HomeMy WebLinkAbout09 - Uptown Newport Facilities Relocation and Acquisition AgreementsTO:
FROM
CITY OF
NEWPORT BEACH
City Council Staff Report
February 12, 2019
Agenda Item No. 9
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Michael J. Sinacori, P.E., Acting City Engineer
msinacori(a-)newportbeachca.gov
PHONE: 949-644-3342
TITLE: Uptown Newport Facilities Relocation and Acquisition Agreements
ABSTRACT:
On June 26, 2018, City Council authorized a Community Facilities District ("CFD") to be
formed by the California Statewide Communities Development Authority ("Authority") in
order to finance public facilities and improvements associated with the Uptown Newport
development project, including undergrounding of Southern California Edison ("SCE")
overhead utilities and certain public park improvements. City Council granted authority
to City staff to execute an associated Acquisition Agreement ("Acquisition Agreement")
between the Authority, City and the developer. Because the City must enter into a
Facilities Relocation Agreement with SCE in order for the utilities undergrounding to
proceed, staff is proposing to modify the Acquisition Agreement to further protect the City
from potential disputes between the City, the developer, their leasee, Jazz
Semiconductors and SCE. The revised Acquisition Agreement enhances legal and
financial protections for the City that may be required as a result of the construction of the
undergrounding of utilities or public park improvements.
Staff requests City Council approval of the attached "Facilities Relocation Agreement
(Relocation Under SCE Tariff Rule 20B with Applicant to Install Ducts/Substructures)" and
approve the revised Acquisition Agreement.
RECOMMENDATION:
a) Determine that none of the conditions described in Section 15162 of the California
Environmental Quality Act ("CEQA") Guidelines calling for preparation of a
subsequent or supplemental EIR have occurred, that no changes or additions to the
previously certified Environmental Impact Report No. ER2012-001 (SCH No.
20010051094) ("EIR") are required; and further, the action is also exempt pursuant to
Section 15302(d) of the CEQA Guidelines (conversion of overhead electric utility
distribution system facilities to underground including connection to existing overhead
electric utility distribution lines where the surface is restored to the condition existing
prior to the undergrounding); direct City staff to file a Notice of Exemption;
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Uptown Newport Facilities Relocation and Acquisition Agreements
February 12, 2019
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b) Approve the Facilities Relocation Agreement with SCE and authorize the City
Manager to execute the Agreement; and
c) Approve the revised Acquisition Agreement between the Authority, the City and the
Developer, and authorize the City Manager to execute the agreement with any
changes as may be deemed necessary by the City Attorney.
FUNDING REQUIREMENTS:
There is no anticipated fiscal impact related to this item. The developer remains
responsible for the costs associated with forming the CFD and issuing the bonds, and the
utility undergrounding work as addressed in the associated CFD Acquisition Agreement.
Staff believes the legal provisions contained in these agreements to adequately protect
the City from legal or financial obligations that may arise from the construction of the
public improvements.
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The development project known as "Uptown Newport" is owned by Uptown Newport
Jamboree, LLC, a Delaware limited partnership, and TSG — Parcel 1, LLC, a
Delaware limited liability company (collectively, the "Developer"). Uptown Newport
is approved for 1,244 dwelling units and 11,500 square feet of commercial retail and
is subject to, among other things, an approved and certified EIR, Specific Plan,
Development Agreement and recorded Tract Map. The project is located on
Jamboree Road and bounded by Birch Street and MacArthur Boulevard.
On June 26, 2018, the City Council adopted Resolution No. 2018-44 ("Resolution") to
authorize the formation of a CFD through the Authority to finance public capital facilities
and improvements including: preliminary and incidental expense and appurtenant
work and improvements associated with the undergrounding of overhead utilities by
SCE and a public park. The Resolution authorized the City Manager to sign the
associated Acquisition Agreement, authorized the City Manager to cooperate with the
Authority and do all things necessary and appropriate to carry out the intent of the
Resolution and CFD financing. The Authority forms the district, issues the bonds and
is responsible for handling the funds and administering the tax levy.
As noted in the June 26, 2018, staff report, the contemplated undergrounding utility
work was to be addressed under a Rule 20B SCE Agreement with the City. The
attached Facilities Relocation Agreement is the previously contemplated and
authorized Rule 20B SCE Agreement.
The agreement requires that the overhead transmission facilities be relocated
underground, with all existing overhead communication and electric distribution
facilities to be removed, in accordance with SCE's Tariff Rule 20: Replacement of
Overhead with Underground Electric Facilities, Section B (Rule 20B). SCE has
prepared preliminary plans and designs for the relocation that are attached to the
agreement. These preliminary plans have been reviewed and approved by City staff
and may be refined, adjusted or modified with SCE.
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Uptown Newport Facilities Relocation and Acquisition Agreements
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Staff anticipates an additional six to nine months of engineering and planning work
with SCE, along with lead time for SCE to acquire the materials, before SCE begins
work. SCE will not proceed until the Facilities Relocation Agreement is executed.
The Facilities Relocation Agreement generally provides the following:
• The parties will finalize the relocation plans and confirm land rights;
• City will procure and install the pads and vaults for transformers, conduits,
ducts, boxes and poles bases and perform other work related to structures and
substructures (as noted below, Developer performs this work on the City's
behalf);
• SCE will procure and install all materials related to its electrical system (except
the ducts and substructures);
• SCE will remove its overhead electrical facilities after the underground facilities
are placed into permanent service; and
• City will provide SCE a schedule of costs incurred in the construction of the
ducts and substructures.
In coordination with City staff, the Developer completed the majority of the construction
work required to be performed by City (the ducts and substructures), and the remaining
construction work will be completed by the Developer once SCE is ready to proceed.
It is the intent of the Uptown Newport development agreement that the City assist and
cooperate with the developer to fulfill its public improvement obligations but not take
on additional financial or legal exposure associated with improvements. The Facilities
Relocation agreement with SCE provides that the Applicant ("City") is responsible for
costs and expenses associated with SCE's implementation of the relocation plan and
that the City will reimburse SCE for certain costs and expenses estimated for the work.
In addition, the City became aware that the Developer's tenant, Jazz Semiconductors,
is very concerned about any business interruption that may occur as a result of any
scheduled or unscheduled power outages associated with the undergrounding. Since
the City is the entity required to enter into the utilities relocation agreement and wants
to avoid becoming involved in any disputes with the developer's tenant, the City sought
additional protection from the developer for work performed in connection with the
undergrounding utilities improvements. In consultation with the City Attorney's Office
and outside counsel, the City was able to negotiate additional protections in the
Acquisition Agreement for the City as follows:
• Require the developer to be responsible for any and all costs associated with
the Facilities Relocation Agreement (Rule 20B Agreement) including but not
limited to acquiring real property interests, paying all costs associated with
establishing temporary power generating facilities and potential tax liability
incurred associated with the undergrounding as necessary
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Uptown Newport Facilities Relocation and Acquisition Agreements
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• Require the developer to maintain not less than $10 million of business
interruption insurance
• Require that the developer, contractors and subcontractors name the City as
an additional insured in connection with any of the construction contracts
• Require a hold -back of $500,000 from the park development proceeds until the
City receives assurance from SCE that all amounts due under Facilities
Relocation Agreement (Rule 20B Agreement) have been paid
• Require the developer to indemnify, defend and hold harmless for any and all
costs or liabilities to SCE
The Uptown Newport Acquisition Agreement further clarifies that infrastructure and
park improvements will be funded solely by CFD bond proceeds with no financial
obligation by the City. The Acquisition Agreement also clarifies that any and all
monetary obligations are special and limited obligations of the Authority payable only
from proceeds of special taxes collected from the CFD and that no other City funds
will be obligated under any circumstances.
ENVIRONMENTAL REVIEW:
All significant environmental effects for the development of the Uptown Newport Planned
Community were adequately addressed in the previously certified EIR, which included a
mitigation, monitoring and reporting program and statement of overriding considerations,
and the City relied on the EIR for the approval of the Uptown Newport CFD and its
implementation to finance public improvements, including the undergrounding of the
utilities. Copies of the previously prepared environmental document are available for
public review and inspection at the Planning Division or at the City of Newport Beach
website at www.newportbeachca.gov/cega.
Staff recommends the City Council find that none of the conditions described in Section
15162 of the CEQA Guidelines calling for preparation of a subsequent or supplemental
EIR have occurred and that the Facilities Relocation Agreement, which was contemplated
and authorized in the approval of the Uptown Newport CFD and its implementation, does
not require changes or additions to the previously certified EIR. Substantial project
changes are not proposed. No new significant effects would occur, nor would a
substantial increase in the severity of previously identified significant effects occur, as this
is the same previously approved project with no increase in intensity and no changes to
the development standards. There is no new information of substantial importance which
was not known and could not have been known that shows the project will have new
significant effects, that significant effects previously identified will be substantially more
severe or that reasonable alternatives or mitigation measures previously found not to be
feasible would be feasible and substantially reduce effects. There are no additional
reasonable alternatives or mitigation measures.
Uptown Newport Facilities Relocation and Acquisition Agreements
February 12, 2019
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The action is also exempt pursuant to Section 15302(d) of the CEQA Guidelines
(conversion of overhead electric utility distribution system facilities to underground
including connection to existing overhead electric utility distribution lines where the
surface is restored to the condition existing prior to the undergrounding).
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Facilities Relocation Agreement
Attachment B — Acquisition Agreement
Attachment C — Redline Acquisition Agreement
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Attachment A
Facilities Relocation Agreement
wo
FACILITIES RELOCATION AGREEMENT
(RELOCATION UNDER SCE TARIFF RULE 20B - APPLICANT TO INSTALL
DUCTS/SUBSTRUCTURES)
This Facilities Relocation Agreement ("Agreement") is made and entered into this 13 day
of December, 2018 (the "Effective Date") by and between Southern California Edison Company, a
California corporation ("SCE"), and the City of Newport Beach (the "Applicant"). SCE and the
Applicant are sometimes individually referred to herein as a "Party" and collectively as the
"Parties".
RECITALS
WHEREAS, the Applicant, as a public entity, is coordinating with the developer of a
Residential project (the "Project") within that area generally depicted in the attached Exhibit A (the
"Project Location").
WHEREAS, SCE currently operates and maintains certain transmission, facilities
(collectively the "SCE Facilities") within and proximate to the Project Location.
WHEREAS, the Applicant has determined that implementation of the Project will require
the relocation of portions of the SCE Facilities and, to that end, the Applicant has requested that
SCE relocate some or all of the SCE Facilities.
WHEREAS, subject to the terms and provisions set forth herein, SCE is willing and able to
relocate the identified SCE Facilities in order to accommodate the Project.
NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND BETWEEN THE APPLICANT AND SCE
AS FOLLOWS:
AGREEMENT
1. SCOPE OF WORK
The Project will require that certain of SCE's overhead transmission, facilities be relocated
underground ("the Relocation"). The Applicant hereby represents that the area to be
undergrounded includes both sides of a street for at least one block or 600 feet, whichever is
lesser, and all existing overhead communication and electric distribution facilities within the
area will be removed. The Relocation will be performed in accordance with SCE's Tariff Rule 20:
Replacement of Overhead with Underground Electric Facilities, Section B ("Rule 206"), which is
incorporated herein by this reference. The Scope of Work for the Relocation is as follows:
Rule 20B conversion of overhead to underground relocation, which includes, but not limited to;
two (2) TSP risers and two (2) vaults and removal of power poles on Jamboree Rd in conflict with
development west side of Jamboree Blvd@ Fairchild Rd in the City of Newport Beach.
2. RELOCATION PLANS
a. Approved Relocation Plans. In furtherance of the Applicant's request, SCE
has prepared certain plans/designs that identify (i) the SCE Facilities that will be impacted by
the Project and (ii) the relocation areas for the affected SCE Facilities (the "Relocation Plans").
Copies of the Relocation Plans are attached hereto as Exhibit B. The Applicant expressly
acknowledges that (a) it has reviewed and approved the Relocation Plans and (b) the Relocation
Plans do not present any conflicts with the Applicant's development plans for the Project, nor
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do the Relocation Plans conflict with any other non -SCE utilities that are located, or will be
located, in the Project Location. It is the Applicant's sole responsibility to ensure that no
conflicts exist between the Relocation Plans and the Applicant's development plans or other
non -SCE utilities, and to timely inform SCE of the need for any refinements, modifications, or
revisions to the Relocation Plans to resolve any such conflicts that may later arise, all in
accordance with subsections (b) - (d) below.
b. Refinements to Plans. Depending upon the design status of the Project
as of the Effective Date, the Parties acknowledge that refinements and/or adjustments to
portions of the Relocation Plans may be required in order to eliminate minor conflicts. In such
instance, SCE shall prepare such refinements to the Relocation Plans as may be necessary in
order to address/eliminate said conflicts. The refined Relocation Plans shall be presented to
the Applicant for review and approval; SCE shall not commence the Relocation Work (see
Section 4, below) unless and until the Applicant has reviewed and approved the refined
Relocation Plans. The Applicant shall be responsible for all costs and expenses reasonably
incurred by SCE in relation to SCE's refinement of the Relocation Plans.
C. Revised Plans. In the event that modifications/revisions to the Relocation
Plans are required in order to accommodate changes to the Project (including the elimination of
conflicts with the Applicant's development plans), to resolve conflicts with other non -SCE
utilities within the Project area, or to address other changed circumstances, then SCE shall
prepare such modifications/revisions as are necessary to address said changes and shall
present same to the Applicant for review and approval. The Applicant shall be responsible for
all costs and expenses reasonably incurred by SCE in relation to SCE's preparation of the
modifications/revisions to the Relocation Plans.
d. Potential Project Delays. The Applicant expressly acknowledges that the
preparation of refined, modified and/or revised Relocation Plans may cause delays in SCE's
performance of the Relocation Work, and that said delays could impact the development
schedule for the Project. The Parties agree that SCE shall not have any liability or obligation to
the Applicant (or others) in the event that the preparation of refined, modified and/or revised
Relocation Plans results in delays in the Project.
