HomeMy WebLinkAbout18 - Amendment to The Tennis Club at Newport Beach Development Agreement No. DA2022-001 (PA2022-038)Q SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
June 28, 2022
Agenda Item No. 18
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Community Development Director - 949-644-3232,
sjurjis@newportbeachca.gov
PREPARED BY: Rosalinh Ung, Principal Planner, rung@newportbeachca.gov
PHONE: 949-644-3208
TITLE: Ordinance No. 2022-16: Amendment to The Tennis Club at Newport
Beach Development Agreement No. DA2022-001 (PA2022-038)
ABSTRACT:
For the City Council's consideration is a request to extend the term of The Tennis Club at
Newport Beach Development Agreement (Development Agreement) to ensure the
orderly redevelopment of The Tennis Club at Newport Beach site with a replacement
tennis facility, visitor accommodations, and five, single-family homes (Approved Project).
Staff is recommending a one-year extension to allow additional time for staff to evaluate
a separate application submitted by the applicant to modify the Approved Project. State
law and the Newport Beach Municipal Code (NBMC) require City Council consideration
of a development agreement or an amendment to a development agreement.
RECOMMENDATION:
a) Conduct a public hearing;
b) Find all significant environmental concerns for the Approved Project have been
addressed in a previously approved Mitigated Negative Declaration No. ND2010-008
(SCH 2O10091052) and an Errata to Mitigated Negative Declaration No. ND2010-008
(together referred as "MND"), and that the City of Newport Beach intends to use said
document for the proposed First Amendment to Agreement, and further that there are
no additional reasonable alternative or mitigation measures that should be considered
in conjunction with the First Amendment to Agreement; and
c) Waive full reading, direct the City Clerk to read by title only, and introduce Ordinance
No. 2022-16, An Ordinance of the City Council of the City of Newport Beach,
California, Amending the Development Agreement Between the City of Newport
Beach and Golf Realty Fund (PA2022-038), and pass to second reading on July 12,
2022.
18-1
Ordinance No. 2022-16: Amendment to The Tennis Club at Newport Beach
Development Agreement No. DA2022-001 (PA2022-038)
June 28, 2022
Page 2
DISCUSSION:
On March 27, 2012, the City Council approved entitlements and the Development
Agreement for the Approved Project to reconstruct the existing 3,725-square-foot tennis
clubhouse, reduce the total number of tennis courts from 24 to seven including one lighted
stadium court, and construct a 27-unit boutique hotel with a 2,200-square-foot guest
center and a 9,700-square-foot spa/fitness center, and five single -unit residential
dwellings. The City Council also adopted Newport Beach Country Club Planned
Community Development Plan (PC-47) for the subject site as part of the overall
development of the Newport Beach Country Club properties that also includes the
adjacent Newport Beach Country Club Golf Course site.
On November 20, 2018, the Zoning Administrator approved a coastal development permit
for the demolition of existing structures on the subject property, implementation of the
Approved Project, and further subdivision of the subject property. The permit was due to
expire two years from the date of approval; and thus far, has received two, one-year
extensions and is due to expire on November 20, 2022, unless another extension is
granted.
On November 2, 2021, the applicant filed an application to modify and expand the
Approved Project to increase the number of hotel units from 27 to 41 units with an
additional 4,686 square feet of ancillary uses, and to add one additional tennis court for
a total of eight tennis courts. The proposed changes require the reconsideration of all land
use entitlements previously granted to the Approved Project, including the Development
Agreement. The request to modify the Approved Project is a separate application from
the subject Development Agreement extension request.
Development Agreement Extension
The Development Agreement for the Approved Project became effective on September
23, 2012, with a 10-year term, and it is due to expire on September 23, 2022. The
applicant requested a 10-year extension as he feels it is sufficient to implement the
revised project under consideration. The evaluation of the revised project will not be
completed before expiration of the current Development Agreement. Instead, staff is
recommending a one-year extension to the existing Development Agreement, allowing
enough time to complete the review of the revised project. The applicant has agreed to
the one-year extension. Extending the Development Agreement one year would provide
enough time for both the applicant and the City of Newport Beach (City) to renegotiate
terms for a future amended Development Agreement consistent with the revised project.
Planning Commission Review
The Planning Commission held a public hearing on May 12, 2022, which was continued
to the May 26, 2022, special meeting. There was no discussion or public testimony taken
at the May 12, 2022, meeting.
18-2
Ordinance No. 2022-16: Amendment to The Tennis Club at Newport Beach
Development Agreement No. DA2022-001 (PA2022-038)
June 28, 2022
Page 3
At the May 26, 2022 hearing, the Planning Commission discussed the overall extension
request. One member of the public provided oral comments. At the conclusion of the
public hearing, the Planning Commission voted 6-0 (6 ayes, 1 absent) to adopt Resolution
No. PC2022-008, recommending approval of the amendment to the Development
Agreement to extend the term one year, from September 27, 2022 to September 27,
2023. The May 26, 2022 Planning Commission meeting minutes excerpts and resolution
are attached for reference as Attachments B and C.
FISCAL IMPACT:
The applicant is required to reimburse the City for all costs associated with the
Development Agreement extension request.
ENVIRONMENTAL REVIEW:
On March 27, 2012, the Newport Beach City Council approved Mitigated Negative
Declaration No. ND2010-008 (SCH 2O10091052) and an Errata to Mitigated Negative
Declaration No. ND2010-008 (together referred as MND) that addressed the potential
environmental effects associated with the Approved Project.
All environmental concerns for the Approved Project are addressed in previously
approved MND. The proposed First Amendment does not change the Approved Project
but rather only extends the term of the Agreement by one year. The proposed First
Amendment does not amend development standards, development requirements, or
required mitigation measures identified in MND.
NOTICING:
Notice of this hearing was published in the Daily Pilot, mailed to all owners of property
within 300 feet of the boundaries of the site (excluding intervening rights -of -way and
waterways) including the applicant, and posted on the subject property at least 10 days
before the scheduled meeting, consistent with the provisions of the Newport Beach
Municipal Code. Additionally, the item appeared on the agenda for this meeting, which
was posted at City Hall and on the City website.
ATTACHMENTS:
Attachment A — Ordinance No. 2022-16 Approving First Amendment to Agreement
Attachment B — Planning Commission Minute Excerpts, Dated May 26, 2022
Attachment C — Planning Commission Resolution No. PC2022-008
18-3
ATTACHMENT A
ORDINANCE NO. 2022-16
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, AMENDING THE
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF
NEWPORT BEACH AND GOLF REALTY FUND (PA2022-
038)
WHEREAS, on March 27, 2012, the City Council of the City of Newport Beach
("City") adopted Ordinance No. 2012-3 approving Development Agreement No.
DA2008-001 ("Agreement") between the City and Golf Realty Fund ("GRF") for the
redevelopment of the Tennis Club site within the Newport Beach Country Club Planned
Community (PC-47) with a replacement tennis facility, visitor accommodations, and five
(5) single-family residential units ("Project") for a term of ten (10) years ("Term"),
WHEREAS, GRF has requested an extension of the Term of the Agreement
("First Amendment");
WHEREAS, Section 15.45.040 (Development Agreements; Contents) of the
Newport Beach Municipal Code ("NBMC") requires development agreements to include,
among other provisions, the term, permitted uses, density and intensity of the
development, and maximum height and size of the proposed buildings;
WHEREAS, the Agreement meets the requirements of Section 15.45.040 of the
NBMC as it includes the permitted uses, density and intensity of development, and
maximum height and size of the proposed buildings, which remain unchanged by the
First Amendment;
WHEREAS, the Planning Commission opened the public hearing on May 12,
2022 and continued the hearing to May 26, 2022, in the City Council Chambers, located
at 100 Civic Center Drive, Newport Beach, California, at which time the Planning
Commission considered the First Amendment. A notice of time, place and purpose of
the hearing was given in accordance with California Government Code Section 54950
et seq. ("Ralph M. Brown Act'), California Government Code Section 65867 and Section
15.45.050 (Public Hearing -Notice) of the NBMC. Evidence, both written and oral, was
presented to, and considered by, the Planning Commission at this hearing;
WHEREAS, at the conclusion of the hearing, the Planning Commission adopted
Resolution No. PC2022-008 by a unanimous vote (6 ayes, 1 absent) recommending
approval of the First Amendment to the City Council;
I
Ordinance No. 2022-
Page 2 of 5
WHEREAS, the City Council held a public hearing on June 28, 2022, in the City
Council Chambers, located at 100 Civic Center Drive, Newport Beach, California, at
which time the City Council considered the First Amendment. A notice of time, place
and purpose of the hearing was given in accordance with the Ralph M. Brown Act,
California Government Code Section 65867 and Section 15.45.050 (Public Hearing -
Notice) of the NBMC. Evidence, both written and oral, was presented to, and
considered by, the City Council at this hearing;
WHEREAS, the City Council previously found the Agreement consistent with
Land Use Element of the General Plan which designates the Tennis Club site as Mixed
Use Horizontal 3/Park and Recreation (MU-H3/PR) which provides for the horizontal
intermixing of regional commercial office, hotel, single-family and multi -family residential
and ancillary commercial uses;
WHEREAS, the PR designation allows active public or private recreational uses
including parks (both active and passive), golf courses, marina support facilities, aquatic
facilities, tennis clubs and courts, private recreation, and similar facilities;
WHEREAS, the City Council previously found the Agreement consistent with
Section 15.45.040 (Development Agreement Content) of the NBMC as it included all the
necessary components including the term, permitted uses, density and intensity of
development, and maximum height and size of proposed buildings to be developed on
the Tennis Club site, when it adopted Ordinance No. 2012-3 in 2012;
WHEREAS, the City Council finds the First Amendment is entered into pursuant
to, and constitutes a present exercise of, the City's police power;
WHEREAS, the City Council finds the First Amendment is in the best interest of
the health, safety, and general welfare of the City, residents, and the public;
WHEREAS, the City Council finds the First Amendment is consistent with
provisions of California Government Code Sections 65864 to 65869.5 and Chapter
15.45 (Development Agreements) of the NBMC which authorize binding agreements
that: (i) encourage investment in, and commitment to, comprehensive planning and
public facilities financing; (ii) strengthen the public planning process and encourage
private implementation of the local general plan; (iii) provide certainty in the approval of
projects in order to avoid waste of time and resources; and (iv) reduce the economic
costs of development by providing assurance to the property owners that they may
proceed with projects consistent with existing policies, rules, and regulations;
18-5
Ordinance No. 2022-
Page 3 of 5
WHEREAS, with the exception of extending the Term, all of the other necessary
components articulated above, remain unchanged by the First Amendment; and
WHEREAS, the City Council finds that judicial challenges to the City's CEQA
determinations and approvals of land use projects are costly and time consuming. In
addition, project opponents often seek an award of attorneys' fees in such challenges.
As project applicants are the primary beneficiaries of such approvals, it is appropriate
that such applicants should bear the expense of defending against any such judicial
challenge, and bear the responsibility for any costs, attorneys' fees, and damages which
may be awarded to a successful challenger.
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: In accordance with the California Environmental Quality Act
("CEQA") set forth in the California Public Resources Code Section 21000, et. seq. and
its implementing State regulations set forth in the California Code of Regulations, Title
14, Division 6, Chapter 3 ("CEQA Guidelines"), the Newport Beach City Council
approved Mitigated Negative Declaration No. ND2010-008 (SCH 2O10091052) and an
Errata to Mitigated Negative Declaration No. ND2010-008 (together referred as "MND")
that addressed the potential environmental effects associated with the Project on March
27, 2012. All significant environmental effects of the Project have been addressed in
the MND and no new or additional impacts will result from the First Amendment. The
First Amendment does not change the Project but rather only extends the term of the
Agreement by a year. The First Amendment does not amend any development
standards, development requirements, or required mitigation measures identified in
MND.
Section 3: The First Amendment to Development Agreement No. DA2008-001
attached hereto and incorporated herein by reference as Exhibit "A" between the City of
Newport Beach and GRF to extend the Term for one (1) year and make other minor
changes is hereby approved.
Section 4: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
:.
Ordinance No. 2022-
Page 4 of 5
Section 5: 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 6: 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, and the same shall become effective
thirty (30) days after the date of its adoption.
18-7
Ordinance No. 2022-
Page 5 of 5
This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 28th day of June, 2022, and adopted on the 12th day of
July, 2022, by the following vote, to -wit:
AYES, COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
KEVIN MULDOON, MAYOR
ATTEST:
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
A.., c '--
AA ON C. HARP, CITY ATTORNEY
Attachment(s): Exhibit "A" — First Amendment to Development Agreement
18-8
EXHIBIT A
First Amendment to Development Agreement No. DA2008-001
:•
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 First Amendment 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.
