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HomeMy WebLinkAboutE-12 Staff Report - 5th Amendment to DDA - The Avenue Azusa LLC61147.80003\33423311.1 CONSENT ITEM E-12 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: MATT MARQUEZ, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: DECEMBER 13, 2021 SUBJECT: REQUEST TO APPROVE THE FIFTH AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT AND APPROVE A REVISED GRANT DEED (APNs 8608-025-902, 8608-025-907, 8608-025-908, 8608-025-909, 8608-025-910 AND A PORTION OF 8608-025-914) SUMMARY: The City and Successor Agency to the Redevelopment Agency are owners of several parcels generally located on the southeast corner of Azusa Avenue and 9th Street in the City (APNs 8608-025-902, 8608- 025-907, 8608-025-908, 8608-025-909, 8608-025-910 and a portion of 8608-025-914) (“Property”). The Successor Agency, pursuant to the Long Range Property Management Plan, desires to sell and the City desires to sell for economic development purposes, their respective portions of the Property. On June 19, 2017, the City entered into a Disposition and Development Agreement (DDA) and the Successor Agency entered into a Purchase and Sale Agreement and Joint Escrow Instructions (PSA) with Costanzo Investments, LLC to sell the Property. Since then, there have been four subsequent amendments to the DDA and PSA. On November 2, 2020, the City Council approved an Assignment and Assumption Agreement assigning the DDA and PSA to The Avenue Azusa, LLC a joint venture between Costanzo Investments, LLC and Serrano Development Group. To date, Serrano has served as the lead applicant and has pursued obtaining building plan check approvals. RECOMMENDATION: Staff recommends that the following actions be taken: 1) Approve in substantially final form the Fifth Amendment to the Disposition and Development Agreement; and 2) Approve a revised Grant Deed. APPROVED CITY COUNCIL 12/13/2021 Approve 5th Amendment to DDA and Revised Grant Deed with The Avenue Azusa, LLC. December 13, 2021 Page 2 3) Authorize the City Manager to execute the agreements, in a form acceptable to the City Attorney and to take any additional actions necessary to conclude the transactions provided there is no additional cost to the City or the Successor Agency. DISCUSSION: Since the assignment of the DDA and PSA to The Avenue Azusa, LLC, Serrano Development Group (“Developer”) has diligently pursued the revised schedule of performance identified in the Fourth Amendment to the DDA. The following table outlines the performance milestones established by the Amendment and their respective status’. Task Date Status Developer Submits to Plan Check February 22, 2021 Satisfied Developer responds to Plan Check comments May 28, 2021 Satisfied Closing Date 75 days after Ready to Issue Permits from the City. TBD Permit Issuance Developer to pay for building permit fees 10 days after close of escrow. TBD Construction Commencement 75 days from Ready to Issue permits. TBD Project Completion 29 Months from Construction Commencement. Outside project completion date, subject to any extensions provided in the Original Agreement shall be October 30, 2024. TBD As a result of the Assignment of the DDA and PSA, the Developer has made several project revisions which have resulted in the following: • Project name was changed from The Avenue to Lumia • Previously approved 12,000 square feet of commercial space was updated to 9,201 square feet of commercial space and 3,124 of live/work space for a total of 12,325 square feet • Alleyway vacation was removed and an Alleyway Grant of Easement was requested • Dedication of land to the City was reduced to only include that area off of 9th Street • Proposed outdoor plaza easement was removed • Developer to purchase 3,000 square feet of land from the City for the benefit of the adjacent retail tenants at $28.50 per square foot for a total of $85,500, the previously agreed upon price. • Developer to grant a utility access easement to the City for access rights to the City’s electric facilities • Developer to grant an access easement to the City for public access to the sidewalk and parkway Such changes required the Planning Commission to adopt resolutions approving the entitlements listed below. The Planning Commission approved the following entitlements at their August 25, 2021 meeting: • DR-2021-11 for Design Review Approve 5th Amendment to DDA and Revised Grant Deed with The Avenue Azusa, LLC. December 13, 2021 Page 3 • MUP-2021-06 for a Minor Use Permit for two live/work units • MUP-2021-07 for a Minor Use Permit for tandem parking of some residential units • MV-2021-01 for a Minor Variance for the +/- 10% reduction of tandem parking stall depth • Amendment to the Tentative Tract Map No. 82207 Therefore, City Staff and Developer agree a Fifth Amendment is necessary to clarify and modify the DDA to reflect updated terms and conditions of the sale and development. To facilitate the sale of the Property and to ensure the Developer can secure funding and commence construction shortly after the close of escrow, Staff is requesting the City Council approve a revised Grant Deed (Attachment 2) to include the additional land the developer will purchase from the City. The developer will purchase an additional 3,000 square feet at $28.50 per square foot, the appraised fair market value. In 2015, the City adopted the TOD Specific Plan and its corresponding environmental impact report (EIR). The site subject to these agreements is included within the boundaries of the Specific Plan project area and was included in the environmental analysis in accordance with Public Resources Code section 21166 and State CEQA Guidelines, section 15162. The actions contemplated in this staff report do not constitute a significant change and therefore are consistent with the EIR previously adopted for the TOD Specific Plan. Therefore, no further environmental review is required. FISCAL IMPACT: The fiscal impact will be an increase of $326,244 to the General Fund upon close of escrow, and the funds will be recognized under 10-90-000-000-4899. The City will sell an additional 3,000 square feet of city-owned property to the Developer and will receive a compensation of Eighty-Five Thousand Five Hundred Dollars ($85,500) for the additional land. A grand total of Three Hundred Twenty-Six Thousand Two Hundred Forty-four Dollars and Zero Cents ($326,244.00), will be made available in cash or immediately available funds at the close of escrow. Prepared by: Reviewed and Approved: Carina Campos Matt Marquez Economic Development Specialist Economic and Community Development Director Fiscal Impact Review: Reviewed and Approved: Talika M. Johnson Sergio Gonzalez Services Director City Manager Attachments: 1) Fifth Amendment to the Disposition and Development Agreement 2) Revised Grant Deed FIFTH AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT (The Avenue Azusa, LLC/A-2 Property) THIS FIFTH AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT (this “Fifth Amendment”) is dated as of, ______ __, 2021 for reference purposes only, and is entered into by and between the City of Azusa, a California municipal corporation (the “City”), and The Avenue Azusa, LLC, a Delaware limited liability company (the “Developer”) (collectively, the “Parties,” and each a “Party”). The Parties enter into this Fifth Amendment with reference to the following facts: RECITALS A. The Successor Agency to the Azusa Redevelopment Agency (“Successor Agency”) is the owner of that certain real property located at 826, 858, 832, and 830 N. Azusa Avenue, Azusa (APNs 8608-025-902, 8608-025-907, 8608-025-908, 8608-025-909, and 8608-025-910) (“SA