3. ACQUISITION OF LAND RIGHTS
The Applicant shall be responsible for securing all land rights required by SCE to allow SCE to
relocate, construct and permanently operate and maintain the SCE Facilities on the areas
depicted in the Relocation Plans (the "Relocation Areas"). The land rights acquired by the
Applicant (the "SCE Land Rights") shall be in a form prescribed by SCE (the "SCE Land Rights
Form"); SCE shall provide the SCE Land Rights Form to the Applicant.
The SCE Land Rights shall also include permanent rights of ingress/egress that allow SCE to
gain reasonable, unimpeded and non -escorted access to and from the Relocation Areas and the
SCE Facilities (whether over lands owned by the Applicant or otherwise). In connection with the
acquisition of the SCE Land Rights, the Applicant shall be responsible for clearing all
encumbrances identified by SCE that could interfere with the Relocation Work and the exercise
of the SCE Land Rights on/about the Relocation Areas (including access thereto/therefrom).
Unless otherwise agreed (in writing) by SCE, the SCE Land Rights shall be granted directly to
SCE. Notwithstanding any provision herein to the contrary, SCE will not begin the Relocation
Work unless and until all required SCE Land Rights have been executed, in writing, and
presented to and approved by SCE.
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4. RELOCATION WORK
Following (i) the Parties' confirmation of the finality of the Relocation Plans and (ii) the
Applicant's acquisition (and SCE's approval) of the SCE Land Rights, SCE shall cause the SCE
Facilities to be removed and relocated to the Relocation Areas in accordance with the Relocation
Plans (the "Relocation Work"). SCE and the Applicant shall perform the Relocation Work in
accordance with all applicable laws, rules and regulations.
a. Work to Be Performed by SCE
1. SCE shall procure and install all materials related to its electrical system - for
example: cable, transformers, switches, capacitors, meters, and connectors -
except the ducts and substructures as defined in Rule 20B.2.a, which are to
be procured and installed by the Applicant. SCE shall provide all engineering
work related to the relocation of said electrical facilities.
SCE shall inspect and approve all ducts and substructures procured and
installed by the Applicant before SCE begins the installation of the
underground facilities.
3. SCE shall, at no cost to the Applicant, remove its overhead electrical facilities
after the underground facilities have been installed, energized, and placed into
permanent service.
4. Except as stated in Section 9 below, SCE and the Applicant shall each separately
be responsible for obtaining all permits required to complete the portion of
the work for which each Party is responsible under this Agreement, unless the
Parties agree otherwise in writing.
b. Work to Be Performed by Applicant
1. The Applicant, at no cost to SCE, is responsible for providing SCE with any
required street improvement or site plans reflecting the location of all existing
and proposed underground and/or overhead structures and/or facilities.
The Applicant, at no cost to SCE, shall procure and install the pads and vaults
for transformers and associated equipment, conduits, ducts, boxes, and
poles bases, and perform other work related to structures and substructures
including breaking of pavement, trenching, backfilling, and repaving in
connection with the installation of the underground system, all in accordance
with the Relocation Plans, subject to inspection and approval by SCE.
3. The Applicant shall notify SCE 48 hours prior to construction or installation
of the ducts and substructures so that SCE can schedule the required
inspection.
4. The Applicant shall provide SCE with "As -Built" drawings.
5. The Applicant, at no cost to SCE and subject to SCE's approval and acceptance,
will grant SCE, in writing, ownership of all ducts and substructures installed
pursuant to this Agreement. The Applicant warrants and represents that the
ownership of the installed ducts and substructures, and each and every
component thereof, as approved by SCE, will pass to SCE free and clear of any
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and all liens and encumbrances.
6. After the Applicant has completed installation of all ducts and substructures,
and the ducts and substructures have been inspected and approved by SCE,
the Applicant shall furnish to SCE a schedule of all costs incurred in the
construction of the ducts and substructures. The purpose of this information
is to allow SCE to calculate the amount of Income Tax Component of
Contribution ("ITCC") that will be charged on the ducts and substructures
installed by the Applicant. SCE must have this information before SCE
energizes the underground facilities and de -energizes the overhead facilities.
As part of the project reconciliation, SCE will provide a statement of ITCC for
the project, which includes the ITCC charged on the ducts and substructures
installed by the Applicant.
5. COST ALLOCATION
Applicant is exclusively responsible for all costs and expenses associated with SCE's
implementation of the Relocation Plans including, but not limited to, the costs and expenses
associated with (i) SCE's preparation of the Relocation Plans (and any revisions thereto and
refinements thereof), (ii) SCE's performance of the Relocation Work and (iii) the Applicant's
acquisition of the SCE Land Rights SCE may provide Applicant with credits with respect to the
Relocation as required by its applicable Tariff Rules of service.
Applicant shall reimburse SCE for costs and expenses incurred by SCE in accordance with the
provisions of Section 6, below.
6. INITIAL COST ESTIMATE, PAYMENT(S) AND RECONCILIATION
a. Initial Cost Estimate. The total estimated cost for the Relocation Work for
which the Applicant is responsible is $937,000 (the "Initial Cost Estimate").
The Initial Cost Estimate does not include an Income Tax Component of Contribution ("ITCC")
based on SCE's understanding that this project is exempt from ITCC charges. In the event that
the Internal Revenue Service, state, city, and/or local governmental taxing authority determines
that this project is taxable, the Applicant will reimburse SCE for the full amount of the tax
liability, plus interest, penalties, fees, and related costs. Such amounts will be paid to SCE
within 60 days after notification of such event by SCE to the Applicant. By execution of this
Agreement, the Applicant hereby acknowledges that this project is funded by the Applicant.
b. Prior Advances: Outstanding Balance. SCE has previously received an
engineering advance from the Applicant in the amount of $144,000 and an amount for long
lead time items of $200,000, which have been applied toward the total Initial Cost Estimate
owed by the Applicant. Thus, the total remaining balance due to SCE at this time is $593,000
(the "Outstanding Balance").
C. Payment of Outstanding Balance. Concurrent with the Applicant's
execution and delivery of this Agreement, the Applicant shall pay to SCE the Outstanding
Balance. The Outstanding Balance shall be delivered to SCE at the address shown in
Section 12.b, below, and shall reference the following SCE Project File Number: 747
Notwithstanding any provision herein to the contrary, the Applicant acknowledges and agrees
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that SCE will not begin the Relocation Work unless and until SCE has received the Outstanding
Balance.
d. Reconciliation. The Parties acknowledge that the Initial Cost Estimate is
valid only for a period of 90 days following the Effective Date, and that the costs associated
with SCE's performance of the Relocation Work could increase prior to SCE's completion of the
Relocation Work. Upon completion of the Relocation Work (or the cancellation of the Project or
termination of this Agreement), the Applicant will be responsible for paying the total costs and
expenses actually incurred by SCE for which the Applicant is responsible under this Agreement
in relation to implementation of the Relocation Plans. Thus, at the completion of the Relocation
Work (or upon the cancellation of the Project or termination of this Agreement), SCE will
calculate the total actual costs and expenses for which the Applicant is responsible hereunder,
and the Applicant will be provided with a final invoice identifying said costs and expenses. The
Applicant will be billed or refunded, as applicable, for any difference between the amounts paid
by the Applicant hereunder and the actual costs and expenses incurred by SCE. Any amount
owed to SCE shall be due no later than 30 days after the Applicant's receipt of the final invoice.
Similarly, any amount owed by SCE to the Applicant shall be refunded by SCE to the Applicant
within 30 days following SCE's preparation and delivery of the final invoice.
If the Applicant fails to pay the final invoice within 30 days of receipt, the Applicant is
responsible for paying to SCE, in addition to the invoiced amount, any and all costs incurred by
SCE to collect the past due amount, including but not limited to, collection agency fees and
court costs, but excluding attorneys' fees.
7. PROJECT SCHEDULING
The Parties acknowledge and agree that completion of the Relocation Work is contingent upon
mutually acceptable schedules, which, among other things, limit impacts on customers of SCE,
available resources, the timely obtaining of permits, licenses, real property rights, and other
documents, outages or other key items and not being delayed by those forces described in
Section 8, below. The Parties shall work cooperatively and in good faith to timely meet all
mutually -acceptable schedules and to minimize delays or impacts on customers of SCE;
however, the Applicant expressly acknowledges and agrees that SCE offers no guarantees or
warranties regarding the completion date for the Relocation Work.
8. NO RESPONSIBILITY FOR DELAYS
SCE shall not be responsible or liable to the Applicant (or others) for any delay in its
performance hereunder, or for any delays in the Project, due to any reason including, but not
limited to: shortage of labor or materials, delivery delays, major equipment breakdown, load
management, strikes, labor disturbances, war, riot, insurrection, civil disturbance, weather
conditions, epidemic, quarantine restriction, sabotage, act of public enemy, earthquake,
governmental rule, regulation or order, including orders of judgments of any court or
commission, requirement of additional or separate Environmental Impact Reports requested by
the California Public Utilities Commission ("CPUC"), delay in receiving a Certificate of Public
Convenience and Necessity from the CPUC, delay in obtaining necessary rights of way, act of
God, or any cause or conditions beyond the control of SCE or the Applicant. The Applicant
expressly waives and releases any and all claims for damages against SCE arising out of any
delays in the Project unless due to SCE's sole negligence or willful misconduct.
9. COMPLIANCE WITH CEQA AND OTHER ENVIRONMENTAL LAWS
The Applicant, at no cost to SCE, but with SCE's reasonable cooperation, shall comply with the
requirements of the California Environmental Quality Act ("CEQA") and other environmental
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laws, as applicable, and shall prepare any and all Negative Declarations, Mitigated Negative
Declarations and/or Environmental Impact Reports which may be required by any agency or
entity having jurisdiction over the Project and the Relocation Work. The Applicant expressly
acknowledges that SCE is relying upon the Applicant's representations that the Relocation Work
is covered by the environmental documentation, clearances and permits issued (or to be issued)
in relation to the Project, and that the Applicant is responsible for satisfying all mitigation
requirements and conditions attendant to SCE's performance of the Relocation Work.
Notwithstanding any provision herein to the contrary, the Applicant acknowledges and agrees
that SCE will not begin the Relocation Work unless and until all environmental permits,
approvals, certifications and authorizations have been issued in relation to the Project and the
Relocation Work.
10. COOPERATION BY BOTH PARTIES: TIMELY COMMUNICATION
The Parties shall work cooperatively and in good faith to timely implement their respective
duties and obligations set forth herein. To that end, the Parties shall timely communicate with
one another regarding the status of the Project, the status of the Relocation Work, and ways
that the Parties may work together to facilitate the completion of this Agreement.
Notwithstanding any provision herein to the contrary, failure by the Applicant to timely respond
to requests for information by SCE shall be considered a default of this Agreement.
11. INDEMNIFICATION
The Applicant agrees, for itself, and for its agents, contractors, and employees, to save
harmless, defend, and indemnify SCE, its officers, agents, contractors, and employees, and its
successors and assigns, from and against all claims, loss, damage, actions, causes of action,
expense and/or liability arising from or growing out of loss or damage to property, including
SCE's own personal property, or injury to or death of persons, including employees of SCE,
resulting in any manner whatsoever, directly or indirectly, by reason of the Applicant's Project
necessitating the subject work. Applicant's duty to indemnify SCE includes, without limitation,
claims against SCE regarding approvals given by Applicant for SCE's plans, claims against SCE
pertaining to the location and/or underlying real property rights for SCE's facilities in new
locations (as may be applicable), and claims against SCE for the removal and/or remediation of
pre-existing environmental contamination (provided such contamination was not caused by
SCE). Applicant shall not be excused of its duty to indemnify for SCE's ordinary negligence, but
shall be excused to the extent claims, losses, or damages are attributable to SCE's sole
negligence, gross negligence, or willful misconduct.
SCE agrees, for itself, and for its agents, contractors, and employees, to save harmless, defend,
and indemnify Applicant, its officers, agents, contractors, and employees, and its successors
and assigns, from and against all claims, loss, damage, actions, causes of action, expense
and/or liability arising from or growing out of loss or damage to property, including Applicant's
own personal property, or injury to or death of persons, including employees of Applicant,
resulting directly from the performance of SCE's construction and/or relocation work under this
Agreement. SCE shall not be excused of its duty to indemnify for Applicant's ordinary
negligence, but shall be excused to the extent claims, losses, or damages are attributable to
Applicant's sole negligence, gross negligence, or willful misconduct.
12. NOTICES, CORRESPONDENCE, AND PAYMENT ADDRESS
a. Notices and Correspondence. Any notices and correspondence provided
for in this Agreement, other than payments, to be given by either Party hereto to the other
shall be deemed to have been duly given when made in writing and deposited in the United
States mail, registered or certified and postage prepaid, addressed as follows:
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To SCE:
Ryann Higashi
Project Manager (Transmission)
Southern California Edison
1444 E. McFadden Ave, Bldg D
Santa Ana, CA 92705
To City of Newport Beach:
3300 jamboree Rd.
Newport Beach, CA 92663
Attention: Mike Sinacori
b. Payments: Any payments provided for in this Agreement shall be
forwarded to the addresses below.
To SCE:
Southern California Edison Company
P.O. Box 800
Rosemead, California 91771-0001
Attention: Accounts Receivable
To City of Newport Beach:
3300 jamboree Rd.