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
between
CITY OF NEWPORT BEACH
and
GOLF REALTY FUND
CONCERNING PROPERTIES LOCATED AT TENNIS CLUB AT NEWPORT BEACH
WITHIN THE
NEWPORT BEACH COUNTRY CLUB PLANNED COMMUNITY DISTRICT
18-10
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
(Pursuant to California Government Code Sections 65864-65869.5)
This FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (the "First
Amendment") is entered into and effective on the date it is recorded with the Orange County
Recorder ("Effective Date") by and between the CITY OF NEWPORT BEACH ("City"), and
GOLF REALTY FUND, a California limited partnership "Property Owner"). City and
Property Owner are sometimes collectively referred to in this First Amendment as the
"Parties" and individually as a "Party."
RECITALS
A. Property Owner is the managing owner of and owns a fee interest in title to that
certain real property located in the City of Newport Beach, County of Orange, State of California
which is more particularly described in the legal description attached as Exhibit "A" and
depicted on the site map attached hereto as Exhibit `B" ("Property"). The Property consists of
approximately seven (7) acres within the area shown on the City's Zoning Map as the Newport
Beach Country Club Planned Community District. The Property comprises the Tennis Club at
Newport Beach site shown on Exhibit `B" which consists of The Villas Sub -Area, The Tennis
Club Sub -Area, and The Bungalows Sub -Area.
B. City and Property Owner entered into that certain Development Agreement
between the City of Newport Beach and Golf Realty Fund dated March 27, 2012, and recorded
in the Official Records of Orange County on January 29, 2014, as document number
2014000036369 ("Agreement") attached hereto as Exhibit "C" with a ten (10) year term.
C. On November 20, 2018, the City approved Coastal Development Permit No.
CD2017-039 to allow the demolition of the 18 existing tennis courts and construction of the
Tennis Club, Villas and Bungalows at the Tennis Property, however, the Agreement was not
amended or modified.
D. The Parties now wish to enter into that First Amendment extending the term for
an additional year and updating certain provisions.
E. On May 12, 2022, the Planning Commission opened the noticed public hearing on
this First Amendment and continued the item to May 26, 2022.
F. On May 26, 2022, the Planning Commission held the public hearing on this First
Amendment and considered the testimony and information submitted by City staff, Property
Owner, and members of the public. Consistent with applicable provisions of the Development
Agreement Statute and Ordinance, the Planning Commission adopted Resolution No. PC2022-
008, recommending the City Council approve this First Amendment.
1
18-11
G. On June 28, 2022, the City Council held a noticed public hearing on this First
Amendment and considered the testimony and information submitted by City staff, Property
Owner, and members of the public. On July 12, 2022, consistent with applicable provisions of
the Development Agreement Statute and Ordinance, the City Council held the second reading
and adopted Ordinance No. approving this First Amendment.
H. This First Amendment is consistent with the City of Newport Beach General
Plan ("General Plan"), including without limitation the General Plan's designation of the
Property as "MU-H3/PR" (Mixed Use Horizontal /(Parks and Recreation) (Anomaly 46); Coastal
Land Use Plan designation as "MU-H/PR (Mixed Use Horizontal / Parks & Recreation"; the
Newport Beach Country Club Planned Community District that was adopted in 1997 by
Ordinance No. 97-10 in order to establish appropriate zoning to regulate land use and
development of the Property consistent with the General Plan; and Newport Beach Country Club
Planned Community Development Plan No PC2005-002 approved for the Property on March 27,
2012 by Ordinance No. 2012-2.
I. The City Council finds that this First Amendment: (i) is consistent with the City
of Newport Beach General Plan as of the date of this First Amendment; (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, City's police power; (iv) is
consistent and has been approved consistent with the Mitigated Negative Declaration No.
ND2010-008 (SCH 2O10091052) and an Errata to Mitigated Negative Declaration No. ND2010-
008 (together referred as "MND") for the Newport Beach Country Club Planned Community
District (PA2005-002) approved by the City Council, both of which analyze the environmental
effects of the proposed development of the Project on the Property; and (v) is consistent and has
been approved consistent with provisions of California Government Code section 65867 et seq.
and Chapter 15.45 City of Newport Beach Municipal Code ("NBMC").
AGREEMENT
NOW, THEREFORE, City and Property Owner agree as follows:
1. Term of Agreement. Section 2.4 of the Agreement is hereby amended in its
entirety to read as follows:
"The term of this Agreement (the "Term") shall commence on the
Effective Date and continue until 2023, unless
otherwise terminated or modified pursuant to its terms.
Notwithstanding any other provision set forth in this Agreement to
the contrary, the provisions set forth in Article 10 and Section
13.10 (as well as any other Property Owner obligations set forth in
this Agreement that are expressly written to survive the
Termination Date) shall survive the Termination Date of this
Agreement."
2. Attorneys' Fees. Section 8.10 of the Agreement is hereby amended in its entirety
to read as follows:
2
18-12
"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."
3. Notices. Section 13.1 of the Agreement is hereby amended in its entirety to read
as follows:
"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 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, CA 92660
Attn: City Manager
With a copy to: City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attn: City Attorney
TO PROPERTY OWNER: Golf Realty Fund
One Upper Newport Plaza
Newport Beach, CA 92660
Attn: Robert O'Hill
Either Party may change the address stated in this Section 13.1 by
delivering notice to the other Party in the manner provided in this
Section 13.1, and thereafter, notices to such Party 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 (iii) three business days
after deposit in the mail as provided above."
3
18-13
4. Full Force and Effect. Except as modified by this First Amendment, the entire
Agreement, its exhibits, and the exhibits attached hereto, are incorporated herein to this First
Amendment and shall remain in full force and effect.
5. Recitals. The Recitals set forth above are true and correct and incorporated herein
by reference.
6. Recordation. The City Clerk shall record this First Amendment in the Office of
the County Recorder of the County of Orange within the period required by California
Government Code Section 65858.5 and Section 15.45.100 of the NBMC.
[SIGNATURES ON NEXT PAGE]
4
18-14
SIGNATURE PAGE TO
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
GOLF REALTY FUND, a California
limited partnership
By:
Its:
am
Its:
"CITY"
CITY OF NEWPORT BEACH, a California
municipal corporation
Kevin Muldoon, Mayor
ATTEST:
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
Aaron C. Harp, City Attorney
Attachments: Exhibit A — Legal Description of Property
Exhibit B — Depiction of Property
Exhibit C — Development Agreement Recorded January 29, 2014
5
18-15
ACKNOWLEDGMENT
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 } SS.
On , 20 before me, , Notary Public,
personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signatures(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)
ACKNOWLEDGMENT
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 } SS.
On , 20 before me, , Notary Public,
personally appeared , 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 signatures(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)
0
18-16
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Parcel 1 and Parcel 2 of Parcel Map 94-102, in the City of Newport Beach, County of Orange,
State of California, as per Map filed in Book 316, Pages 3 to 6, inclusive, of Parcel Maps, in the
office of the County Recorder of Orange County.
A-1 18-17
EXHIBIT B
DEPICTION OF PROPERTY
MASTER PLAN
•THETENNIS CLUB
3 new stadium court
Tennis Clubhouse
• THE VILLAS
5 single family homes
• THE BUNGALOWS
27 guest rental units
• THE GOLF CLUB
EXHIBIT C
DEVELOPMENT AGREEMENT RECORDED JANUARY 29, 2014
C-1
18-19
r'. 7, "`F"rded ' Official Records, Orange County
r .. hitrgtf�,Nlgiu , Clerk -Recorder
RECORDING REQUESTED BY Iill '`ffllIII Il �IIII�IIII III IIIII�[�I II�� [ NO FEE
AND WHEN RECORDED RETU .N TO. -; $� o:_ 0 6 4 7 3 5 4 0 $
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663-3884 r -
Attn: City Clerk
2014600036369 8: 05 am 01 /29114
' -'''47(422 Al 32
� 70,0070.00 0.00 0.00 93.00 0.00 0.00 0.00
(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
GOLF REALTY FUND
CONCERNING PROPERTIES LOCATED IN NEWPORT CENTER
WITHIN THE
NEWPORT BEACH COUNTRY CLUB PLANNED COMMUNITY DISTRICT
A10-00773 03.07.12 0
18-20
DEVELOPMENT AGREEMENT
(Pursuant to California Government Code Sections 65864-65869.5)
This DEVELOPMENT AGREEMENT (the "Agreement") is dated for reference
purposes as of the 23'day of [ Ar C h , 2012 (the "Agreement Date"), and is being entered
into by and between the City of Newport Beach ("City"), and Golf Realty Fund, a California
limited partnership "Prop . Owner"). City and Property Owner are sometimes collectively
referred to in this Agreement as the "Parties" and individually as a "Party."
RECITALS
A. Property Owner is the managing owner of and owns a fee interest in title to that
certain real property located in the City of Newport Beach, County of Orange, State of California
which is more particularly described in the legal description attached as Exhibit "A" and
depicted on the site map attached hereto as Exhibit B (the, "Property"). The Property consists of
approximately 7 acres within the area shown on the City's Zoning Map as the Newport Beach
Country Club Planned Community District. The Property comprises the area shown on Exhibit
B as The Villas Sub- Area, The Tennis Club Sub -Area, and The Bungalows Sub -Area.
B. In order 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 in order 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 (the "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" (the "Development Agreement Ordinance"). This Agreement is
consistent with the Development Agreement Ordinance.
D. As detailed in Section 3 of this Agreement, Property Owner has agreed to provide
the following significant public benefits as consideration for this Agreement: Visitor -Serving
Uses within the Coastal Zone, and other economic contributions including the payment of a
Public Benefit Fee.
E. This Agreement is consistent with the City of Newport Beach General Plan
("General Plan"), including without limitation the General Plan's designation of the Property as
"MU-H3/PR" (Mixed Use Horizontal /(Parks and Recreation) (Anomaly 46), the Coastal Land
Use Plan's designation as "MU-H/PR (Mixed Use Horizontal / Parks & Recreation", the
Newport Beach Country Club Planned Community District that was adopted in 1997 by
Ordinance No. 97-10 in order to establish appropriate zoning to regulate land use and
development of the Property consistent with the General Plan, and the Newport Beach Country
Club Planned Community Development Plan No PC2005-002 approved for the Property on
March 27, 2012 by Ordinance No. 0 2' 2 .
A 10-00773 v4 01.06.1 l FINAL -1-
18-21
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, City's police power; (iv) is consistent and has been approved
consistent with the Final Environmental Impact Report for the City of Newport Beach General
Plan 2006 Update (State Clearinghouse No. 2006011119) and the Mitigated Negative
Declaration No. ND2010-008 for the Newport Beach Country Club Planned Community District
(PA d 0Q5— ��#O ) approved by the City Council on or before the Agreement Date, both of
which analyze the environmental effects of the proposed development of the Project on the
Property; 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.
G. On October 20, 2011 and November 17, 2011 , City's Planning Commission held
public hearings on this Agreement, and on November 17, 2011, 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 24, 2012 and March 13, 2012 , the City Council also held public
hearings on this Agreement and considered the Planning Commission's recommendations and
the testimony and information submitted by City staff, Property Owner, and members of the
public. On March 27, 2012 , consistent with applicable provisions of the Development
Agreement Statute and Development Agreement Ordinance, the City Council adopted its
Ordinance No. 2012-3 (the "Adopting Ordinance"), finding this Agreement to be consistent with
the City of Newport Beach General Plan and approving this Agreement.
AGREEMENT
NOW, THEREFORE, City and Property Owner 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. 2012-3 approving and
adopting this Agreement.
"Agreement" shall mean this Development Agreement, as the same may be amended
from time to time.
"Agreement Date" shall mean March 27, 2012, which date is the date the City Council
adopted the Adopting Ordinance.
"CE A" shall mean the California Environmental Quality Act (California Public
Resources Code Sections 21000-21177) and the implementing regulations promulgated
A10-00773 v4 01.06.11 FINAL 2
18-22
thereunder by the Secretary for Resources (California Code of Regulations, Title 14, section
15000 et seq.) ("CEQA Guidelines"), as the same may be amended from time to time.
"City" shall mean the City of Newport Beach, a California charter city.
"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.
"Develop" 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 terms "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.
"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 the Newport Beach Planned CommunityDevelopment
Plan No. PC2005-002 for the Property adopted by Ordinance No. 2012-2, Vesting Tentative
Tract Map No. NT2005-003, Site Development Review No. SD2011-002 as approved by
Resolution No. 2012-10 for the Property, Limited Term Permit No. XP2011-004, and
AIO-00773 0 01.06.1 I FINAL 3
18-23
Conversion of Development Rights as approved by City Council on or before the Agreement
Date, as the same may be amended from time to time consistent with this Agreement.
