HomeMy WebLinkAbout2021-2 - Approving Development Agreement No. DA2020-002 for the Residences at 4400 Von Karman Project Located at 4400 Von Karman Avenue (PA2020-061)ORDINANCE NO. 2021-2
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, APPROVING
DEVELOPMENT AGREEMENT NO. DA2020-002 FOR THE
RESIDENCES AT 4400 VON KARMAN PROJECT LOCATED
AT 4400 VON KARMAN AVENUE (PA2020-061)
WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the
City Council with the authority to make and enforce all laws, rules and regulations with
respect to municipal affairs subject only to the restrictions and limitations contained in the
Charter and the State Constitution, and the power to exercise, or act pursuant to any and
all rights, powers, and privileges, or procedures granted or prescribed by any law of the
State of California;
WHEREAS, an application was filed by TPG (KCN) Acquisition, LLC ("Applicant")
with respect to property located at 4400 Von Karman Avenue, generally bounded by Birch
Street and Von Karman Avenue, and legally described in Exhibit "A" attached hereto and
incorporated herein ("Property");
WHEREAS, the Applicant is requesting an approval for the development of 312
apartment units atop an 825 -space parking structure, a 284 -space free-standing parking
structure, one -acre public park, and reconfiguration of existing surface parking lots serving
existing office buildings ("Project') which require the following approvals from the City:
• Planned Community Development Plan Amendment (PD2020-001) ("PCDP
Amendment') - An amendment to Planned Community Development Plan #15
(Koll Center Newport Planned Community) for the creation of a residential overlay
zone and a park overlay zone to allow for residential uses and a public park within
the Koll Center Newport Professional and Business Office Site B ("Office Site B");
• Major Site Development Review (SD2020-006) ("SD") - A site development review
in accordance with the amended Koll Center Planned Community and Section
20.52.080 (Site Development Reviews) of the Newport Beach Municipal Code
("NBMC") for the construction of the Project;
• Traffic Study (TS2020-001) ("TS") - A traffic study pursuant to Chapter 15.40
(Traffic Phasing Ordinance) of the NBMC, which is required for projects that
generate in excess of 300 new average daily trips;
• Lot Line Adjustment (LA2020-002) ("LA") - To adjust the lot lines of two (2)
underlying parcels that comprise the Project;
Ordinance No. 2021-2
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• Affordable Housing Implementation Plan (AH -2020-003) ("AHIP") - A program
specifying how the Project meets the City's affordable housing requirements, in
exchange for a request of 20 percent increase in density and meets the
requirements for a development concession related to the mix of affordable units,
pursuant to Chapter 20.32 (Density Bonus) of the NBMC and Government Code
Section 65915 et seq.;
• Development Agreement (DA2020-002) ("Development Agreement") — A request
for a development agreement between the Applicant and the City, which would
provide vested rights to develop the Property, while also providing negotiated
public benefits; and
• Addendum No. ER2020-003 to the 2006 General Plan Update Environmental
Impact Report and the 2008-2014 City of Newport Beach Housing Element Update
Initial Study/Negative Declaration ("Addendum") — Pursuant to the California
Environmental Quality Act ("CEQA"), the Addendum will address reasonably
foreseeable environmental impacts resulting from the Project;
WHEREAS, the Property is designated MU -H2 (Mixed -Use Horizontal 2) by the
City of Newport Beach General Plan ("General Plan") Land Use Element and located
within the Airport Business Area, and the Airport Business Area Integrated Conceptual
Development Plan ("ICDP"). The ICDP allocates a maximum of 260 residential units to
be developed on the Property;
WHEREAS, the Property is currently located within the PC -15 (Koll Center
Newport Planned Community Office Site B) Zoning District;
WHEREAS, the Project is not located in the coastal zone; therefore, amending the
Local Coastal Program or a coastal development permit is not required;
WHEREAS, a telephonic public hearing was held by the Planning Commission on
November 5, 2020, in the Council Chambers located at 100 Civic Center Drive, Newport
Beach, California, due to the Declaration of a State Emergency and Proclamation of Local
Emergency related to COVID-19. A notice of time, place and purpose of the public hearing
was given in accordance with California Government Code Section 54950 et seq. ("Ralph
M. Brown Act") and Chapter 20.62 (Public Hearings) of the Newport Beach Municipal
Code ("NBMC"). Evidence, both written and oral, was presented to, and considered by,
the Planning Commission at this public hearing;
WHEREAS, at the hearing, the Planning Commission adopted Resolution No.
PC2020-040 by a unanimous vote of (4 ayes, 0 nays) recommending approval of the
Project; and land use entitlements referenced above, to the City Council;
Ordinance No. 2021-2
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WHEREAS, due to the proposed amendment to the Property's zoning regulations,
California Public Utilities Code Section 21676(b) requires the City to refer the Project to
the Orange County Airport Land Use Commission ("ALUC") for a determination of the
Project's consistency with the Airport Environs Land Use Plan ("AELUP") for John Wayne
Airport;
WHEREAS, on November 19, 2020, the ALUC found the Project to be consistent
with the AELUP for John Wayne Airport;
WHEREAS, telephonic public meetings were held by the Parks, Beaches and
Recreation ("PB&R") Commission on December 1, 2020 and January 25, 2021, in the
City Council Chambers located at 100 Civic Center Drive, Newport Beach, California, due
to the Declaration of a State Emergency and Proclamation of Local Emergency related to
COVID-19. A notice of time, place and purpose of the public hearings were given in
accordance with the Ralph M. Brown Act and by providing written notice to property
owners within a 300 foot radius of the Project;
WHEREAS, the PB&R Commission determined that the proposed amenities to be
provided within the proposed public park for the Project are practical, useable and feasible
for the general public, and provided additional recommendations to the City Council;
WHEREAS, at the January 12, 2021 City Council meeting, the City Council
continued the public hearing to January 26, 2021. A notice of time, place and purpose of
the public hearing was given in accordance with the Ralph M. Brown Act;
WHEREAS, the continued public hearing was held telephonically by the City
Council on January 26, 2021, in the Council Chambers located at 100 Civic Center Drive,
Newport Beach, California, due to the Declaration of a State Emergency and
Proclamation of Local Emergency related to COVID-19. A notice of time, place and
purpose of the public hearing were given in accordance with California Public Utilities
Code Section 21676(b), the Ralph M. Brown Act, and Chapters 15.40 (Traffic Phasing
Ordinance), 15.45 (Development Agreements), 19.76 (Lot Line Adjustments), 20.56
(Planning Community District Procedures) and 20.62 (Public Hearings) of the NBMC.
Evidence, both written and oral, was presented to, and considered by, the City Council at
this public hearing;
WHEREAS, Development Agreement No. DA2020-002 is required by Chapter
15.45 (Development Agreements) of the NBMC in that the Project would add more than
50 dwelling units within Statistical Area L4 (Airport Area);
Ordinance No. 2021-2
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WHEREAS, Section 15.45.040 (Contents) of the NBMC requires inclusion of the
permitted uses of the property, density or intensity of uses, maximum height and size of
proposed buildings and any reservation or dedication of land required into a development
agreement;
WHEREAS, Section 15.45.040 (Contents) of the NBMC permits inclusion of
additional provisions into the development agreement, including but not limited to,
conditions, terms, restrictions and requirements for subsequent discretionary actions as
well as specifying when construction commence;
WHEREAS, Development Agreement No. DA2020-002 satisfies the mandatory
elements of Section 15.45.040 (Contents) of the NBMC in providing for the development
of 260 dwelling units, exclusive of any permitted density bonus and specifies the provision
for the dedication of parkland;
WHEREAS, Development Agreement No. DA2020-002 further satisfies other
mandatory elements of Section 15.45.040 (Contents) of the NBMC in the definition of
Development Plan which incorporates all land use approvals required for the Project;
WHEREAS, Development Agreement No. DA2020-002 also provides other non-
mandatory elements, including a term of 10 years for completion of the Project along with
providing public benefits that are appropriate to support conveying the vested
development rights consistent with the City of Newport Beach General Plan, NBMC, and
Government Code Sections 65864 et seq.; and
WHEREAS, the public benefits include the payment of a $500,000 public safety
fee to provide new emergency response services or Fire Department equipment to serve
the Airport Area and $7,500,000 public benefit fee to be used by the City Council as
specified in Development Agreement.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
Section 1: The City Council has considered the recommendation of the
Planning Commission and has determined that modifications to the Project made by the
City Council, if any, are not major changes that require referral back to the Planning
Commission for consideration and recommendation.
Section 2: The City Council hereby approves Development Agreement No.
DA2020-002, which is attached hereto and incorporated herein by reference as Exhibit
"B„
Ordinance No. 2021-2
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Section 3: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 4: If any section, subsection, sentence, clause or phrase of this
ordinance is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this ordinance. The City
Council hereby declares that it would have passed this ordinance and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 5: Environmental Impact Report Addendum No. ER2020-003 was
prepared for the Project in compliance with California Public Resources Code Section
21000 et seq. ("CEQA"), CEQA Guidelines as set forth in California Code of Regulations,
Title 14, Division 6, Chapter 3, and City Council Policy K-3. On the basis of the entire
environmental record, the Project will not result in any new significant impacts that were
not previously analyzed in the PEIR and Addenda Nos. 1, 2, and 3 to the 2006 General
Plan Update (SCH No. 2006011119) along with the 2008-2014 Housing Element Update
Initial Study/Negative Declaration. The potential impacts associated with this Project
would either be the same or less than those described in the PEIR and Addenda Nos. 1,
2, and 3 to the 2006 General Plan Update along with the 2008-2014 Housing Element
Update Initial Study/Negative Declaration. In addition, there are no substantial changes
to the circumstances under which the Project would be undertaken that would result in
new or more severe environmental impacts than previously addressed nor has any new
information regarding the potential for new or more severe significant environmental
impacts been identified. As a result of the aforementioned, the City Council adopted
Resolution No. 2021-2 in accordance with Section 15164 of the CEQA Guidelines
approving Addendum No. ER2020-003 for the Project. Resolution No. 2021-2, including
all findings contained therein, is hereby incorporated by reference.
Section 6: Except as expressly modified in this ordinance, all other sections,
subsections, terms, clauses and phrases set forth in the NBMC shall remain unchanged
and shall be in full force and effect.
Section 7: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published pursuant to City Charter Section 414. This ordinance shall be effective thirty
(30) calendar days after its adoption.