Property”). B. The Successor Agency and Costanzo Investments, LLC (“CI”), entered into that certain 2017 Purchase and Sale Agreement for the sale of the SA Property to CI. C. The Parties acknowledge that as a result of a clerical error APN 8608-025-909 is only referenced in certain Successor Agency documents as being included in the Successor Agency transaction. The Successor Agency and Developer memorialized in that certain Assignment and Assumption Agreement approved by the Successor Agency on November 2, 2020 that the omission of the parcel APN 8608-025-909 was in error and is intended to be included in the sale of the SA Property. D. The City is the owner of that certain remnant parcel formerly known as a portion of APN 8608-025-906 (“City Property”). The SA Property and City Property are collectively referred to as the “Properties.” E. The City and CI entered into that certain Disposition and Development Agreement, dated March 6, 2017 (the “Original Agreement”), for the sale and development of the City Property. F. The Parties acknowledge that as a result of mapping and other changes, the parcel formerly identified as APN 8608-025-906 was modified and subsumed into new parcels APN 8608-025-914 and 915 through the parcel map process creating the lot for the parking structure. G. The Parties have determined that the legal description should be modified to include a portion of Parcel 1 of Tract 73341 to provide for additional access and development opportunities. The legal description of the City Parcel pursuant to Exhibit 2 is updated to include the additional land the developer will purchase as set forth in Exhibit 3 Grant Deed. F. The City and CI entered into a First Amendment to the Original Agreement on April 8, 2019, a Second Amendment to the Original Agreement on or about December 3, 2019, a Third Amendment on or about August 17, 2020, and thereafter entered into a Fourth Amendment with The Avenue Azusa LLC, on or about November 19, 2020 (collectively referred to as the “DDA”). All capitalized terms used herein and not defined shall have the same meaning as within the Original Agreement. H. Pursuant to that certain Assignment and Assumption Agreement by and between CI, The Avenue Azusa LLC and the City, the DDA was assigned to Developer. I. Following the assignment of the DDA and the Fourth Amendment, the Parties desire to clarify and modify the DDA to reflect the current terms and conditions of the sale and development of the Properties. NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH THE PARTIES ACKNOWLEDGE, AND PURSUANT TO THE PROMISES AND COVENANTS SET FORTH IN THIS FIFTH AMENDMENT, THE PARTIES AGREE, AS FOLLOWS: 1. Alleyway Vacation. Section 2(a) of the Fourth Amendment is hereby deleted in its entirety. 2. Proposed Outdoor Plaza. Section 2(b) of the Fourth Amendment is hereby deleted in its entirety. 3. Dedication to the City. Land to be dedicated to the City pursuant to Exhibit 2 of the Fourth Amendment is hereby amended to the area identified on Exhibit 1 of this Fifth Amendment. 4. Maintenance Agreement. Section 4(b) of the Fourth Amendment is hereby amended to read as follows: “Prior to the issuance of the Certificate of Occupancy, Developer and City shall enter into” (1) A Maintenance Agreement whereby the Developer shall be responsible for the ongoing maintenance of the area identified as the “10 FT Wide Dedication” as shown on Exhibit 1 of this Fifth Amendment. (2) If determined by the City, a Maintenance Agreement whereby Developer shall be responsible for the ongoing maintenance of the Alley along the east property line. 5. Encroachment for Electric Equipment. The Encroachment for electric equipment shown in Exhibit 2 of the Fourth Amendment is hereby deleted in its entirety. 6. Developer Grant of Easements to the City. Developer shall grant a “pedestrian access easement” for the use of the sidewalk along the south property line as set forth in Exhibit 1 to this Fifth Amendment. In addition, the Developer shall grant a “utility access easement” to access electric facilities including but not limited to underground conduits, pullboxes, vaults and pad mount equipment. The geometry of the utility access easement will be determined when the Developer submits an application for new electrical services. The grant of easements shall be done through a final map or through a separate instrument. The grant of easements shall be accomplished prior to the issuance of the Certificate of Occupancy. 7. Purchase Price. Section 1.1.65 of the Original Agreement is hereby amended to read in its entirety as follows: “Purchase Price” means the amount of Three Hundred Twenty-Six Thousand Two Hundred Forty-four Dollars and Zero Cents ($326,244.00), in cash or immediately available funds.” The Purchase Price reflects the original amount of Two Hundred Forty Thousand Seven Hundred Forty-Four and Zero Cents ($240,744.00) and the compensation for an additional 3,000 square feet of city-owned property the City will sell to the developer at $28.50 per square foot, the appraised fair market value. 8. Landscape and Decorative Sidewalk Maintenance Agreement. Developer shall enter into a Landscape Maintenance Agreement to be recorded to maintain landscaping and decorative sidewalk in the public right-of-way for the life of the project prior to issuance of the Certificate of Occupancy. 9. Additional Land Disposition. The Parties have determined that the legal description should be modified to include a portion of Parcel 1 of Tract 73341 to provide for additional access and development opportunities. The legal description of the City Parcel pursuant to Exhibit 2 is updated to include the additional land the developer will purchase as set forth in Exhibit 3 Grant Deed. 10. Effective Date of Fifth Amendment. This Fifth Amendment shall be effective on the date last signed by the Parties following approval by the City Council. If this Fifth Amendment is not fully executed within thirty (30) days of the Council action it shall be null and void and of no further force or effect. 11. Effect Upon Original Agreement. Except as expressly amended by this Fifth Amendment, the Original Agreement remains in full force and effect, unmodified except as otherwise expressly provided herein. Wherever the term “Agreement” appears in the Original Agreement, it shall be read and understood to mean the Original Agreement as amended by the First, Second, Third, and Fourth Amendments, as well as by this Fifth Amendment. In the event of any direct conflict or inconsistency between the terms of the Original Agreement (and/or any prior amendments) and this Fifth Amendment, the terms of this Fifth Amendment shall be controlling to the extent of such conflict or inconsistency. 