"Development Regulations" shall mean the following regulations as they are in effect as
of the Agreement 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 Agreement Date that impairs or restricts Property Owner's rights
set forth in this Agreement, unless such amendment or modification is expressly authorized by
this Agreement or is agreed to by Property Owner in writing: the General Plan; the Development
Plan; and, to the extent not expressly superseded by the Development Plan or this Agreement, all
other land use and subdivision regulations governing the permitted uses, density and intensity of
use, design, improvement, and construction standards and specifications, procedures for
obtaining required City permits and approvals for development, and similar matters that may
apply to development of the Project on the Property during the Term of this Agreement that are
set forth in Title 15 of the Municipal Code (buildings and construction), Title 19 of the
Municipal Code (subdivisions), and Title 20 of the Municipal Code (planning and zoning), but
specifically excluding all other sections of the Municipal Code, including without limitation Title
5 of the Municipal Code (business licenses and regulations). 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 the following: (1) 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 the following dates, as applicable: (i) the date
that is thirty (30) days after the Agreement Date; (ii) if a referendum concerning the Adopting
Ordinance 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 such Development
Regulations and becomes effective, if applicable; (iii) if a lawsuit is timely filed challenging the
validity or legality of the Adopting Ordinance, this Agreement, 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,
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 of
approval of a coastal development permit for the Project; (v) the date of or if a lawsuit is timely
filed challenging the validity or legality of the approval of a coastal development permit for the
Project, the date on which said challenge is finally resolved in favor of the validity or legality of
the coastal development permit for the Project, 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. Notwithstanding the
foregoing, the Effective Date shall be no later than one hundred eighty (180) days from the
Agreement Date. 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.
A10-00773 A 01.06.11 FINAL 4
18-24
"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 M., 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 M., 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 seq., as amended; the Clean Air Act, 42 U.S.C. Sections 7401 e_ t seq., as
amended; the Clean Water Act, 33 U.S.C. Section 1251, et §eq., as amended; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et seq., as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et seq., as amended; the Federal Safe
Drinking Water Act, 42 U.S.C. Sections 300f e_ t seq., as amended; the Federal Radon and Indoor
Air Quality Research Act, 42 U.S.C. Sections 7401 et seq., 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 M.
"General Plan" shall mean City's 2006 General Plan adopted by the City Council on July
25, 2006, by Resolution No. 2006-76, as amended through the Agreement Date but excluding
any amendment after the Agreement Date that impairs or restricts Property Owner's rights set
forth in this Agreement, unless such amendment is expressly authorized by this Agreement, is
authorized by Sections 8 or 9, or is specifically agreed to by Property Owner. 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.
"Pa ' or "Parties" shall mean either City or Property Owner or both, as determined by
the context.
AIO-00773 v401.06.11 FINAL 5
18-25
"Project" shall mean all on -site and off -site improvements that Property Owner is
authorized and/or may be required to construct with respect to each parcel of the Property, 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 Iaw.
"Property" is described in Exhibit A and generally depicted on Exhibit B as The Tennis
Club, The Villas, and The Bungalows Sub -Areas shown on Exhibit B .
"Property Owner" shall mean Golf Realty Fund, a California limited partnership and any
successor or assignee, including lessees, to all or any portion of the right, title, and interest of
Golf Realty Fund in and to ownership of all or a portion of the Property.
"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 Property Owner is permitted to obtain to Develop the Project on and with
respect to the Property after the Agreement Date consistent with the Development Regulations.
"Term" shall have the meaning ascribed in Section 2.4 of this Agreement.
"Termination Date" and "Lot Termination Date" shall have the meaning ascribed in
Section 2.4 of this Agreement.
"Transfer" shall have the meaning ascribed in Section 11 of this Agreement.
2. General Provisions.
2.1 Plan Consistency, Zoning Implementation.
This Agreement and the Development Regulations applicable to the Property are
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 Property Owner Representations and Warranties Regarding Ownership of the
Property and Related Matters Pertaining to this Agreement.
Property Owner and each person executing this Agreement on behalf of Property Owner
hereby represents and warrants to City as follows: (i) Property Owner or any co-owner
comprising Property Owner is a legal entity and that such entity is duly formed and existing and
is authorized to do business in the State of California; (ii) if Property Owner or any co-owner 0
comprising Property Owner is a natural person that such natural person has the legal right and
capacity to execute this Agreement; (iii) that all actions required to be taken by all persons and
entities comprising Property Owner to enter into this Agreement have been taken and that
A10-W773 v4 01.06.11 FINAL 6
18-26
Property Owner has the legal authority to enter into this Agreement; (iv) that to the best of
Property Owner's knowledge, Property Owner'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 Property Owner or any person or entity comprising Property Owner has to any third party;
(v) that neither Property Owner nor any co-owner comprising Property Owner is the subject of
any voluntary or involuntary petition in bankruptcy; and (vi) that to the best of Property Owner's
knowledge, Property Owner has the authority and ability to enter into or perform any of its
obligations set forth in this Agreement.
2.4 Term.
The term of this Agreement (the "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 either
Party reasonably determines that the Effective Date of this Agreement will not occur because (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, a coastal development permit for
the Project 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 shall have the right to terminate this Agreement upon delivery of a
written notice of termination to the other Party, in which event neither Party shall have any
further rights or obligations hereunder except that Property Owner'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 similarly be null and
void at such time.
The Termination Date shall be the earliest of the following dates: (i) the tenth (10th)
anniversary of the Effective Date, as said date may be extended in accordance with Section 5 of
this Agreement; (ii) such earlier date that this Agreement may be terminated in accordance with
Articles 5, 7, and/or Section 8.3 of this Agreement and/or Sections 65865.1 and/or 65868 of the
Development Agreement Statute; (iii) as to any separate legal lot within the Property (but not as
to the balance of the Property or the portion thereof that remains subject to this Agreement at
such time), upon the "Lot Termination Date" (defined below); or (iv) completion of the Project
in accordance with the terms of this Agreement, including Property Owner'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.
As used herein, the term "Lot Termination Date" for any separate legal lot within the
Property means the date on which all of the following conditions have been satisfied with respect
to said lot: (i) the lot has been finally subdivided and sold or leased (for a period longer than one
year), individually or in a "bulk" of four or fewer lots, to a member of the public or other
AI 0-00773 v4 01.06.11 FINAL 7
18-27
ultimate user, (ii) a final Certificate of Occupancy or "Release of Utilities" has been issued for
the building or buildings approved for construction on said lot.
Notwithstanding any other provision set forth in this Agreement to the contrary, the
provisions set forth in Article 10 and Section 13.10 (as well as any other Property Owner
obligations set forth in this Agreement that are expressly written to survive the Termination
Date) shall survive the Termination Date of this Agreement.
3. Public Benefits,
3.1 Public Benefit Fee.
As consideration for City's approval and performance of its obligations set forth in this
Agreement, Property Owner shall pay to City a fee that shall be in addition to any other fee or
charge to which the Property and the Project would otherwise be subject (herein, the "Public
Benefit Fee") in the sum of (1) Ninety-three thousandDollars ($ 93,000per each residential
dwelling units; and (ii) Ten dollars ($10) per square foot of construction for the proposed golf
clubhouse'; and (ill) Ten dollars ($10) per square foot of construction to the proposed tennis
clubhouse, with the unpaid balance of said Public Benefit Fee increased on the first January 1
following the Effective Date of this Agreement by the percentage increase in the CPI Index
between the Effective Date and said January 1" date (the first "Adjustment Date") and thereafter
with the unpaid balance of said Public Benefit Fee increased on each subsequent January 1
during the Term of this Agreement (each, an "Adjustment Date") by the percentage increase in
the CPI Index in the year prior to the applicable 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
Effective Date of this Agreement falls on July 1 and the most recently available CPI Index figure
on the first Adjustment Date (January 1 of the following year) is the CPI Index for November of
the preceding year, the percentage increase in the CPI Index for that partial year (a 6-month
period) shall be calculated by comparing the CPI Index for November of the preceding year with
the CPI Index for May of the preceding year (a 6-month period). In no event, however, shall
application of the CPI Index reduce the amount of the Public Benefit Fee (or unpaid portion
thereof) below the amount in effect prior to any applicable Adjustment Date. Property Owner
shall pay the Public Benefit Fee at the following time(s): (i) As to the residential dwelling units,
at the issuance of the building permit for each individual residential unit; and (ii) as to the golf
clubhouse and tennis clubhouse construction, at the time each building permit is issued to
Property Owner or on Property Owner's behalf. Notwithstanding any other provision set forth in
this Agreement to the contrary, during the Term of this Agreement City shall not increase the
Public Benefit Fee except pursuant to the CPI Index as stated in this Section 3.1. The Public Fee
Benefit Fee shall be calculated based on the total square feet of construction for the proposed
golf clubhouse and proposed tennis clubhouse Property Owner shall not be entitled to any credit
or offset to the Public Benefit Fee for any existing buildings or structures. Property Owner
The City has entered into a separate Development Agreement with The Newport Beach Country Club, Inc.,
Development Agreement No. 2ZO� — CO J (the "NBCC DA"), pertaining to the development of a golf
clubhouse on the adjacent property. This requirement to pay a Public Benefit Fee for the construction of
the golf clubhouse shall not apply to Property Owner, unless Property Owner itself, or its successors or
assignees, is seeking issuance of permits for the construction of a golf clubhouse on the adjacent property.
A10-00773 v401.06.11 FINAL 8
acknowledges by its approval and execution of this Agreement that it is voluntarily agreeing to
pay the Public Benefit Fee, that its obligation to pay the Public Benefit Fee is an essential term of
this Agreement and is not severable from City's obligations and Property Owner's vesting rights
to be acquired hereunder, and that Property Owner 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 such fee 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 Property
Owner's default, if Property Owner shall fail to timely pay any portion of the Public Benefit Fee
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.
3.2 Other Public Benefits.
The development of the Project will include the addition of Visitor -Serving Uses
consistent with the City's Coastal Land Use Plan and will provide a unique amenity for those
visitors whose interests include tennis. It is anticipated that the Property will continue to host
numerous events of significant social and economic benefit to the City, its citizens, businesses
and charitable institutions.
4. Development of Project.
4.1 Applicable Regulations; Property Owner'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) Property Owner 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 City's discretion with respect to (i) review and approval
requirements contained in the Development Regulations, (ii) exercise of any discretionary
authority City retains under the Development Regulations, (iii) the approval, conditional
approval, or denial of any Subsequent Development Approvals applied for by Property Owner,
or that are required, for Development of the Project as of the Agreement Date provided that all
such actions are consistent with the Development Regulations, 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 referred to in clauses (i)-(iv) of this sentence, City reserves
its full discretion to the same extent City 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 Property Owner's rights with respect to any laws, regulations, rules, or official policies of
any other 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
A(0-00773 v401.06.11 FINAL 9
18-29
official policies are adopted or applied to the Property or the Project prior or subsequent to the
Agreement Date.
Property Owner has expended and will continue to expend substantial amounts of time
and money in the planning and entitlement process to permit Development of the Project in the
future. Property Owner represents and City acknowledges that Property Owner would not make
these expenditures without this Agreement, and that Property Owner is and will be making these
expenditures in reasonable reliance upon obtaining vested rights to Develop the Project as set
forth in this Agreement.
Property Owner may apply to City for permits or approvals necessary to modify or
amend the Development specified in the Development Regulations, provided that unless this
Agreement also is amended, 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. In addition, Property Owner may apply to City for approval of
minor amendments to existing tentative tract maps, tentative parcel maps, 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 Agreement Date to the extent it conflicts with this
Agreement. 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 Property
Owner shall have the vested right to Develop the Project on and with respect to the Property at
the rate, timing, and sequencing that Property Owner deems appropriate within the exercise of
Property Owner'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 Agreement 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 Property Owner's
A10-00773 v4 01.06.11 FINAL 10
18-30
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. 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
Property Owner 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 Property Owner, 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 Property
Owner has consented in writing to the regulations, shall apply to the Property.
4.3.4 _Development Exactions Applicable to Propertx. During the Term of this
Agreement, Property Owner 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 Property Owner and the Project in the absence of this Agreement; provided, however,
that to the extent the scope and extent of a particular Development Exaction (excluding any
development impact fee) for the Project has been established and fixed by City in the conditions
of approval for any of the Development Regulations approved on or before the Agreement Date,
City shall not alter, increase, or modify said Development Exaction in a manner that is
inconsistent with such Development Regulations without Property Owner's prior written consent
or as may be otherwise required pursuant to overriding federal or state laws or regulations
(Section 4.3.5 hereinbelow). In addition, nothing in this Agreement is intended or shall be
deemed to vest Property Owner 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; (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
A10-00773 v4 01.06.11 FINAL 11
18-31
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
Chapter 3.12 of City's Municipal Code.
4.3.5 Overriding Federal and State Laws and Regulations. Federal and state
laws and regulations that override Property Owner'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) Property Owner 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 Property Owner 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 Property Owner 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 Property Owner agree to preserve the terms of this Agreement and
the rights of Property Owner as derived from this Agreement to the maximum feasible extent
while resolving the conflict. City agrees to cooperate with Property Owner at no cost to City in
resolving the conflict in a manner which minimizes any financial impact of the conflict upon
Property Owner. City also agrees to process in a prompt manner Property Owner's proposed
changes to this Agreement, 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 Property Owner's
vested rights under this Agreement.