Newport Beach, CA 92663
Attention: Mike Sinacori
13. TERMINATION
a. Applicant's Right to Terminate Agreement. The Applicant shall have the
right to terminate this Agreement at any time upon written notice to SCE. If this Agreement is
terminated by the Applicant, the Applicant shall be responsible to SCE for all costs and
expenses actually incurred by SCE in connection with SCE's preparation of the Relocation Plans,
performance of the Relocation Work, and any other actions/activities under this Agreement,
notwithstanding the cost allocation provisions in Section S, above. Additionally, Applicant shall
be responsible for any additional costs and expenses incurred by SCE as a result of the
termination, including but not limited to, restoring the SCE Facilities to a permanent operational
state; all costs for equipment and/or materials; and all costs or expenses related to the
cancellation of contracts, purchase orders, or other commitments or agreements entered into
up to and including the date of the notice of termination, between SCE and all parties furnishing
labor, materials, and services in connection with this Agreement. SCE shall prepare and deliver
to the Applicant an invoice that describes/identifies the costs and expenses thus incurred by
SCE. Within 30 days following SCE's delivery of said invoice, the Applicant shall pay to SCE the
amounts specified in the invoice.
b. Termination Due to Applicant's Default. If the Applicant is in default of
any of the terms, provisions, conditions, limitations and covenants of this Agreement, SCE may
give the Applicant written notice of default ("Default Notice"). If the Applicant does not cure
Page 7 of 12 1ransm scion Project Management Revision Date
Rule 20B -=applicant to Install Ducts Substructures March 2016
9-13
such default within the time specified in the Default Notice, SCE has the right, but not the
obligation, to terminate this Agreement upon 30 days written notice to the Applicant (or such
lesser time as may be appropriate under the circumstances). Except as otherwise provided,
should SCE exercise such right of termination, SCE shall be entitled to payment for all costs and
expenses for materials, services, labor, overhead, and any other expenses related to the
performance of this Agreement thus incurred by SCE, up to and including the date of
termination, notwithstanding the cost allocation provisions in Section 5, above. SCE shall also
be entitled to payment for all costs and expenses required to effect the termination of this
Agreement, including but not limited to: all costs and expenses pertaining to the restoration of
the SCE Facilities to a permanent operational state; all costs for equipment and/or materials;
and all costs and expenses related to the cancellation of contracts, purchase orders,
commitments or other agreements entered into up to and including the date of the notice of
termination, between SCE and all parties furnishing labor, materials, and services in connection
with this Agreement. SCE shall prepare and deliver to the Applicant an invoice that
describes/identifies the costs and expenses thus incurred by SCE. Within 30 days following
SCE's delivery of said invoice, the Applicant shall pay to SCE the amounts specified in the
invoice.
14. JURISDICTION OF PUBLIC UTILITIES COMMISSION
This Agreement shall at all times be subject to such changes or modifications as the California
Public Utilities Commission may, from time to time, direct in the exercise of its jurisdiction
pursuant to the authority conferred upon it by law.
15. AMENDMENTS
The provisions of this Agreement shall not be altered or amended by any representations or
promises of any Party unless consented to in a writing executed by all Parties.
16. GOVERNING LAW
This Agreement shall be subject to and construed according to the laws of the State of
California.
17. HEADINGS
The captions and headings used in this Agreement are strictly for convenience and are not
intended to and shall not affect the Parties' rights and obligations, or the construction or
interpretation of this Agreement.
18. THIRD PARTY BENEFICIARIES
Nothing herein is intended to create any third party benefit.
19. NO AGENCY, PARTNERSHIP OR JOINT VENTURE
Nothing contained herein shall be deemed or construed as creating the relationship of principal
and agent or of partnership or of joint venture by and between the Parties hereto.
20. WAIVER
No waiver of any default or breach hereunder shall be implied from any omission to take action
on account thereof, notwithstanding any custom and practice or course of dealing. No waiver
by any Party of any provision under this Agreement shall be effective unless in writing and
Page 8 of 12 transmission Project Management Revision Date.
Rule 209 - Applicant to Install Ducts;'Substructures March ?016
9-14
signed by such Party, and no waiver shall affect any default other than the default specified in
the waiver and then said waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant shall not be construed as a waiver of any subsequent breach of
the same.
21. DUPLICATE ORIGINALS AND ELECTRONIC SIGNATURES
This Agreement may be executed in duplicate originals, each of which, when so executed and
delivered, shall be an original but such counterparts shall together constitute one instrument
and agreement. The exchange of copies of this Agreement and of signature pages by facsimile
transmission, Portable Document Format (i.e., PDF) or by other electronic means constitutes
effective execution and delivery of this Agreement as to the Parties and may be used in lieu of
the original Agreement for all purposes. This Agreement may be executed by way of an
electronic signature, in which case, said electronic signature shall have the same force and
effect as a written signature.
[THIS SPACE INTENTIONALLY LEFT BLANK; SIGNATURES TO FOLLOW)
Page 9 of 12 Transmission Project Management Revision Date
Rule 20B - Applicant to Install Ducts; Substructures Ivlarch 2016
9-15
IN WITNESS WHEREOF, this Agreement and each and every term herein is agreed to by and
between the undersigned.
DATED:
DATED:_____..-_M_--
DATED:AMJ 14--
DATED:
1 -1__
DATED:
CITY OF NEWPORT BEACH, a
California Municipal Corporation
BY:
---------------
Diane B. Dixon
Mayor
ATTEST:
------------------------------------
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
------------ --------- --- -----------
fb' Aaron C. Harp, City Attorney
SOUTHERN CALIFORNIA EDISON COMPANY,
a California corporation
BY:
Jennifer Ward signing on Behalf of
Ryann Higashi
Project Manager
Page 10 of 12 Transmission Project Management Revision Date:
Rule 20B - Applicant to Install Ducts/Substructures March 2076
9-16
EXHIBIT A
Description of the Project Location
J
Pro ect~ 747 CI of N r
ty . Newport beach Rule 2oB
Page 1 1 of 12 Transmission Project Management
Rule 20B - Applicant to Install Ducts/Substructures
tNtl{
Sti NINIUPM�
� r
9-17
EXHIBIT B
APPROVED RELOCATION PLANS
Please See Attached
Page 12 of 12 Transmission Project Management
Rule 20B - Applicant to Install Duds/Substructures
am
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Attachment B
Acquisition Agreement
9-23
Execution Version
ACQUISITION AGREEMENT
BY AND AMONG
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,
CITY OF NEWPORT BEACH
.2��
TSG — PARCEL 1, LLC and UPTOWN NEWPORT JAMBOREE, LLC
Dated as of March [ • ], 2019
US-DOCS\105642049.4
9-24
ACQUISITION AGREEMENT
Recitals
A. The parties to this Acquisition Agreement (the "Agreement") are the California
Statewide Communities Development Authority (the "Authority"), City of Newport Beach (the
"City"), Uptown Newport Jamboree, LLC, a Delaware limited liability company and TSG – Parcel
1, LLC, a Delaware limited liability company (collectively, the "Developer").
B. The effective date of this Agreement is March [ • ], 2019.
C. The Developer has applied for the financing of certain public capital improvements
(each, as more particularly described on Exhibit A, an "Acquisition Improvement" and
collectively, the "Acquisition Improvements") and certain utility undergrounding (the
"Undergrounding") through the Authority. The Acquisition Improvements are to be owned and
operated by the City, and the financing is to be accomplished through a Community Facilities
District which will be established and administered by the Authority under and pursuant to the
Mello -Roos Community Facilities Act of 1982 – California Government Code Sections 53311 and
following (the "Act"). On June 26, 2018, the City adopted Resolution No. 2018-44 authorizing
the Authority to form a community facilities district (the "Community Facilities District") within
the territorial limits of the City to finance the Acquisition Improvements. On December 20, 2018,
the Authority formed the Community Facilities District and, on the same date, a landowner
election was conducted for the Community Facilities District in which all of the votes were cast
unanimously in favor of conferring the Community Facilities District authority on the Authority
Commission.
D. The Authority intends to levy special taxes for facilities and issue bonds for the
Community Facilities District, in one or more series, to fund, among other things, all or a portion
of the Acquisition Improvements and to fund the Undergrounding. The portion of the proceeds of
such special taxes (including prepayments) and bonds allocable to the cost of the Undergrounding
and the Acquisition Improvements, together with interest earned thereon, is referred to herein as
the "Available Amount".
E. The Community Facilities District will provide financing for (i) the
Undergrounding of the utility lines by Southern California Edison as more particularly described
herein and (ii) the acquisition by the City of the Acquisition Improvements and the payment of the
Acquisition Price (as defined herein) of the Acquisition Improvements from the Available
Amount. Attached hereto as Exhibit A is a description of the Acquisition Improvements, which
includes authorized discrete and usable portions, if any, of the Acquisition Improvements, pursuant
to Section 53313.51 of the Act, to be acquired from the Developer.
F. The parties anticipate that, upon completion of the Acquisition Improvements and
subject to the terms and conditions of this Agreement, the City will acquire the completed
Acquisition Improvements.
G. In order to facilitate the Undergrounding, the City will enter into a Facilities
Relocation Agreement (Relocation under SCE Tariff Rule 20B—Applicant to Install
US-DOCS\105642049.4
9-25
Ducts/Substructures) (the "Rule 20B Agreement") with Southern California Edison. It is the
intention of the parties hereto that the Developer be obligated to pay for any costs incurred by the
City under the Rule 20B Agreement and to indemnify, defend and hold the City harmless for any
and all costs or liabilities to Southern California Edison in excess of the Available Amounts and
amounts previously paid to the City and Southern California Edison and arising out of or relating
to the Undergrounding.
H. Any and all monetary obligations of the City arising out of this Agreement are the
special and limited obligations of the City payable only from the Available Amount, and no other
funds whatsoever of the City shall be obligated therefor under any circumstances.
I. Attached to this Agreement are Exhibit A (Description of the Acquisition
Improvements and the Eligible Portions thereof), Exhibit B (Disbursement Request Form for
Acquisition Improvements) and Exhibit C (Bidding, Contracting and Construction Requirements
for Acquisition Improvements), all of which are incorporated into this Agreement for all purposes.
Agreement
ARTICLE I
DEFINITIONS; COMMUNITY FACILITIES DISTRICT FORMATION AND
FINANCING PLAN
Section 1.01. Definitions. As used herein, the following capitalized terms shall
have the meanings ascribed to them below:
"Acceptable Title" means title (whether a fee interest, easement or other acceptable title or
property rights) free and clear of all monetary liens, encumbrances, assessments, whether any such
item is recorded or unrecorded, and taxes, except (i) those items which are reasonably determined
by the City Engineer or Southern California Edison, as applicable, not to interfere with the intended
use and therefore are not required to be cleared from the title, and (ii) the lien of the Community
Facilities District or any other community facilities district or assessment district provided that the
property owned by the City is exempt from such taxation or assessment.
"Acquisition and Construction Fund" means each "Uptown Newport Community Facilities
District Acquisition and Construction Fund" established by the Authority pursuant to the
Resolution and Section 1.03 hereof for the purpose of paying the Acquisition Price of the
Acquisition Improvements.
"Acquisition Improvement" means a public capital improvement described in Exhibit A
hereto.
"Acquisition Price" means the total amount eligible to be paid to the Developer upon
acquisition of an Acquisition Improvement as provided in Section 2.03, not to exceed the Actual
Cost of the Acquisition Improvement.
2
US-DOCS\105642049.4
9-26
"Actual Cost" means the total cost of an Acquisition Improvement, as documented by the
Developer to the satisfaction of the City and as certified by the City Engineer in an Actual Cost
Certificate including, without limitation, (a) the Developer's cost of constructing such Acquisition
Improvement including grading, labor, material and equipment costs, (b) the Developer's cost of
designing and engineering the Acquisition Improvement, preparing the plans and specifications
and bid documents for such Acquisition Improvement, and the costs of inspection, materials testing
and construction staking for such Acquisition Improvement, (c) the Developer's cost of any
performance, payment and maintenance bonds and insurance, including title insurance, required
hereby for such Acquisition Improvement, (d) the Developer's cost of any real property or interest
therein that is either necessary for the construction of such Acquisition Improvement
(e.g., temporary construction easements, haul roads, etc.), or is required to be conveyed with such
Acquisition Improvement in order to convey Acceptable Title thereto to the City or its designee,
(e) the Developer's cost of environmental evaluation or mitigation required for such Acquisition
Improvement, (f) the amount of any fees actually paid by the Developer to governmental agencies
in order to obtain permits, licenses or other necessary governmental approvals and reviews for
such Acquisition Improvement, (g) the Developer's cost for construction and project management,
administration and supervision services for such Acquisition Improvement, and (h) the
Developer's cost for professional services related to such Acquisition Improvement, including
engineering, accounting, legal, financial, appraisal and similar professional services.
"Actual Cost Certificate" means a certificate prepared by the Developer detailing the
Actual Cost of an Acquisition Improvement, or an Eligible Portion thereof, to be acquired
hereunder, as may be revised by the City Engineer pursuant to Section 2.03.
"Agreement" means this Acquisition Agreement, dated as of March [ • ], 2019.
"Authority" means the California Statewide Communities Development Authority.
"Authority Trust Agreement" means a Trust Agreement or Indenture entered into by the
Authority and an Authority Trustee in connection with the issuance of bonds.
"Authority Trustee" means the financial institution identified as trustee in an Authority
Trust Agreement.
"Available Amount" shall have the meaning assigned to the term in Recital D.
"Bonds" means bonds or other indebtedness issued by the Authority that are to be repaid
with Special Taxes.
"City" means the City of Newport Beach, California.
"City Engineer" means the Engineer of the City or his/her designee who will be responsible
for administering the Undergrounding and the acquisition of the Acquisition Improvements
hereunder.
"Code" means the Government Code of the State of California.
US-DOCS\105642049.4
9-27
"Community Facilities District" shall have the meaning assigned to the term in Recital C.
"Developer" means, collectively or severally, as appropriate, TSG — Parcel 1, LLC, a
Delaware limited partnership and Uptown Newport Jamboree, LLC, a Delaware limited liability
company, and their respective successors and assigns.
"Disbursement Request Form" means a requisition for payment of funds from an
Acquisition and Construction Fund for an Acquisition Improvement, or an Eligible Portion thereof
in substantially the form contained in Exhibit B hereto.
"Eligible Portion" shall have the meaning ascribed to it in Section 2.03 below.