Ordinance No. 2021-2
Page 6 of 6
This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 26th day of January, 2021, and adopted on the 9th day of
February, 2021, by the following vote, to -wit:
AYES: Mayor Avery, Mayor Pro Tem Muldoon, Council Member Blom Council
Member Brenner, Council Member Dixon, Council Member Duffield
NAYS:
ABSENT:
RECUSED: Council Member O'Neill
ATTEST:
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
AY(RdN C. HARP, CITY A TORNEY
Attachments: Exhibit A - Legal Description
Exhibit B - Development Agreement
Exhibit "A"
Legal Description
PARCEL 1:
THAT CERTAIN PARCEL OF LAND SITUATED IN THE CITY OF NEWPORT BEACH,
COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THAT PORTION OF PARCEL
2 OF PARCEL MAP NO. 91-155 AS SHOWN ON A MAP THEREOF, FILED IN BOOK 266,
PAGES 16 THROUGH 22 OF PARCEL MAPS IN THE OFFICE OF THE COUNTY
RECORDER OF SAID ORANGE COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEASTERLY CORNER OF SAID PARCEL 2 OF PARCEL
MAP NO. 91-155; THENCE ALONG THE NORTHEASTERLY LINE THEREOF NORTH
49021'34" WEST 584.54 FEET TO THE TRUE POINT OF BEGINNING; THENCE
LEAVING SAID NORTHEASTERLY LINE SOUTH 41005'02" WEST 54.87 FEET;
THENCE SOUTH 04016'29" EAST 257.91 FEET; THENCE SOUTH 85°43'31" WEST
685.70 FEET TO A LINE PARALLEL WITH AND 1.00 FEET EASTERLY OF THE
EASTERLY RIGHT-OF-WAY LINE OF VON KARMAN AVENUE AS SHOWN ON SAID
PARCEL MAP NO 91-155; THENCE ALONG SAID PARALLEL LINE NORTH 06059'31"
WEST 296.00 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE
NORTHEASTERLY AND HAVING A RADIUS OF 549.00 FEET; THENCE ALONG SAID
CURVE NORTHEASTERLY 90.98 FEET THROUGH A CENTRAL ANGLE OF 09029'40"
TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF
THAT CERTAIN PARCEL LABELED N.A.P. OF SAID PARCEL MAP NO. 91-155 HAVING
A BEARING AND DISTANCE OF "NORTH 49021'34" WEST 204.00 FEET"; THENCE
ALONG THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE
AND THE SOUTHEASTERLY LINE OF SAID N.A.P. PARCEL AND ITS
NORTHEASTERLY PROLONGATION THROUGH THE FOLLOWING COURSES:
SOUTH 49021'34" EAST 274.72 FEET; THENCE NORTH 40038'26" EAST 156.94 FEET
TO THE SOUTHWESTERLY LINE OF THAT CERTAIN PARCEL LABELED N.A.P. OF
SAID PARCEL MAP NO. 91-155 HAVING A BEARING AND DISTANCE OF "NORTH
49021'34" EAST 204.44 FEET"; THENCE ALONG SAID SOUTHWESTERLY LINE AND
THE SOUTHEASTERLY LINE OF SAID N.A.P. PARCEL AND ITS NORTHEASTERLY
PROLONGATION THROUGH THE FOLLOWING COURSES: SOUTH 49021'34" EAST
166.34 FEET; THENCE NORTH 40°38'26" EAST 284.73 FEET TO SAID
NORTHEASTERLY LINE OF PARCEL 2; THENCE ALONG SAID NORTHEASTERLY
LINE SOUTH 49°21'34' EAST 157.28 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING: 4.51 ACRES, MORE OF LESS.
PARCEL 2:
THAT CERTAIN PARCEL OF LAND SITUATED IN THE CITY OF NEWPORT BEACH,
COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THAT PORTION OF PARCEL
2 OF PARCEL MAP NO. 91-155 AS SHOWN ON A MAP THEREOF, FILED IN BOOK 266,
PAGES 16 THROUGH 22 OF PARCEL MAPS, TOGETHER WITH PARCEL 1 OF
PARCEL MAP NO. 82-713 AS SHOWN ON A MAP THEREOF, FILED IN BOOK 181,
PAGES 13 THROUGH 19 OF PARCEL MAPS, BOTH IN THE OFFICE OF THE COUNTY
RECORDER OF SAID ORANGE COUNTY.
EXCEPTING THEREFROM THAT CERTAIN PARCEL DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEASTERLY CORNER OF SAID PARCEL 2 OF PARCEL
MAP NO. 91-155; THENCE ALONG THE NORTHEASTERLY LINE THEREOF NORTH
4921'34" WEST 584.54 FEET TO THE TRUE POINT OF BEGINNING; THENCE
LEAVING SAID NORTHEASTERLY LINE SOUTH 41005'02" WEST 54.87 FEET;
THENCE SOUTH 0401629" EAST 257.91 FEET; THENCE SOUTH 85°43'31" WEST
685.70 FEET TO A LINE PARALLEL WITH AND 1.00 FEET EASTERLY OF THE
EASTERLY RIGHT-OF-WAY LINE OF VON KARMAN AVENUE AS SHOWN ON SAID
PARCEL MAP NO 91-155; THENCE ALONG SAID PARALLEL LINE NORTH 06°59'31"
WEST 296.00 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE
NORTHEASTERLY AND HAVING A RADIUS OF 549.00 FEET; THENCE ALONG SAID
CURVE NORTHEASTERLY 90.98 FEET THROUGH A CENTRAL ANGLE OF 09029'40"
TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF
THAT CERTAIN PARCEL LABELED N.A.P. OF SAID PARCEL MAP NO. 91-155 HAVING
A BEARING AND DISTANCE OF "NORTH 49021'34" WEST 204.00 FEET"; THENCE
ALONG THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE
AND THE SOUTHEASTERLY LINE OF SAID N.A.P. PARCEL AND ITS
NORTHEASTERLY PROLONGATION THROUGH THE FOLLOWING COURSES:
SOUTH 49021'34" EAST 274.72 FEET; THENCE NORTH 40038'26" EAST 156.94 FEET
TO THE SOUTHWESTERLY LINE OF THAT CERTAIN PARCEL LABELED N.A.P. OF
SAID PARCEL MAP NO. 91-155 HAVING A BEARING AND DISTANCE OF "NORTH
49021'34" EAST 204.44 FEET"; THENCE ALONG SAID SOUTHWESTERLY LINE AND
THE SOUTHEASTERLY LINE OF SAID N.A.P. PARCEL AND ITS NORTHEASTERLY
PROLONGATION THROUGH THE FOLLOWING COURSES: SOUTH 49021'34" EAST
166.34 FEET; THENCE NORTH 40°38'26" EAST 284.73 FEET TO SAID
NORTHEASTERLY LINE OF PARCEL 2; THENCE ALONG SAID NORTHEASTERLY
LINE SOUTH 49°21'34' EAST 157.28 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING: 20.09 ACRES, MORE OF LESS.
SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAY AND EASEMENTS OF
RECORD.
Exhibit "B"
Development Agreement No. DA2020-002
Document attached.
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attn: Citv Clerk
(Space Above This Line Is for Recorder's Use Only)
This Agreement is recorded at the request and for
the benefit of the City of Newport Beach and is
exempt from the payment of a recording fee
pursuant to Government Code §§ 6103 and 27383.
DEVELOPMENT AGREEMENT
between
CITY OF NEWPORT BEACH
and
TPG (KCN) Acquisition, LLC
concerning
THE RESIDENCES AT 4400 VON KARMAN
4400 Von Karman
DEVELOPMENT AGREEMENT
(Pursuant to Newport Beach Municipal Code Chapter 15.45 and California Government
Code Sections 65864-65869.5)
This DEVELOPMENT AGREEMENT ("Agreement" or "Development Agreement") is
dated for reference purposes as of the 9th day of February, 2021 ("Agreement Date"), and is
being entered into by and between the CITY OF NEWPORT BEACH "Ci a California
municipal corporation and charter city, organized and existing under and by virtue of its
Charter and the Constitution, and the laws of the State of California, and TPG (KCN)
Acquisition, LLC, a California limited liability company ("Developer"). City and
Developer are sometimes collectively referred to in this Agreement as the "Parties" and
individually as a "Party."
RECITALS
A. Developer is in the process of the purchasing that certain real property located in
the City of Newport Beach, County of Orange, State of California commonly referred to as 4400
Von Karman Avenue (APNs #445-131-04, 29, and 30) and generally located on the southwest
side of Birch Street and southeast side of Von Karman Avenue ("Property"). As of the
Agreement Date, the Property is owned by SLF-KC Towers, LLC, a Delaware limited liability
corporation, but Developer has legal or equitable interest in the Property and therefore is
authorized to enter into this Agreement pursuant to Government Code Section 65865 and
Newport Beach Municipal Code Chapter 15.45 (Development Agreements). The Property is
more particularly described in the legal description attached hereto as Exhibit A and is depicted
on the site map attached hereto as Exhibit B.
B. To encourage investment in, and commitment to, comprehensive planning and
public facilities financing, strengthen the public planning process and encourage private
implementation of the local general plan, provide certainty in the approval of projects to avoid
waste of time and resources, and reduce the economic costs of development by providing
assurance to property owners that they may proceed with projects consistent with existing land
use policies, rules, and regulations, the California Legislature adopted California Government
Code Sections 65864-65869.5 ("Development Agreement Statute") authorizing cities and
counties to enter into development agreements with persons or entities having a legal or
equitable interest in real property located within their jurisdiction.
C. On March 13, 2007, the City Council adopted Ordinance No. 2007-6, entitled
"Ordinance Amending Chapter 15.45 of City of Newport Beach Municipal Code Regarding
Development Agreements" ("Development Agreement Ordinance"), This Agreement is
consistent with the Development Agreement Ordinance.
D. As detailed in Section 4 of this Agreement and the Development Plans (as defined
herein), and in consideration of the significant benefits outlined in this Agreement, Developer
has agreed to pay a total Public Benefit Fee (as defined herein) in the sum of Seven Million Five
Hundred Thousand Dollars and 00/100 ($7,500,000.00). Developer shall pay the Public Benefit
Fee to the City as provided in Article 3 of this Agreement.
E. This Agreement is consistent with the City of Newport Beach General Plan,
including, without limitation, the Property's "MU -1-12" (Mixed -Use Horizontal 2) General Plan
designation which provides for a horizontal intermixing of uses that may include regional
commercial office, multifamily residential, vertical mixed-use buildings, industrial, hotel rooms,
and ancillary neighborhood commercial uses.
F. In recognition of the significant public benefits that this Agreement provides, the
City Council has found that this Agreement: (i) is consistent with the City of Newport Beach
General Plan as of the date of this Agreement; (ii) is in the best interests of the health, safety, and
general welfare of City, its residents, and the public; (iii) is entered into pursuant to, and
constitutes a present exercise of, the City's police power; (iv) is consistent and has been
approved consistent with the Project's Addendum to the Environmental Impact Report (SCH#
200601 1 1 1 19) ("PEIR") that was certified by the City Council on July 25, 2006 for the 2006
General Plan Update and the Initial Study/Negative Declaration prepared in accordance with
CEQA for the Newport Beach Housing Element Update (General Plan Amendment No.
GP2008-003) adopted by the City Council on November 22, 2011 (the PEIR and Initial
Study/Negative Declaration are collectively referred to herein as the "PEIR"), all of which
analyze the environmental effects of the proposed development of the Project on the Property,
and all of the findings, conditions of approval and mitigation measures related thereto; and (v) is
consistent and has been approved consistent with provisions of California Government Code
Section 65867 and City of Newport Beach Municipal Code Chapter 15.45 (Development
Agreements).
G. On November 5, 2020, City's Planning Commission held a public hearing on this
Agreement, made findings and determinations with respect to this Agreement, and recommended
to the City Council that the City Council approve this Agreement.
H. On January 12, 2020, the City Council also held a public hearing on this
Agreement and considered the Planning Commission's recommendations and the testimony and
information submitted by City staff, Developer, and members of the public. On
January 26, 2020, consistent with applicable provisions of the Development Agreement Statute
and Development Agreement Ordinance, the City Council adopted Ordinance No. 2020-2
("Adopting Ordinance' ), finding this Agreement consistent with the City of Newport Beach
General Plan and approving and adopting this Agreement.
AGREEMENT
NOW, THEREFORE, City and Developer agree as follows:
1. Definitions.
In addition to any terms defined elsewhere in this Agreement, the following terms when
used in this Agreement shall have the meanings set forth below:
"Action' shall have the meaning ascribed in Section 8.10 of this Agreement.