4.3.7 Uniform Building Standards. Existing and future building and building -
related standards set forth in the uniform 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 Property Owner 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.
A10-00773 v401.06.11 FINAL 12
18-32
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 Property
Owner 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
that inadequate utility capacity exists to adequately serve the Project at the time Development is
scheduled to commence.
4.4 Tentative Subdivision Maps.
City agrees that Property Owner 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. 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.
Other than modifications of this Agreement under Section 8.3 of this 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 City of
Newport Beach Municipal Code section 15.45.060 or by unilateral termination by City in the
event of an uncured default of Property Owner.
6. Enforcement.
Unless this Agreement is amended, canceled, modified, or suspended as authorized
herein or pursuant to California Government Code section 65869.5, 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 Property Owner'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. Property Owner (including any successor to the Property Owner
executing this Agreement on or before the Agreement Date) shall pay City a reasonable fee in an
amount City may reasonably establish from time to time to cover the actual and necessary 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 Property Owner Obligation to Demonstrate Good Faith Compliance
A10-00773 001.06.11 FINAL 13
18-33
During each annual review by City, Property Owner is required to demonstrate good faith
compliance with the terms of the Agreement. Property Owner agrees to fiunish such evidence of
good faith compliance as City, in the reasonable exercise of its discretion, may require, thirty
(30) days prior to each anniversary of the Effective Date during the Term.
7.3 Procedure.
The City Council of City shall conduct a duly noticed hearing and shall determine, on the
basis of substantial evidence, whether or not Property Owner has, for the period under review,
complied with the terms of this Agreement. If the City Council finds that Property Owner has so
complied, the annual review shall be concluded. If the City Council finds, on the basis of
substantial evidence, that Property Owner has not so complied, written notice shall be sent to
Property Owner by first class mail of the City Council's finding of non-compliance, and Property
Owner shall be given at least ten (10) days to cure any noncompliance that relates to the payment
of money and thirty (30) days to cure any other type of noncompliance. If a cure not relating to
the payment of money cannot be completed within thirty (30) days for reasons which are beyond
the control of Property Owner, Property Owner must commence the cure within such thirty (30)
days and diligently pursue such cure to completion. If Property Owner 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
Propertv Owner'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 Property Owner 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 have the right to 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 (ten (10) days if the
Default relates to the failure to timely make a monetary payment due hereunder and not less than
thirty (30) days in the event of non -monetary Defaults) in which the Default must be cured (the
"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
quickly as possible, and in no event later than thirty (30) days after it receives the Notice of
Default, and thereafter diligently pursue said cure to completion.
8.2 Default by Property Owner.
A10-00773 v401.06.11 FINAL 14
18-34
If Property Owner is alleged to have committed a non -monetary Default and it disputes
the claimed Default, it may make a written request for an appeal hearing before the City Council
within ten (10) days of receiving the Notice of Default, and a public hearing shall be scheduled at
the next available City Council meeting to consider Property Owner's appeal of the Notice of
Default. Failure to appeal a Notice of Default to the City Council within the ten (10) day period
shall waive any right to a hearing on the claimed Default. If Property Owner's appeal of the
Notice of Default is timely and in good faith but after a public hearing of Property Owner's
appeal the City Council concludes that Property Owner is in Default as alleged in the Notice of
Default, the accrual date for commencement of the thirty (30) day Cure Period provided in
Section 8.1 shall be extended until the City Council's denial of Property Owner's appeal is
communicated to Property Owner.
8.3 Cites Qption to Terminate Agreement.
In the event of an alleged Property Owner Default, City may not terminate this
Agreement without first delivering a written Notice of Default and providing Property Owner
with the opportunity to cure the Default within the Cure Period, as provided in Section 8.1, and
complying with Section 8.2 if Property Owner timely appeals any Notice of Default with respect
to a non -monetary 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 Property Owner. Any such judicial challenge must
be brought within thirty (30) days of service on Property Owner, 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. It is the intention of the Parties that,
while the City Council may declare a default and initiate termination of this Agreement on the
basis of substantial evidence in the administrative record, if the declaration of default is
contested in court, the court will review the default claim de novo and base its decision on
whether the preponderance of evidence supports the City Council's finding of breach.
8.4 Default by City.
If Property Owner alleges a City Default and alleges that the City has not cured the
Default within the Cure Period, Property Owner may pursue any equitable remedy available to it
under this Agreement, 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 Property Owner's performance hereunder shall neither be a
Property Owner Default nor constitute grounds for termination or cancellation of this Agreement
by City and shall, at Property Owner's option (and provided Property Owner delivers written
notice to City within thirty (30) 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 either 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.
8.6 Specific Performance Remedy.
A10-00773 v401.06.11 FINAL 15
18-35
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 Property Owner 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. Property Owner 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 Property Owner or City for
such efforts. For the above reasons, City and Property Owner agree that damages would not be
an adequate remedy if either City or Property Owner fails to carry out its obligations under this
Agreement. Therefore, specific performance of this Agreement is necessary to compensate
Property Owner if City fails to carry out its obligations under this Agreement or to compensate
City if Property Owner falls to carry out its obligations under this Agreement.
8.7 Monetary Damages.
The Parties agree that monetary damages shall not be an available remedy for either 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 Property Owner as set forth herein; and (ii) nothing in this Section 8.7 is intended
or shall be interpreted to limit or restrict Property Owner'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.
8.8 Additional City Remedy for Property Owner's Default
In the event of any Default by Property Owner, 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 Property
Owner's Default without recourse from Property Owner 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.
8.10 Recovery of Legal Expenses by Prevailing Partin •n 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 recover all of its actual and reasonable 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 expert witness fees, attorneys' fees, and costs of investigation and preparation
before initiation of the Action. The right to recover these costs and expenses shall accrue upon
initiation of the Action, regardless of whether the Action is prosecuted to a final judgment or
decision.
A10-00773 v401.06.11 FINAL 16
18-36
9. Force Majeure.
Neither 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 Property Owner's obligation to pay Public
Benefit Fees, be extended pursuant to this Section.
10. Indemnity Obligations of Property Owner.
10.1 Indemnity Arising From Acts or Omissions of Property Owner.
Property Owner shall indemnify, defend, and hold harmless City and City's officials,
employees, agents, attorneys, and contractors (collectively, the "City's Affiliated Parties") from
and against all suits, claims, liabilities, losses, damages, penalties, obligations, and expenses
(including but not limited to attorneys' fees and costs) (collectively, a "Claim") that may arise,
directly or indirectly, from the acts, omissions, or operations of Property Owner or Property
Owner's agents, contractors, subcontractors, agents, or employees in the course of Development
of the Project or any other activities of Property Owner relating to the Property or pursuant to
this Agreement. City shall have the right to select and retain counsel to defend any Claim filed
against City and/or any of City's Affiliated Parties, and Property Owner shall pay the reasonable
cost for defense of any Claim. 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 PartLitigation.
In addition to its indemnity obligations set forth in Section 10.1, Property Owner shall
indemnify, defend, and hold harmless City and City's Affiliated Parties from and against any
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. Said indemnity obligation shall include payment of attorney's fees, expert
witness fees, and court costs. City shall promptly notify Property Owner of any such Claim and
City shall cooperate with Property Owner in the defense of such Claim. If City fails to promptly
notify Property Owner of such Claim, Property Owner shall not be responsible to indemnify,
defend, and hold City harmless from such Claim until Property Owner is so notified and if City
fails to cooperate in the defense of a Claim Property Owner 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 defense costs for its separate counsel shall be included in
Property Owner's indemnity obligation, provided that such counsel shall reasonably cooperate
with Property Owner in an effort to minimize the total litigation expenses incurred by Property
AI0-00773 0 01.06.11 FINAL 17
18-37
Owner. In the event either City or Property Owner recovers any attorney's fees, expert witness
fees, costs, interest, or other amounts from the party or parties asserting the Claim, Property
Owner shall be entitled to retain the same (provided it has fully performed its indemnity
obligations hereunder). 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 EnvironmentalIndemnity.
In addition to its indemnity obligations set forth in Section 10.1, from and after the
Agreement Date Property Owner 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 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 Property Owner in connection with Property Owner's
Development of the Project. The foregoing indemnity obligations shall not apply to any
Hazardous Substance placed or stored on a separate legal lot within the Property after the Lot
Termination Date for said lot, as provided in Section 2.4 of this Agreement. The indemnity
provisions in this Section 10.3 shall commence on the Agreement Date, regardless of whether the
Effective Date occurs, and shall survive the Termination Date.
11. Assignment.
Property Owner shall have the right to sell, transfer, or assign (hereinafter, collectively, a
"Transfer') Property Owner's fee interest in to the Property, in whole or in part, to any person,
partnership, joint venture, firm, or corporation (which successor, as of the effective date of the
Transfer, shall become the "Property Owner" 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 sea.) or
City's local subdivision ordinance and any such Transfer shall include the assignment and
assumption of Property Owner'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
Property Owner's rights or interest under this Agreement shall be made unless made together
with the Transfer of all or a part of the Property; and (ii) prior to the effective date of any
proposed Transfer, Property Owner (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 Property Owner and in a form subject to the reasonable
approval of the City Attorney of City (or designee), pursuant to which the transferring Property
Owner assigns to the successor Property Owner and the successor Property Owner assumes from
the transferring Property Owner all of the rights and obligations of the transferring Property
Owner with respect to 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 off of the
A10-00773 v4 01.06.11 FINAL 18
portion of the Property so Transferred that are a condition precedent to the successor Property
Owner's right to develop the portion of the Property so Transferred.
Notwithstanding any Transfer, the transferring Property Owner shall continue to be
jointly and severally liable to City, together with the successor Property Owner, to perform all of
the transferred obligations set forth in or arising under this Agreement unless the transferring
Property Owner is given a release in writing by City, which release shall be only with respect to
the portion of the Property so Transferred in the event of a partial Transfer. City shall provide
such a release upon the transferring Property Owner's full satisfaction of all of the following
conditions: (i) the transferring Property Owner 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 Property Owner 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 Property Owner 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 Property Owner either (A) provides
City with substitute security equivalent to any security previously provided by the transferring
Property Owner to City to secure performance of the successor Property Owner's obligations
hereunder with respect to the Property or the portion of the Property so Transferred or (B) if the
transferred obligation in question is not a secured obligation, the successor Property Owner
either provides security reasonably satisfactory to City or otherwise demonstrates to City's
reasonable satisfaction that the successor Property Owner has the financial resources or
commitments available to perfonm the transferred obligation at the time and in the manner
required under this Agreement and the Development Regulations for the Project.
12. Mortgagee Rights.
12.1 Encumbrances on Property.
The Parties agree that this Agreement shall not prevent or limit Property Owner 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 Property
Owner or other affirmative covenants of Property Owner, or to guarantee this performance
A10-00773 v401.0&11 FINAL 19
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 Property Owner 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 Property Owner of its obligations set forth in this Agreement.
Each Mortgagee shall have a further right, but not an obligation, to cure the Default
within ten (10) days after receiving a Notice of Default with respect to a monetary Default and
within thirty (30) days after receiving a Notice of Default with respect to a non -monetary
Default. If the Mortgagee can only remedy or cur 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 thirty (30) 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 thirty (30)-day period. In the case of a non -monetary Default
that cannot with diligence be remedied or cured within thirty (30) 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 thirty (30) days and diligently
prosecutes the cure to completion.
A10-00773 v4 01.06.1 l FINAL 20
13. Miscellaneous Terms.
13.1 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
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, California 92663-3884
Attn: City Manager
With a copy to: City Attorney
City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, California 92663-3884
TO PROPERTY OWNER: Golf Realty Fund
One Upper Newport Plaza
Newport Beach, California 92660
Attn: Robert O Hill
With a copy to: Tim Paone
Cox Castle & Nicholson, LLP
19800 MacArthur Blvd., Suite 500
Irvine, CA. 92612
Either Party may change the address stated in this Section 13.1 by delivering notice to the
other Party in the manner provided in this Section 13.1, and thereafter notices to such Party 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 (iii) three
business days after deposit in the mail as provided above.
13.2 Private Undertaking.
Any future Development of the Project is a private undertaking. Neither Party will be
acting as the agent of the other in any respect, and each Party will be an independent contracting
entity with respect to the terns, covenants, and conditions set forth in this Agreement. This
Agreement forms no partnership, joint venture, or other association of any kind. The only
relationship between the Parties is that of a government entity regulating the Development of
private property by the owner or user of the Property.
A10-00773 v4 01.06.11 FINAL 21
18-41
13.3 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.
13.4 Estoppel Certificates.
At any time, either Party may deliver written notice to the other Party requesting that 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.
The Party requested to furnish an estoppel certificate shall execute and return the
certificate within thirty (30) days following receipt. Requests for the City to furnish an estoppel
certificate shall include reimbursement for all administrative costs incurred by the City including
reasonable attorneys fees incurred by the City in furnishing an estoppels certificate.