"Holdback" shall have the meaning ascribed to it in the Section 2.04(b).
"Installment Payment" means an amount equal to ninety percent (90%) of the Actual Cost
of an Eligible Portion.
"Jazz Semiconductor" means Newport Fab LLC, a Delaware limited liability company
doing business as "Jazz Semiconductor."
"Project" means the development of the property in the Community Facilities District,
including the design and construction of the Acquisition Improvements and the Undergrounding
and the other public and private improvements to be constructed by the Developer or Southern
California Edison within or in the vicinity of the Community Facilities District.
"Resolution" means City of Newport Beach Resolution No. 2018-44, adopted June 26,
2018 authorizing the execution and delivery of this Agreement.
"Special Taxes" means annual special taxes for facilities, and prepayments thereof,
authorized by the Community Facilities District to be levied by the Commission of the Authority
within the Community Facilities District.
"Title Documents" means, for each Acquisition Improvement acquired hereunder or for
the Undergrounding, a grant deed or similar instrument necessary to transfer title to any real
property or interests therein (including easements or rights of way), or an irrevocable offer of
dedication of such real property with interests therein necessary to the operation, maintenance,
rehabilitation and improvement by the City of the Acquisition Improvement or Southern California
Edison with respect to the Undergrounding (including, if necessary, easements for ingress and
egress) and a bill of sale or similar instrument evidencing transfer of title to the Acquisition
Improvement (other than said real property interests) to the City or title to Undergrounding to
Southern California Edison, where applicable.
"Undergrounding" means the underground relocation of overhead electrical transmission
utilities operated and maintained by Southern California Edison within the vicinity of the Project.
Section 1.02. Establishment of Community Facilities District. Developer has
requested the City to permit the Authority to provide for financing of the Acquisition
M
US-DOCS\105642049.4
9-28
Improvements and the Undergrounding and collection of special tax through the establishment and
authorization of the Community Facilities District and the City agreed by its adoption of the
Resolution. The Community Facilities District was established by the Authority on December 20,
2018, and through the successful landowner election held that same day with respect to the
Community Facilities District, the Commission of the Authority is authorized to levy the Special
Taxes and to issue the Bonds to finance the Acquisition Improvements and the Undergrounding.
Developer and the City agree to reasonably cooperate with one another and with the Authority in
the completion of the financing through the issuance of the Bonds in one or more series for the
Community Facilities District.
Section 1.03. Deposit and Use of Available Amount.
(a) Prior to the issuance of Bonds for the Community Facilities District, Special
Taxes collected by the Authority (including from prepayments of Special Taxes) shall be deposited
in the Acquisition and Construction Fund established by the Authority pursuant to the terms of the
Resolution, and may be disbursed to pay the Acquisition Price of Acquisition Improvements or
the costs of Undergrounding in accordance with Article II of this Agreement. All funds in the
Acquisition and Construction Fund shall be considered a portion of the Available Amount, and
upon the issuance of the Bonds the Acquisition and Construction Fund shall be transferred to the
Authority Trustee to be held in accordance with the Authority Trust Agreement.
(b) If not already established pursuant to the Resolution, upon the issuance of
the Bonds, the Authority will cause the Authority Trustee to establish and maintain the Acquisition
and Construction Fund for the purpose of holding all funds for the Acquisition Improvements or
the costs of Undergrounding to be financed by the Community Facilities District. All earnings on
amounts in the Acquisition and Construction Fund shall remain in the Acquisition and
Construction Fund for use as provided herein and pursuant to the Authority Trust Agreement.
Money in such Acquisition and Construction Fund shall be available to respond to delivery of a
Disbursement Request Form and to be paid to the Developer or its designee to pay the Acquisition
Price of the Acquisition Improvements or the costs of Undergrounding, as specified in Article II
hereof. Upon completion of all of the Acquisition Improvements and the Undergrounding and the
payment of all costs thereof, any remaining funds in the Acquisition and Construction Fund (less
any amount determined by the City as necessary to reserve for claims against the account) (i) shall
be applied to pay the costs of any additional Acquisition Improvements eligible for acquisition
with respect to the Project, as approved by the Authority and, to the extent not so used, (ii) shall
be applied by the Authority to call Bonds or to reduce Special Taxes as the Authority shall
determine.
Section 1.04. No City Liability; City Discretion; No Effect on Other Agreements.
In no event shall any actual or alleged act by the City or any actual or alleged omission or failure
to act by the City with respect to the Authority subject the City to monetary liability therefor.
Further, nothing in this Agreement shall be construed as affecting the Developer's or the City's
duty to perform their respective obligations under any other agreements, public improvement
standards, land use regulations or subdivision requirements related to the Project, which
obligations are and shall remain independent of the Developer's and the City's rights and
obligations under this Agreement.
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ARTICLE II
DESIGN, CONSTRUCTION AND ACQUISITION OF ACQUISITION IMPROVEMENTS
Section 2.01. Letting and Administering Design Contracts. The Developer has
awarded and administered, or will award and administer, engineering design contracts for the
Acquisition Improvements to be acquired from Developer. All eligible expenditures of the
Developer for design engineering and related costs in connection with the Acquisition
Improvements (whether as an advance to the City or directly to the design consultant) shall be
reimbursed at the time of acquisition of the Acquisition Improvements. The Developer shall be
entitled to reimbursement for any design costs of the Acquisition Improvements only out of the
Acquisition Price as provided in Section 2.03 and shall not be entitled to any payment for design
costs independent of the acquisition of Acquisition Improvements.
Section 2.02. Letting and Administration of Construction Contracts;
Indemnification. State law requires that all Acquisition Improvements not completed prior to the
formation of the Community Facilities District shall be constructed as if they were constructed
under the direction and supervision, or under the authority, of the City. In order to assure
compliance with those provisions, except for any contracts entered into prior to the date hereof,
Developer agrees to comply with the requirements set forth in Exhibit C hereto with respect to the
bidding and contracting for the construction of the Acquisition Improvements. The Developer
agrees that all the contracts shall call for payment of prevailing wages as required by the Labor
Code of the State of California. The Developer's indemnification obligation set forth in
Section 3.01 of this Agreement shall also apply to any alleged failure to comply with the
requirements of this Section, and/or applicable State laws regarding public contracting and
prevailing wages.
Section 2.03. Sale of Acquisition Improvements. The Developer agrees to sell to
the City each Acquisition Improvement to be constructed by or on behalf of the Developer
(including any rights-of-way or other easements necessary for the Acquisition Improvements, to
the extent not already publicly owned), when the Acquisition Improvement is completed to the
satisfaction of the City for an amount not to exceed the lesser of (i) the Available Amount from
time to time or (ii) the Actual Cost of the Acquisition Improvement. Exhibit A, attached hereto
and incorporated herein, contains a list of the Acquisition Improvements. Portions of an
Acquisition Improvement eligible for Installment Payments prior to completion of the entire
Acquisition Improvement are described as eligible, discrete and usable portions in Exhibit A (each,
an "Eligible Portion"). At the time of completion of each Acquisition Improvement, or Eligible
Portion thereof, the Developer shall deliver to the City Engineer a written request for acquisition,
accompanied by an Actual Cost Certificate, and by executed Title Documents for the transfer of
the Acquisition Improvement where necessary. In the event that the City Engineer finds that the
supporting paperwork submitted by the Developer fails to demonstrate the required relationship
between the subject Actual Cost and eligible work, the City Engineer shall advise the Developer
that the determination of the Actual Cost (or the ineligible portion thereof) has been disallowed
and shall request further documentation from the Developer. If the further documentation is still
not adequate, the City Engineer may revise the Actual Cost Certificate to delete any disallowed
items and the determination shall be final and conclusive.
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Certain soft costs for the Acquisition Improvements, such as civil engineering, may have
been incurred pursuant to single contracts that include work relating also to the private portions of
the Project. In those instances, the total costs under such contracts will be allocated to each
Acquisition Improvement as approved by the City Engineer. Where a specific contract has been
awarded for design or engineering work relating solely to an Acquisition Improvement, one
hundred percent (100%) of the costs under the contract will be allocated to that Acquisition
Improvement. Amounts allocated to an Acquisition Improvement will be further allocated among
the Eligible Portions of that Acquisition Improvement, if any, in the same proportion as the amount
to be reimbursed for hard costs for each Eligible Portion bears to the amount to be reimbursed for
hard costs for the entire Acquisition Improvement. Costs will be allocated to each Acquisition
Improvement as approved by the City Engineer. The costs of certain environmental mitigation
required to mitigate impacts of the public and private portions of the Project will be allocated to
each Acquisition Improvement as approved by the City Engineer.
Section 2.04. Conditions Precedent to Payment of Acquisition Price. Payment to
the Developer or its designee of the Acquisition Price for an Acquisition Improvement from the
Acquisition and Construction Fund shall in every case be conditioned first upon the determination
of the City Engineer, pursuant to Section 2.03, that the Acquisition Improvement satisfies all City
regulations and ordinances and is otherwise complete and ready for acceptance by the City, and
shall be further conditioned upon satisfaction of the following additional conditions precedent:
(a) The City shall have paid all amounts to be due and owing pursuant to the
Rule 20B Agreement between the City and Southern California Edison within the time frame
specified therein for the Undergrounding and the City shall have received confirmation from
Southern California Edison that they have received the same. The City's obligation to pay amounts
under the Rule 20B Agreement shall be solely from the Available Amounts or other funds made
available to the City by the Developer pursuant to Section 2.08 below.
(b) $500,000 of proceeds from bonds issued by the Community Facilities
District (the "Holdback"), will be retained in the Acquisition and Construction Fund to be used
first to make any additional payments due to Southern California Edison under the Rule 20B
Agreement under the Rule 20B Agreement in connection with the Undergrounding and second,
upon completion of the Undergrounding and payment of all amounts related thereto, to make an
additional payment to the Developer for the remainder of the Acquisition Price for such
Acquisition Improvement (solely to the extent of available funds therefor). The City shall be under
no obligation to direct the release of the Holdback to the Developer until it receives assurances
from Southern California Edison that all amounts due under the Rule 20B Agreement have been
paid.
(c) The Developer shall have provided the City with lien releases or other
similar documentation satisfactory to the City Engineer as evidence that none of the property
(including any rights-of-way or other easements necessary for the operation and maintenance of
the Acquisition Improvement, to the extent not already publicly owned) comprising the
Acquisition Improvement is not subject to any prospective mechanics lien claim respecting the
Acquisition Improvements.
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(d) The Developer shall be current in the payment of all due and payable
general property taxes, and all special taxes of the Community Facilities District, on property
owned by the Developer within the Community Facilities District. Property shall be exempt from
the special tax of the Community Facilities District upon conveyance to the City or the Developer
shall prepay the special tax on the property so conveyed.
(e) The Developer shall certify that it is not in default with respect to any loan
secured by any interest in the Project.
(f) The Developer shall have provided the City with Title Documents needed
to provide the City with Acceptable Title to the site, right-of-way, or easement upon which the
subject Acquisition Improvement is situated. All such Title Documents shall be in a form
acceptable to the City and shall convey Acceptable Title. The Developer shall provide a policy of
title insurance as of the date of transfer in a form acceptable to the City Engineer and the City
Attorney insuring the City as to the interests acquired in connection with the acquisition of any
interest for which such a policy of title insurance is not required by another agreement between
the City and the Developer. Each title insurance policy required hereunder shall be in the amount
equal to the Acquisition Price. The amount paid to the Developer or its designee upon satisfaction
of the foregoing conditions precedent shall be the Acquisition Price less all Installment Payments
paid previously with respect to the Acquisition Improvement less the Holdback (which shall be
paid to the Developer, to the extent of funds available therefor, pursuant to the provisions of
2.04(b) and 2.06 below).
Section 2.05. Payment for Eligible Portions. The Developer may submit an
Actual Cost Certificate to the City Engineer with respect to any Eligible Portion. Payment to the
Developer or its designee from the Acquisition and Construction Fund of an Installment Payment
with respect to such Eligible Portion shall in every case be conditioned first upon the determination
of the City Engineer, pursuant to Section 2.03, that the Eligible Portion has been completed in
accordance with the applicable plans and specifications and that the Eligible Portion satisfies all
City regulations and ordinances and is otherwise complete and, where appropriate, is ready for
acceptance by the City, and shall be further conditioned upon satisfaction of the following
additional conditions precedent:
(a) The Developer shall have provided the City with lien releases or other
similar documentation satisfactory to the City Engineer as evidence that the property (including
any rights-of-way or other easements necessary for the operation and maintenance of the Eligible
Portion, to the extent not already owned by the City) comprising the Eligible Portion is not subject
to any prospective mechanics lien claim respecting the Eligible Portion.
(b) The Developer shall be current in the payment of all due and payable
general property taxes, and all special taxes of the Community Facilities District, on property
owned by the Developer within the Community Facilities District.
(c) The Developer shall have provided the City with Title Documents needed
to provide the City with title to the site, right-of-way, or easement upon which the subject Eligible
Portion is situated. All such Title Documents shall be in a form acceptable to the City Engineer
US-DOCS\105642049.4
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and shall be sufficient, upon completion of the Acquisition Improvement of which the Eligible
Portion is a part, to convey Acceptable Title.
(d) Payment and performance bonds, from a bonding company with an A.M.
Best rating of at least "A-" or its equivalent, applying to plans and specifications for the
Acquisition Improvement approved by the City, shall be in place to secure completion of the
Acquisition Improvement of which the Eligible Portion is a part.