"Adopting Ordinance" shall mean City Council Ordinance No. 2020-2 approving and
adopting this Agreement.
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"Agreement" shall mean this Development Agreement, as the same may be amended
from time to time.
"Agreement Date" shall mean the date first written above, which date is the date the City
Council adopted the Adopting Ordinance.
"CEOA" shall mean the California Environmental Quality Act (California Public
Resources Code sections 21000-21177) and the implementing regulations promulgated
thereunder by the Secretary for Resources (California Code of Regulations, Title 14, Division 6,
Chapter 3, Section 15000 et seg.), as the same may be amended from time to time.
"Ci!Z" shall mean the City of Newport Beach, a California municipal corporation and
charter city, and any successor or assignee of the rights and obligations of the City of Newport
Beach hereunder.
"City Council" shall mean the governing body of City.
"City's Affiliated Parties" shall have the meaning ascribed in Section 10.1 of this
Agreement.
"Claim" shall have the meaning ascribed in Section 10. 1 of this Agreement.
"CPI Index" shall mean the Consumer Price Index published from time to time by the
United States Department of Labor for all urban consumers (all items) for the smallest
geographic area that includes the City or, if such index is discontinued, such other similar index
as may be publicly available that is selected by City in its reasonable discretion.
"Cure Period" shall have the meaning ascribed in Section 8.1 of this Agreement.
"Default" shall have the meaning ascribed to that term in Section 8.1 of this Agreement.
"Develoa" or "Development" shall mean to improve or the improvement of the Property
for the purpose of completing the structures, improvements, and facilities comprising the Project,
including but not limited to: grading; the construction of infrastructure and public facilities
related to the Project, whether located within or outside the Property; the construction of all of
the private improvements and facilities comprising the Project; the preservation or restoration, as
required of natural and man-made or altered open space areas; and the installation of
landscaping. The terns "Develop" and "Development," as used herein, do not include the
maintenance, repair, reconstruction, replacement, or redevelopment of any structure,
improvement, or facility after the initial construction and completion thereof.
"Developer" shall mean TPG (KCN) Acquisition, LLC and any successor or assignee to
all or any portion of its right, title, and/or interest in and to ownership of all or a portion of the
Property and/or the Project.
"Development Agreement Ordinance" shall mean Chapter 15.45 of the City of Newport
Beach Municipal Code.
"Development Agreement Statute" shall mean California Government Code Sections
65864-65869.5, inclusive.
"Development Exactions" shall mean any requirement of City in connection with or
pursuant to any ordinance, resolution, rule, or official policy for the dedication of land, the
construction or installation of any public improvement or facility, or the payment of any fee or
charge in order to lessen, offset, mitigate, or compensate for the impacts of Development of the
Project on the environment or other public interests.
"Development Plan" shall mean all of the land use entitlements, approvals and permits
approved by the City for the Project on or before the Agreement Date, as the same may be
amended from time to time consistent with this Agreement. Such land use entitlements,
approvals and permits include, without limitation, the following: (1) the Development rights as
provided under this Agreement; (2) Planned Community Development Plan Amendment No. # 15
PD2020-001 to amend the Koll Center Newport Planned Community Development Plan
("PCDP") to create a residential overlay zone to allow for the 312 apartment units and a public
park; (3) Major Site Development Review No. SD2020-006, a site development review in
accordance with the amended Koll Center Newport Planned Community and Section 20.52.80
(Site Development Reviews) of the Newport Beach Municipal Code for the construction of the
Project; (4) Lot Line Adjustment No. LA2020-002 to reconfigure the lot lines of two underlying
parcels; (5) Affordable Housing Implementation Plan No. AH2020-003 demonstrating how the
Project would meet the City's affordable housing requirements; (6) Traffic Study No. TS2020-
001 in accordance with Chapter 15.40 (Traffic Phasing Ordinance) of the Newport Beach
Municipal Code; (7) Development Agreement No. DA2020-002 in accordance with Chapter
15.45 (Development Agreements) of the Newport Beach Municipal Code which would provide
vested rights to develop the PCDP as amended, while also providing public benefits should the
Project be approved; (8) a density bonus in accordance with the California Government Code
Section 65915 et. seg. (9) the Addendum the 2006 General Plan Update EIR ER2020-003
(SCH#2006011119); and (10) all conditions of approval and all mitigation measure approved for
the Project on or before the Agreement Date.
"Development Regulations" shall mean the following regulations as they are in effect as
of the Effective Date and to the extent they govern or regulate the development of the Property,
but excluding any amendment or modification to the Development Regulations adopted,
approved, or imposed after the Effective Date that affects the Development of the Property,
unless such amendment or modification is expressly authorized by this Agreement or is agreed to
by Developer in writing: the General Plan; the Development Plan; and, to the extent not
expressly superseded by the Development Plan or this Agreement (see Section 4.3 in particular),
all other land use and subdivision regulations governing the permitted uses, density and intensity
of use, design, and improvement, procedures for obtaining required City permits and approvals
for development, and similar matters that may apply to the Development of the Project on the
Property during the Term of this Agreement that are set forth in Title 15 (Buildings and
Construction) of the Municipal Code, Title 19 (Subdivisions) of the Newport Beach Municipal
Code, and Title 20 (Planning and Zoning) of the Newport Beach Municipal Code but specifically
excluding all other sections of the Newport Beach Municipal Code, including without limitation
Title 5 (Business Licenses and Regulations) of the Newport Beach Municipal Code.
Notwithstanding the foregoing, the term "Development Regulations," as used herein, does not
include any City ordinance, resolution, code, rule, regulation or official policy governing any of
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the following: (i) the conduct of businesses, professions, and occupations; (ii) taxes and
assessments; (iii) the control and abatement of nuisances; (iv) the granting of encroachment
permits and the conveyance of rights and interests which provide for the use of or the entry upon
public property; or (v) the exercise of the power of eminent domain.
"Effective Date" shall mean the latest of all of the following occurring: (i) the date that is
ninety (90) calendar days after the Agreement Date; (ii) if a referendum concerning the Adopting
Ordinance, the Development Plan, or any of the Development Regulations approved on or before
the Agreement Date is timely qualified for the ballot and a referendum election is held
concerning the Adopting Ordinance or any of such Development Regulations, the date on which
the referendum is certified resulting in upholding and approving the Adopting Ordinance and the
Development Regulations; (iii) if a lawsuit is timely filed challenging the validity or legality of
the Adopting Ordinance, this Agreement, the Development Plan, and/or any of the Development
Regulations approved on or before the Agreement Date, the date on which said challenge is
finally resolved in favor of the validity or legality of the Adopting Ordinance, this Agreement,
the Development Plan, and/or the applicable Development Regulations, whether such finality is
achieved by a final non -appealable judgment, voluntary or involuntary dismissal (and the
passage of any time required to appeal an involuntary dismissal), or binding written settlement
agreement or (iv) the date on which title to the Property has been transferred to, and vested in,
Developer as evidenced by an instrument duly recorded with the Office of the County Recorder
of the County of Orange. Promptly after the Effective Date occurs, the Parties agree to cooperate
in causing an appropriate instrument to be executed and recorded against the Property
memorializing the Effective Date.
"Environmental Laws" means all federal, state, regional, county, municipal, and local
laws, statutes, ordinances, rules, and regulations which are in effect as of the Agreement Date,
and all federal, state, regional, county, municipal, and local laws, statutes, rules, ordinances,
rules, and regulations which may hereafter be enacted and which apply to the Property or any
part thereof, pertaining to the use, generation, storage, disposal, release, treatment, or removal of
any Hazardous Substances, including without limitation the following: the Comprehensive
Environmental Response Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601,
et seq., as amended ("CERCLA"); the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901, et sM., as amended
("RCRA"); the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.
Sections 11001 et seq., as amended; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seg., as amended; the Clean Air Act, 42 U.S.C. Sections 7401 et seq., as
amended; the Clean Water Act, 33 U.S.C. Section 1251, et SeMc ., as amended; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et sea., as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et sea., as amended; the Federal Safe
Drinking Water Act, 42 U.S.C. Sections 300f et sea., as amended; the Federal Radon and Indoor
Air Quality Research Act, 42 U.S.C. Sections 7401 et sea., as amended; the Occupational Safety
and Health Act, 29 U.S.C. Sections 651 et sea., as amended; and California Health and Safety
Code Section 25100, et secl.
"General Plan" shall mean City's 2006 General Plan adopted by the City Council on July
25, 2006, by Resolution No. 2006-76, and any amendments to the 2006 General Plan that
became effective before the Effective Date. The term "General Plan" shall exclude any
amendments that became effective after the Effective Date unless such amendment is expressly
5
authorized by this Agreement, or is specifically agreed to by Developer. The Land Use Plan of
the Land Use Element of the General Plan was approved by City voters in a general election on
November 7, 2006.
"Hazardous Substances" means any toxic substance or waste, pollutant, hazardous
substance or waste, contaminant, special waste, industrial substance or waste, petroleum or
petroleum -derived substance or waste, or any toxic or hazardous constituent or additive to or
breakdown component from any such substance or waste, including without limitation any
substance, waste, or material regulated under or defined as "hazardous" or "toxic" under any
Environmental Law.
"Mortgage" shall mean a mortgage, deed of trust, sale and leaseback arrangement, or any
other form of conveyance in which the Property, or a part or interest in the Property, is pledged
as security and contracted for in good faith and for fair value.
"Mortgagee" shall mean the holder of a beneficial interest under a Mortgage or any
successor or assignee of the Mortgagee.
"Notice of Default" shall have the meaning ascribed in Section 8.1 of this Agreement.
"Egty" or "Parties" shall mean the City or Developer or both, as determined by the
context.
"Project" shall mean the development of 312 apartment units including density bonus units,
a 284 -space free-standing parking structure, an approximately one (1) acre public park, and
reconfiguration of existing surface parking lots serving existing office buildings including all on-
site and off-site improvements, as provided in this Agreement and the Development Regulations,
as the same may be modified or amended from time to time consistent with this Agreement and
applicable law.
"Property" is located 4400 Von Karman Avenue in the City, as described in Exhibit A
and depicted on Exhibit B.
"Public Benefit Fee" shall have the meaning ascribed in Section 3.1 of this Agreement.
"Subsequent Development Approvals" shall mean all discretionary development and
building approvals that Developer is required to obtain to Develop the Project on and with
respect to the Property after the Agreement Date consistent with the Development Regulations
and this Agreement.
"Term" shall have the meaning ascribed in Section 2.4 of this Agreement.
"Termination Date" shall have the meaning ascribed in Section 2.4 of this Agreement.
"Transfer" shall have the meaning ascribed in Section 1 l of this Agreement.
I
2. General Provisions.
2.1 Plan Consistency, Zoning Implementation.
This Agreement and the Development Regulations applicable to the Property will cause
City's zoning and other land use regulations for the Property to be consistent with the General
Plan.
2.2 Binding Effect of Agreement.
The Property is hereby made subject to this Agreement. Development of the Property is
hereby authorized and shall be carried out in accordance with the terms of this Agreement.
2.3 Developer Representations and Warranties Regarding Ownership of the Property
and Related Matters Pertaining to this Agreement.