13.5 Rules of Construction.
The singular includes the plural; the masculine and neuter include the feminine; "shall" is
mandatory; and "may" is permissive.
13.6 Time Is of the Essence.
Time is of the essence regarding each provision of this Agreement as to which time is an
element.
13.7 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 Parry's right to demand strict compliance by the
other Party in the future.
13.8 Counterparts.
This Agreement may be executed in two 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 and the same agreement.
Al0-00773 v4 01.06.11 FINAL 22
18-42
13.9 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.
13.10 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 neither 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 Property Owner shall not receive
any of the benefits of this Agreement if any of Property Owner'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 Property Owner shall cooperate as required, despite this Agreement, should third party
litigation result in the nonperformance of Property Owner's obligations under this Agreement.
The provisions of this Section 13.10 shall apply regardless of whether the Effective Date occurs
and after the Termination Date.
13.11 Construction.
This Agreement has been drafted after negotiation and revision. Both City and Property
Owner are sophisticated parties who were represented by independent counsel throughout the
negotiations or City and Property Owner had the opportunity to be so represented and voluntarily
chose to not be so represented. City and Property Owner 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 applicable principle or presumptions of contract construction or
interpretation, if any, shall be used to construe the whole or any part of this Agreement in favor
of or against either Party.
13.12 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. All provisions of this
Agreement shall be enforceable as equitable servitudes and constitute covenants running with the
land. Each covenant to do or refrain from doing some act hereunder with regard to Development
of the Property: (i) is 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 13.12 applies regardless of whether the instrument by
A10-00773 v4 01.06.11 FINAL 23
18-43
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 Section 11.
13.13 No Third Party Beneficiaries.
The only Parties to this Agreement are City and Property Owner. 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.
13.14 Applicable Law and Venue.
This Agreement shall be construed and enforced consistent with the internal 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.
13.15 Section Headings.
All section headings and subheadings are inserted for convenience only and shall not
affect construction or interpretation of this Agreement.
13.16 Incorporation of Recitals and Exhibits.
All of the Recitals are incorporated into this Agreement by this reference. Exhibits A and
B are attached to this Agreement and incorporated by this reference as follows:
EXHIBIT I DESCRIPTION
DESIGNATION
A I Legal Description of Property
B I Depiction of the Property
13.17 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
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.
A10-00773 v401.06.11 FINAL 24
W.
SIGNATURE PAGE TO
DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
I0
Its:
By:.
Its:
"CITY"
CIT
By:
Its:
ATTEST -
City Clerk
ROVED AS TO FORM:
I-
Aaron Harp, City Attorney + `f
AID-00773 v40I.06.11 FINAL 25
18-45
STATE OF CALIFORNIA
COUNTY OF ORANGE
On N V V j L+ . '2 0 \"1 ,before me, � ti-N (V l V E t� I -AN N KIU� VC -1 , a NotaryPublic
in and for said State, personally appeared N t� iy c 1 L �(n; iy Ga I� t, (�i iZ. ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose names) 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 signatures(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. JENNIFER ANN MULVEY
��. Commission # 2045022
' _ = Notary Public - California
Z ' "i' Orange County
M Comm. Expires Oct 12, 2017
Notary Publ c in and fo
said v and State 1
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF ORANGE
On , before me, , a Notary
Public in and for said State, 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 signatures(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.
Notary Public in and for
said County and State
18-46
SIGNATURE PAGE TO
DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
By:
Its:
By
: -
Its:
«CITY,,
CITY OF NEWPORT BEACH
By:
Its: Mayor
ATTEST:
City Clerk
ROVED AS TO FORM:
aron Harp, City Attomey ? /2
A10-00773 v401.06.11 FINAL 25
18-4 7
STATE OF CALIFORNIA
COUNTY OF ORANGE
On 4 I , before me, _ T�,�, �, a , a Notary Public
in and for said State, personally appeared tZ _o PEE; --T' -o H 1 v-1-_ ,
who proved to me on the basis of satisfactory evidence to be the person() whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/tlieyexecuted the same
in his/hw/their authorized capacity(ies), and that by his/her/thor signatures(a) on the instrument
the person( a), or the entity upon behalf of which the person(&) 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. SHANE THOMAS JOHNSON
to Commission# 1991314Notary Public - Ca!ifornia z2 Orange County a
My Comm. Expires Sep 16. 2016
Notary Public in and for
said County and State
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF ORANGE
On , before me,
a Notary
Public in and for said State, 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 titizthin 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 signatures(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.
Notary Public in and for
said County and State
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The Property:
Parcel 1 and Parcel 2 of Parcel Map 94-102, in the City of Newport Beach, County of Orange,
State of California, as per Map filed in Book 316, Pages 3 to 6, inclusive, of Parcel Maps, in the
office of the County Recorder of Orange County.
A10-00773 v4 01.06.11 FINAL
11103.0-0
DEPICTION OF PROPERTY
TO BE INSERTED
A104)OM A 0I.06.11 FINAL
18-50
EXHIBIT B
DEPICTION OF PROPERY
MASTER PLAN
•THE TENNIS CLUB - Sub -Area
I new stadium court
Tennis Clubhouse
• THE VILLAS - Sub Area
S single family homes
�rQ ;` • THE BUNGALOWS - Sub Area
27 guest rental units
p� yf • THE GOLF CLUB -Sub Area
NOT A PART
THE VILLAS
THE
BUNGALOWS r
THE : l-
y `.� • ; TENNIS CLUB
- — - NBCC
Planned Community
-- -" _ S t e a r n s EXHIBIT
ARCHITECTURE
IOFI
18-51
Attachment 6
Planning Commission Minute Excerpts, dated
May 26, 2022
18-52
NEWPORT BEACH PLANNING COMMISSION MINUTES
CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE
THURSDAY, MAY 26, 2022
SPECIAL MEETING — 6:30 P.M.
CALL TO ORDER — The meeting was called to order at 6:30 p.m.
PLEDGE OF ALLEGIANCE — Commissioner Weigand
ROLL CALL
PRESENT: Chair Lee Lowrey, Vice Chair Lauren Kleiman, Secretary Curtis Ellmore, Commissioner Peter
Koetting, Commissioner Sarah Klaustermeier, Commissioner Erik Weigand
ABSENT: Commissioner Rosene
Staff Present: Community Development Director Seimone Jurjis, Assistant City Attorney Yolanda Summerhill,
Assistant Planner David Lee, Principal Planner Jaime Murillo, Senior Planner Benjamin Zdeba, and
Administrative Assistant Clarivel Rodriguez
IV. PUBLIC COMMENTS
None
V. REQUEST FOR CONTINUANCES
None
VI. CONSENT ITEMS
VII.
ITEM NO. 1 MINUTES OF MAY 12, 2022
Recommended Action: Approve and file
Motion made by Vice Chair Kleiman and seconded by Secretary Ellmore to approve the minutes of the May 12,
2022, meeting with Mr. Mosher's proposed edits.
AYES:
Ellmore, Klaustermeier, Kleiman, Koetting, Lowrey, and Weigand
NOES:
None
ABSTAIN:
None
ABSENT:
Rosene
PUBLIC HEARING ITEMS
ITEM NO. 2 NEWPORT BEACH TENNIS CLUB DEVELOPMENT AGREEMENT EXTENSION
(PA2022-038)
Site Location: 1602 East Coast Highway
Summary: The City and Golf Realty Fund, Managing Owner ("GRF"), entered into a Development
Agreement ("Agreement") in 2012 to ensure the orderly redevelopment of the Newport Beach
Tennis Club site overtime with a replacement tennis facility, visitor accommodations, and 5 single-
family homes ("Approved Project"). The term of the Agreement is 10 years, and it will expire on
September 23, 2022, if no action is taken. The Agreement provides GRF the vested right to
implement the Approved Project provided it is in compliance with the approved entitlements and
development standards specified in the Newport Beach Country Club Planned Community for the
Tennis Club site. The Agreement also requires GRF to provide certain public benefits. GRF
requests a 10-year extension.
18-53
Planning Commission Special Meeting Minutes
May 26, 2022
Recommended Action:
1. Conduct a public hearing;
2. Find all significant environment concerns for the Approval Project have been addressed in
a previously approved Mitigated Negative Declaration No. ND2010-008 (SCH2010091025)
and an Errata to Mitigated Negative Declaration No. ND2010-008 (together referred as
"MND"), and that the City of Newport Beach intends to use said document for the proposed
First Amendment to Agreement, and further that there are no additional reasonable
alternative or mitigation measures that should be considered in conjunction with the First
Amendment to Agreement; and
3. Adopt Resolution No. PC2022-008 recommending approval to the City Council of First
Amendment to Development Agreement (DA2022-001), to extend the term of the
Development Agreement by one year from September 23, 2022, to September 23, 2023
(Attachment No. PC 1).
Assistant Planner Lee utilized a presentation to review the Newport Beach Tennis Club Development Agreement
extension, vicinity map, proposed first amendment to the development agreement approved in 2012, site plan, and
extension request by the applicant.
In response to Commissioner Koetting's questions, Assistant Planner Lee indicated changes in the hotel unit, tennis
court, and single-family housing counts and confirmed acceptance by the applicant for a one-year extension.
In response to Commissioner Klaustermeier's questions, Assistant Planner Lee clarified that revisions will return to
the Planning Commission as a full project with entitlements for review and Assistant City Attorney Summerhill
confirmed a longer extension with the development agreement.
In response to Commissioner Weigand's questions, Assistant City Attorney Summerhill confirmed that the City is
within its rights to approve the extension and consider property ownership dynamics with future entitlements.
Commissioners reported no ex parte communication except Commissioner Weigand who reached out to the applicant.
Chair Lowrey opened the public hearing.
Jonathan Bailey, Project Manager for the applicant, clarified that Mr. O Hill is the managing owner and has the
authority to process the entitlements as per an arbitration hearing.
Jim Mosher noted that the current entitlement is different than the current development.
Chair Lowrey closed the public hearing.
The applicant agreed to the Conditions of Approval within the resolution.
Motion made by Secretary Ellmore and seconded by Commissioner Koetting to approve the Newport Beach Tennis
Club Development Agreement Extension (PA2022-038) as proposed.
AYES: Ellmore, Klaustermeier, Kleiman, Koetting, Lowrey, and Weigand
NOES: None
ABSTAIN: None
ABSENT: Rosene
2 of 5
18-54
Planning Commission Special Meeting Minutes
May 26, 2022
ITEM NO. 3 SENATE BILL 9 IMPLEMENTATION CODE AMENDMENT (PA2021-277)
Site Location: Citywide
Summary:
Senate Bill 9 Implementation Code Amendment - Amendments to Title 19 (Subdivisions) and Title
20 (Planning and Zoning) establishing regulations to implement Government Code Sections
65852.21 and 66411.7 that went into effect on January 1, 2022. Specifically, the amendment would
allow ministerial subdivisions and the construction of up to two units for lots that are designated for
single-family use.
Recommended Action:
1. Conduct a public hearing;
2. Find this amendment statutorily exempt from environmental review and not considered a
project under the California Environmental Quality Act (CEQA) pursuant to Government Code
Sections 65852.21(j) and 66411.7(n) and further find that this amendment is categorically
exempt from CEQA under Section 15303 and 15315 as set forth in Title 14, Division 6, Chapter
3 of the California Code of Regulations which categorically exempts the construction of a
second dwelling unit in a residential zone and the division of property in urbanized areas zoned
for residential use into four or fewer parcels; and
3. Adopt Resolution No. PC2022-012 (Attachment No. PC 1) recommending the City Council
approve Code Amendment No. CA2021-007 implementing new state law requirements relating
to SB 9 housing developments and urban lot splits.
Senior Planner Zdeba and Principal Planner Murillo reviewed the background of Senate Bill (SB) 9, including SB 9
housing development projects and SB 9 urban lot split scenarios without and with an ordinance, proposed SB 9
housing development standards, proposed urban lot split development standards, additional requirements, and next
steps.
In response to Commissioner Klaustermeier's query, Senior Planner Zdeba noted the parking requirements per
State law and displayed a draft exhibit of high -quality transit areas to discuss parking exemptions and requirements.
He also clarified the use of easements to access parking.
In response to Commissioner Koetting's questions, Senior Planner Zdeba confirmed that Homeowner Associations
(HOAs) can enforce private Covenants, Conditions, and Restrictions (CC&Rs) to restrict SB 9 and not ADUs due
to State law, off -site improvements, such as sidewalk construction, cannot be imposed through the City's approval
of SB 9 projects, provisions of public services relate to utility easements, tailored objective design standards to
better guide the regulations must be clearly written, and owner occupancy requirements for a three-year period.
In response to Vice Chair Kleiman's queries, Senior Planner Zdeba relayed that he did not know an exact number
of affected parcels in the Coastal Zone, but that approximately 17,500 parcels are eligible for SB 9 provisions.