12. Counterparts. This Fifth Amendment may be executed in one or more counterparts, including the transmission of counterparts by facsimile or electronic mail, each of which shall be deemed an original but all of which, taken together, shall constitute one in the same Fourth Amendment. [Signatures on following page] SIGNATURE PAGE TO THE FIFTH AMENDMENT TO THE 2017 DISPOSITION AND DEVELOPMENT AGREEMENT (The Avenue Azusa, LLC/A-2 Property) IN WITNESS WHEREOF, the City and the Developer have executed this FIFTH AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT by and through the signatures of their duly authorized representative(s) set forth below: CITY: CITY OF AZUSA, a California municipal corporation By: _____________________________ Name: Sergio Gonzalez Its: City Manager Date: _____________________ Attest: By:_______________________________ City Clerk Date: _________________________ APPROVED AS TO FORM: By:______________________________ City Attorney Date:_________________________ DEVELOPER: THE AVENUE AZUSA, LLC, a Delaware limited liability company By: MT Partners II LLC, a Delaware limited liability company, its Manager By: ___________________________________ Its: Manager Date: __________________________ Exhibit 1 To the Fifth Amendment to the Disposition and Development Agreement by and between the City of Azusa and The Avenue Azusa, LLC Revised Site Plan Exhibit 2 To the Fifth Amendment to the Disposition and Development Agreement by and between the City of Azusa and The Avenue Azusa, LLC Legal Description of City Parcel Exhibit 3 To the Fifth Amendment to the Disposition and Development Agreement by and between the City of Azusa and The Avenue Azusa LLC City of Azusa - Grant Deed RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF AZUSA City Clerk 213 East Foothill Blvd. Azusa, CA 91702-1295 ______________________________________________________________________________________________ THE CITY OF AZUSA GRANT DEED PART ONE FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE CITY OF AZUSA, a California municipal corporation (“Grantor”), hereby grants to THE AVENUE AZUSA, LLC, a Delaware limited liability company (“Grantee”), that certain real property located in the City of Azusa, County of Los Angeles, State of California, specifically described in Exhibit “A” and Exhibit “B” attached to this Grant Deed (“Property”) and made a part of this Grant Deed by this reference. PART TWO The conveyance of the Property by the Grantor to the Grantee in Part One is subject to the following community development 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 2017 Disposition and Development Agreement (Costanzo Investments, LLC/A-2 Property), dated as of March 6, 2017, between the Grantor and the Grantee (the “Agreement”). The provisions of the Agreement are incorporated into this Grant Deed by this reference and are deemed to be a part of this Grant Deed, as though fully set forth in this Grant Deed. Section 2. Condition of Property. The Grantee acknowledges and agrees that the Property is conveyed by the Grantor to the Grantee in its “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS CONDITION,” as of the date of recordation of this Grant Deed, with no 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. Obligation to Refrain from Discrimination. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and or the “Project” (as defined in the Agreement), covenants and agrees that: 3.1 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. The covenant of this Section 3 shall run with the land of the Property and shall be enforceable against the Grantee and its successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of Agreement. 3.2 The covenant of this Section 3 shall run with the land of the Property in perpetuity, shall be enforceable against the Grantee and its successors and assigns, and shall be covenants set forth in the Grant Deed. Section 4. Form of Non-Discrimination and Non-Segregation Clauses. The Grantee for itself, its successors and assigns to all or any part or portion of the P roperty and/or Project, covenants and agrees that: 4.1 The Grantee, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Properties (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 Properties shall contain or be subject to substantially the following non-discrimination or non- segregation covenants: (a) 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.” (b) 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.” (c) 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. 4.2 The covenants of this Section 4 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed. Section 5. Covenant to Maintain Property on Tax Rolls. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that 5.1 The Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance by the Grantor of a certificate of occupancy for the Project (“Certificate of Occupancy”).. 5.2 The Grantee shall pay all property tax bills with respect to the Property and all improvements thereon 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. The Grantee further covenants and agrees to provide to the Grantor, on or before July 31 of each year, commencing in the calendar year following the calendar year in which the Certificate of Completion for the Project is recorded and in each calendar year, thereafter, for the full term of this covenant: (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Grantee and the County regarding the Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Grantee in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon, with respect to the preceding County fiscal year. 5.3 The covenants of this Section 5 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns, and shall terminate and expire upon the issuance of the Certificate of Occupancy. Section 6. No Conveyance to Tax Exempt Entity. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: 6.1 The Grantee shall not use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, the Project, or any portion of any of the foregoing to any entity or person, or for any use of the Property, the Project, or any portion of any of the foregoing, who Grantee knows to be partially or wholly exempt from the payment of real or personal property taxes or that would cause the exemption of the payment of all or any portion of real or personal property taxes otherwise assessable regarding the Property, the Project, or any portion of any of the foregoing, without the prior written consent of the Grantor, which may be withheld in the Grantor’s sole and absolute discretion, for twenty years from the date of issuance of the certificate of completion for the Project. 6.2 If the Property, or any portion of the Property, shall be conveyed, transferred or sold to any entity or person that is partially or wholly exempt from the payment of real or personal property taxes otherwise assessable against the Properties, or any portion thereof, without the prior written consent of the Grantor , then, at the Grantor election and in addition to all other remedies available to the Grantor under this Agreement or at law or in equity, the Grantee shall pay to the City a fee in lieu of payment of such taxes each year in an amount determined by the City to be one percent (1%) of the “full cash value” of the Property, or portion thereof, as may be subject to such exemption from payment of real or personal property taxes. The Grantor ’s determination of “full cash value” for in-lieu payment purposes under this Section 6 shall be established by the Grantor each year, if necessary, by reference to the real or personal property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The Grantor ’s determination of “full cash value” and that an in-lieu payment is due shall be conclusive on such matters. If the Grantor determines that an amount is payable as an in -lieu payment under this Section 6 in any tax year, then such amount shall be paid to the Grantor for that tax year within forty-five (45) days following transmittal by the Grantee to the Developer of an invoice for payment of the in-lieu amount. 6.3 The covenants of this Section 6 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns of the Property, and shall terminate and expire upon the issuance of the Certificate of Completion. Section 7. Maintenance Condition of the Property. