: "Sec. 46-4. Effective Date of Reward Offer. 2 ORANGE\NSTUESS\31770.S r (a) An offer of reward by the City shall be effective, subject to Subsection (b) of this section, upon publication by the City Clerk, as provided for herein, and, subject to Subsection (c) of this section, shall remain in effect for the stated term of the offer or for the term of any extension thereof which may be approved by the City Council prior to the termination of the offer of reward. In the event the term of an offer of reward is extended, as provided herein, the City Clerk shall provide the same publicity as that given to the original offer of reward. (b) Information received by the City after adoption of a resolution to authorize payment of a reward, but prior to publication, shall be deemed to have been received during the effective term of the offer for purposes of Council deliberations on the payment of any reward in said matter. (c) An offer of reward, by the City shall terminate by payment, revocation, withdrawal thereof by the City Council by resolution or expiration of the period of time set forth in the resolution offering the reward, or any extension thereof, which was approved by the City Council while the offer was otherwise effective. A terminated offer of reward shall have no operative or legal force or'effect, except with respect to City Council consideration of information received by the City prior to the termination of the offer of reward. In the event an offer of reward had been terminated by revocation or withdrawal by the City Council prior to the term identified in the offer of reward or an approved extension thereof, the City Clerk shall provide the same publicity thereto as that given to the original offer of reward." Section 5., New Section 46-5 of Article I of Chapter 46 of the Azusa Municipal Code is hereby added to read as follows: ' "Sec. 46-5. City Council Review. After an identification, apprehension, or where applicable the arrest and conviction, of a person or persons with respect to commission of an act which prompted the offer of reward, the City Council shall determine whether the information received had been: (1) Either accompanied, or followed by, a letter or other written expression of an intent to claim the reward offered; (2) Received during the term in which the offer of reward was in effect; (3) Tendered as more than a mere suspicion and was sufficient to provide for the subsequent identification, apprehension, or where applicable the arrest and conviction, of the person or persons responsible in whole or in part for that act which prompted the offer of reward; (4) Accompanied by sufficient information to satisfy whatever had been established by the City Council as special conditions for payment of the reward; and is consistent with the limitations upon payment set forth in the resolution offering the reward." 3 ORANGE\NSTOBBS\31770.5 ,V p Section 6. New Section 46-6 of Article I of Chapter 46 of the Azusa Municipal Code is hereby added to read as follows: "Sec. 46-6. Payment. (a) Payment of any reward or rewards, as provided -in this chapter, shall require City Council approval by resolution. (b) No employee or official of the City shall be eligible to receive payment of a reward pursuant to this chapter. (c) No reward shall be paid to any person or persons involved in misconduct which prompted the offer of the reward by the City Council. (d) No offer of reward or payment of reward shall be made to anyone who is acting as an agent for the suspect(s) or if suspect(s) will benefit from payment of such reward." Section 7. If any section, subsection, sentence, clause, phase, or portion of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases or portions might subsequently be declared invalid or unconstitutional. Section 8. This Ordinance shall become effective thirty (30) days after its - adoption. Section 9. The City Clerk shall certify the adoption of this Ordinance and shall cause the same to be posted as required by law. PASSED, APPROVED, AND ADOPTED this day of 2008. Joseph R. Rocha Mayor ATTEST: 4 ORANGE\NSTUBBS\31770.5 d