Assistant City Attorney Summerhill added that the Turner Institute prepared a study that estimates 10 percent of eligible
parcels will actually take advantage of SB 9. Senior Planner Zdeba noted that January 1, 2022, was the effective
date for SB 9 and no applications have been submitted to the City to date. He noted an affidavit signing requirement
by the State to satisfy the owner -occupied requirement and clarified the intent of the affordability requirement for
only one SB 9 unit noting that a higher inclusionary requirement would serve as an impediment to SB 9
development. He added that land values and development costs are high in Newport Beach, so the City views the
affordability requirement as a way to produce affordable housing units.
Commissioners reported no ex parte communication.
In response to Commissioner Koetting's questions regarding outreach, Senior Planner Zdeba disclosed informal
conversations with home builders or real estate agencies and two study sessions that received no comments.
3 of 5
18-55
VIII
IX.
Planning Commission Special Meeting Minutes
May 26, 2022
Community Development Director Jurjis noted the direction to staff by the City Council to proceed in this manner
and that tonight's meeting was publicly noticed.
Chair Lowrey opened the public hearing.
Jim Mosher questioned SB 9 for Coastal Zone parcels while awaiting the Local Coastal Program (LCP) amendment
approval, expressed the opinion that the code amendment parts copied from SB 9 written poorly and subject to
lawsuits, and questioned the objective meaning in the amendment for "within one block" in the conditions where the
City cannot impose parking requirements.
Chair Lowrey closed the public hearing.
In response to Mr. Mosher's questions, Community Development Director Jurjis confirmed that the City's LCP does
not allow for SB 9 units in the Coastal Zone and the ordinance will be applicable for only outside the Coastal Zone
until the LCP amendment is complete.
Motion made by Secretary Ellmore and seconded by Commissioner Klaustermeier to support Item No. 3 Senate
Bill 9 Implementation Code Amendment (PA2021-277).
AYES:
Ellmore, Klaustermeier, Kleiman, Koetting, Lowrey, and Weigand
NOES:
None
RECUSED:
None
ABSENT:
Rosene
STAFF AND COMMISSIONER ITEMS
ITEM NO. 4 MOTION FOR RECONSIDERATION
None
ITEM NO. 5 REPORT BY THE COMMUNITY DEVELOPMENT DIRECTOR OR REQUEST FOR MATTERS
WHICH A PLANNING COMMISSION MEMBER WOULD LIKE PLACED ON A FUTURE AGENDA.
Community Development Director Jurjis announced that four items are planned for the June 9, 2022, Planning
Commission meeting and the June 23, 2022, meeting will be cancelled.
ITEM NO. 6 REQUESTS FOR EXCUSED ABSENCES
Secretary Ellmore requested an excused absence on November 18, 2022.
Commissioner Klaustermeier requested excused absences on June 9, 2022, and July 7, 2022, and attendance by
Zoom on July 21, 2022.
ADJOURNMENT — The meeting adjourned at 7:08 p.m. until June 9, 2022.
4 of 5
18-56
Planning Commission Special Meeting Minutes
May 26, 2022
The agenda for the May 26, 2022, Planning Commission meeting was posted on Thursday, May
19, 2022, at 3:16 p.m. in the Chambers binder, on the digital display board located inside the
vestibule of the Council Chambers at 100 Civic Center Drive, and on the City's website on
Thursday, May 19, 2022, at 3:39 p.m.
Curtis Ellmore, Secretary
5 of 5
18-57
Attachment C
Planning Commission Resolution No. 2022-008
18-58
RESOLUTION NO. PC2022-008
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, RECOMMENDING TO THE
CITY COUNCIL APPROVAL OF A FIRST AMENDMENT TO THE
DEVELOPMENT AGREEMENT (DA2022-001) FOR THE TENNIS
CLUB SITE WITHIN THE NEWPORT BEACH COUNTRY CLUB
PLANNED COMMUNITY LOCATED AT 1602 EAST COAST
HIGHWAY (PA2022-038)
THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS
FOLLOWS:
SECTION 1. STATEMENT OF FACTS.
On March 27, 2012, the City Council of the City of Newport Beach ("City") adopted
Ordinance No. 2012-3 approving Development Agreement No. DA2008-001
("Agreement") between the City and Golf Realty Fund ("GRF") for the Tennis Club site
within the Newport Beach Country Club Planned Community. The Agreement was
executed and recorded, as document number 2014000036369 on January 29, 2014. The
effective date of the Agreement is September 27, 2012 with a term of ten years.
2. GRF has requested a first amendment to extend the term of the Agreement one additional
year, from September 27, 2022 to September 27, 2023 ("First Amendment"), in order to
develop the Tennis Club site consistent with the Newport Beach Country Club Planned
Community (PC-47). The approved entitlements for the Tennis Club site, including
development regulations and required conditions of approval as provided in the
Agreement, remain unchanged by this First Amendment.
3. Section 15.45.040 (Development Agreements; Contents) of the Newport Beach Municipal
Code ("NBMC") requires development agreements include, among other provisions, the
term, permitted uses, density and intensity of development, and maximum height and size
of proposed buildings. The Agreement meets the requirements of Section 15.45.040 of the
NBMC as it includes the permitted uses, density and intensity of development, and
maximum height and size of the proposed buildings. None of those provisions are changed
by this First Amendment.
4. The Planning Commission held a public hearing on May 12, 2022 which was continued to
May 26, 2022, in the City Council Chambers, located at 100 Civic Center Drive, Newport
Beach, California, at which time the Planning Commission considered the First
Amendment. A notice of time, place and purpose of the hearing was given in accordance
with California Government Code Section 54950 et seq. ("Ralph M. Brown Act"),
California Government Code Section 65867 and Section 15.45.050 (Public Hearing -
Notice) of the NBMC. Evidence, both written and oral, was presented to, and considered
by, the Planning Commission at this hearing.
18-59
Planning Commission Resolution No. PC2022-008
Paae 2 of 4
SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION.
In accordance with the California Environmental Quality Act ("CEQA") set forth in the California
Public Resources Code Section 21000, et. seq. and its implementing State regulations set forth
in the California Code of Regulations, Title 14, Division 6, Chapter 3 ("CEQA Guidelines"):
On March 27, 2012, the Newport Beach City Council approved Mitigated Negative
Declaration No. ND2010-008 (SCH 2O10091052) and an Errata to Mitigated Negative
Declaration No. ND2010-008 (together referred as "MND") that addressed the potential
environmental effects associated with the Tennis Club site within the Newport Beach
Country Club Planned Community ("Project").
2. All environmental concerns for the Project are addressed in the previously approved
MND. The First Amendment does not change the Project but rather only extends the
Term of the Agreement by one year. The First Amendment does not amend
development standards, development requirements, or required mitigation measures
identified in the MND.
The Planning Commission finds that judicial challenges to the City's CEQA determinations and
approvals of land use projects are costly and time consuming. In addition, project opponents
often seek an award of attorneys' fees in such challenges. As project applicants are the primary
beneficiaries of such approvals, it is appropriate that such applicants should bear the expense
of defending against any such judicial challenge, and bear the responsibility for any costs,
attorneys' fees, and damages which may be awarded to a successful challenger.
SECTION 3. FINDINGS.
1. The City Council previously found the Agreement consistent with Land Use Element of
the General Plan which designates the Tennis Club site as Mixed Use Horizontal 3/Park
and Recreation (MU-H3/PR). The MU-H3/PR designation on the Tennis Club site
provides for the horizontal intermixing of regional commercial office, hotel, single-family
and multi -family residential and ancillary commercial uses. The PR designation allows
active public or private recreational uses including parks (both active and passive), golf
courses, marina support facilities, aquatic facilities, tennis clubs and courts, private
recreation, and similar facilities.
2. The City Council previously found the Agreement consistent with Section 15.45.040
(Development Agreement Content) of the NBMC as it included all the necessary
components including the term, permitted uses, density and intensity of development,
and maximum height and size of proposed buildings to be developed on the Tennis Club
site, when it adopted Ordinance No. 2012-3 in 2012. With the exception of extending
the term, all of the other necessary components articulated above, remain unchanged
by this First Amendment.
3. The Planning Commission finds extension of the Agreement for one additional year is
consistent with provisions of California Government Code Sections 65864 to 65869.5 and
Chapter 15.45 (Development Agreements) of the NBMC that authorize binding
18-60
Planning Commission Resolution No. PC2022-008
Paae 3 of 4
agreements that: (i) encourage investment in, and commitment to, comprehensive
planning and public facilities financing; (ii) strengthen the public planning process and
encourage private implementation of the local general plan; (iii) provide certainty in the
approval of projects in order to avoid waste of time and resources; and (iv) reduce the
economic costs of development by providing assurance to the property owners that they
may proceed with projects consistent with existing policies, rules, and regulations. With the
exception of extending the term, all of the other necessary components articulated above,
remain unchanged by this First Amendment.
SECTION 4. DECISION.
NOW, THEREFORE, BE IT RESOLVED:
The Planning Commission of the City of Newport Beach, California hereby recommends to the
City Council:
All significant environmental concerns for the Project have been addressed in Negative
Declaration No. ND2010-008 and an Errata to Mitigated Negative Declaration No.
ND2010-008 and no new or additional impacts will result from the First Amendment. The
First Amendment does not change the Project but rather only extends the term of the
Agreement by one year. The First Amendment does not amend any development
standards, development requirements, or required mitigation measures identified in
Negative Declaration No. ND2010-008 and an Errata to Mitigated Negative Declaration
No. ND2010-008.
2. Adopt the First Amendment to Development Agreement No. DA2008-001 between the City
of Newport Beach and GRF to extend the term of the Agreement by one year, from
September 27, 2022 to September 27, 2023. Except as modified by the First Amendment,
the Planning Commission recommends the amended Agreement remain in full force and
effect.
18-61
Planning Commission Resolution No. PC2022-008
Page 4 of 4
PASSED, APPROVED, AND ADOPTED THIS 26th DAY OF MAY, 2022.
AYES: Ellmore, Klaustermeier, Kleiman, Koetting, Lowrey, and Weigand
NOES: None
ABSTAIN: None
Curtis Ellmore, Secretary
Attachment(s): Ex! �ibit A — First Amendment to Development Agreement
18-62
EXHIBIT A
First Amendment to Development Agreement No. DA2008-001
18-63
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attn: City Clerk
(Space Above This Line Is for Recorder's Use Only)
This First Amendment 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.
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
between
CITY OF NEWPORT BEACH
and
GOLF REALTY FUND
CONCERNING PROPERTIES LOCATED AT NEWPORT BEACH TENNIS CLUB
WITHIN THE
NEWPORT BEACH COUNTRY CLUB PLANNED COMMUNITY DISTRICT
18-64
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
(Pursuant to California Government Code Sections 65864-65869.5)
This FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (the "First
Amendment") is entered into and effective on the date it is recorded with the Orange County
Recorder ("Effective Date") by and between the CITY OF NEWPORT BEACH ("City"), and
GOLF REALTY FUND, a California limited partnership "Property Owner"). City and
Property Owner are sometimes collectively referred to in this First Amendment as the
"Parties" and individually as a "Party."
RECITALS
A. Property Owner is the managing owner of and owns a fee interest in title to that
certain real property located in the City of Newport Beach, County of Orange, State of California
which is more particularly described in the legal description attached as Exhibit "A" and
depicted on the site map attached hereto as Exhibit `B" ("Property"). The Property consists of
approximately seven (7) acres within the area shown on the City's Zoning Map as the Newport
Beach Country Club Planned Community District. The Property comprises the Newport Beach
Tennis Club site shown on Exhibit `B", which consists of The Villas Sub -Area, The Tennis Club
Sub -Area, and The Bungalows Sub -Area.
B. City and Property Owner entered into that certain Development Agreement
between the City of Newport Beach and Golf Realty Fund dated March 27, 2012, and recorded
in the Official Records of Orange County on January 29, 2014, as document number
2014000036369 ("Agreement") attached hereto as Exhibit "C" with a ten (10) year term.
C. On November 20, 2018, the City approved Coastal Development Permit No.
CD2017-039 to allow the demolition of the 18 existing tennis courts and construction of Tennis
Club, Villas and Bungalows at the Tennis Property, however, the Agreement was not amended
or modified.
D. The Parties now wish to enter into that First Amendment extending the term for
an additional year.
E. On May 12, 2022, the Planning Commission noticed a public hearing on this
First Amendment and continued the item to a date certain, May 26, 2022, at the conclusion of
the public hearing.
F. On May 26, 2022, the Planning Commission held a noticed public hearing on this
First Amendment and considered the testimony and information submitted by City staff,
Property Owner, and members of the public. Consistent with applicable provisions of the
Development Agreement Statute and Ordinance, the Planning Commission adopted Resolution
No. PC2022-008, recommending the City Council approve this First Amendment.