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: 7.1 The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maint enance standard described above (a “Maintenance Deficiency”), then the Grantor shall notify the Grantee in writing of the Maintenance Deficiency. If the Grantee fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within sixt y (60) days of its receipt of notice of the Maintenance Deficiency, the Grantor 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 Grantor to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Grantor for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 7.1 shall become a lien on the Property, as applicabl e. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Grantor to the Grantee, the Grantor shall have the right to enforce the lien in the manner provided in Section 7.1. 7.2 Graffiti, as this term is 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 Grantee 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 and is not removed within ninety-six (96) hours following the time of the discovery of the graffiti, the Grantor shall have the right to enter the Property and remove the graffiti, without notice to the Grantee. Any sum expended by the Grantor for the removal of graffiti from the Property pursuant to this Section 7.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Grantee from the Grantor, the Grantor shall have the right to enforce its lien in the manner provided in Section 7.2. 7.3 The Parties further mutually understand and agree that the rights conferred upon the Grantor under this Section 7.3 expressly include a grant by the Grantee of a security interest in the Property with the power to establish and enforce a lien or other encumbrance against the Property or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure the obligations of the Grantee and it successors under Section 7.1 or Section 7.2, including the reasonable attorneys’ fees and costs of the Grantor associated with the abatement of a Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the Grantor” mean and include the salaries, benefits and costs of the City Attorney of Grantor and the lawyers employed in the Office of the City Attorney of Grantor. 7.4 The provisions of this Section 7.4, shall be a covenant running with the land of the Property, shall be enforceable against the Grantee and its successors and assigns in perpetuity, and shall terminate and expire on the date ten (10) years after the issuance of the Certificate of Completion. Nothing in the foregoing provisions of this Section 7 sha ll be deemed to preclude the Grantee from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City of Azusa. Section 8 Grantor Power of Termination Regarding the Property. 8.1 The Grantor hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq. and subject to the provisions of Section 7.6 of the Agreement and this Section 8 (the “City Termination Power”), exercisable by the Grantor, in its sole and absolute discretion, upon sixty (60) calendar days written notice to the Grantee referencing Section 7.6 of the Agreement and this Section 8.1, to terminate the fee interest of the Grantee in the Property and/or any improvements to the Property and revest such fee title in the Grantor and take possession of all or any portion of such real property and improvements, without compensation to the Grantee except as set forth in Section 8.5 below or otherwise required by applicable law, pursuant to the terms of Section 7.6 of the Agreement and this Section 8.1 upon the occurrence of Termination Default by the Grantee occurring following the Close of Escrow and prior to the Completion of Construction (as defined in the Agreement). 8.2 As provided in Section 7.6.2 of the Agreement, Before delivering the sixty (60) calendar day written notice specified Section 8.1 (the “Initial Termination Notice”), Grantor shall have reasonably determined that (i) one or more Event of Default has occurred and is continuing, (ii) one or more of such Event(s) of Default constitutes a Termination Default, (iii) Grantee is no longer able to complete the Project in substantially the manner required pursuant to this Agreement and that instead another developer would be better able than Grantee to complete the Project on terms (including, without limitation, the timing of Completion of Construction) as close to those set forth in this Agreement as Grantor determines to be appropriate in light of such Termination Default(s) by Grantee; and (iv) it is in best interests of the health, safety and welfare of the Grantor’s taxpayers and residents that Grantor exercise the City Termination Power. For the purposes of this Agreement a “Termination Default” shall mean an Event of Default consisting of (x) an act of fraud or intentional dishonesty by Grantee’s management personnel in dealing with the Grantor in connection with the Project; (y) Grantee’s falling behind by more than one hundred eighty (180) days in the time schedule for the Project without reasonable cause such that Grantor reasonably determines that the Completion of Construction will not be accomplished until at least one hundred eighty (180) days after the time specified in the “Schedule of Performance” (as defined in the Agreement), or (z) Grantee’s committing a particular type of Event of Default at least three (3) ti mes during any 12-month period as to each of which Grantor has given Grantee written notice of such Event of Default . Grantor’s Initial Termination Notice shall specify the Termination Default(s) by the Grantee triggering the Grantor’s exercise of City Termination Power. The Grantor shall proceed with its remedy set forth in Section 8.1 only if the Grantee continues in such default for a period of sixty (60) calendar days following its receipt of the Initial Termination Notice or, upon commencing to cure such Termination Default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. In addition, before exercising its remedy to complete the City Termination Power under this Section 8, Grantor shall, upon Grantee’s request, which must be delivered, if at all, within fifteen (15) days following its receipt of the Initial Termination Notice, meet and confer with Grantee’s representatives for a period of thirty (30) days. During such time, the Parties shall meet as often as reasonably requested by any Party to negotiate, in good faith, methods and means by which the Termination Default(s), if not cured or curable, may be mitigated or otherwise addressed by Grantee so that the Project can be completed on terms (including, without limitation, the timing of Completion of Construction) as close to those set forth in the Agreement as Grantor determines to be appropriate in light of such Termination Default(s) by Grantee. Nothing herein shall constitute an agreement, representation, or warranty by any Party that an acceptable negotiated resolution will be reached, nor shall Grantor be obligated to expend any out-of-pocket funds or undertake any other action whatsoever with respect to curing any Event of Default by Grantee. If, at the end of such thirty (30) day period, the Parties have not been able to agree on a mutually acceptable method of mitigating or otherwise addressing a Termination Default that may not be cured or be curable, then Grantor may continue toward exercising the City Termination Power pursuant to this Section 8 with the Parties reserving all rights. Before exercising the City Termination Power, however, Grantor shall deliver an additional written notice of its election to do so to Grantor at least 60 days after the Grantor’s prior delivery of Initial Termination Notice and so long as an Termination Default continues to exist (the “Termination Election Notice”). 8.3 The rights of the Grantor under this Section 8 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (1) Each Lien recorded against the Property and specifically authorized by this Agreement as a Permitted Transfer; (2) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Property and specifically authorized by this Agreement as a Permitted Transfer. 