Section 2.06. Disbursement Request Form/Payment of Holdback. Upon a
determination by the City Engineer to pay the Acquisition Price of an Acquisition Improvement
pursuant to Section 2.04 or to pay an Installment Payment for an Eligible Portion pursuant to
Section 2.05, the City Engineer shall cause a Disbursement Request Form substantially in the form
attached hereto as Exhibit B-1 to be submitted to the Authority and Authority Trustee, and the
Authority or Authority Trustee shall make payment directly to the Developer or its designee of the
amount requested from the applicable Acquisition and Construction Fund. The City and the
Developer acknowledge and agree that the Authority or Authority Trustee shall make payment
strictly in accordance with the Disbursement Request Form and shall not be required to determine
whether or not the Acquisition Improvement or Eligible Portion has been completed or what the
Actual Costs may be with respect to the Acquisition Improvement or Eligible Portion. The
Authority or Authority Trustee shall be entitled to rely on the executed Disbursement Request
Form on its face without any further duty of investigation.
Subject to the Holdback and Section 2.08 below, in the event that the Actual Cost of an
Acquisition Improvement or the Installment Payment for an Eligible Portion is in excess of the
Available Amount, the Authority or Authority Trustee shall withdraw all funds remaining in the
Acquisition and Construction Fund and shall transfer those amounts to the Developer or its
designee. The unpaid portion of the Actual Cost shall be paid from funds that may subsequently
be deposited in the Acquisition and Construction Fund from a subsequent issuance of Bonds, from
prepayments of Special Taxes to be used for financing Acquisition Improvements, or from Special
Tax revenues, if any of those occurs.
Upon a determination by the City Engineer to pay the Acquisition Price of an Acquisition
Improvement less any Holdback pursuant to Section 2.04(b) and further upon completion of the
Undergrounding and payment of all amounts due and owing with respect thereto, the City Engineer
shall notify the Authority Trustee and authorize the release to the Developer of all amounts
previously included and approved in an executed Disbursement Request Form with respect to an
Acquisition Improvement but held back by the Authority as a Holdback (but solely to the extent
of any available amounts remaining in or subsequently deposited in the Acquisition and
Construction Fund).
Section 2.07. Limitation on Obligations. - In no event shall the City be required to
pay the Developer or its designee more than the amounts held in the Acquisition and Construction
Fund.
Section 2.08. Undergrounding of Utilities. In addition to financing the acquisition
of the Acquisition Improvements, proceeds of bonds for the Community Facilities District are
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expected to finance the Undergrounding of certain electrical transmission facilities operated and
maintained by Southern California Edison. Notwithstanding anything to the contrary herein, the
City shall be entitled to directly request payment to the City (or to reimburse the Developer)
pursuant to a Request to the Authority Trustee to (i) reimburse amounts the City or Developer has
paid Southern California Edison or a contractor for the amount in such request, or (ii) to pay
directly to Southern California Edison, the Developer or a contractor for the amount in such
request. To the extent authorized by law, the City agrees to first reimburse amounts previously
deposited by the Developer pursuant to the Deposit Agreement between the City of Newport Beach
and TSG — Parcel 1, LLC, dated January 5, 2015, for the costs of the Undergrounding of utilities,
including design and planning and any amounts deposited by Developer for materials or otherwise,
from proceeds of Bonds or the Special Tax pursuant to this Section. Pursuant to the Rule 20B
Agreement, Southern California Edison has estimated the costs of the Undergrounding to be
performed by Southern California Edison to be $937,000. To the extent the actual cost of the
Undergrounding exceeds $937,000 plus the Holdback Amount and the Developer has not
reimbursed the City or paid Southern California Edison directly within 90 days of receipt of the
final invoice from Southern California Edison, the Authority and the Developer shall levy special
taxes up to the maximum amount permitted to reimburse the City or pay Southern California
Edison directly for such costs.
The Developer further agrees that it shall transfer: (i) any and all real property interests required
by Southern California Edison as part of the Undergrounding to the City or Southern California
Edison, as applicable, free of any encumbrances to which Southern California Edison objects, and
(ii) all ducts and substructures built in connection with the Undergrounding, all in accordance with
the terms of the 20B Agreement. The Developer shall be responsible for the costs of acquiring
such real property interests, if necessary, and all costs of providing Acceptable Title.
In addition, the Developer agrees that it shall pay any and all costs associated with the
establishment of any temporary power generating facilities required in connection with the
Undergrounding and the provision of power therefrom and may include such costs in costs to be
paid to Southern California Edison and/or reimbursed to Developer as part of the costs of the
Undergrounding from proceeds of the Bonds, to the extent amounts are available therefrom.
Furthermore, the Developer acknowledges that it has reviewed all relocation plans provided by
Southern California Edison and the City in connection with the Undergrounding, and further
acknowledges that it is not aware of any conflicts with the plans of the Developer, or any related
entity, to develop the property within the Community Facilities District.
ARTICLE III
MISCELLANEOUS
Section 3.01. Indemnification and Hold Harmless. The Developer hereby
assumes the defense of, and indemnifies and saves harmless the City, the Authority and their
respective officers, directors, employees and agents, including the Authority Trustee, from and
against (a) any amounts due and owing to Southern California Edison pursuant to the 20B
Agreement executed and delivered by the City and Southern California Edison with respect to the
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Undergrounding, including any Income Tax Component of Contribution required to be paid by
Southern California Edison, but solely to the extent not otherwise paid, funded or advanced to
Southern California Edison from the proceeds of the Bonds and/or previously paid to the City
and/or Southern California Edison by the Developer; (b) any claims, lawsuits or proceedings by
any third parties, including, but not limited to, Jazz Semiconductor, that result or relate in any way
to the Undergrounding or any disruption of electrical power related thereto or to the Rule 20B
Agreement, and (c) all actions, damages, claims, losses or expenses of every type and description
to which they may be subjected or put, by reason of, or resulting from or alleged to have resulted
from the acts or omissions of the Developer or its agents and employees arising out of any contract
for the design, engineering and construction of the Acquisition Improvements or the
Undergrounding entered into by the Developer or arising out of any alleged misstatements of fact
or alleged omission of a material fact made by the Developer, its officers, directors, employees or
agents to the Authority's underwriter, financial advisor, appraiser, district engineer or bond
counsel or regarding the Developer, its proposed developments, its property ownership and its
contractual arrangements contained in the official statement relating to the Authority financing
(provided that the Developer shall have been furnished a copy of the official statement and shall
not have objected thereto); and provided, further, that nothing in this Section 3.01 shall limit in
any manner the City's rights against any of the Developer's architects, engineers, contractors or
other consultants. Except as set forth in this Section 3.01, no provision of this Agreement shall in
any way limit the extent of the responsibility of the Developer for payment of damages resulting
from the operations of the Developer, its agents and employees. Nothing in this Section 3.01 shall
be understood or construed to mean that the Developer agrees to indemnify the City, the Authority
or any of their respective officers, directors, employees or agents, for any wrongful acts or
omissions to act of the Authority or its officers, employees, agents or any consultants or
contractors, including the Authority Trustee, and for any wrongful acts, willful misconduct, active
gross negligence or willful omissions to act of the City, or its officers, employees, agents or any
consultants or contractors, including the Authority Trustee.
Section 3.02. Waiver of Claims, Insurance. The Developer hereby agrees to
waive any and all claims against the City arising in connection with the Undergrounding or the
agreement with Southern California Edison in connection therewith, including by reason of delay
by any parry acting in connection with the Undergrounding. The Developer hereby agrees (i) to
name or cause its contractors and subcontractors to name the City as an additional insured in
connection with any of the construction contracts for the Acquisition Improvements and the
Undergrounding work performed by Developers and (ii) to provide an insurance policy providing
business interruption coverage in favor of Jazz Semiconductor and naming the City as an
additional insured in an aggregate amount not less than $10,000,000 to cover potential losses to
Jazz Semiconductor as a result of any interruption in their business due to the a loss of utility
services during the Undergrounding.
Section 3.03. Audit. The City shall have the right, during normal business hours
and upon the giving of ten days' written notice to the Developer, to review all books and records
of the Developer pertaining to costs and expenses incurred by the Developer (for which the
Developer seeks reimbursement pursuant to this Agreement) in constructing the Acquisition
Improvements.
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Section 3.04. Cooperation. The City and the Developer agree to cooperate with
respect to the completion of the financing of the Acquisition Improvements by the Authority
through the levy of the Community Facilities District Special Taxes and issuance of Bonds. The
City and the Developer agree to meet in good faith to resolve any differences on future matters
which are not specifically covered by this Agreement.
Section 3.05. General Standard of Reasonableness. Any provision of this
Agreement which requires the consent, approval or acceptance of either party hereto or any of their
respective employees, officers or agents shall be deemed to require that the consent, approval or
acceptance not be unreasonably withheld or delayed, unless the provision expressly incorporates
a different standard.
Section 3.06. Third Party Beneficiaries. The Authority and its officers,
employees, agents or any consultants or contractors are expressly deemed third parry beneficiaries
of this Agreement with respect to the provisions of Section 3.01. It is expressly agreed that, except
for the Authority with respect to the provisions of Section 3.01, there are no third party
beneficiaries of this Agreement, including without limitation any owners of bonds, any of the
City's or the Developer's contractors for the Acquisition Improvements and any of the City's, the
Authority's or the Developer's agents and employees.
Section 3.07. Conflict with Other Agreements. Nothing contained herein shall be
construed as releasing the Developer or the City from any condition of development or requirement
imposed by any other agreement between the City and the Developer, and, in the event of a
conflicting provision, the other agreement shall prevail unless the conflicting provision is
specifically waived or modified in writing by the City and the Developer.
Section 3.08. Notices. All invoices for payment, reports, other communication
and notices relating to this Agreement shall be mailed to:
If to the City:
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attention: City Manager
If to the Authority:
California Statewide Communities Development Authority
1100 K Street, Suite 101
Sacramento, CA 95814
Attention: Chair
If to the Developer:
Uptown Newport Jamboree, LLC
c/o Shopoff Realty Investments, L.P
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2 Park Plaza, Suite 700
Irvine, CA 92614
Attention: William A. Shopoff
TSG — Parcel 1, LLC
c/o Shopoff Realty Investments, L.P
2 Park Plaza, Suite 700
Irvine, CA 92614
Attention: William A. Shopoff
With a copy to:
Jackson Tidus
2030 Main Street 12th Floor
Irvine, CA 92614
Attention: Gregory P. Powers, Esq.
Either party may change its address by giving notice in writing to the other party.
Section 3.09. Severability. If any part of this Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given
effect to the fullest extent reasonably possible.
Section 3.10. Governing Law. This Agreement and any dispute arising hereunder
shall be governed by and interpreted in accordance with the laws of the State of California.
Section 3.11. Waiver. Failure by a party to insist upon the strict performance of
any of the provisions of this Agreement by the other party, or the failure by a party to exercise its
rights upon the default of the other party, shall not constitute a waiver of such party's right to insist
and demand strict compliance by the other party with the terms of this Agreement.
Section 3.12. Singular and Plural; Gender. As used herein, the singular of any
word includes the plural, and terms in the masculine gender shall include the feminine.
Section 3.13. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original.
Section 3.14. Successors and Assigns. This Agreement is binding upon the heirs,
assigns and successors -in -interest of the parties hereto. The Developer may not assign its rights
or obligations hereunder, except to successors -in -interest to the property within the Community
Facilities District, without the prior written consent of the City.
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Section 3.15. Remedies in General. It is acknowledged by the parties that the City
would not have entered into this Agreement if it were to be liable in damages under or with respect
to this Agreement or the application thereof, other than for the payment to the Developer of any
(i) moneys owing to the Developer hereunder, or (ii) moneys paid by the Developer pursuant to
the provisions hereof which are misappropriated or improperly obtained, withheld or applied by
the City.
Section 3.16. Non -Liability of Authority. The Authority shall not be liable for
any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any
conceivable theory, under or by reason of or in connection with this Agreement, except only to the
extent amounts are received for the payment thereof from the Special Tax.
In general, each of the parties hereto may pursue any remedy at law or equity available for
the breach of any provision of this Agreement, except that the City shall not be liable in damages
to the Developer, or to any assignee or transferee of the Developer other than for the payments to
the Developer specified Section 3.14. Subject to the foregoing, the Developer covenants not to
sue for or claim any damages for any alleged breach of, or dispute which arises out of, this
Agreement.
[Remainder of Page Intentionally Left Blankl
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9-38
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
written above.
ATTEST:
City Clerk
LO -A
CITY OF NEWPORT BEACH
[Authorized Officer]
UPTOWN NEWPORT JAMBOREE, LLC,
a Delaware limited partnership
By: _
Name
Title
TSG — PARCEL 1, LLC,
a Delaware limited liability company
By: _
Name
Title
CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT
AUTHORITY
Authorized Signatory
SIGNATURE PAGE - ACQUISITION AGREEMENT
9-39
EXHIBIT A TO THE ACQUISITION AGREEMENT
DESCRIPTION OF ACQUISITION IMPROVEMENTS, ELIGIBLE PORTIONS
UISITION IMPROVEMENTS
Park improvements, including playground infrastructure, irrigation, landscaping, utilities, drainage
and grading.
A-1
US-DOCS\105642049.4
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EXHIBIT B TO THE ACQUISITION AGREEMENT
DISBURSEMENT REQUEST FORM
(Acquisition Improvement or Eligible Portion)
To: [Authority Trustee]
Attention:
Fax:
Phone:
Re: CSCDA Community Facilities District No.
The undersigned, a duly authorized officer of the CITY OF NEWPORT BEACH hereby
requests a withdrawal from the Uptown Newport Project Community Facilities District
Acquisition and Construction Fund, as follows:
Request Date:
Name of Developer:
[Insert Date of Request]
Acquisition Price/Installment [Insert Acquisition Price/Installment
Payment: Payment]
Acquisition Improvements: [Insert Description of Acquisition
Improvement(s)/Eligible Portion(s) from
Exhibit A]
Holdback Amount: [Insert Holdback Amount, if applicable]
Withdrawal Amount: [Insert Acquisition Price less Holdback]
Payment Instructions: [Insert Wire Instructions or Payment Address
for Developer or Developer's designee as
provided by the Developer]
The undersigned hereby certifies as follows:
The Withdrawal is being made in accordance with a permitted use of the monies pursuant
to the Acquisition Agreement and the Withdrawal is not being made for the purpose of
reinvestment.