Developer and each person executing this Agreement on behalf of Developer hereby
represents and warrants to City as follows: (i) that Developer is the fee simple owner to the
Property; (ii) if Developer or any co-owner comprising Developer is a legal entity that such
entity is duly formed and existing and is authorized to do business in the State of California; (iii)
if Developer or any co-owner comprising Developer is a natural person that such natural person
has the legal right and capacity to execute this Agreement; (iv) that all actions required to be
taken by all persons and entities comprising Developer to enter into this Agreement have been
taken and that Developer has the legal authority to enter into this Agreement; (v) that
Developer's entering into and performing its obligations set forth in this Agreement will not
result in a violation of any obligation, contractual or otherwise, that Developer or any person or
entity comprising Developer has to any third party; and (vi) that neither Developer nor any co-
owner comprising Developer is currently the subject of any voluntary or involuntary bankruptcy
or insolvency petition; and (vii) that Developer has no actual knowledge of any pending or
threatened claims of any person or entity affecting the validity of any of the representations and
warranties set forth in clauses (i) -(vi), inclusive or affecting Developer's authority or ability to
enter into or perform any of its obligations set forth in this Agreement.
2.4 Term.
The term of this Agreement ("Term") shall commence on the Effective Date and shall
terminate on the "Termination Date."
Notwithstanding any other provision set forth in this Agreement to the contrary, if any
Party reasonably determines that the Effective Date of this Agreement will not occur because, for
example, (i) the Adopting Ordinance or any of the Development Regulations approved on or
before the Agreement Date for the Project has/have been disapproved by City's voters at a
referendum election or (ii) a final non -appealable judgment is entered in a judicial action
challenging the validity or legality of the Adopting Ordinance, this Agreement, and/or any of the
Development Regulations for the Project approved on or before the Agreement Date such that
this Agreement and/or any of such Development Regulations is/are invalid and unenforceable in
whole or in such a substantial part that the judgment substantially impairs such Party's rights or
substantially increases its obligations or risks hereunder or thereunder, then such Party, in its sole
and absolute discretion, shall have the right to terminate this Agreement upon delivery of a
7
written notice of termination to the other Party, in which event neither Party shall have any
further rights or obligations hereunder except that Developer's indemnity obligations set forth in
Article 10 shall remain in full force and effect and shall be enforceable, and the Development
Regulations applicable to the Project and the Property only (but not those general Development
Regulations applicable to other properties in the City) shall be repealed by the City after delivery
of said notice of termination except for the Development Regulations that have been disapproved
by City's voters at a referendum election and, therefore, never took effect.
The Termination Date shall be the earliest of the following dates: (i) the tenth (1011)
anniversary of the Effective Date as said date may be extended in accordance with Section 5.1 of
this Agreement; (ii) such earlier date that this Agreement may be terminated in accordance with
Articles 5, and 7, and/or Section 8.3 of this Agreement and/or Sections 65865.1 and/or 65868 of
the Development Agreement Statute; or (iii) completion of the Project in accordance with the
terms of this Agreement, including Developer's complete satisfaction, performance, and
payment, as applicable, of all Development Exactions, the issuance of all required final
occupancy permits, and acceptance by City or applicable public agency(ies) or private entity(ies)
of all required offers of dedication.
Notwithstanding any other provision se
provisions set forth in Article 10 and Section 1z
set forth in this Agreement that are expressly
survive the Termination Date of this Agreement.
3. Public Benefits.
3.1 Public Benefit Fee.
t forth in this Agreement to the contrary, the
..11 (as well as any other Developer obligations
written to survive the Termination Date) shall
As consideration for City's approval and performance of its obligations set forth in this
Agreement, Developer shall pay to City a fee in the amount of Seven Million Dollars Five
Hundred Thousand Dollars and 00/100 ($7,500,000.00) which shall be in addition to any other
fee or charge to which the Property and the Project would otherwise be subject.
Of the Seven Million Five Hundred Thousand Dollars and 00/100 ($7,500,000.00), the
Developer shall nay Six Million Five Hundred Thousand Dollars and 00/100 ($6,500,000.00) of
the Public Benefit Fee to the City within five (5) days of the Effective Date of the Agreement.
The Developer shall pay the second installment of the Public Benefit Fee in the amount of One
Million Dollars and 00/100 ($1,000,000.00) to the City at the time the first building permit is
issued for the residential portion of the Project.
The City has not designated a specific project or purpose for the Public Benefit Fee
except as provided in Section 3.1.1 below. Developer acknowledges by its approval and
execution of this Agreement that it is voluntarily agreeing to pay the Public Benefit Fee and the
fees identified in Section 3.2 below, that its obligation to pay the Public Benefit Fee or the fees in
Section 3.2 is an essential term of this Agreement and is not severable from City's obligations
and Developer's vested rights to be acquired hereunder, and that Developer expressly waives any
constitutional, statutory, or common law right it might have in the absence of this Agreement to
protest or challenge the payment of the Public Benefits identified in this Section 3.1 on any
ground whatsoever, including without limitation pursuant to the Fifth and Fourteenth
Amendments to the United States Constitution, California Constitution Article I Section 19, the
Mitigation Fee Act (California Government Code Section 66000 et seq.), or otherwise. In
addition to any other remedy set forth in this Agreement for Developer's default, if Developer
shall fail to timely pay any portion of the Public Benefits identified in this Section 3.1 when due,
City shall have the right to withhold issuance of any further building permits, occupancy permits,
or other development or building permits for the Project.
3.1.1 Public Benefit Fee Allocation.
The City Council retains sole and absolute discretion to determine how Six Million
Dollars and 00/100 ($6,000,000.00) of the Public Benefit Fee provided in Section 3.1 shall be
allocated and no final decisions have been made as of the Agreement Date. In light of the City's
commitment to housing issues, the City agrees to use the remaining One Million Five Hundred
Thousand Dollars and 00/100 ($1,500,000.00) Public Benefit Fee as follows: (i) Five Hundred
Thousand Dollars and 00/100 ($500,000.00) of the Public Benefit Fee shall be used, at the City's
discretion, to support the City's ongoing homeless shelter or permanent supportive housing
efforts; and (ii) One Million Dollars and 00/100 ($1,000,000.00) shall be placed in a separate
affordable housing fund and used, at the City's discretion, for the development of future,
speculative, affordable housing projects in the City (no specific project is contemplated).
3.2 Other Public Benefits. In addition to the Public Benefit Fee, the direct and
indirect benefits City expects to receive pursuant to this Development Agreement are as follows:
3.2.1 Park Land and Improvements. The park land dedication requirement for the Project
pursuant to the City General Plan Land Use Policy 6.15.13 is approximately one (1) acre. City
acknowledges that Developer's performance of its obligations as set forth in this section satisfies
all of Developer's General Plan, Quimby Act and Newport Beach Municipal Code Chapter 19.52
(Park Dedication and Fees) obligations governing park land dedication and fees. City
acknowledges that Developer is eligible to receive credit against the payment of fees or
dedication of land consistent with the General Plan. As of the Effective Date, the established fair
market value for one (1) acre of land used in assessing in -lieu of park dedication fees equals Two
Million Five Hundred Thousand Dollars and 00/100 ($2,500,000). Developer fees and credit
shall be based on the established Two Million Five Hundred Thousand Dollars and 00/100
($2,500,000) per acre. Based upon the obligations provided herein, Developer agrees to construct
and improve a one (1) acre park within the Property pursuant to the Development Plan.
Developer shall offer the one (1) acre park to the City for dedication in fee simple and City shall
accept Developer's offer of dedication provided that the park has been completed in accordance
with the Development Plan. The park shall be privately maintained by Developer in perpetuity
and in accordance with the Development Plan as set forth in a separate written maintenance and
license agreement approved as to form by the City Attorney.
3.2.2 Public Safety Developer shall pay a public safety fee in the amount of Five
Hundred Thousand Dollars and 00/100 ($500,000.00) to be used, at City's discretion, to fund the
cost of staffing, services and equipment as necessary for fire related public safety purposes. The
fee shall be paid at the time the first building permit is issued for the residential portion of the
Project.
E
3.2.4 Consumer Price Index (CPI) Increases. Any fee provided in this Section 3 (Public
Benefit) shall be increased based upon percentage increases in the CPI Index as provided herein.
The first CPI adjustment shall occur on the third anniversary of the City Council's adoption of
the Adopting Ordinance (the first "Adjustment Date") and subsequent CPI adjustments shall
occur on each anniversary of the first Adjustment Date thereafter until expiration of the Term of
this Agreement (each, an "Adjustment Date"). The amount of the CPI adjustment on the first
Adjustment Date shall be the percentage increase in the CPI Index between the second
anniversary of the City Council's adoption of the Adopting Ordinance and the third anniversary
of the City Council's adoption of the Adopting Ordinance. The amount of the CPI adjustment on
each subsequent Adjustment Date shall be the percentage increase between said Adjustment Date
and the immediately preceding Adjustment Date. The amount of the percentage increase in the
CPI Index on the applicable Adjustment Dates shall in each instance be calculated based on the
then most recently available CPI Index figures such that, for example, if the first Adjustment
Date occurs on September 1, 2020, and the most recently available CPI Index figure on that date
is the CPI Index for July 2020 (2 months prior to the first Adjustment Date), the percentage
increase in the CPI Index on the first Adjustment Date shall be calculated by comparing the CPI
Index for July 2019 with the CPI Index for July 2020. In no event, however, shall application of
the CPI Index on any Adjustment Date reduce the amount of any fee provided in this Section 3
(Public Benefit) (or unpaid portion thereof) below the amount in effect prior to that Adjustment
Date.
4. Development of Project.
4.1 Applicable Regulations; Developer's Vested Rights and City's Reservation of
Discretion With Respect to Subsequent Development Approvals.
Other than as expressly set forth in this Agreement, during the Term of this Agreement,
(i) Developer shall have the vested right to Develop the Project on and with respect to the
Property in accordance with the terms of the Development Regulations and this Agreement and
(ii) City shall not prohibit or prevent development of the Property on grounds inconsistent with
the Development Regulations or this Agreement. Notwithstanding the foregoing, nothing herein
is intended to limit or restrict the City's discretion with respect to (i) those review and approval
requirements contained in the Development Regulations, (ii) the exercise of any discretionary
authority City retains under the Development Regulations, (iii) the approval, conditional
approval, or denial of any Subsequent Development Approvals that are required for
Development of the Project as of the Effective Date, or (iv) any environmental approvals that
may be required under CEQA or any other federal or state law or regulation in conjunction with
any Subsequent Development Approvals that may be required for the Project, and in this regard,
as to future actions in connection with the Subsequent Development Approvals, the City reserves
its full discretion to the same extent that it would have such discretion in the absence of this
Agreement. In addition, it is understood and agreed that nothing in this Agreement is intended to
vest Developer's rights with respect to any laws, regulations, rules, or official policies of any
other (i.e., non -City) governmental agency or public utility company with jurisdiction over the
Property or the Project; or any applicable federal or state laws, regulations, rules, or official
policies that may be inconsistent with this Agreement and that override or supersede the
provisions set forth in this Agreement, and regardless of whether such overriding or superseding
laws, regulations, rules, or official policies are adopted or applied to the Property or the Project
prior or subsequent to the Agreement Date.
L
Developer has expended and will continue to expend substantial amounts of time and
money planning and preparing for Development of the Project. Developer represents, and City
acknowledges, that Developer would not make these expenditures without this Agreement, and
that Developer is and will be making these expenditures in reasonable reliance upon its vested
rights to Develop the Project as set forth in this Agreement.
Developer may apply to City for permits or approvals necessary to modify or amend the
Development specified in the Development Regulations, without amending this Agreement,
provided that the request does not propose an increase in the maximum density, intensity, height,
or size of proposed structures, or a change in use that generates more peak hour traffic or more
daily traffic and, in addition, Developer may apply to City for approval of minor amendments to
the existing tentative tract map, if any, or associated conditions of approval, consistent with City
of Newport Beach Municipal Code Section 19.12.090. This Agreement does not constitute a
promise or commitment by City to approve any such permit or approval, or to approve the same
with or without any particular requirements or conditions, and City's discretion with respect to
such matters shall be the same as it would be in the absence of this Agreement.