8.4 Upon the Grantor’s exercise of the City Termination Power pursuant to this Section 8, the Grantee or its successors or assigns shall convey by grant deed to the Grantor title to the Property, as specified in the Grantor’s notice pursuant to Section 8.1, and all improvements thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the Grantee and a notary in a manner suitable for recordation. The Grantor may enforce its rights pursuant to this Section 8.4 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. 8.5 Upon the revesting in the Grantor of the Property, whether by grant deed or court decree, the Grantor shall exercise its reasonable good faith efforts to resell the Property at its then fair market value, as soon and in such manner as the Grantor shall, in its sole discretion, find feasible and consistent with the objectives of the City of Azusa General Plan, to a qualified and responsible person or persons (as reasonably determined by the Grantor) who will assume the Grantee’s obligations to begin and/or complete and/or operate the Project located on the Property, or such other replacement development acceptable to the Grantor, in its sole and absolute discretion. Upon any such resale of the Defaulted Portion of the Property (or any portion thereof), the proceeds to the Grantor from such sale shall be applied as follows: (1) First, to pay any and all amounts required to release/reconvey any Lien recorded against all or any portion of the Property; and (2) Second, to reimburse the Grantor on its own behalf or on behalf of the Grantor for all actual internal and third-party costs and expenses previously or currently incurred by the Grantor, or the Grantor related to the Property, the Project, or this Agreement, including, but not limited to, customary and reasonable fees or salaries to third-party personnel engaged in such actions, in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the Grantor and/or the Grantor or authority with respect to the Property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Grantee with respect to the acquisition of the Property or the construction of the Project and amounts otherwise owing to the Grantor or authority by the Grantee or its successors or assigns pursuant to the terms of this Agreement; and (3) Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse the Grantee, or its successors in interest to the equal to the sum of: (1) Purchase Price; and (2) the third-party costs actually incurred and paid by the Grantee regarding the development of the Project, including, but not limited to, pro rata costs of carry, taxes, and other items as set forth in a cost certification to be made by the Grantee to the Grantor prior to any such reimbursement, which certification shall be subject to the Grantor’s reasonable approval; provided, however, that the Grantee shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, Liens or other encumbrances that are paid by the Grantor pursuant to the provisions of sub- sections (1) or (2) above. (4) Any portion of the proceeds from the resale of the Property remaining after the foregoing applications shall be retained by the Grantor as its sole and exclusive property. 8.6 IMMEDIATELY FOLLOWING THE EXPIRATION OF THIRTY (30) DAYS AFTER THE GRANTOR’S GIVING OF THE TERMINATION ELECTION NOTICE PURSUANT TO SECTION 7.6.1, OF THE AGREEMENT, GRANTOR, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE PROPERTY AND ANY IMPROVEMENTS THEREON, WITHOUT FURTHER NOTICE OR COMPENSATION TO GRANTEE (EXCEPT AS OTHERWISE PROVIDED IN SECTION 8.5). BY INITIALING BELOW, THE GRANTEE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT THE GRANTEE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED, REPLACED, RENUMBERED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. GRANTEE’S INITIALS ____________ 8.7 THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE GRANTOR’S EXERCISE OF THE CITY TERMINATION POWER PURSUANT TO THIS SECTION 8.7 MAY WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO THE GRANTEE THROUGH THE GRANT DEED. THE GRANTEE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT THE GRANTEE MAY HAVE TO THE ENFORCEABILITY OF SUCH FORFEITURE REMEDY, AND TO THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES AS A MATTER OF LAW, BUT NOT INCLUDING CLAIMS, DEFENSES OR DISAGREEMENTS CONCERNING THE PARTICULAR FACTS OF THIS CASE. THE GRANTEE FURTHER EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE GRANTEE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SUBSTANTIALLY THE SAME EFFECT. THE GRANTEE ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THE AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE GRANTOR’S POWER OF TERMINATION PROVIDED IN THIS SECTION 8.7 AND FURTHER ACKNOWLEDGE THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO SECTION 8.6 AND THIS SECTION 8.7. 8.8. The provisions of this Section 8 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns, and shall terminate and expire upon Completion of Construction. GRANTEE’S INITIALS ____________ PART THREE Section 9. Grantee Covenant to Undertake Project. The Grantee covenants, for itself, its successors and assigns, to and for the exclusive benefit of Grantor, that Grantee shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance, subject to the effect of “Unavoidable Delay” (as defined in the Agreement) and subject to the provisions of Section 4.1 of the Agreement. Grantee covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of the Agreement, the Scope of Development (with such modifications as Grantor shall have approved), the Schedule of Performance, the “Entitlements” (as defined in the Agreement) and the “Additional Project Approvals” (as defined in the Agreement), except for such changes as may be mutually agreed upon in writing by and between Grantor and Grantee, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. Section 10. Covenants Run with the Land of the Property. Each of the covenants and agreements contained in this Grant Deed touch and concern the Property and each of them is expressly declared to be a community development covenant that runs with the land for the benefit of the Grantor, and such covenants run with the land in favor of the Grantor for the entire period that such covenants are in full force and effect, regardless of whether the Grantor is or remains an owner of any land or interest in land to which such covenants relate. The Grantor, 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 Grant Deed are for the benefit of and are enforceable only by the Grantor and shall survive the execution and recordation of this Grantor Deed and the issuance and recordation of each and every Certificate of Completion, for the time period set forth above for each covenant. Section 11. 