None of the items for which payment is requested have been reimbursed previously from
the Acquisition and Construction Fund.
If the Withdrawal Amount is greater than the funds held in the Acquisition and
Construction Fund, the Authority Trustee is authorized to pay the amount of such funds and to pay
US-DOCS\105642049.4
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remaining amount(s) as funds are subsequently deposited in the Acquisition and Construction
Fund, should that occur.
[For Park Improvement Disbursements:][The amounts being disbursed pursuant to this
request are being used to finance or refinance certain public infrastructure and facilities (the
"Improvements"). The City will own, and for the entire useful life of such Improvements
reasonably expects to own, all of such Improvements. To the extent any of such Improvements
are sold to an entity that is not a state or local government agency, the City will seek the advice
and approval of bond counsel to the Authority prior to any such sale. The City will not allow any
of such Improvements to be used (for example, by lease or other contract) in the trade or business
of any nongovernmental persons (other than in their roles as members of the general public). All
of such Improvements will be used in the performance of essential governmental functions of the
City or another state or local government agency. The average expected useful life of such
Improvements is at least 20 years. The representations and covenants contained in this paragraph
are intended to support the conclusion that the interest paid on the bonds issued to finance the
Improvements is excluded from gross income for federal income tax purposes under Section 103
of the Internal Revenue Code of 1986 (the "Code").]
CITY OF NEWPORT BEACH
By:
Title:
IM
US-DOCS\105642049.4
9-42
EXHIBIT C TO THE ACQUISITION AGREEMENT
BIDDING, CONTRACTING AND CONSTRUCTION REQUIREMENTS FOR
ACQUISITION IMPROVEMENTS
With respect to construction contracts awarded after approval of the Agreement, bids for
construction shall be solicited from at least three (3) qualified contractors, provided at least three
(3) qualified contractors are reasonably available. The Developer may also directly solicit bids.
The bid package may consist of preliminary plans and specifications.
The bidding response time shall be not less than ten (10) working days.
An authorized representative of the City shall be provided a copy of the tabulation of bid results
upon request.
Contract(s) for the construction of the public Acquisition Improvements shall be awarded to the
qualified contractor(s) submitting the lowest responsible bid(s), as determined by the Developer.
The contractor to whom a contract is awarded shall be required to pay not less than the prevailing
rates of wages pursuant to Labor Code Sections 1770, 1773 and 1773.1. A current copy of
applicable wage rates shall be on file in the Office of the City Clerk, as required by Labor Code
Section 1773.2.
The Developer shall provide the City with certified payrolls.
C-1
US-DOCS\105642049.4
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Attachment C
Redline Acquisition Agreement
. ,.
Execution Version
ACQUISITION AGREEMENT
BY AND AMONG
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,
CITY OF NEWPORT BEACH
AND
TSG — PARCEL 1, LLC and UPTOWN NEWPORT JAMBOREE, LLC
Dated as of March •1, 20-2019
US -DOCS" 44813 ".' 105642049.4
9-45
ACQUISITION AGREEMENT
Recital,
A. The parties to this Acquisition Agreement (the "Agreement") are the California
Statewide Communities Development Authority (the "Authority"), City of Newport Beach (the
"City"), Uptown Newport Jamboree, LLC, a Delaware limited pliability company
and TSG – Parcel 1, LLC, a Delaware limited liability company (collectively, the "Developer").
B. The effective date of this Agreement is March •1, 2-W-2019.
C. The Developer has applied for the financing of certain public capital
improvements (each, as more particularly described on Exhibit A, an "Acquisition Improvement"
and collectively, the "Acquisition Improvements") and certain utility undergrounding (the
"Undergrounding") through the Authority. The Acquisition Improvements are to be owned and
operated by the City, and the financing is to be accomplished through a Community Facilities
District which will be established and administered by the Authority under and pursuant to the
Mello -Roos Community Facilities Act of 1982 – California Government Code Sections 53311
and following (the "Act"). On June 26, 2018, the City adopted Resolution No. 2018-44
authorizing the Authority to form a community facilities district (the "Community Facilities
District") within the territorial limits of the City and designate improvement areas within the
" to finance the Acquisition
Improvements. On ,December 20— 201, the Authority formed the Community
Facilities District and, on the same date, a landowner election was conducted for en -eh
lmprovemeat–the Community Facilities District in which all of the votes were cast
unanimously in favor of conferring the Community Facilities District authority on the Authority
Commission.
D. The Authority intends to levy special taxes for facilities and issue bonds for eneh
the Community Facilities District, in one or more series, to fund, among
other things, all or a portion of the Acquisition Improvements and to fund the Undergrounding.
The portion of the proceeds of such special taxes (including prepayments) and bonds allocable to
the cost of the Undergrounding and the Acquisition Improvements, together with interest earned
thereon, is referred to herein as the "Available Amount".
E. The Community Facilities District will provide financing for (i) the
nder roundinof the utility lines by Southern California Edison as more
particularly described herein and (ii) the acquisition by the City of the Acquisition Improvements
and the payment of the Acquisition Price (as defined herein) of the Acquisition Improvements
from the Available Amount. Attached hereto as Exhibit A is a description of the Acquisition
Improvements, which includes authorized discrete and usable portions, if any, of the Acquisition
Improvements, pursuant to Section 53313.51 of the Act, to be acquired from the Developer.
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F. The parties anticipate that, upon completion of the Acquisition Improvements and
subject to the terms and conditions of this Agreement, the City will acquire the completed
Acquisition Improvements.
G. In order to facilitate the Undergrounding, the City will enter into a Facilities
Relocation Agreement (Relocation under SCE Tariff Rule 20B—Applicant to Install
Ducts/Substructures) (the "Rule 20B Agreement") with Southern California Edison. It is
the intention of the parties hereto that the Developer be obligated to pay for any costs
incurred by the City under the Rule 20B Agreement and to indemnify, defend and hold the
City harmless for any and all costs or liabilities to Southern California Edison in excess of
the Available Amounts and amounts previously paid to the City and Southern California
Edison and arising out of or relating to the Undergroundin
GH. Any and all monetary obligations of the City arising out of this Agreement are the
special and limited obligations of the City payable only from the Available Amount, and no other
funds whatsoever of the City shall be obligated therefor under any circumstances.
ISI. Attached to this Agreement are Exhibit A (Description of the Acquisition
Improvements and the Eligible Portions thereof), Exhibit B (Disbursement Request Form for
Acquisition Improvements) and Exhibit C (Bidding, Contracting and Construction Requirements
for Acquisition Improvements), all of which are incorporated into this Agreement for all
purposes.
Agreement
ARTICLE I
DEFINITIONS; COMMUNITY FACILITIES DISTRICT FORMATION AND
FINANCING PLAN
Section 1.01. Definitions. As used herein, the following capitalized terms shall
have the meanings ascribed to them below:
"Acceptable Title" means title (whether a fee interest, easement or other acceptable title
or property rights) free and clear of all monetary liens, encumbrances, assessments, whether any
such item is recorded or unrecorded, and taxes, except (i) those items which are reasonably
determined by the City Engineer or Southern California Edison, as applicable. not to interfere
with the intended use and therefore are not required to be cleared from the title, and (ii) the lien
of the Community Facilities District or any other community facilities district or assessment
district provided that the property owned by the City is exempt from such taxation or assessment.
"Acquisition and Construction Fund" means each "Uptown Newport Community
Facilities District Acquisition and Construction Fund" established by the Authority pursuant to
the Resolution and Section 1.03 hereof for the purpose of paying the Acquisition Price of the
Acquisition Improvements.
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"Acquisition Improvement" means a public capital improvement described in Exhibit A
hereto.
"Acquisition Price" means the total amount eligible to be paid to the Developer upon
acquisition of an Acquisition Improvement as provided in Section 2.03, not to exceed the Actual
Cost of the Acquisition Improvement.
"Actual Cost" means the total cost of an Acquisition Improvement, as documented by the
Developer to the satisfaction of the City and as certified by the City Engineer in an Actual Cost
Certificate including, without limitation, (a) the Developer's cost of constructing such
Acquisition Improvement including grading, labor, material and equipment costs, (b) the
Developer's cost of designing and engineering the Acquisition Improvement, preparing the plans
and specifications and bid documents for such Acquisition Improvement, and the costs of
inspection, materials testing and construction staking for such Acquisition Improvement, (c) the
Developer's cost of any performance, payment and maintenance bonds and insurance, including
title insurance, required hereby for such Acquisition Improvement, (d) the Developer's cost of
any real property or interest therein that is either necessary for the construction of such
Acquisition Improvement (e.g., temporary construction easements, haul roads, etc.), or is
required to be conveyed with such Acquisition Improvement in order to convey Acceptable Title
thereto to the City or its designee, (e) the Developer's cost of environmental evaluation or
mitigation required for such Acquisition Improvement, (f) the amount of any fees actually paid by
the Developer to governmental agencies in order to obtain permits, licenses or other necessary
governmental approvals and reviews for such Acquisition Improvement, (g) the Developer's cost
for construction and project management, administration and supervision services for such
Acquisition Improvement, and (h) the Developer's cost for professional services related to such
Acquisition Improvement, including engineering, accounting, legal, financial, appraisal and
similar professional services.
"Actual Cost Certificate" means a certificate prepared by the Developer detailing the
Actual Cost of an Acquisition Improvement, or an Eligible Portion thereof, to be acquired
hereunder, as may be revised by the City Engineer pursuant to Section 2.03.
"Agreement" means this Acquisition Agreement, dated as of March
[ •_], 20-2019.
"Authority" means the California Statewide Communities Development Authority.
"Authority Trust Agreement" means a Trust Agreement or Indenture entered into by the
Authority and an Authority Trustee in connection with the issuance of bonds.
"Authority Trustee" means the financial institution identified as trustee in an Authority
Trust Agreement.
"Available Amount" shall have the meaning assigned to the term in Recital D.
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"Bonds" means bonds or other indebtedness issued by the Authority that isare to be
repaid with Special Taxes.
"City" means the City of Newport Beach, California.
"City Engineer" means the Engineer of the City or his/her designee who will be
responsible for administering the Undergrounding and the acquisition of the Acquisition
Improvements hereunder.
"Code" means the Government Code of the State of California.
"Community Facilities District" shall have the meaning assigned to the term in Recital C.
"Developer" means, collectively or severally, as appropriate, TSG – Parcel 1, LLC, a
Delaware limited partnership and Uptown Newport Jamboree, LLC, a Delaware limited liability
company, and their respective successors and assigns.
"Disbursement Request Form" means a requisition for payment of funds from an
Acquisition and Construction Fund for an Acquisition Improvement, or an Eligible Portion
thereof in substantially the form contained in Exhibit B hereto.
"Eligible Portion" shall have the meaning ascribed to it in Section 2.03 below.
"Improvement Area" means an i . nt area of the Community Faefli
Distriet designated as sueh by the Authority in aeeor-danee with the ,
"Holdback" shall have the meaning ascribed to it in the Section 2.04(b).
"Installment Payment" means an amount equal to ninety percent (90%) of the Actual Cost
of an Eligible Portion.
"Jazz Semiconductor" means Newport Fab LLC. a Delaware limited liability
company doing business as "Jazz Semiconductor."
"Project" means the development of the property in the Community Facilities District,
including the design and construction of the Acquisition Improvements and the Undergrounding
and the other public and private improvements to be constructed by the Developer or Southern
California Edison within or in the vicinity of the Community Facilities District.
"Resolution" means City of Newport Beach Resolution No. —018-44, adopted
20 June 26.2018 authorizing the execution and delivery of this Agreement.
"Special Taxes" means annual special taxes for facilities, and prepayments thereof,
authorized by the Community Facilities District to be levied by the Commission of the Authority
within the Community Facilities District.
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"Title Documents" means, for each Acquisition Improvement acquired hereunder or for
the Undergrounding, a grant deed or similar instrument necessary to transfer title to any real
property or interests therein (including easements or rights of way), or an irrevocable offer of
dedication of such real property with interests therein necessary to the operation, maintenance,
rehabilitation and improvement by the City of the Acquisition Improvement or Southern
California Edison with respect to the Undergrounding, (including, if necessary, easements for
ingress and egress) and a bill of sale or similar instrument evidencing transfer of title to the
Acquisition Improvement (other than said real property interests) to the City or title to
Undergrounding to Southern California Edison, where applicable.
"Undergrounding" means the underground relocation of overhead electrical transmission
utilities operated and maintained by Southern California Edison within the vicinity of the Project.
Section 1.02. Establishment of Community Facilities District. Developer has
requested the City to permit the Authority to provide for financing of the Acquisition
Improvements and the Undergrounding and collection of special tax through the establishment
and authorization of the Community Facilities District and the City agreed by its adoption of the
Resolution. The Community Facilities District was established by the Authority on
,December, 20—, 2018, and through the successful landowner election held that
same day with respect to eaeh improvement Area of the Community Facilities District, the
Commission of the Authority is authorized to levy the Special Taxes and to issue the Bonds to
finance the Acquisition Improvements and the Undergrounding. Developer and the City agree
to reasonably cooperate with one another and with the Authority in the completion of the
financing through the issuance of the Bonds in one or more series for
Areathe Community Facilities District.
Section 1.03. Deposit and Use of Available Amount.
(a) Prior to the issuance of Bonds for eaeh improvement Amathe
Community Facilities District, Special Taxes collected by the Authority (including from
prepayments of Special Taxes) shall be deposited in the Acquisition and Construction Fund
established by the Authority pursuant to the terms of the Resolution, and may be disbursed to pay
the Acquisition Price of Acquisition Improvements or the costs of Undergrounding in
accordance with Article II of this Agreement. All funds in the Acquisition and Construction
Fund shall be considered a portion of the Available Amount, and upon the issuance of the Bonds
the Acquisition and Construction Fund shall be transferred to the Authority Trustee to be held in
accordance with the Authority Trust Agreement.