4.2 No Conflicting Enactments.
Except to the extent City reserves its discretion as expressly set forth in this Agreement,
during the Term of this Agreement City shall not apply to the Project or the Property any
ordinance, policy, rule, regulation, or other measure relating to Development of the Project that
is enacted or becomes effective after the Effective Date to the extent it conflicts with this
Agreement or Developer consents in writing. This Section 4.2 shall not restrict City's ability to
enact an ordinance, policy, rule, regulation, or other measure applicable to the Project pursuant to
California Government Code Section 65866 consistent with the procedures specified in Section
4.3 of this Agreement. In Pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465,
the California Supreme Court held that a construction company was not exempt from a city's
growth control ordinance even though the city and construction company had entered into a
consent judgment (tantamount to a contract under California law) establishing the company's
vested rights to develop its property consistent with the zoning. The California Supreme Court
reached this result because the consent judgment failed to address the timing of development.
The Parties intend to avoid the result of the Pardee case by acknowledging and providing in this
Agreement that Developer shall have the vested right to Develop the Project on and with respect
to the Property at the rate, timing, and sequencing that Developer deems appropriate within the
exercise of Developer's sole subjective business judgment, provided that such Development
occurs in accordance with this Agreement and the Development Regulations, notwithstanding
adoption by City's electorate of an initiative to the contrary after the Effective Date. No City
moratorium or other similar limitation relating to the rate, timing, or sequencing of the
Development of all or any part of the Project and whether enacted by initiative or another
method, affecting subdivision maps, building permits, occupancy certificates, or other
entitlement to use, shall apply to the Project to the extent such moratorium or other similar
limitation restricts Developer's vested rights in this Agreement or otherwise conflicts with the
express provisions of this Agreement.
4.3 Reservations of Authority.
Notwithstanding any other provision set forth in this Agreement to the contrary, the laws,
rules, regulations, and official policies set forth in this Section 4.3 shall apply to and govern the
Development of the Project on and with respect to the Property.
4.3.1 Procedural Regulations. Unless otherwise specified in this Agreement,
procedural regulations relating to hearing bodies, petitions, applications, notices, findings,
records, hearings, reports, recommendations, appeals, and any other matter of procedure shall
apply to the Property, provided that such procedural regulations are adopted and applied City-
wide or to all other properties similarly situated in City.
4.3.2 Processing and Permit Fees. City shall have the right to charge, and
Developer shall be required to pay, all applicable processing and permit fees to cover the
reasonable cost to City of processing and reviewing applications and plans for any required
Subsequent Development Approvals, building permits, excavation and grading permits,
encroachment permits, and the like, for performing necessary studies and reports in connection
therewith, inspecting the work constructed or installed by or on behalf of Developer, and
monitoring compliance with any requirements applicable to Development of the Project, all at
the rates in effect at the time fees are due.
4.3.3 Consistent Future City Regulations. City ordinances, resolutions,
regulations, and official policies governing Development which do not conflict with the
Development Regulations, or with respect to such regulations that do conflict, where Developer
has consented in writing to the regulations, shall apply to the Property.
4.3.4 Development Exactions Applicable to Property. During the Term of this
Agreement, Developer shall be required to satisfy and pay all Development Exactions at the time
performance or payment is due to the same extent and in the same amount(s) that would apply to
Developer and the Project in the absence of this Agreement. City shall not alter, increase, or
modify said Development Exaction in a manner that is inconsistent with this Agreement, the
Project's conditions of approval, or the Development Regulations without Developer's prior
written consent or as may be otherwise required pursuant to overriding federal or state laws or
regulations (Section 4.3.5 below). In addition, nothing in this Agreement is intended or shall be
deemed to vest Developer against the obligation to pay any of the following (which are not
included within the definition of "Development Exactions") in the full amount that would apply
in the absence of this Agreement: (i) City's normal fees for processing, environmental
assessment and review, tentative tract and parcel map review, plan checking, site review and
approval, administrative review, building permit, grading permit, inspection, and similar fees
imposed to recover City's costs associated with processing, reviewing, and inspecting project
applications, plans, and specifications, including CEQA review; (ii) fees and charges levied by
any other public agency, utility, district, or joint powers authority, regardless of whether City
collects those fees and charges; or (iii) community facility district special taxes or special district
assessments or similar assessments, business license fees, bonds or other security required for
public improvements, transient occupancy taxes, sales taxes, property taxes, sewer lateral
connection fees, water service connection fees, new water meter fees, and the Property
Development Tax payable under Section 3.12 of Newport Beach Municipal Code.
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4.3.5 Overriding Federal and State Laws and Regulations. Federal and state
laws and regulations that override Developer's vested rights set forth in this Agreement shall
apply to the Property, together with any City ordinances, resolutions, regulations, and official
policies that are necessary to enable City to comply with the provisions of any such overriding
federal or state laws and regulations, provided that (i) Developer does not waive its right to
challenge or contest the validity of any such purportedly overriding federal, state, or City law or
regulation; and (ii) upon the discovery of any such overriding federal, state, or City law or
regulation that prevents or precludes compliance with any provision of this Agreement, City or
Developer shall provide to the other Party a written notice identifying the federal, state, or City
law or regulation, together with a copy of the law or regulation and a brief written statement of
the conflict(s) between that law or regulation and the provisions of this Agreement. Promptly
thereafter, City and Developer shall meet and confer in good faith in a reasonable attempt to
determine whether a modification or suspension of this Agreement, in whole or in part, is
necessary to comply with such overriding federal, state, or City law or regulation. In such
negotiations, City and Developer agree to preserve the terms of this Agreement and the rights of
Developer as derived from this Agreement to the maximum feasible extent while resolving the
conflict. City agrees to cooperate with Developer at no cost to City in resolving the conflict in a
manner which minimizes any financial impact of the conflict upon Developer. City also agrees
to process in a prompt manner Developer's proposed changes to the Project and any of the
Development Regulations as may be necessary to comply with such overriding federal, state, or
City law or regulation; provided, however, that the approval of such changes by City shall be
subject to the discretion of City, consistent with this Agreement.
4.3.6 Public Health and Safety. Any City ordinance, resolution, rule, regulation,
program, or official policy that is necessary to protect persons on the Property or in the
immediate vicinity from conditions dangerous to their health or safety, as reasonably determined
by City, shall apply to the Property, even though the application of the ordinance, resolution, rule
regulation, program, or official policy would result in the impairment of Developer's vested
rights under this Agreement.
4.3.7 Uniform Building Standards. Existing and future building and building -
related standards set forth in the building standard codes adopted and amended by City from
time -to -time, including building, plumbing, mechanical, electrical, housing, swimming pool, and
fire codes, and any modifications and amendments thereof shall all apply to the Project and the
Property to the same extent that the same would apply in the absence of this Agreement.
4.3.8 Public Works Improvements. To the extent Developer constructs or
installs any public improvements, works, or facilities, the City standards in effect for such public
improvements, works, or facilities at the time of City's issuance of a permit, license, or other
authorization for construction or installation of same shall apply.
4.3.9 No Guarantee or Reservation of Utility Capacity. Notwithstanding any
other provision set forth in this Agreement to the contrary, nothing in this Agreement is intended
or shall be interpreted to require City to guarantee or reserve to or for the benefit of Developer or
the Property any utility capacity, service, or facilities that may be needed to serve the Project,
whether domestic or reclaimed water service, sanitary sewer transmission or wastewater
treatment capacity, downstream drainage capacity, or otherwise, and City shall have the right to
limit or restrict Development of the Project if and to the extent that City reasonably determines
13
that inadequate utility capacity exists to adequately serve the Project at the time Development is
scheduled to commence. Notwithstanding the foregoing, City covenants to provide utility
services to the Project on a non-discriminatory basis (i.e., on the same terms and conditions that
City undertakes to provide such services to other similarly situated new developments in the City
of Newport Beach as and when service connections are provided and service commences).
4.4 Tentative Subdivision Maps.
City agrees that Developer may file and process new and existing vesting tentative maps
for the Property consistent with California Government Code sections 66498.1-66498.9 and City
of Newport Beach Municipal Code Chapter 19.20 (Vesting Tentative Maps). Developer agrees
that filing and issuance of a new subdivision map may trigger additional development impact
fees. Pursuant to the applicable provision of the California Subdivision Map Act (California
Government Code section 66452.6(a)), the life of any tentative subdivision map approved for the
Property, whether designated a "vesting tentative map" or otherwise, shall be extended for the
Term of this Agreement.
5. Amendment or Cancellation of Agreement.
This Agreement may be amended or canceled in whole or in part only by mutual written
and executed consent of the Parties in compliance with California Government Code Section
65868 and Newport Beach Municipal Code Section 15.45.070 or by unilateral termination by
City in the event of an uncured default of Developer.
5.1 Extension.
The City Council may approve further extensions beyond the term upon written request
from the Developer.
6. Enforcement.
Unless amended or canceled pursuant to California Government Code Section 65868,
Newport Beach Municipal Code Section 15.45.070, or modified or suspended pursuant to
Newport Beach Municipal Code Chapter 15.45 or California Government Code Section 65869.5,
and except as otherwise provided in subdivision (b) of Section 65865.3, this Agreement shall be
enforceable by either Party despite any change in any applicable general or specific plan, zoning,
subdivision, or building regulation or other applicable ordinance or regulation adopted by City
(including by City's electorate) that purports to apply to any or all of the Property.
7. Annual Review of Developer's Compliance With Agreement.
7.1 General.
City shall review this Agreement once during every twelve (12) month period following
the Effective Date for compliance with the terms of this Agreement as provided in Government
Code section 65865.1. Developer (including any successor to the owner executing this
Agreement on or before the date of the Adopting Ordinance) shall pay City a reasonable fee in
an amount City may reasonably establish from time -to -time to cover the actual and necessary
14
costs for the annual review. City's failure to timely provide or conduct an annual review shall
not constitute a Default hereunder by City.
7.2 Developer Obligation to Demonstrate Good Faith Compliance.
During each annual review by City, Developer is required to demonstrate good faith
compliance with the terms of the Agreement. Developer agrees to furnish such evidence of good
faith compliance as City, in the reasonable exercise of its discretion, may require, thirty (30)
calendar days prior to each anniversary of the Effective Date during the Term.
7.3 Procedure.
The Zoning Administrator shall conduct a duly noticed hearing and shall determine, on
the basis of substantial evidence, whether or not Developer has, for the period under review,
complied with the terms of this Agreement. If the Zoning Administrator finds that Developer
has so complied, the annual review shall be concluded. If the Zoning Administrator finds, on the
basis of substantial evidence, that Developer has not so complied, written notice shall be sent to
Developer by first class mail of the Zoning Administrator's finding of non-compliance, and
Developer shall be given at least ten (10) calendar days to cure any noncompliance that relates to
the payment of money and thirty (30) calendar days to cure any other type of noncompliance. If
a cure not relating to the payment of money cannot be completed within thirty (30) calendar days
for reasons which are beyond the control of Developer, Developer must commence the cure
within such thirty (30) calendar days and diligently pursue such cure to completion. If
Developer fails to cure such noncompliance within the time(s) set forth above, such failure shall
be considered to be a Default and City shall be entitled to exercise the remedies set forth in
Article 8 below.