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 Grant 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 12. Effect of Unlawful Provision; Severability. In the event that any provision of this Grant 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 Grant Deed. IN WITNESS WHEREOF, the Grantor has caused this Grant Deed to be executed by its authorized representative(s) on this _____ day of __________________, 2021. GRANTOR: THE CITY OF AZUSA a California municipal corporation By: ___________________________ Sergio Gonzalez City Manager [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] EXHIBIT A TO GRANT DEED Legal Description EXHIBIT B TO GRANT DEED Legal Description Plat CERTIFICATE OF ACCEPTANCE OF GRANT DEED The undersigned hereby acknowledges acceptance by The Avenue Azusa, LLC, a Delaware limited liability company, the Grantee in the within Grant Deed, of the delivery of the subject Property described in the within Grant Deed from the City of Azusa. GRANTEE: The Avenue Azusa, LLC a Delaware limited liability company Dated: ________________________ By: MT Partners II LLC, its Manager By: _____________________________ Jason Tolleson, its Manager [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF AZUSA City Clerk 213 East Foothill Blvd. Azusa, CA 91702-1295 ______________________________________________________________________________________________ THE CITY OF AZUSA GRANT DEED PART ONE FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE CITY OF AZUSA, a California municipal corporation (“Grantor”), hereby grants to THE AVENUE AZUSA, LLC, a Delaware limited liability company (“Grantee”), that certain real property located in the City of Azusa, County of Los Angeles, State of California, specifically described in Exhibit “A” and Exhibit “B” attached to this Grant Deed (“Property”) and made a part of this Grant Deed by this reference. PART TWO The conveyance of the Property by the Grantor to the Grantee in Part One is subject to the following community development 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 2017 Disposition and Development Agreement (Costanzo Investments, LLC/A-2 Property), dated as of March 6, 2017, between the Grantor and the Grantee (the “Agreement”). The provisions of the Agreement are incorporated into this Grant Deed by this reference and are deemed to be a part of this Grant Deed, as though fully set forth in this Grant Deed. Section 2. Condition of Property. The Grantee acknowledges and agrees that the Property is conveyed by the Grantor to the Grantee in its “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS CONDITION,” as of the date of recordation of this Grant Deed, with no 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. Obligation to Refrain from Discrimination. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and or the “Project” (as defined in the Agreement), covenants and agrees that: 3.1 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. The covenant of this Section 3 shall run with the land of the Property and shall be enforceable against the Grantee and its successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of Agreement. 3.2 The covenant of this Section 3 shall run with the land of the Property in perpetuity, shall be enforceable against the Grantee and its successors and assigns, and shall be covenants set forth in the Grant Deed. Section 4. Form of Non-Discrimination and Non-Segregation Clauses. The Grantee for itself, its successors and assigns to all or any part or portion of the P roperty and/or Project, covenants and agrees that: 4.1 The Grantee, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Properties (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 Properties shall contain or be subject to substantially the following non-discrimination or non- segregation covenants: (a) 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.” (b) 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.” (c) 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. 4.2 The covenants of this Section 4 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed. Section 5. Covenant to Maintain Property on Tax Rolls. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that 5.1 The Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance by the Grantor of a certificate of occupancy for the Project (“Certificate of Occupancy”).. 5.2 The Grantee shall pay all property tax bills with respect to the Property and all improvements thereon 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. The Grantee further covenants and agrees to provide to the Grantor, on or before July 31 of each year, commencing in the calendar year following the calendar year in which the Certificate of Completion for the Project is recorded and in each calendar year, thereafter, for the full term of this covenant: (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Grantee and the County regarding the Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Grantee in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon, with respect to the preceding County fiscal year. 5.3 The covenants of this Section 5 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns, and shall terminate and expire upon the issuance of the Certificate of Occupancy. Section 6. No Conveyance to Tax Exempt Entity. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: 6.1 The Grantee shall not use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, the Project, or any portion of any of the foregoing to any entity or person, or for any use of the Property, the Project, or any portion of any of the foregoing, who Grantee knows to be partially or wholly exempt from the payment of real or personal property taxes or that would cause the exemption of the payment of all or any portion of real or personal property taxes otherwise assessable regarding the Property, the Project, or any portion of any of the foregoing, without the prior written consent of the Grantor, which may be withheld in the Grantor’s sole and absolute discretion, for twenty years from the date of issuance of the certificate of completion for the Project. 6.2 If the Property, or any portion of the Property, shall be conveyed, transferred or sold to any entity or person that is partially or wholly exempt from the payment of real or personal property taxes otherwise assessable against the Properties, or any portion thereof, without the prior written consent of the Grantor , then, at the Grantor election and in addition to all other remedies available to the Grantor under this Agreement or at law or in equity, the Grantee shall pay to the City a fee in lieu of payment of such taxes each year in an amount determined by the City to be one percent (1%) of the “full cash value” of the Property, or portion thereof, as may be subject to such exemption from payment of real or personal property taxes. The Grantor ’s determination of “full cash value” for in-lieu payment purposes under this Section 6 shall be established by the Grantor each year, if necessary, by reference to the real or personal property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The Grantor ’s determination of “full cash value” and that an in-lieu payment is due shall be conclusive on such matters. If the Grantor determines that an amount is payable as an in -lieu payment under this Section 6 in any tax year, then such amount shall be paid to the Grantor for that tax year within forty-five (45) days following transmittal by the Grantee to the Developer of an invoice for payment of the in-lieu amount. 6.3 The covenants of this Section 6 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns of the Property, and shall terminate and expire upon the issuance of the Certificate of Completion. Section 7. Maintenance Condition of the Property. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: 7.1 The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maint enance standard described above (a “Maintenance Deficiency”), then the Grantor shall notify the Grantee in writing of the Maintenance Deficiency. If the Grantee fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within sixt y (60) days of its receipt of notice of the Maintenance Deficiency, the Grantor 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 Grantor to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Grantor for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 7.1 shall become a lien on the Property, as applicabl e. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Grantor to the Grantee, the Grantor shall have the right to enforce the lien in the manner provided in Section 7.1. 7.2 Graffiti, as this term is 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 Grantee 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 and is not removed within ninety-six (96) hours following the time of the discovery of the graffiti, the Grantor shall have the right to enter the Property and remove the graffiti, without notice to the Grantee. Any sum expended by the Grantor for the removal of graffiti from the Property pursuant to this Section 7.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Grantee from the Grantor, the Grantor shall have the right to enforce its lien in the manner provided in Section 7.2. 7.3 The Parties further mutually understand and agree that the rights conferred upon the Grantor under this Section 7.3 expressly include a grant by the Grantee of a security interest in the Property with the power to establish and enforce a lien or other encumbrance against the Property or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure the obligations of the Grantee and it successors under Section 7.1 or Section 7.2, including the reasonable attorneys’ fees and costs of the Grantor associated with the abatement of a Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the Grantor” mean and include the salaries, benefits and costs of the City Attorney of Grantor and the lawyers employed in the Office of the City Attorney of Grantor. 7.4 The provisions of this Section 7.4, shall be a covenant running with the land of the Property, shall be enforceable against the Grantee and its successors and assigns in perpetuity, and shall terminate and expire on the date ten (10) years after the issuance of the Certificate of Completion. Nothing in the foregoing provisions of this Section 7 sha ll be deemed to preclude the Grantee from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City of Azusa. Section 8 Grantor Power of Termination Regarding the Property. 8.1 The Grantor hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq. and subject to the provisions of Section 7.6 of the Agreement and this Section 8 (the “City Termination Power”), exercisable by the Grantor, in its sole and absolute discretion, upon sixty (60) calendar days written notice to the Grantee referencing Section 7.6 of the Agreement and this Section 8.1, to terminate the fee interest of the Grantee in the Property and/or any improvements to the Property and revest such fee title in the Grantor and take possession of all or any portion of such real property and improvements, without compensation to the Grantee except as set forth in Section 8.5 below or otherwise required by applicable law, pursuant to the terms of Section 7.6 of the Agreement and this Section 8.1 upon the occurrence of Termination Default by the Grantee occurring following the Close of Escrow and prior to the Completion of Construction (as defined in the Agreement). 8.2 As provided in Section 7.6.2 of the Agreement, Before delivering the sixty (60) calendar day written notice specified Section 8.1 (the “Initial Termination Notice”), Grantor shall have reasonably determined that (i) one or more Event of Default has occurred and is continuing, (ii) one or more of such Event(s) of Default constitutes a Termination Default, (iii) Grantee is no longer able to complete the Project in substantially the manner required pursuant to this Agreement and that instead another developer would be better able than Grantee to complete the Project on terms (including, without limitation, the timing of Completion of Construction) as close to those set forth in this Agreement as Grantor determines to be appropriate in light of such Termination Default(s) by Grantee; and (iv) it is in best interests of the health, safety and welfare of the Grantor’s taxpayers and residents that Grantor exercise the City Termination Power. For the purposes of this Agreement a “Termination Default” shall mean an Event of Default consisting of (x) an act of fraud or intentional dishonesty by Grantee’s management personnel in dealing with the Grantor in connection with the Project; (y) Grantee’s falling behind by more than one hundred eighty (180) days in the time schedule for the Project without reasonable cause such that Grantor reasonably determines that the Completion of Construction will not be accomplished until at least one hundred eighty (180) days after the time specified in the “Schedule of Performance” (as defined in the Agreement), or (z) Grantee’s committing a particular type of Event of Default at least three (3) ti mes during any 12-month period as to each of which Grantor has given Grantee written notice of such Event of Default . Grantor’s Initial Termination Notice shall specify the Termination Default(s) by the Grantee triggering the Grantor’s exercise of City Termination Power. The Grantor shall proceed with its remedy set forth in Section 8.1 only if the Grantee continues in such default for a period of sixty (60) calendar days following its receipt of the Initial Termination Notice or, upon commencing to cure such Termination Default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. In addition, before exercising its remedy to complete the City Termination Power under this Section 8, Grantor shall, upon Grantee’s request, which must be delivered, if at all, within fifteen (15) days following its receipt of the Initial Termination Notice, meet and confer with Grantee’s representatives for a period of thirty (30) days. During such time, the Parties shall meet as often as reasonably requested by any Party to negotiate, in good faith, methods and means by which the Termination Default(s), if not cured or curable, may be mitigated or otherwise addressed by Grantee so that the Project can be completed on terms (including, without limitation, the timing of Completion of Construction) as close to those set forth in the Agreement as Grantor determines to be appropriate in light of such Termination Default(s) by Grantee. Nothing herein shall constitute an agreement, representation, or warranty by any Party that an acceptable negotiated resolution will be reached, nor shall Grantor be obligated to expend any out-of-pocket funds or undertake any other action whatsoever with respect to curing any Event of Default by Grantee. If, at the end of such thirty (30) day period, the Parties have not been able to agree on a mutually acceptable method of mitigating or otherwise addressing a Termination Default that may not be cured or be curable, then Grantor may continue toward exercising the City Termination Power pursuant to this Section 8 with the Parties reserving all rights. Before exercising the City Termination Power, however, Grantor shall deliver an additional written notice of its election to do so to Grantor at least 60 days after the Grantor’s prior delivery of Initial Termination Notice and so long as an Termination Default continues to exist (the “Termination Election Notice”). 8.3 The rights of the Grantor under this Section 8 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (1) Each Lien recorded against the Property and specifically authorized by this Agreement as a Permitted Transfer; (2) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Property and specifically authorized by this Agreement as a Permitted Transfer. 8.4 Upon the Grantor’s exercise of the City Termination Power pursuant to this Section 8, the Grantee or its successors or assigns shall convey by grant deed to the Grantor title to the Property, as specified in the Grantor’s notice pursuant to Section 8.1, and all improvements thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the Grantee and a notary in a manner suitable for recordation. The Grantor may enforce its rights pursuant to this Section 8.4 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. 