(b) If not already established pursuant to the Resolution, upon the issuance of
the Bonds of an improvement Ar , the Authority will cause the Authority Trustee to establish
and maintain the Acquisition and Construction Fund for the purpose of holding all funds for the
Acquisition Improvements or the costs of Undergrounding, to be financed by sueh
improvement Are the Community Facilities District. All earnings on amounts in the
Acquisition and Construction Fund shall remain in the Acquisition and Construction Fund for use
as provided herein and pursuant to the Authority Trust Agreement. Money in such Acquisition
and Construction Fund shall be available to respond to delivery of a Disbursement Request Form
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and to be paid to the Developer or its designee to pay the Acquisition Price of the Acquisition
Improvements or the costs of Undergrounding, as specified in Article II hereof. Upon
completion of all of the Acquisition Improvements and the Underground ing and the payment of
all costs thereof, any remaining funds in the Acquisition and Construction Fund (less any amount
determined by the City as necessary to reserve for claims against the account) (i) shall be applied
to pay the costs of any additional Acquisition Improvements eligible for acquisition with respect
to the Project, as approved by the Authority and, to the extent not so used, (ii) shall be applied by
the Authority to call Bonds for sueh improvement Area or to reduce Special Taxes for sueh
improvement Area as the Authority shall determine.
Section 1.04. No City Liability; City Discretion; No Effect on Other Agreements.
In no event shall any actual or alleged act by the City or any actual or alleged omission or failure
to act by the City with respect to the Authority subject the City to monetary liability therefor.
Further, nothing in this Agreement shall be construed as affecting the Developer's or the City's
duty to perform their respective obligations under any other agreements, public improvement
standards, land use regulations or subdivision requirements related to the Project, which
obligations are and shall remain independent of the Developer's and the City's rights and
obligations under this Agreement.
ARTICLE II
DESIGN, CONSTRUCTION AND ACQUISITION OF ACQUISITION IMPROVEMENTS
Section 2.01. Letting and Administering Design Contracts. The Developer has
awarded and administered, or will award and administer, engineering design contracts for the
Acquisition Improvements to be acquired from Developer. All eligible expenditures of the
Developer for design engineering and related costs in connection with the Acquisition
Improvements (whether as an advance to the City or directly to the design consultant) shall be
reimbursed at the time of acquisition of the Acquisition Improvements. The Developer shall be
entitled to reimbursement for any design costs of the Acquisition Improvements only out of the
Acquisition Price as provided in Section 2.03 and shall not be entitled to any payment for design
costs independent of the acquisition of Acquisition Improvements.
Section 2.02. Letting and Administration of Construction Contracts;
Indemnification. State law requires that all Acquisition Improvements not completed prior to the
formation of the Community Facilities District shall be constructed as if they were constructed
under the direction and supervision, or under the authority, of the City. In order to assure
compliance with those provisions, except for any contracts entered into prior to the date hereof,
Developer agrees to comply with the requirements set forth in Exhibit C hereto with respect to
the bidding and contracting for the construction of the Acquisition Improvements. The
Developer agrees that all the contracts shall call for payment of prevailing wages as required by
the Labor Code of the State of California. The Developer's indemnification obligation set forth
in Section 3.01 of this Agreement shall also apply to any alleged failure to comply with the
requirements of this Section, and/or applicable State laws regarding public contracting and
prevailing wages.
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Section 2.03. Sale of Acquisition Improvements. The Developer agrees to sell to
the City each Acquisition Improvement to be constructed by or on behalf of the Developer
(including any rights-of-way or other easements necessary for the Acquisition Improvements, to
the extent not already publicly owned), when the Acquisition Improvement is completed to the
satisfaction of the City for an amount not to exceed the lesser of (i) the Available Amount from
time to time or (ii) the Actual Cost of the Acquisition Improvement. Exhibit A, attached hereto
and incorporated herein, contains a list of the Acquisition Improvements. Portions of an
Acquisition Improvement eligible for Installment Payments prior to completion of the entire
Acquisition Improvement are described as eligible, discrete and usable portions in Exhibit A
(each, an "Eligible Portion"). At the time of completion of each Acquisition Improvement, or
Eligible Portion thereof, the Developer shall deliver to the City Engineer a written request for
acquisition, accompanied by an Actual Cost Certificate, and by executed Title Documents for the
transfer of the Acquisition Improvement where necessary. In the event that the City Engineer
finds that the supporting paperwork submitted by the Developer fails to demonstrate the required
relationship between the subject Actual Cost and eligible work, the City Engineer shall advise the
Developer that the determination of the Actual Cost (or the ineligible portion thereof) has been
disallowed and shall request further documentation from the Developer. If the further
documentation is still not adequate, the City Engineer may revise the Actual Cost Certificate to
delete any disallowed items and the determination shall be final and conclusive.
Certain soft costs for the Acquisition Improvements, such as civil engineering, may have
been incurred pursuant to single contracts that include work relating also to the private portions
of the Project. In those instances, the total costs under such contracts will be allocated to each
Acquisition Improvement as approved by the City Engineer. Where a specific contract has been
awarded for design or engineering work relating solely to an Acquisition Improvement, one
hundred percent (100%) of the costs under the contract will be allocated to that Acquisition
Improvement. Amounts allocated to an Acquisition Improvement will be further allocated
among the Eligible Portions of that Acquisition Improvement, if any, in the same proportion as
the amount to be reimbursed for hard costs for each Eligible Portion bears to the amount to be
reimbursed for hard costs for the entire Acquisition Improvement. Costs will be allocated to
each Acquisition Improvement as approved by the City Engineer. The costs of certain
environmental mitigation required to mitigate impacts of the public and private portions of the
Project will be allocated to each Acquisition Improvement as approved by the City Engineer.
Section 2.04. Conditions Precedent to Payment of Acquisition Price. Payment to
the Developer or its designee of the Acquisition Price for an Acquisition Improvement from the
Acquisition and Construction Fund shall in every case be conditioned first upon the determination
of the City Engineer, pursuant to Section 2.03, that the Acquisition Improvement satisfies all City
regulations and ordinances and is otherwise complete and ready for acceptance by the City, and
shall be further conditioned upon satisfaction of the following additional conditions precedent:
(a) The City shall have paid all amounts to be due and owing pursuant to the
Rule 20B Agreement between the City and Southern California Edison within the time
frame specified therein for the Undergrounding and the City shall have received confirmation
from Southern California Edison that .they have received the
same. The City's obligation to pay amounts under the Rule 20B Agreement shall be solely
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from the Available Amounts or other funds made available to the City by the Developer
pursuant to Section 2.08 below.
f $500,000 of proceeds from bonds issued by the Community Facilities
District (the "Holdback"), will be retained in the Acquisition and Construction Fund to be
used first to make any additional payments due to Southern California Edison under the
Rule 20B Agreement under the Rule 20B Agreement in connection with the
Undergrounding and second, upon completion of the Undergrounding and payment of all
amounts related thereto, to make an additional payment to the Developer for the
remainder of the Acquisition Price for such Acauisition�Improvement (solely to the extent
of available funds therefor). The City shall be under no obligation to direct the release of
the Holdback to the Developer until it receives assurances from Southern California
Edison that all amounts due under the Rule 20B Agreement have been paid.
sW (b) -The Developer shall have provided the City with lien releases or other
similar documentation satisfactory to the City Engineer as evidence that none of the property
(including any rights-of-way or other easements necessary for the operation and maintenance of
the Acquisition Improvement, to the extent not already publicly owned) comprising the
Acquisition Improvement is not subject to any prospective mechanics lien claim respecting the
Acquisition Improvements.
fd (e) -The Developer shall be current in the payment of all due and payable
general property taxes, and all special taxes of the Community Facilities District, on property
owned by the Developer within the Community Facilities District. Property shall be exempt from
the special tax of the Community Facilities District upon conveyance to the City or the
Developer shall prepay the special tax on the property so conveyed.
W (d) -The Developer shall certify that it is not in default with respect to any
loan secured by any interest in the Project.
0 (e) --The Developer shall have provided the City with Title Documents
needed to provide the City with Acceptable Title to the site, right-of-way, or easement upon
which the subject Acquisition Improvement is situated. All such Title Documents shall be in a
form acceptable to the City and shall convey Acceptable Title. The Developer shall provide a
policy of title insurance as of the date of transfer in a form acceptable to the City Engineer and
the City Attorney insuring the City as to the interests acquired in connection with the acquisition
of any interest for which such a policy of title insurance is not required by another agreement
between the City and the Developer. Each title insurance policy required hereunder shall be in
the amount equal to the Acquisition Price. The amount paid to the Developer or its designee
upon satisfaction of the foregoing conditions precedent shall be the Acquisition Price less all
Installment Payments paid previously with respect to the Acquisition Improvement less the
Holdback (which shall be paid to the Developer, to the extent of funds available therefor.
pursuant to the provisions of 2.04(b) and 2.06 below).
Section 2.05. Payment for Eligible Portions. The Developer may submit an
Actual Cost Certificate to the City Engineer with respect to any Eligible Portion. Payment to the
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Developer or its designee from the Acquisition and Construction Fund of an Installment Payment
with respect to such Eligible Portion shall in every case be conditioned first upon the
determination of the City Engineer, pursuant to Section 2.03, that the Eligible Portion has been
completed in accordance with the applicable plans and specifications and that the Eligible Portion
satisfies all City regulations and ordinances and is otherwise complete and, where appropriate, is
ready for acceptance by the City, and shall be further conditioned upon satisfaction of the
following additional conditions precedent:
(a) The Developer shall have provided the City with lien releases or other
similar documentation satisfactory to the City Engineer as evidence that the property (including
any rights-of-way or other easements necessary for the operation and maintenance of the Eligible
Portion, to the extent not already owned by the City) comprising the Eligible Portion is not
subject to any prospective mechanics lien claim respecting the Eligible Portion.
(b) The Developer shall be current in the payment of all due and payable
general property taxes, and all special taxes of the Community Facilities District, on property
owned by the Developer within the Community Facilities District.
(c) The Developer shall have provided the City with Title Documents needed
to provide the City with title to the site, right-of-way, or easement upon which the subject
Eligible Portion is situated. All such Title Documents shall be in a form acceptable to the City
Engineer and shall be sufficient, upon completion of the Acquisition Improvement of which the
Eligible Portion is a part, to convey Acceptable Title.
(d) Payment and performance bonds, from a bonding company with an A.M.
Best rating of at least "A-" or its equivalent, applying to plans and specifications for the
Acquisition Improvement approved by the City, shall be in place to secure completion of the
Acquisition Improvement of which the Eligible Portion is a part.
Section 2.06. Disbursement Request FormZPayment of Holdback. Upon a
determination by the City Engineer to pay the Acquisition Price of an Acquisition Improvement
pursuant to Section 2.04 or to pay an Installment Payment for an Eligible Portion pursuant to
Section 2.05, the City Engineer shall cause a Disbursement Request Form substantially in the
form attached hereto as Exhibit B-1 to be submitted to the Authority and Authority Trustee, and
the Authority or Authority Trustee shall make payment directly to the Developer or its designee
of the amount requested from the applicable Acquisition and Construction Fund. The City and
the Developer acknowledge and agree that the Authority or Authority Trustee shall make
payment strictly in accordance with the Disbursement Request Form and shall not be required to
determine whether or not the Acquisition Improvement or Eligible Portion has been completed
or what the Actual Costs may be with respect to the Acquisition Improvement or Eligible
Portion. The Authority or Authority Trustee shall be entitled to rely on the executed
Disbursement Request Form on its face without any further duty of investigation.
in theSubject to the Holdback and Section 2.08 below, in the event that the Actual
Cost of an Acquisition Improvement or the Installment Payment for an Eligible Portion is in
excess of the Available Amount, the Authority or Authority Trustee shall withdraw all funds
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remaining in the Acquisition and Construction Fund and shall transfer those amounts to the
Developer or its designee. The unpaid portion of the Actual Cost shall be paid from funds that
may subsequently be deposited in the Acquisition and Construction Fund from a subsequent
issuance of Bonds, from prepayments of Special Taxes to be used for financing Acquisition
Improvements, or from Special Tax revenues, if any of those occurs.
Upon a determination by the City Engineer to nay the Acquisition Price of an
Acquisition Improvement less any Holdback pursuant to Section 2.04(b) and further upon
completion of the Undergrounding and payment of all amounts due and owing with
respect thereto. the City Engineer shall notify the Authority Trustee and authorize the
release to the Developer of all amounts previously included and approved in an executed
Disbursement Request Form with respect to an Acquisition Improvement but held back by
the Authority as a Holdback (but solely to the extent of any available amounts remaining,
in or subsequently deposited in the Acquisition and Construction Fundl.
Section 2.07. Limitation on Obligations. In no event shall the City be required to
pay the Developer or its designee more than the amounts held in the Acquisition and
Construction Fund.
Section 2.08. Undergrounding of Utilities. In addition to financing the
acquisition of the Acquisition Improvements, proceeds of bonds for the Community Facilities
District are expected to finance the Undergrounding of certain electrical transmission facilities
operated and maintained by Southern California Edison. Notwithstanding anything to the
contrary herein, the City shall be entitled to directly request payment to the City (or to reimburse
the Developer) pursuant to a Request to the Authority Trustee to (i) reimburse amounts the City
or Developer has paid Southern California Edison or a contractor for the amount in such request,
or (ii) to pay directly to Southern California Edison, the Developer or a contractor for the
amount in such request. To the extent authorized by law, the City agrees to first reimburse
amounts previously deposited by the Developer pursuant to the Deposit Agreement between the
City of Newport Beach and TSG — Parcel 1, LLC, dated January 5, 2015, for the costs of the
nder roundinof utilities, including design and planning and any amounts
deposited by Developer for materials or otherwise, from proceeds of hendsBonds or the
Special Tax pursuant to this Section. Before payment of the Aequisition Price ou-a*y
Aequisition improvement, the City shall have reeeived Pursuant to the
Rule 20B Agreement, Southern California Edison has estimated the costs of the
Undergrounding to be performed by Southern California Edison to be $937,000. To the
extent the actual cost of the Undergrounding exceeds $937,000 plus the Holdback Amount
and the Developer has not reimbursed the City or paid Southern California Edison directly
within 90 days of receipt of the final invoice from Southern California Edison—th4-+he
Under -grounding is eomplete, the Authority and the Developer shall levy special taxes up to
the maximum amount permitted to reimburse the City or pay Southern California Edison
directly for such costs.