7.4 Annual Review a Non -Exclusive Means for Determining and Requiring Cure of
Developer's Default.
The annual review procedures set forth in this Article 7 shall not be the exclusive means
for City to identify a Default by Developer or limit City's rights or remedies for any such
Default.
8. Events of Default.
8.1 General Provisions.
In the event of any material default, breach, or violation of the terms of this Agreement
("Default"), the Party alleging a Default shall deliver a written notice (each, a "Notice of
Default") to the defaulting Party. The Notice of Default shall specify the nature of the alleged
Default and a reasonable manner and sufficient period of time (twenty (20) calendar days if the
Default relates to the failure to timely make a monetary payment due hereunder and not less than
thirty (30) calendar days in the event of non -monetary Defaults) in which the Default must be
cured ("Cure Period"). During the Cure Period, the Party charged shall not be considered in
Default for the purposes of termination of this Agreement or institution of legal proceedings. If
the alleged Default is cured within the Cure Period, then the Default thereafter shall be deemed
not to exist. If a non -monetary Default cannot be cured during the Cure Period with the exercise
of commercially reasonable diligence, the defaulting Party must promptly commence to cure as
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quickly as possible, and in no event later than thirty (30) calendar days after it receives the
Notice of Default, and thereafter diligently pursue said cure to completion. Notwithstanding the
foregoing, the City is not required to give Developer notice of default and may immediately
pursue remedies for a Developer Default that result in an immediate threat to public health,
safety or welfare.
8.2 Default by Developer.
If Developer is alleged to have committed Default and it disputes the claimed Default, it
may make a written request for an appeal hearing before the City Council within ten (10)
calendar days of receiving the Notice of Default, and a public hearing shall be scheduled at the
next available City Council meeting to consider Developer's appeal of the Notice of Default.
Failure to appeal a Notice of Default to the City Council within the ten (10) calendar day period
shall waive any right to a hearing on the claimed Default. If Developer's appeal of the Notice of
Default is timely and in good faith but after a public hearing of Developer's appeal the City
Council concludes that Developer is in Default as alleged in the Notice of Default, the accrual
date for commencement of the thirty (30) calendar day Cure Period provided in Section 8.1 shall
be extended until the City Council's denial of Developer's appeal is communicated to Developer
in writing.
8.3 City's Option to Terminate Agreement.
In the event of an alleged Developer Default, City may not terminate this Agreement
without first delivering a written Notice of Default and providing Developer with the opportunity
to cure the Default within the Cure Period, as provided in Section 8.1, and complying with
Section 8.2 if Developer timely appeals any Notice of Default. A termination of this Agreement
by City shall be valid only if good cause exists and is supported by evidence presented to the
City Council at or in connection with a duly noticed public hearing to establish the existence of a
Default. The validity of any termination may be judicially challenged by Developer. Any such
judicial challenge must be brought within sixty (60) calendar days of service on Developer, by
first class mail, postage prepaid, of written notice of termination by City or a written notice of
City's determination of an appeal of the Notice of Default as provided in Section 8.2.
8.4 Default by City.
If Developer alleges a City Default and alleges that the City has not cured the Default
within the Cure Period, Developer may pursue any legal or equitable remedy available to it,
including, without limitation, an action for a writ of mandamus, injunctive relief, or specific
performance of City's obligations set forth in this Agreement. Upon a City Default, any
resulting delays in Developer's performance hereunder shall neither be a Developer Default nor
constitute grounds for termination or cancellation of this Agreement by City and shall, at
Developer's option (and provided Developer delivers written notice to City within thirty (30)
calendar days of the commencement of the alleged City Default), extend the Term for a period
equal to the length of the delay.
8.5 Waiver.
Failure or delay by any Party in delivering a Notice of Default shall not waive that
Party's right to deliver a future Notice of Default of the same or any other Default.
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8.6 Specific Performance Remedy
Due to the size, nature, and scope of the Project, it will not be practical or possible to
restore the Property to its pre-existing condition once implementation of this Agreement has
begun. After such implementation, both Developer and City may be foreclosed from other
choices they may have had to plan for the development of the Property, to utilize the Property or
provide for other benefits and alternatives. Developer and City have invested significant time
and resources and performed extensive planning and processing of the Project in agreeing to the
terms of this Agreement and will be investing even more significant time and resources in
implementing the Project in reliance upon the terms of this Agreement. It is not possible to
determine the sum of money which would adequately compensate Developer or City for such
efforts. For the above reasons, except as set forth in Section 8.7, City and Developer agree that
damages would not be an adequate remedy if either City or Developer fails to carry out its
obligations under this Agreement. Therefore, except as set forth in Section 8.7, specific
performance of this Agreement is necessary to compensate Developer if City fails to carry out its
obligations under this Agreement or to compensate City if Developer falls to carry out its
obligations under this Agreement.
8.7 Monetary Daman
The Parties agree that monetary damages shall not be an available remedy for any Party
for a Default hereunder by the other Party; provided, however, that (i) nothing in this Section 8.7
is intended or shall be interpreted to limit or restrict City's right to recover the Public Benefit
Fees due from Developer as set forth herein; and (ii) nothing in this Section 8.7 is intended or
shall be interpreted to limit or restrict Developer's indemnity obligations set forth in Article 10
or the right of the prevailing Party in any Action to recover its litigation expenses, as set forth in
Section 8.10. In no event shall damages be awarded against the City upon an event of default or
upon termination of this Agreement. Developer expressly agrees that the City, any City agencies
and their respective elected and appointed councils, boards, commissions, officers, agents,
employees, volunteers and representatives (collectively, for purposes of this Section 8.7, "City")
shall not be liable for any monetary damage for a Default by the City or any claims against City
arising out of this Agreement. Developer hereby expressly waives any such monetary damages
against the City. The sole and exclusive judicial remedy for Developer in the event of a Default
by the City shall be an action in mandamus, specific performance, or other injunctive or
declaratory relief.
8.8 Additional City Remedy for Developer's Default.
In the event of any Default by Developer, in addition to any other remedies which may be
available to City, whether legal or equitable, City shall be entitled to receive and retain any
Development Exactions applicable to the Project or the Property, including any fees, grants,
dedications, or improvements to public property which it may have received prior to Developer's
Default without recourse from Developer or its successors or assigns.
8.9 No Personal Liability of City Officials Employees or Agents
No City official, employee, or agent shall have any personal liability hereunder for a
Default by City of any of its obligations set forth in this Agreement.
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8.10 No Recovery of Legal Expenses by Prevailing Party in Any Action.
In any judicial proceeding, arbitration, or mediation (collectively, an "Action") between
the Parties that seeks to enforce the provisions of this Agreement or arises out of this Agreement,
the prevailing Party shall not recover any of its costs and expenses, regardless of whether they
would be recoverable under California Code of Civil Procedure section 1033.5 or California
Civil Code section 1717 in the absence of this Agreement. These costs and expenses include, but
are not limited to, court costs, expert witness fees, attorneys' fees, City staff costs (including
overhead), and costs of investigation and preparation before initiation of the Action.
Force Majeure.
No Party shall be deemed to be in Default where failure or delay in performance of any
of its obligations under this Agreement is caused, through no fault of the Party whose
performance is prevented or delayed, by floods, earthquakes, other acts of God, fires, wars, riots
or similar hostilities, strikes or other labor difficulties, state or federal regulations, or court
actions. Except as specified above, nonperformance shall not be excused because of the act or
omission of a third person. In no event shall the occurrence of an event of force majeure operate
to extend the Term of this Agreement. In addition, in no event shall the time for performance of
a monetary obligation, including without limitation Developer's obligation to pay Public Benefit
Fees, be extended pursuant to this Section.
10. Indemnity Obligations of Developer.
10.1 Indemnity Arising From Acts or Omissions of Developer.
Except to the extent caused by the intentional misconduct or gross negligent acts, errors
or omissions of City or one (1) or more of City's officials, employees, agents, attorneys, and
contractors (collectively, the "City's Affiliated Parties"), Developer shall indemnify, defend, and
hold harmless City and City's Affiliated Parties from and against all suits, claims, liabilities,
losses, damages, penalties, obligations, and expenses (including but not limited to reasonable
attorneys' fees and costs) (collectively, a "Claim") that may arise, directly or indirectly, from the
acts, omissions, or operations of Developer or Developer's agents, contractors, subcontractors,
agents, or employees in the course of Development of the Project or any other activities of
Developer relating to the Property or Project, or pursuant to this Agreement. City shall be
entitled to retain separate counsel to represent City against the Claim and the City's reasonable
defense costs for its separate counsel shall be included in Developer's indemnity obligation,
provided that such counsel shall reasonably cooperate with Developer in an effort to minimize
the total litigation expenses incurred by Developer. In the event either City or Developer
recovers any attorney's fees, expert witness fees, costs, interest, or other amounts from the party
or parties asserting the Claim, Developer shall be entitled to retain the same (provided it has fully
performed its indemnity obligations hereunder). The indemnity provisions in this Section 10.1
shall commence on the Agreement Date, regardless of whether the Effective Date occurs, and
shall survive the Termination Date.
10.2 Third Party Litigation.
In addition to its indemnity obligations set forth in Section 10.1, Developer shall
indemnify, defend, and hold harmless City and City's Affiliated Parties from and against any
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Claim against City or City's Affiliated Parties seeking to attack, set aside, void, or annul the
approval of this Agreement, the Adopting Ordinance, any of the Development Regulations for
the Project (including without limitation any actions taken pursuant to CEQA with respect
thereto), any Subsequent Development Approval, or the approval of any permit granted pursuant
to this Agreement (including without limitation any actions taken pursuant to CEQA with respect
thereto). Said indemnity obligation shall include payment of reasonable attorney's fees, expert
witness fees, City staff costs (including overhead), and court costs. City shall promptly notify
Developer of any such Claim and City shall cooperate with Developer in the defense of such
Claim. Developer shall not be responsible to indemnify, defend, and hold City harmless from
such Claim until Developer is so notified and if City fails to cooperate in the defense of a Claim
Developer shall not be responsible to defend, indemnify, and hold harmless City during the
period that City so fails to cooperate or for any losses attributable thereto. City shall be entitled
to retain separate counsel to represent City against the Claim and the City's reasonable defense
costs for its separate counsel shall be included in Developer's indemnity obligation, provided
that such counsel shall reasonably cooperate with Developer in an effort to minimize the total
litigation expenses incurred by Developer. In the event either City or Developer recovers any
attorney's fees, expert witness fees, costs, interest, or other amounts from the party or parties
asserting the Claim, Developer shall be entitled to retain the same (provided it has fully
performed its indemnity obligations hereunder). No settlement of any Claim against City or
City's Affiliated Parties shall be executed without the written consent of both the City and
Developer. The indemnity provisions in this Section 10.2 shall commence on the Agreement
Date, regardless of whether the Effective Date occurs, and shall survive the Termination Date.
10.3 Environmentallndemnity.
In addition to its indemnity obligations set forth in Section 10.1, from and after the
Effective Date Developer shall indemnify, defend, and hold harmless City and City's Affiliated
Parties from and against any and all Claims for personal injury or death, property damage,
economic loss, statutory penalties or fines, and damages of any kind or nature whatsoever,
including without limitation reasonable attorney's fees, expert witness fees, and costs, based
upon or arising from any of the following: (i) the actual or alleged presence of any Hazardous
Substance on or under any of the Property in violation of any applicable Environmental Law; (ii)
the actual or alleged migration of any Hazardous Substance from the Property through the soils
or groundwater to a location or locations off of the Property; and (iii) the storage, handling,
transport, or disposal of any Hazardous Substance on, to, or from the Property and any other area
disturbed, graded, or developed by Developer in connection with Developer's Development of
the Project. The indemnity provisions in this Section 10.3 shall commence on the Effective Date
occurs, and shall survive the Termination Date.