8.5 Upon the revesting in the Grantor of the Property, whether by grant deed or court decree, the Grantor shall exercise its reasonable good faith efforts to resell the Property at its then fair market value, as soon and in such manner as the Grantor shall, in its sole discretion, find feasible and consistent with the objectives of the City of Azusa General Plan, to a qualified and responsible person or persons (as reasonably determined by the Grantor) who will assume the Grantee’s obligations to begin and/or complete and/or operate the Project located on the Property, or such other replacement development acceptable to the Grantor, in its sole and absolute discretion. Upon any such resale of the Defaulted Portion of the Property (or any portion thereof), the proceeds to the Grantor from such sale shall be applied as follows: (1) First, to pay any and all amounts required to release/reconvey any Lien recorded against all or any portion of the Property; and (2) Second, to reimburse the Grantor on its own behalf or on behalf of the Grantor for all actual internal and third-party costs and expenses previously or currently incurred by the Grantor, or the Grantor related to the Property, the Project, or this Agreement, including, but not limited to, customary and reasonable fees or salaries to third-party personnel engaged in such actions, in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the Grantor and/or the Grantor or authority with respect to the Property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Grantee with respect to the acquisition of the Property or the construction of the Project and amounts otherwise owing to the Grantor or authority by the Grantee or its successors or assigns pursuant to the terms of this Agreement; and (3) Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse the Grantee, or its successors in interest to the equal to the sum of: (1) Purchase Price; and (2) the third-party costs actually incurred and paid by the Grantee regarding the development of the Project, including, but not limited to, pro rata costs of carry, taxes, and other items as set forth in a cost certification to be made by the Grantee to the Grantor prior to any such reimbursement, which certification shall be subject to the Grantor’s reasonable approval; provided, however, that the Grantee shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, Liens or other encumbrances that are paid by the Grantor pursuant to the provisions of sub- sections (1) or (2) above. (4) Any portion of the proceeds from the resale of the Property remaining after the foregoing applications shall be retained by the Grantor as its sole and exclusive property. 8.6 IMMEDIATELY FOLLOWING THE EXPIRATION OF THIRTY (30) DAYS AFTER THE GRANTOR’S GIVING OF THE TERMINATION ELECTION NOTICE PURSUANT TO SECTION 7.6.1, OF THE AGREEMENT, GRANTOR, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE PROPERTY AND ANY IMPROVEMENTS THEREON, WITHOUT FURTHER NOTICE OR COMPENSATION TO GRANTEE (EXCEPT AS OTHERWISE PROVIDED IN SECTION 8.5). BY INITIALING BELOW, THE GRANTEE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT THE GRANTEE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED, REPLACED, RENUMBERED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. GRANTEE’S INITIALS ____________ 8.7 THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE GRANTOR’S EXERCISE OF THE CITY TERMINATION POWER PURSUANT TO THIS SECTION 8.7 MAY WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO THE GRANTEE THROUGH THE GRANT DEED. THE GRANTEE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT THE GRANTEE MAY HAVE TO THE ENFORCEABILITY OF SUCH FORFEITURE REMEDY, AND TO THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES AS A MATTER OF LAW, BUT NOT INCLUDING CLAIMS, DEFENSES OR DISAGREEMENTS CONCERNING THE PARTICULAR FACTS OF THIS CASE. THE GRANTEE FURTHER EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE GRANTEE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SUBSTANTIALLY THE SAME EFFECT. THE GRANTEE ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THE AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE GRANTOR’S POWER OF TERMINATION PROVIDED IN THIS SECTION 8.7 AND FURTHER ACKNOWLEDGE THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO SECTION 8.6 AND THIS SECTION 8.7. 8.8. The provisions of this Section 8 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns, and shall terminate and expire upon Completion of Construction. GRANTEE’S INITIALS ____________ PART THREE Section 9. Grantee Covenant to Undertake Project. The Grantee covenants, for itself, its successors and assigns, to and for the exclusive benefit of Grantor, that Grantee shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance, subject to the effect of “Unavoidable Delay” (as defined in the Agreement) and subject to the provisions of Section 4.1 of the Agreement. Grantee covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of the Agreement, the Scope of Development (with such modifications as Grantor shall have approved), the Schedule of Performance, the “Entitlements” (as defined in the Agreement) and the “Additional Project Approvals” (as defined in the Agreement), except for such changes as may be mutually agreed upon in writing by and between Grantor and Grantee, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. Section 10. Covenants Run with the Land of the Property. Each of the covenants and agreements contained in this Grant Deed touch and concern the Property and each of them is expressly declared to be a community development covenant that runs with the land for the benefit of the Grantor, and such covenants run with the land in favor of the Grantor for the entire period that such covenants are in full force and effect, regardless of whether the Grantor is or remains an owner of any land or interest in land to which such covenants relate. The Grantor, 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 Grant Deed are for the benefit of and are enforceable only by the Grantor and shall survive the execution and recordation of this Grantor Deed and the issuance and recordation of each and every Certificate of Completion, for the time period set forth above for each covenant. Section 11. 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 Grant 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 12. Effect of Unlawful Provision; Severability. In the event that any provision of this Grant 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 Grant Deed. IN WITNESS WHEREOF, the Grantor has caused this Grant Deed to be executed by its authorized representative(s) on this _____ day of __________________, 2021. GRANTOR: THE CITY OF AZUSA a California municipal corporation By: ___________________________ Sergio Gonzalez City Manager [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] EXHIBIT A TO GRANT DEED Legal Description EXHIBIT B TO GRANT DEED Legal Description Plat CERTIFICATE OF ACCEPTANCE OF GRANT DEED The undersigned hereby acknowledges acceptance by The Avenue Azusa, LLC, a Delaware limited liability company, the Grantee in the within Grant Deed, of the delivery of the subject Property described in the within Grant Deed from the City of Azusa. GRANTEE: The Avenue Azusa, LLC a Delaware limited liability company Dated: ________________________ By: MT Partners II LLC, its Manager By: _____________________________ Jason Tolleson, its Manager [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]