The Developer further agrees that it shall transfer: (i) any and all real property interests
required by Southern California Edison as part of the Undergrounding to the City or
Southern California Edison, as applicable, free of any encumbrances to which Southern
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California Edison objects, and (ii) all ducts and substructures built in connection with the
Undergrounding, all in accordance with the terms of the 20B Agreement. The Developer
shall be responsible for the costs of acquiring such real property interests, if necessary. and
all costs of providing Acceptable Title.
In addition. the Developer agrees that it shall pay ani and all costs associated with the
establishment of any temporary power generating facilities required in connection with the
Undergrounding and the provision of power therefrom and may include such costs in costs
to be paid to Southern California Edison and/or reimbursed to Developer as part of the
costs of the Undergrounding from proceeds of the Bonds. to the extent amounts are
available therefrom.
Furthermore. the Developer acknowledges that it has reviewed all relocation plans
provjded by Southern California Edison and the City in connection with the
Undergrounding, and further acknowledges that it is not aware of any conflicts with the
plans of the Developer, or any related entity, to develop the property within the
Community Facilities District.
ARTICLE III
MISCELLANEOUS
Section 3.01. Indemnification and Hold Harmless. The Developer hereby
assumes the defense of, and indemnifies and saves harmless the City, the Authority and their
respective officers, directors, employees and agents, including the Authority Trustee, from and
against a) any amounts due and owing to Southern California Edison pursuant to the 20B
Agreement executed and delivered by the City and Southern California Edison with
respect to the Undergrounding, including any Income Tax Component of Contribution
required to be paid by Southern California Edison, but solely to the extent not otherwise
paid, funded or advanced to Southern California Edison from the proceeds of the Bonds
and/or previously paid to the City and/or Southern California Edison by the Developer: (W
any claims, lawsuits or proceedings by any third parties, including, but not limited to. Jazz
Semiconductor, that result or relate in any way to the Undergrounding or any disruption
of electrical power related thereto or to the Rule 20B Agreement. and (c) all actions,
damages, claims, losses or expenses of every type and description to which they may be
subjected or put, by reason of, or resulting from or alleged to have resulted from the acts or
omissions of the Developer or its agents and employees arising out of any contract for the design,
engineering and construction of the Acquisition Improvements or the Undergrounding, entered
into by the Developer or arising out of any alleged misstatements of fact or alleged omission of a
material fact made by the Developer, its officers, directors, employees or agents to the
Authority's underwriter, financial advisor, appraiser, district engineer or bond counsel or
regarding the Developer, its proposed developments, its property ownership and its contractual
arrangements contained in the official statement relating to the Authority financing (provided that
the Developer shall have been furnished a copy of the official statement and shall not have
objected thereto); and provided, further, that nothing in this Section 3.01 shall limit in any
manner the City's rights against any of the Developer's architects, engineers, contractors or other
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consultants. Except as set forth in this Section 3.01, no provision of this Agreement shall in any
way limit the extent of the responsibility of the Developer for payment of damages resulting from
the operations of the Developer, its agents and employees. Nothing in this Section 3.01 shall be
understood or construed to mean that the Developer agrees to indemnify the City, the Authority
or any of their respective officers, directors, employees or agents, for any wrongful acts or
omissions to act of the Authority or its officers, employees, agents or any consultants or
contractors, including the Authority Trustee, and for any wrongful acts, willful misconduct,
active gross negligence or willful omissions to act of the City, or its officers, employees, agents
or any consultants or contractors, including the Authority Trustee.
Section 3.02. Waiver of Claims. Insurance. The Developer hereby agrees to
waive any and all claims against the City arising in connection with the Undergrounding,
or the agreement with Southern California Edison in connection therewith, including by
reason of delay by any party acting in connection with the Undergrounding. The
Developer hereby agrees (i) to name or cause its contractors and subcontractors to name
the City as an additional insured in connection with any of the construction contracts for
the Acquisition Improvements and the Undergrounding work performed by Developers
and (ii) to provide an insurance policy providing business interruption coverage in favor of
Jazz Semiconductor and naming the City as an additional insured in an aggregate amount
not less than $10.000.000 to cover potential losses to Jazz Semiconductor as a result of any
interruption in their business due to the a loss of utility services during the
Undergrounding
Section 3.03, Seetien 3.02—.Audit. The City shall have the right, during normal
business hours and upon the giving of ten days' written notice to the Developer, to review all
books and records of the Developer pertaining to costs and expenses incurred by the Developer
(for which the Developer seeks reimbursement pursuant to this Agreement) in constructing the
Acquisition Improvements.
Section 3.04, Seetio 2.03. Cooperation. The City and the Developer agree to
cooperate with respect to the completion of the financing of the Acquisition Improvements by the
Authority through the levy of the Community Facilities District Special Taxes and issuance of
Bonds. The City and the Developer agree to meet in good faith to resolve any differences on
future matters which are not specifically covered by this Agreement.
Section 3.05, Section 3.04. General Standard of Reasonableness. Any provision
of this Agreement which requires the consent, approval or acceptance of either party hereto or
any of their respective employees, officers or agents shall be deemed to require that the consent,
approval or acceptance not be unreasonably withheld or delayed, unless the provision expressly
incorporates a different standard.
Section 3.06, Section 3.Third Party Beneficiaries. The Authority and its
officers, employees, agents or any consultants or contractors are expressly deemed third party
beneficiaries of this Agreement with respect to the provisions of Section 3.01. It is expressly
agreed that, except for the Authority with respect to the provisions of Section 3.01, there are no
third party beneficiaries of this Agreement, including without limitation any owners of bonds, any
12
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of the City's or the Developer's contractors for the Acquisition Improvements and any of the
City's, the Authority's or the Developer's agents and employees.
Section 3.07, Seetio 3.Conflict with Other Agreements. Nothing contained
herein shall be construed as releasing the Developer or the City from any condition of
development or requirement imposed by any other agreement between the City and the
Developer, and, in the event of a conflicting provision, the other agreement shall prevail unless
the conflicting provision is specifically waived or modified in writing by the City and the
Developer.
Section 3.08. Seetion 3.0 otices. All invoices for payment, reports, other
communication and notices relating to this Agreement shall be mailed to:
If to the City:
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attention: City Manager
If to the Authority:
California Statewide Communities Development Authority
1100 K Street, Suite 101
Sacramento, CA 95814
Attention: Chair
If to the Developer:
Uptown Newport Jamboree, LLC
{c/o Shopoff Realty Investments, L.P
2 Park Plaza, Suite 700
Irvine, CA 92614
Attention: William A. Shopofq
TSG — Parcel 1, LLC
c/o Shopoff Realty Investments, LP
2 Park Plaza, Suite 700
Irvine, CA 92614
Attention: William A. Shopoff
With a copy to:
Jackson Tidus
2030 Main Street 12th Floor
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Irvine, CA 92614
Attention: Gregory P. Powers, Esq.
Either party may change its address by giving notice in writing to the other party.
Section 3.09, Section 3.04. Severability. If any part of this Agreement is held to
be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement
shall be given effect to the fullest extent reasonably possible.
Section 3.10. Seetion 3.nn. Governing Law. This Agreement and any dispute
arising hereunder shall be governed by and interpreted in accordance with the laws of the State of
California.
Section 3.11. Seetion 2.N. Waiver. Failure by a party to insist upon the strict
performance of any of the provisions of this Agreement by the other party, or the failure by a
party to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms of this
Agreement.
Section 3.12, Seetion 3Singular and Plural; Gender. As used herein, the
singular of any word includes the plural, and terms in the masculine gender shall include the
feminine.
Section 3.13. Seetion 3.172—.CounteMarts. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
Section 3.14, Seetion 3.4 Successors and Assigns. This Agreement is binding
upon the heirs, assigns and successors -in -interest of the parties hereto. The Developer may not
assign its rights or obligations hereunder, except to successors -in -interest to the property within
the Community Facilities District, without the prior written consent of the City.
Section 3.15. Seetion 3.M—.Remedies in General. It is acknowledged by the
parties that the City would not have entered into this Agreement if it were to be liable in damages
under or with respect to this Agreement or the application thereof, other than for the payment to
the Developer of any (i) moneys owing to the Developer hereunder, or (ii) moneys paid by the
Developer pursuant to the provisions hereof which are misappropriated or improperly obtained,
withheld or applied by the City.
Section 3.16. Seetion 2.19. Non -Liability of Authority. The Authority shall not
be liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on
any conceivable theory, under or by reason of or in connection with this Agreement, except only
to the extent amounts are received for the payment thereof from the Special Tax.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this Agreement, except that the City shall not be liable in
damages to the Developer, or to any assignee or transferee of the Developer other than for the
payments to the Developer specified Section 3.14. Subject to the foregoing, the Developer
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covenants not to sue for or claim any damages for any alleged breach of, or dispute which arises
out of, this Agreement.
[Remainder of Page Intentionally Left Blank]
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••/
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year written above.
ATTEST:
City Clerk
CITY OF NEWPORT BEACH
[Authorized Officer]
UPTOWN NEWPORT JAMBOREE, LLC,
a Delaware limited partnership
By:_
Name
Title
TSG — PARCEL 1, LLC,
a Delaware limited liability company
By:_
Name
Title
CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT
AUTHORITY
UA
Authorized Signatory
SIGNATURE PAGE - ACQUISITION AGREEMENT
9-61
SIGNATURE PAGE - ACQUISITION AGREEMENT
9-62
EXHIBIT A TO THE ACQUISITION AGREEMENT
DESCRIPTION OF ACQUISITION IMPROVEMENTS, ELIGIBLE PORTIONS
ITION IMPROVEMENTS
Park improvements, including playground infrastructure, irrigation, landscaping, utilities,
drainage and grading.
A-1
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EXHIBIT B TO THE ACQUISITION AGREEMENT
DISBURSEMENT REQUEST FORM
(Acquisition Improvement or Eligible Portion)
To: [Authority Trustee]
Attention:
Fax:
Phone:
Re: CSCDA Community Facilities District No. .
The undersigned, a duly authorized officer of the CITY OF NEWPORT BEACH hereby
requests a withdrawal from the Uptown Newport Project Community Facilities District
Acquisition and Construction Fund, as follows:
Request Date:
Name of Developer:
[Insert Date of Request]
Withdrawal AmouAcauisition [Insert Acquisition Price/Installment Payment]
Price/Installment Payment:
Acquisition Improvements: [Insert Description of Acquisition
Improvement(s)/Eligible Portion(s) from
Exhibit A]
Holdback Amount: [Insert Holdback Amount, if annlicablel
Withdrawal Amount: [Insert Acquisition Price less Holdbackl
Payment Instructions: [Insert Wire Instructions or Payment Address
for Developer or Developer's designee as
provided by the Developer]
The undersigned hereby certifies as follows:
The Withdrawal is being made in accordance with a permitted use of the monies pursuant
to the Acquisition Agreement and the Withdrawal is not being made for the purpose of
reinvestment.
None of the items for which payment is requested have been reimbursed previously from
the Acquisition and Construction Fund.
414 LL '-4' '!64 AAOL'1A AOL'1
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• 0 ,
If the Withdrawal Amount is greater than the funds held in the Acquisition and
Construction Fund, the Authority Trustee is authorized to pay the amount of such funds and to
pay remaining amount(s) as funds are subsequently deposited in the Acquisition and Construction
Fund, should that occur.
[For Park Improvement Disbursements:][The amounts being disbursed pursuant to this
request are being used to finance or refinance certain public infrastructure and facilities (the
"Improvements"). The City will own, and for the entire useful life of such Improvements
reasonably expects to own, all of such Improvements. To the extent any of such Improvements
are sold to an entity that is not a state or local government agency, the City will seek the advice
and approval of bond counsel to the Authority prior to any such sale. The City will not allow any
of such Improvements to be used (for example, by lease or other contract) in the trade or
business of any nongovernmental persons (other than in their roles as members of the general
public). All of such Improvements will be used in the performance of essential governmental
functions of the City or another state or local government agency. The average expected useful
life of such Improvements is at least 20 years. The representations and covenants contained in
this paragraph are intended to support the conclusion that the interest paid on the bonds issued to
finance the Improvements is excluded from gross income for federal income tax purposes under
Section 103 of the Internal Revenue Code of 1986 (the "Code").]
CITY OF NEWPORT BEACH
Title:
MIN
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EXHIBIT C TO THE ACQUISITION AGREEMENT
BIDDING, CONTRACTING AND CONSTRUCTION REQUIREMENTS FOR
ACQUISITION IMPROVEMENTS
With respect to construction contracts awarded after approval of the Agreement, bids for
construction shall be solicited from at least three (3) qualified contractors, provided at least three
(3) qualified contractors are reasonably available. The Developer may also directly solicit bids.
The bid package may consist of preliminary plans and specifications.
The bidding response time shall be not less than ten (10) working days.
An authorized representative of the City shall be provided a copy of the tabulation of bid results
upon request.
Contract(s) for the construction of the public Acquisition Improvements shall be awarded to the
qualified contractor(s) submitting the lowest responsible bid(s), as determined by the Developer.
The contractor to whom a contract is awarded shall be required to pay not less than the
prevailing rates of wages pursuant to Labor Code Sections 1770, 1773 and 1773.1. A current
copy of applicable wage rates shall be on file in the Office of the City Clerk, as required by Labor
Code Section 1773.2.
The Developer shall provide the City with certified payrolls.
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