1
18-65
G. On , 2022, the City Council held a noticed public hearing on this
First Amendment and considered the testimony and information submitted by City staff,
Property Owner, and members of the public. On , 2022, consistent with
applicable provisions of the Development Agreement Statute and Ordinance, the City Council
held second reading and adopted Ordinance No. approving this First Amendment.
H. This First Amendment is consistent with the City of Newport Beach General
Plan ("General Plan"), including without limitation the General Plan's designation of the
Property as "MU-H3/PR" (Mixed Use Horizontal /(Parks and Recreation) (Anomaly 46), the
Coastal Land Use Plan's designation as "MU-H/PR (Mixed Use Horizontal / Parks &
Recreation", the Newport Beach Country Club Planned Community District that was adopted in
1997 by Ordinance No. 97-10 in order to establish appropriate zoning to regulate land use and
development of the Property consistent with the General Plan, and the Newport Beach Country
Club Planned Community Development Plan No PC2005-002 approved for the Property on
March 27, 2012 by Ordinance No. 2012-2.
L In recognition of the significant public benefits that this Agreement provides, the
City Council has found that this First Amendment: (i) is consistent with the City of Newport
Beach General Plan as of the date of this First Amendment; (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, City's police power; (iv) is consistent and has
been approved consistent with the Final Environmental Impact Report for the City of Newport
Beach General Plan 2006 Update (State Clearinghouse No. 2006011119) and the Mitigated
Negative Declaration No. ND2010-008 for the Newport Beach Country Club Planned
Community District (PA2005-002) approved by the City Council, both of which analyze the
environmental effects of the proposed development of the Project on the Property; and (v) is
consistent and has been approved consistent with provisions of California Government Code
section 65867 et seq. and Chapter 15.45 City of Newport Beach Municipal Code ("NBMC").
AGREEMENT
NOW, THEREFORE, City and Property Owner agree as follows:
1. Term of Agreement. Section 2.4 of the Agreement is hereby amended in its
entirety to read as follows:
"The term of this Agreement (the "Term") shall commence on the
Effective Date and continue until 2023, unless
otherwise terminated or modified pursuant to its terms.
Notwithstanding any other provision set forth in this Agreement to
the contrary, the provisions set forth in Article 10 and Section
13.10 (as well as any other Property Owner obligations set forth in
this Agreement that are expressly written to survive the
Termination Date) shall survive the Termination Date of this
Agreement."
2. Attorneys' Fees. Section 8.10 of the Agreement is hereby amended in its entirety
to read as follows:
0)
18-66
"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."
3. Notices. Section 13.1 of the Agreement is hereby amended in its entirety to read
as follows:
"Any notice or demand that shall be required or permitted by law
or any provision of this Agreement and First Amendment 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 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, CA 92660
Attn: City Manager
With a copy to: City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attn: City Attorney
TO PROPERTY OWNER: Golf Realty Fund
One Upper Newport Plaza
Newport Beach, CA 92660
Attn: Robert OHill
With a copy to:
3
18-67
Either Party may change the address stated in this Section 13.1 by
delivering notice to the other Party in the manner provided in this
Section 13.1, and thereafter, notices to such Party shall be
addressed and submitted to the new address. Notices delivered in
accordance with this First Amendment shall be deemed to be
delivered upon the earlier of: (i) the date received or (iii) three
business days after deposit in the mail as provided above."
4. Full Force and Effect. Except as modified by the First Amendment, the entire
Agreement, its exhibits, and the exhibits attached hereto, are incorporated herein to this First
Amendment and shall remain in full force and effect.
5. Recitals. The Recitals set forth above are true and correct and incorporated herein
by reference.
[SIGNATURES ON NEXT PAGE]
al
18-68
SIGNATURE PAGE TO
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
GOLF REALTY FUND, a California
limited partnership
By:
Its:
By:
Its:
"CITY"
CITY OF NEWPORT BEACH, a California
municipal corporation
Lo
ATTEST:
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
Kevin Muldoon, Mayor
Aaron C. Harp, City Attorney
Attachments: Exhibit A — Legal Description of Property
Exhibit B — Depiction of Property
Exhibit C — Development Agreement Recorded January 29, 2014
5
18-69
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 } SS.
On 520 before me, , Notary Public,
personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signatures(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
ACKNOWLEDGMENT
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.
(seal)
State of California
County of } SS.
On 520 before me, , Notary Public,
personally appeared , 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 signatures(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)
Co
18-70
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Parcel 1 and Parcel 2 of Parcel Map 94-102, in the City of Newport Beach, County of Orange,
State of California, as per Map filed in Book 316, Pages 3 to 6, inclusive, of Parcel Maps, in the
office of the County Recorder of Orange County.
A-1
18-71
EXHIBIT B
EPICTION OF PROPERTY
i
18-72
EXHIBIT C
DEVELOPMENT AGREEMENT RECORDED JANUARY 29, 2014
W
18- 73
1— " --" Re�rded ' Official Records, Orange County
. . _.A gh Nqui e , Clerk -Recorder
RECORDING REQUESTED BY I� �; I � J II I I II IIIII I I III II jj� NO FEE
AND WHEN RECORDED RETURN`TO` -?* $, JDa 6 4 7 3 5 4 0$
2014000036369 8:05 am 01/29114
City of Newport Beach '�'�#22 Al2 32
3300 Newport Boulevard-0t0(0.00 0.00 0.00 93.00 0.00 0.00 0.00
Newport Beach, CA 92663-3884 r
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
GOLF REALTY FUND
CONCERNING PROPERTIES LOCATED IN NEWPORT CENTER
WITHIN THE
NEWPORT BEACH COUNTRY CLUB PLANNED COMMUNITY DISTRICT
A10-00773 03.07.12 v3
18-74
DEVELOPMENT AGREEMENT
(Pursuant to California Government Code Sections 65864-65869.5)
This DEVELOPMENT AGREEMENT (the "Agreement") is dated for reference
purposes as of the aday of 1A A(Gh , 2012 (the "Agreement Date"), and is being entered
into by and between the City of Newport Beach ("City"), and Golf Realty Fund, a California
limited partnership "Property Owner"). City and Property Owner are sometimes collectively
referred to in this Agreement as the "Parties" and individually as a "Party."
RECITALS
A. Property Owner is the managing owner of and owns a fee interest in title to that
certain real property located in the City of Newport Beach, County of Orange, State of California
which is more particularly described in the legal description attached as Exhibit "A" and
depicted on the site map attached hereto as Exhibit B (the, "Property"). The Property consists of
approximately 7 acres within the area shown on the City's Zoning Map as the Newport Beach
Country Club Planned Community District. The Property comprises the area shown on Exhibit
B as The Villas Sub- Area, The Tennis Club Sub -Area, and The Bungalows Sub -Area.
B. In order 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 in order 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 (the "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" (the "Development Agreement Ordinance"). This Agreement is
consistent with the Development Agreement Ordinance.
D. As detailed in Section 3 of this Agreement, Property Owner has agreed to provide
the following significant public benefits as consideration for this Agreement: Visitor -Serving
Uses within the Coastal Zone, and other economic contributions including the payment of a
Public Benefit Fee.
E. This Agreement is consistent with the City of Newport Beach General Plan
("General Plan"), including without limitation the General Plan's designation of the Property as
"MU-H3/PR" (Mixed Use Horizontal /(Parks and Recreation) (Anomaly 46), the Coastal Land
Use Plan's designation as "MU-H/PR (Mixed Use Horizontal / Parks & Recreation", the
Newport Beach Country Club Planned Community District that was adopted in 1997 by
Ordinance No. 97-10 in order to establish appropriate zoning to regulate land use and
development of the Property consistent with the General Plan, and the Newport Beach Country
Club Planned Community Development Plan No PC2005-002 approved for the Property on
March 27, 2012 by Ordinance No. 2 O 12" 2- -
A10-00773 v4 01.06.11 FINAL - I -
18- 75
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, City's police power; (iv) is consistent and has been approved
consistent with the Final Environmental Impact Report for the City of Newport Beach General
Plan 2006 Update (State Clearinghouse No. 2006011119) and the Mitigated Negative
Declaration No. ND2010-008 for the Newport Beach Country Club Planned Community District
(PA a 0 0 5 -_I 40) approved by the City Council on or before the Agreement Date, both of
which analyze the environmental effects of the proposed development of the Project on the
Property; 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.
G. On October 20, 2011 and November 17, 2011 , City's Planning Commission held
public hearings on this Agreement, and on November 17, 2011, 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 24, 2012 and March 13, 2012 , the City Council also held public
hearings on this Agreement and considered the Planning Commission's recommendations and
the testimony and information submitted by City staff, Property Owner, and members of the
public. On March 27, 2012 , consistent with applicable provisions of the Development
Agreement Statute and Development Agreement Ordinance, the City Council adopted its
Ordinance No. 2012-3 (the "Adopting Ordinance"), finding this Agreement to be consistent with
the City of Newport Beach General Plan and approving this Agreement.
AGREEMENT
NOW, THEREFORE, City and Property Owner 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. 2012-3 approving and
adopting this Agreement.
"Agreement' shall mean this Development Agreement, as the same may be amended
from time to time.
"Agreement Date" shall mean March 27, 2012, which date is the date the City Council
adopted the Adopting Ordinance.
"CE A" shall mean the California Environmental Quality Act (California Public
Resources Code Sections 21000-21177) and the implementing regulations promulgated
A10-00773 v4 01.06.11 FINAL 2
18-76
thereunder by the Secretary for Resources (California Code of Regulations, Title 14, section
15000 et seq.) ("CEQA Guidelines"), as the same may be amended from time to time.
"City" shall mean the City of Newport Beach, a California charter city.
"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.
"Develop" 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 terms "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.
"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 the Newport Beach Planned CommunityDevelopment
Plan No. PC2005-002 for the Property adopted by Ordinance No. 2012-2, Vesting Tentative
Tract Map No. NT2005-003, Site Development Review No. SD2011-002 as approved by
Resolution No. 2012-10 for the Property, Limited Term Permit No. XP2011-004, and
Al0-00773 v4 01.06.11 FINAL 3
18-77
Conversion of Development Rights as approved by City Council on or before the Agreement
Date, as the same may be amended from time to time consistent with this Agreement.
"Development Regulations" shall mean the following regulations as they are in effect as
of the Agreement 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 Agreement Date that impairs or restricts Property Owner's rights
set forth in this Agreement, unless such amendment or modification is expressly authorized by
this Agreement or is agreed to by Property Owner in writing: the General Plan; the Development
Plan; and, to the extent not expressly superseded by the Development Plan or this Agreement, all
other land use and subdivision regulations governing the permitted uses, density and intensity of
use, design, improvement, and construction standards and specifications, procedures for
obtaining required City permits and approvals for development, and similar matters that may
apply to development of the Project on the Property during the Term of this Agreement that are
set forth in Title 15 of the Municipal Code (buildings and construction), Title 19 of the
Municipal Code (subdivisions), and Title 20 of the Municipal Code (planning and zoning), but
specifically excluding all other sections of the Municipal Code, including without limitation Title
5 of the Municipal Code (business licenses and regulations). 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 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 the following dates, as applicable: (i) the date
that is thirty (30) days after the Agreement Date; (ii) if a referendum concerning the Adopting
Ordinance 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 such Development
Regulations and becomes effective, if applicable; (iii) if a lawsuit is timely filed challenging the
validity or legality of the Adopting Ordinance, this Agreement, 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,
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 of
approval of a coastal development permit for the Project; (v) the date of or if a lawsuit is timely
filed challenging the validity or legality of the approval of a coastal development permit for the
Project, the date on which said challenge is finally resolved in favor of the validity or legality of
the coastal development permit for the Project, 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. Notwithstanding the
foregoing, the Effective Date shall be no later than one hundred eighty (180) days from the
Agreement Date. 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.
A10-00773 v4 01.06.11 FINAL 4
18-78
"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 seq., 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 sew., 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 seq., as amended; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et seq., as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et seq., as amended; the Federal Safe
Drinking Water Act, 42 U.S.C. Sections 300f e"se . as amended; the Federal Radon and Indoor
Air Quality Research Act, 42 U.S.C. Sections 7401 "se ., as amended; the Occupational Safety
and Health Act, 29 U.S.C. Sections 651 et seq., as amended; and California Health and Safety
Code Section 25100, et seq.
"General Plan" shall mean City's 2006 General Plan adopted by the City Council on July
25, 2006, by Resolution No. 2006-76, as amended through the Agreement Date but excluding
any amendment after the Agreement Date that impairs or restricts Property Owner's rights set
forth in this Agreement, unless such amendment is expressly authorized by this Agreement, is
authorized by Sections 8 or 9, or is specifically agreed to by Property Owner. 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.
"Party" or "Parties" shall mean either City or Property Owner or both, as determined by
the context.