11. Assignment.
Owner and Developer shall have the right to sell, transfer, or assign (hereinafter, collectively, a
"Transfer") Developer's interest in or fee title to the Property, in whole or in part, to a "Permitted
Transferee" (which successor, as of the effective date of the Transfer, shall become the
"Developer" under this Agreement) at any time from the Agreement Date until the Termination
Date; provided, however, that no such Transfer shall violate the provisions of the Subdivision
Map Act (Government Code Section 66410 et seq.) or City's local subdivision ordinance and
any such transfer shall include the assignment and assumption of Developer's rights, duties, and
obligations set forth in or arising under this Agreement as to the Property or the portion thereof
so Transferred and shall be made in strict compliance with the following conditions precedent:
(i) no transfer or assignment of any of Developer's rights or interest under this Agreement shall
be made unless made together with the Transfer of all or a part of Developer's interest in the
Property; and (ii) prior to the effective date of any proposed Transfer, Developer (as transferor)
shall notify City, in writing, of such proposed Transfer and deliver to City a written assignment
and assumption, executed in recordable form by the transferring and successor Developer and in
a form subject to the reasonable approval of the City Attorney of City (or designee), pursuant to
which the transferring Developer assigns to the successor Developer and the successor
Developer assumes from the transferring Developer all of the rights and obligations of the
transferring Developer with respect to the Property and this Agreement, or interest in the
Property, or portion thereof to be so Transferred, including in the case of a partial Transfer the
obligation to perform such obligations that must be performed outside of the Property so
Transferred that are a condition precedent to the successor Developer's right to develop the
portion of the Property so Transferred. Any Permitted Transferee shall have all of the same
rights, benefits, duties, obligations, and liabilities of Developer under this Agreement with
respect to the portion of, or interest in, the Property sold, transferred, and assigned to such
Permitted Transferee; provided, however, that in the event of a Transfer of less than all of the
Property, or interest in the Property, no such Permitted Transferee shall have the right to enter
into an amendment of this Agreement that jeopardizes or impairs the rights or increases the
obligations of the Developer with respect to the balance of the Property, without Developer's
written consent.
Notwithstanding any Transfer, the transferring Developer shall continue to be jointly and
severally liable to City, together with the successor Developer, to perform all of the transferred
obligations set forth in or arising under this Agreement unless there is full satisfaction of all of
the following conditions, in which event the transferring Developer shall be automatically
released from any and all obligations with respect to the portion of the Property so Transferred:
(i) the transferring Developer no longer has a legal or equitable interest in the portion of the
Property so Transferred other than as a beneficiary under a deed of trust; (ii) the transferring
Developer is not then in Default under this Agreement and no condition exists that with the
passage of time or the giving of notice, or both, would constitute a Default hereunder; (iii) the
transferring Developer has provided City with the notice and the fully executed written and
recordable assignment and assumption agreement required as set forth in the first paragraph of
this Section 11; and (iv) the successor Developer either (A) provides City with substitute security
equivalent to any security previously provided by the transferring Developer to City to secure
performance of the successor Developer's obligations hereunder with respect to the Property, or
interest in the Property, or the portion of the Property so Transferred, as determined in the City's
sole discretion, or (B) if the transferred obligation in question is not a secured obligation, the
successor Developer either provides security reasonably satisfactory to City or otherwise
demonstrates to City's reasonable satisfaction, as determined in the City's sole discretion, that
the successor Developer has the financial resources or commitments available to perform the
transferred obligation at the time and in the manner required under this Agreement and the
Development Regulations for the Project. Any determination by the City in regards to the second
paragraph of Section 11, subpart (iv) (A), (B), shall be documented in writing.
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12. Mortgagee Rights.
12.1 Encumbrances on Property.
The Parties agree that this Agreement shall not prevent or limit Developer in any manner
from encumbering the Property, any part of the Property, or any improvements on the Property
with any Mortgage securing financing with respect to the construction, development, use, or
operation of the Project.
12.2 Mortgagee Protection.
This Agreement shall be superior and senior to the lien of any Mortgage. Nevertheless,
no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any
Mortgage made in good faith and for value. Any acquisition or acceptance of title or any right or
interest in the Property or part of the Property by a Mortgagee (whether due to foreclosure,
trustee's sale, deed in lieu of foreclosure, lease termination, or otherwise) shall be subject to all
of the terms and conditions of this Agreement. Any Mortgagee who takes title to the Property or
any part of the Property shall be entitled to the benefits arising under this Agreement.
12.3 Mortgagee Not Obligated.
Notwithstanding the provisions of this Section 12.3, a Mortgagee will not have any
obligation or duty under the terms of this Agreement to perform the obligations of Developer or
other affirmative covenants of Developer, or to guarantee this performance except that: (i) the
Mortgagee shall have no right to develop the Project under the Development Regulations without
fully complying with the terms of this Agreement; and (ii) to the extent that any covenant to be
performed by Developer is a condition to the performance of a covenant by City, that
performance shall continue to be a condition precedent to City's performance.
12.4 Notice of Default to Mortgagee, Right of Mortgagee to Cure.
Each Mortgagee shall, upon written request to City, be entitled to receive written notice
from City of: (i) the results of the periodic review of compliance specified in Article 7 of this
Agreement, and (ii) any default by Developer of its obligations set forth in this Agreement.
Each Mortgagee shall have a further right, but not an obligation, to cure the Default
within thirty (30) calendar days after receiving a Notice of Default with respect to a monetary
Default and within sixty (60) calendar days after receiving a Notice of Default with respect to a
non -monetary Default. If the Mortgagee can only remedy or cure a non -monetary Default by
obtaining possession of the Property, then the Mortgagee shall have the right to seek to obtain
possession with diligence and continuity through a receiver or otherwise, and to remedy or cure
the non -monetary Default within sixty (60) calendar days after obtaining possession and, except
in case of emergency or to protect the public health or safety, City may not exercise any of its
judicial remedies set forth in this Agreement to terminate or substantially alter the rights of the
Mortgagee until expiration of the sixty (60) calendar day period. In the case of a non -monetary
Default that cannot with diligence be remedied or cured within sixty (60) calendar days, the
Mortgagee shall have additional time as is reasonably necessary to remedy or cure the Default,
provided the Mortgagee promptly commences to cure the non -monetary Default within sixty (60)
calendar days and diligently prosecutes the cure to completion.
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13. Bankruptcy. The obligations of this Agreement shall not be dischargeable in bankruptcy.
14. Miscellaneous Terms.
14.1 Reserved
14.2 Notices.
Any notice or demand that shall be required or permitted by law or any provision of this
Agreement shall be in writing. If the notice or demand will be served upon a Party, it either shall
be personally delivered to the Party; deposited in the United States mail, certified, return receipt
requested, and postage prepaid; or delivered by a reliable courier service that provides a receipt
showing date and time of delivery with courier charges prepaid. The notice or demand shall be
addressed as follows:
TO CITY: City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Manager
With a copy to: City Attorney
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
TO DEVELOPER: Derek Piceme
TPG (KCN) Acquisition, LLC
5000 Birch Street, Ste. 600
Newport Beach, CA 92660
With a copy to: Sean Matsler, Esq.
Cox, Castle & Nicholson LLP
3121 Michelson Drive, Ste. 200
Irvine, CA 92612
Any Party may change the address stated in this Section 14.2 by delivering notice to the
other Parties in the manner provided in this Section 14.2, and thereafter notices to such Party or
Parties shall be addressed and submitted to the new address. Notices delivered in accordance
with this Agreement shall be deemed to be delivered upon the earlier of: (i) the date received, or
(ii) three (3) business days after deposit in the mail as provided above.
14.3 Project as Private Undertaking
The Development of the Project is a private undertaking. Neither the Developer nor the
City is acting as the agent of the other in any respect, and each is an independent contracting
entity with respect to the terms, covenants, and conditions set forth in this Agreement. This
Agreement forms no partnership, joint venture, or other association of any kind. The only
22
relationship between the Parties is that of a government entity regulating the Development of
private property by the owner of the property.
14.4 Cooperation.
Each Party shall cooperate with and provide reasonable assistance to the other Party to
the extent consistent with and necessary to implement this Agreement. Upon the request of a
Party at any time, the other Party shall promptly execute, with acknowledgement or affidavit if
reasonably required, and file or record the required instruments and writings and take any actions
as may be reasonably necessary to implement this Agreement or to evidence or consummate the
transactions contemplated by this Agreement.
14.5 Estoppel Certificates.
At any time, any Party may deliver written notice to the other Party requesting that Party
certify in writing that, to the best of its knowledge: (i) this Agreement is in full force and effect
and is binding on the Party; (ii) this Agreement has not been amended or modified either orally
or in writing or, if this Agreement has been amended, the Party providing the certification shall
identify the amendments or modifications; and (iii) the requesting Party is not in Default in the
performance of its obligations under this Agreement and no event or situation has occurred that
with the passage of time or the giving of Notice or both would constitute a Default or, if such is
not the case, then the other Party shall describe the nature and amount of the actual or
prospective Default. Such estoppel certificates may be relied upon only by the Parties, their
respective successors and assigns, and, in the event of an estoppel certificate issued by City, a
Mortgagee of Developer, including a Permitted Transferee, and its actual or prospective
Mortgagee. City shall be entitled to payment/reimbursement for its actual and reasonable costs
of investigation and preparation of an estoppel certificate prior to issuing the same.
The Party requested to furnish an estoppel certificate shall execute and return the
certificate within thirty (30) calendar days following receipt (assuming, in the case of an estoppel
certificate to be issued by City, Developer has paid City the cost thereof, as provided above).
14.6 Rules of Construction.
The singular includes the plural; the masculine and neuter include the feminine; "shall" is
mandatory; and "may" is permissive.
14.7 Time Is of the Essence.
Time is of the essence regarding each provision of this Agreement as to which time is an
element.
14.8 Waiver.
The failure by a Party to insist upon the strict performance of any of the provisions of this
Agreement by the other Party, and failure by a Party to exercise its rights upon a Default by the
other Party, shall not constitute a waiver of that Party's right to demand strict compliance by the
other Party in the future.
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14.9 Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be
identical and may be introduced in evidence or used for any other purpose without any other
counterpart, but all of which shall together constitute one (1) and the same agreement.
14.10 Entire Agreement.
This Agreement constitutes the entire agreement between the Parties and supersedes all
prior agreements and understandings, both written and oral, between the Parties with respect to
the subject matter addressed in this Agreement.
14.11 Severability.
The Parties intend that each and every obligation of the Parties is interdependent and
interrelated with the other, and if any provision of this Agreement or the application of the
provision to any Party or circumstances shall be held invalid or unenforceable to any extent, it is
the intention of the Parties that the remainder of this Agreement or the application of the
provision to persons or circumstances shall be rendered invalid or unenforceable. The Parties
intend that no Party shall receive any of the benefits of the Agreement without the full
performance by such Party of all of its obligations provided for under this Agreement. Without
limiting the generality of the foregoing, the Parties intend that Developer shall not receive any of
the benefits of this Agreement if any of Developer's obligations are rendered void or
unenforceable as the result of any third party litigation, and City shall be free to exercise its
legislative discretion to amend or repeal the Development Regulations applicable to the Property
and Developer shall cooperate as required, despite this Agreement, should third party litigation
result in the nonperformance of Developer's obligations under this Agreement. The provisions
of this Section 14.11 shall apply regardless of whether the Effective Date occurs and after the
Termination Date.
14.12 Construction.
This Agreement has been drafted after extensive negotiation and revision. Both City and
Developer are sophisticated parties who were represented by independent counsel throughout the
negotiations or City and Developer had the opportunity to be so represented and voluntarily
chose to not be so represented. City and Developer each agree and acknowledge that the terms
of this Agreement are fair and reasonable, taking into account their respective purposes, terms,
and conditions. This Agreement shall therefore be construed as a whole consistent with its fair
meaning, and no principle or presumption of contract construction or interpretation shall be used
to construe the whole or any part of this Agreement in favor of or against any Party.
14.13 Successors and Assigns: Constructive Notice and Acceptance
The burdens of this Agreement shall be binding upon, and the benefits of this Agreement
shall inure to, all successors in interest to the Parties to this Agreement. Except for those
provisions relating to indemnity in Section 10, all other provisions of this Agreement shall, from
and after the Effective Date hereof, be enforceable as equitable servitudes and constitute
covenants running with the land. Subject to occurrence of the Effective Date, each covenant to
do or refrain from doing some act hereunder with regard to Development of the Property: (i) is
24
for the benefit of and is a burden upon every portion of the Property; (ii) runs with the Property
and each portion thereof; and (iii) is binding upon each Party and each successor in interest
during its ownership of the Property or any portion thereof. Every person or entity who now or
later owns or acquires any right, title, or interest in any part of the Project or the Property is and
shall be conclusively deemed to have consented and agreed to every provision of this
Agreement. This Section 14.13 applies regardless of whether the instrument by which such
person or entity acquires the interest refers to or acknowledges this Agreement and regardless of
whether such person or entity has expressly entered into an assignment and assumption
agreement as provided for in Article 11.
14.14 No Third Party Beneficiaries.
The only Parties to this Agreement are City and Developer. This Agreement does not
involve any third party beneficiaries, and it is not intended and shall not be construed to benefit
or be enforceable by any other person or entity.
14.15 Applicable Law and Venue.
This Agreement shall be construed and enforced consistent with the laws of the State of
California, without regard to conflicts of law principles. Any action at law or in equity arising
under this Agreement or brought by any Party for the purpose of enforcing, construing, or
determining the validity of any provision of this Agreement shall be filed and tried in the
Superior Court of the County of Orange, State of California, or the United States District Court
for the Central District of California. The Parties waive all provisions of law providing for the
removal or change of venue to any other court.
14.16 Section Headings.
All section headings and subheadings are inserted for convenience only and shall not
affect construction or interpretation of this Agreement.
14.17 Incorporation of Recitals and Exhibits.
All of the Recitals are incorporated into this Agreement by this reference. Exhibits A
through B are attached to this Agreement and incorporated by this reference as follows:
EXHIBIT
DESIGNATION
DESCRIPTION
A
Legal Description of Property
B
Site Map
14.18 Recordation.
The City Clerk of City shall record this Agreement and any amendment, modification, or
cancellation of this Agreement in the Office of the County Recorder of the County of Orange
041
within the period required by California Government Code section 65868.5 and City of Newport
Beach Municipal Code section 15.45.090. The date of recordation of this Agreement shall not
modify or amend the Effective Date or the Termination Date.
[SIGNATURE PAGE FOLLOWS]
FT
SIGNATURE PAGE TO DEVELOPMENT AGREEMENT
ATTEST:
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
Aaron C. Harp, City Attorney
Sean Matsler, Attorney for Developer
"DEVELOPER"
TPG (KCN) Acquisition, LLC, a California
limited liability company
By: _
Name:
Title:
By: _
Name:
Title:
"CITY"
27
CITY OF NEWPORT BEACH, a municipal
corporation and charter city
Brad Avery, Mayor
ACKNOWLEDGEMENTS
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On , before me,
(here insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On , before me,
(here insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
-28-
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
RESIDENCES AT 4400 VON KARMAN PROJECT
LEGAL DESCRIPTION
PARCEL 1:
THAT CERTAIN PARCEL OF LAND SITUATED IN THE CITY OF NEWPORT BEACH, COUNTY
OF ORANGE, STATE OF CALIFORNIA, BEING THAT PORTION OF PARCEL 2 OF PARCEL
MAP NO. 91-155 AS SHOWN ON A MAP THEREOF, FILED IN BOOK 266, PAGES 16 THROUGH
22 OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE
COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEASTERLY CORNER OF SAID PARCEL 2 OF PARCEL MAP
NO. 91-155; THENCE ALONG THE NORTHEASTERLY LINE THEREOF NORTH 49021'34"
WEST 584.54 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID
NORTHEASTERLY LINE SOUTH 41005'02" WEST 54.87 FEET; THENCE SOUTH 04°16'29"
EAST 257.91 FEET; THENCE SOUTH 85°43'31" WEST 685.70 FEET TO A LINE PARALLEL
WITH AND 1.00 FEET EASTERLY OF THE EASTERLY RIGHT-OF-WAY LINE OF VON
KARMAN AVENUE AS SHOWN ON SAID PARCEL MAP NO 91-155; THENCE ALONG SAID
PARALLEL LINE NORTH 06059'31" WEST 296.00 FEET TO THE BEGINNING OF A TANGENT
CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 549.00 FEET; THENCE
ALONG SAID CURVE NORTHEASTERLY 90.98 FEET THROUGH A CENTRAL ANGLE OF
09029'40" TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF
THAT CERTAIN PARCEL LABELED N.A.P. OF SAID PARCEL MAP NO. 91-155 HAVING A
BEARING AND DISTANCE OF "NORTH 49021'34" WEST 204.00 FEET"; THENCE ALONG THE
NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE AND THE
SOUTHEASTERLY LINE OF SAID N.A.P. PARCEL AND ITS NORTHEASTERLY
PROLONGATION THROUGH THE FOLLOWING COURSES: SOUTH 49021'34" EAST 274.72
FEET; THENCE NORTH 40038'26" EAST 156.94 FEET TO THE SOUTHWESTERLY LINE OF
THAT CERTAIN PARCEL LABELED N.A.P. OF SAID PARCEL MAP NO. 91-155 HAVING A
BEARING AND DISTANCE OF "NORTH 49021'34" EAST 204.44 FEET"; THENCE ALONG SAID
SOUTHWESTERLY LINE AND THE SOUTHEASTERLY LINE OF SAID N.A.P. PARCELAND ITS
NORTHEASTERLY PROLONGATION THROUGH THE FOLLOWING COURSES: SOUTH
49°21'34" EAST 166.34 FEET; THENCE NORTH 40°38'26" EAST 284.73 FEET TO SAID
NORTHEASTERLY LINE OF PARCEL 2; THENCE ALONG SAID NORTHEASTERLY LINE
SOUTH 49°21'34' EAST 157.28 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING: 4.51 ACRES, MORE OF LESS
PARCEL 2:
THAT CERTAIN PARCEL OF LAND SITUATED IN THE CITY OF NEWPORT BEACH, COUNTY
OF ORANGE, STATE OF CALIFORNIA, BEING THAT PORTION OF PARCEL 2 OF PARCEL
MAP NO.91-155AS SHOWN ON A MAP THEREOF, FILED IN BOOK266, PAGES 16 THROUGH
22 OF PARCEL MAPS, TOGETHER WITH PARCEL 1 OF PARCEL MAP NO. 82-713 AS SHOWN
ON A MAP THEREOF, FILED IN BOOK 181, PAGES 13 THROUGH 19 OF PARCEL MAPS,
BOTH IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY.
EXCEPTING THEREFROM THAT CERTAIN PARCEL DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEASTERLY CORNER OF SAID PARCEL 2 OF PARCEL MAP
NO. 91-155; THENCE ALONG THE NORTHEASTERLY LINE THEREOF NORTH 49021'34"
WEST 584.54 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID
NORTHEASTERLY LINE SOUTH 41005'02" WEST 54.87 FEET; THENCE SOUTH 04°16'29"
EAST 257.91 FEET; THENCE SOUTH 85043'31" WEST 685.70 FEET TO A LINE PARALLEL
WITH AND 1.00 FEET EASTERLY OF THE EASTERLY RIGHT-OF-WAY LINE OF VON
KARMAN AVENUE AS SHOWN ON SAID PARCEL MAP NO 91-155; THENCE ALONG SAID
PARALLEL LINE NORTH 06059'31" WEST 296.00 FEET TO THE BEGINNING OF A TANGENT
CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 549.00 FEET; THENCE
ALONG SAID CURVE NORTHEASTERLY 90.98 FEET THROUGH A CENTRAL ANGLE OF
09029'40" TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF
THAT CERTAIN PARCEL LABELED N.A.P. OF SAID PARCEL MAP NO. 91-155 HAVING A
BEARING AND DISTANCE OF "NORTH 49021'34" WEST 204.00 FEET"; THENCE ALONG THE
NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE AND THE
SOUTHEASTERLY LINE OF SAID N.A.P. PARCEL AND ITS NORTHEASTERLY
PROLONGATION THROUGH THE FOLLOWING COURSES: SOUTH 49021'34" EAST 274.72
FEET; THENCE NORTH 40038'26" EAST 156.94 FEET TO THE SOUTHWESTERLY LINE OF
THAT CERTAIN PARCEL LABELED N.A.P. OF SAID PARCEL MAP NO. 91-155 HAVING A
BEARING AND DISTANCE OF "NORTH 49021'34" EAST 204.44 FEET"; THENCE ALONG SAID
SOUTHWESTERLY LINE AND THE SOUTHEASTERLY LINE OF SAID N.A.P. PARCELAND ITS
NORTHEASTERLY PROLONGATION THROUGH THE FOLLOWING COURSES: SOUTH
49021'34" EAST 166.34 FEET; THENCE NORTH 40038'26" EAST 284.73 FEET TO SAID
NORTHEASTERLY LINE OF PARCEL 2; THENCE ALONG SAID NORTHEASTERLY LINE
SOUTH 49°21'34' EAST 157.28 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING: 20.09 ACRES, MORE OF LESS.
SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAY AND EASEMENTS OF RECORD.
EXHIBIT B
SITE MAP
Residences at 4400 Von Karman Project
Site Map
BIRCH 3THET
- - - - - - - - - - - -
D, B.IG
STATE OF CALIFORNIA
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the
whole number of members of the City Council is seven; that the foregoing ordinance, being Ordinance
No. 2021-2 was duly introduced on the 261h day of January, 2021, at a regular meeting, and adopted by
the City Council at a regular meeting duly held on the 9th day of February, 2021, and that the same was
so passed and adopted by the following vote, to wit:
AYES: Mayor Brad Avery, Mayor Pro Tem Kevin Muldoon, Council Member Noah Blom,
Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy
Duffield
NAYS: None
RECUSED: Council Member Will O'Neill
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of
said City this 101h day of February, 2021.
C �
Leilani I. Brown, MMC
City Clerk
City of Newport Beach, California
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, LEILANI I. BROWN, City Clerk of the City of Newport Beach, California, do hereby certify that
Ordinance No. 2021-2 has been duly and regularly published according to law and the order of the City
Council of said City and that same was so published in The Daily Pilot, a newspaper of general circulation
on the following dates:
Introduced Ordinance: January 30, 2021
Adopted Ordinance: February 13, 2021 on h4
In witness whereof, I have hereunto subscribed my name this day of February, 2021.
1
pill pluffin,
Leilani I. Brown, MMC
City Clerk
City of Newport Beach, California