A10-00773 v4 01.06.11 FINAL 5
18-79
"Project" shall mean all on -site and off -site improvements that Property Owner is
authorized and/or may be required to construct with respect to each parcel of the Property, 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 described in Exhibit A and generally depicted on Exhibit B as The Tennis
Club, The Villas, and The Bungalows Sub -Areas shown on Exhibit B .
"Property Owner" shall mean Golf Realty Fund, a California limited partnership and any
successor or assignee, including lessees, to all or any portion of the right, title, and interest of
Golf Realty Fund in and to ownership of all or a portion of the Property.
"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 Property Owner is permitted to obtain to Develop the Project on and with
respect to the Property after the Agreement Date consistent with the Development Regulations.
"Term" shall have the meaning ascribed in Section 2.4 of this Agreement.
"Termination Date" and "Lot Termination Date" shall have the meaning ascribed in
Section 2.4 of this Agreement.
"Transfer" shall have the meaning ascribed in Section 11 of this Agreement.
2. General Provisions.
2.1 Plan Consistency, Zoning Implementation.
This Agreement and the Development Regulations applicable to the Property are
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 Property Owner Representations and Warranties Regarding Ownership of the
Property and Related Matters Pertaining to this Agreement
Property Owner and each person executing this Agreement on behalf of Property Owner
hereby represents and warrants to City as follows: (i) Property Owner or any co-owner
comprising Property Owner is a legal entity and that such entity is duly formed and existing and
is authorized to do business in the State of California; (ii) if Property Owner or any co-owner 0
comprising Property Owner is a natural person that such natural person has the legal right and
capacity to execute this Agreement; (iii) that all actions required to be taken by all persons and
entities comprising Property Owner to enter into this Agreement have been taken and that
A10-00773 v4 01.06.11 FINAL 6
i i1
Property Owner has the legal authority to enter into this Agreement; (iv) that to the best of
Property Owner's knowledge, Property Owner'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 Property Owner or any person or entity comprising Property Owner has to any third party;
(v) that neither Property Owner nor any co-owner comprising Property Owner is the subject of
any voluntary or involuntary petition in bankruptcy; and (vi) that to the best of Property Owner's
knowledge, Property Owner has the authority and ability to enter into or perform any of its
obligations set forth in this Agreement.
2.4 Term.
The term of this Agreement (the "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 either
Party reasonably determines that the Effective Date of this Agreement will not occur because (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, a coastal development permit for
the Project 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 shall have the right to terminate this Agreement upon delivery of a
written notice of termination to the other Party, in which event neither Party shall have any
further rights or obligations hereunder except that Property Owner'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 similarly be null and
void at such time.
The Termination Date shall be the earliest of the following dates: (i) the tenth (loth)
anniversary of the Effective Date, as said date may be extended in accordance with Section 5 of
this Agreement; (ii) such earlier date that this Agreement may be terminated in accordance with
Articles 5, 7, and/or Section 8.3 of this Agreement and/or Sections 65865.1 and/or 65868 of the
Development Agreement Statute; (iii) as to any separate legal lot within the Property (but not as
to the balance of the Property or the portion thereof that remains subject to this Agreement at
such time), upon the "Lot Termination Date" (defined below); or (iv) completion of the Project
in accordance with the terms of this Agreement, including Property Owner'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.
As used herein, the term "Lot Termination Date" for any separate legal lot within the
Property means the date on which all of the following conditions have been satisfied with respect
to said lot: (i) the lot has been finally subdivided and sold or leased (for a period longer than one
year), individually or in a "bulk" of four or fewer lots, to a member of the public or other
AI 0-00773 v4 01.06.11 FINAL 7
ultimate user; (ii) a final Certificate of Occupancy or "Release of Utilities" has been issued for
the building or buildings approved for construction on said lot.
Notwithstanding any other provision set forth in this Agreement to the contrary, the
provisions set forth in Article 10 and Section 13.10 (as well as any other Property Owner
obligations set forth in this Agreement that are expressly written to survive the Termination
Date) shall survive the Termination Date of this Agreement.
3. Public Benefits.
3.1 Public Benefit Fee.
As consideration for City's approval and performance of its obligations set forth in this
Agreement, Property Owner shall pay to City a fee that shall be in addition to any other fee or
charge to which the Property and the Project would otherwise be subject (herein, the "Public
Benefit Fee") in the sum of (i) Ninety-three thousandDollars ($ 93,000per each residential
dwelling units; and (ii) Ten dollars ($10) per square foot of construction for the proposed golf
clubhouse'; and (iii) Ten dollars ($10) per square foot of construction to the proposed tennis
clubhouse, with the unpaid balance of said Public Benefit Fee increased on the first January 1
following the Effective Date of this Agreement by the percentage increase in the CPI Index
between the Effective Date and said January 1st date (the first "Adjustment Date") and thereafter
with the unpaid balance of said Public Benefit Fee increased on each subsequent January 1
during the Term of this Agreement (each, an "Adjustment Date") by the percentage increase in
the CPI Index in the year prior to the applicable 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
Effective Date of this Agreement falls on July 1 and the most recently available CPI Index figure
on the first Adjustment Date (January 1 of the following year) is the CPI Index for November of
the preceding year, the percentage increase in the CPI Index for that partial year (a 6-month
period) shall be calculated by comparing the CPI Index for November of the preceding year with
the CPI Index for May of the preceding year (a 6-month period). In no event, however, shall
application of the CPI Index reduce the amount of the Public Benefit Fee (or unpaid portion
thereof) below the amount in effect prior to any applicable Adjustment Date. Property Owner
shall pay the Public Benefit Fee at the following time(s): (i) As to the residential dwelling units,
at the issuance of the building permit for each individual residential unit; and (ii) as to the golf
clubhouse and tennis clubhouse construction, at the time each building permit is issued to
Property Owner or on Property Owner's behalf. Notwithstanding any other provision set forth in
this Agreement to the contrary, during the Term of this Agreement City shall not increase the
Public Benefit Fee except pursuant to the CPI Index as stated in this Section 3.1. The Public Fee
Benefit Fee shall be calculated based on the total square feet of construction for the proposed
golf clubhouse and proposed tennis clubhouse Property Owner shall not be entitled to any credit
or offset to the Public Benefit Fee for any existing buildings or structures. Property Owner
The City has entered into a separate Development Agreement with The Newport Beach Country Club, Inc.,
Development Agreement No. (the "NBCC DA"), pertaining to the development of a golf
clubhouse on the adjacent property. This requirement to pay a Public Benefit Fee for the construction of
the golf clubhouse shall not apply to Property Owner, unless Property Owner itself, or its successors or
assignees, is seeking issuance of permits for the construction of a golf clubhouse on the adjacent property.
AI 0-00773 v4 01.06.11 FINAL 8
acknowledges by its approval and execution of this Agreement that it is voluntarily agreeing to
pay the Public Benefit Fee, that its obligation to pay the Public Benefit Fee is an essential term of
this Agreement and is not severable from City's obligations and Property Owner's vesting rights
to be acquired hereunder, and that Property Owner 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 such fee 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 Property
Owner's default, if Property Owner shall fail to timely pay any portion of the Public Benefit Fee
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.
3.2 Other Public Benefits.
The development of the Project will include the addition of Visitor -Serving Uses
consistent with the City's Coastal Land Use Plan and will provide a unique amenity for those
visitors whose interests include tennis. It is anticipated that the Property will continue to host
numerous events of significant social and economic benefit to the City, its citizens, businesses
and charitable institutions.
4. Development of Project.
4.1 Applicable Regulations; Property Owner'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) Property Owner 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 City's discretion with respect to (i) review and approval
requirements contained in the Development Regulations, (ii) exercise of any discretionary
authority City retains under the Development Regulations, (iii) the approval, conditional
approval, or denial of any Subsequent Development Approvals applied for by Property Owner,
or that are required, for Development of the Project as of the Agreement Date provided that all
such actions are consistent with the Development Regulations, 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 referred to in clauses (i)-(iv) of this sentence, City reserves
its full discretion to the same extent City 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 Property Owner's rights with respect to any laws, regulations, rules, or official policies of
any other 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
A10-00773 v4 01.06.11 FINAL 9
official policies are adopted or applied to the Property or the Project prior or subsequent to the
Agreement Date.
Property Owner has expended and will continue to expend substantial amounts of time
and money in the planning and entitlement process to permit Development of the Project in the
future. Property Owner represents and City acknowledges that Property Owner would not make
these expenditures without this Agreement, and that Property Owner is and will be making these
expenditures in reasonable reliance upon obtaining vested rights to Develop the Project as set
forth in this Agreement.
Property Owner may apply to City for permits or approvals necessary to modify or
amend the Development specified in the Development Regulations, provided that unless this
Agreement also is amended, 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. In addition, Property Owner may apply to City for approval of
minor amendments to existing tentative tract maps, tentative parcel maps, 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 Agreement Date to the extent it conflicts with this
Agreement. 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 Ca1.3d 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 Property
Owner shall have the vested right to Develop the Project on and with respect to the Property at
the rate, timing, and sequencing that Property Owner deems appropriate within the exercise of
Property Owner'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 Agreement 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 Property Owner's
A10-00773 v4 01.06.11 FINAL 10
i i�
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. 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
Property Owner 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 Property Owner, 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 Citv 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 Property
Owner 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, Property Owner 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 Property Owner and the Project in the absence of this Agreement; provided, however,
that to the extent the scope and extent of a particular Development Exaction (excluding any
development impact fee) for the Project has been established and fixed by City in the conditions
of approval for any of the Development Regulations approved on or before the Agreement Date,
City shall not alter, increase, or modify said Development Exaction in a manner that is
inconsistent with such Development Regulations without Property Owner's prior written consent
or as may be otherwise required pursuant to overriding federal or state laws or regulations
(Section 4.3.5 hereinbelow). In addition, nothing in this Agreement is intended or shall be
deemed to vest Property Owner 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; (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
A10-00773 v4 01.06.11 FINAL 11
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
Chapter 3.12 of City's Municipal Code.
4.3.5 Overriding Federal and State Laws and Regulations. Federal and state
laws and regulations that override Property Owner'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) Property Owner 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 Property Owner 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 Property Owner 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 Property Owner agree to preserve the terms of this Agreement and
the rights of Property Owner as derived from this Agreement to the maximum feasible extent
while resolving the conflict. City agrees to cooperate with Property Owner at no cost to City in
resolving the conflict in a manner which minimizes any financial impact of the conflict upon
Property Owner. City also agrees to process in a prompt manner Property Owner's proposed
changes to this Agreement, 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 Property Owner's
vested rights under this Agreement.
4.3.7 Uniform Building Standards. Existing and future building and building -
related standards set forth in the uniform 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 Property Owner 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.
A10-00773 v4 01.06.11 FINAL 12
i i •
4.3.9 No Guarantee or Reservation of Utility Cqpacity. 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 Property
Owner 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
that inadequate utility capacity exists to adequately serve the Project at the time Development is
scheduled to commence.
4.4 Tentative Subdivision Maps.
City agrees that Property Owner 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. 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.
Other than modifications of this Agreement under Section 8.3 of this 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 City of
Newport Beach Municipal Code section 15.45.060 or by unilateral termination by City in the
event of an uncured default of Property Owner.
6. Enforcement.
Unless this Agreement is amended, canceled, modified, or suspended as authorized
herein or pursuant to California Government Code section 65869.5, 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 Property Owner'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. Property Owner (including any successor to the Property Owner
executing this Agreement on or before the Agreement Date) shall pay City a reasonable fee in an
amount City may reasonably establish from time to time to cover the actual and necessary 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 Property Owner Obligation to Demonstrate Good Faith Compliance
A10-00773 v4 01.06.11 FINAL 13
During each annual review by City, Property Owner is required to demonstrate good faith
compliance with the terms of the Agreement. Property Owner agrees to furnish such evidence of
good faith compliance as City, in the reasonable exercise of its discretion, may require, thirty
(30) days prior to each anniversary of the Effective Date during the Term.
7.3 Procedure.
The City Council of City shall conduct a duly noticed hearing and shall determine, on the
basis of substantial evidence, whether or not Property Owner has, for the period under review,
complied with the terms of this Agreement. If the City Council finds that Property Owner has so
complied, the annual review shall be concluded. If the City Council finds, on the basis of
substantial evidence, that Property Owner has not so complied, written notice shall be sent to
Property Owner by first class mail of the City Council's finding of non-compliance, and Property
Owner shall be given at least ten (10) days to cure any noncompliance that relates to the payment
of money and thirty (30) days to cure any other type of noncompliance. If a cure not relating to
the payment of money cannot be completed within thirty (30) days for reasons which are beyond
the control of Property Owner, Property Owner must commence the cure within such thirty (30)
days and diligently pursue such cure to completion. If Property Owner 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
Property Owner'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 Property Owner 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 have the right to 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 (ten (10) days if the
Default relates to the failure to timely make a monetary payment due hereunder and not less than
thirty (30) days in the event of non -monetary Defaults) in which the Default must be cured (the
"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
quickly as possible, and in no event later than thirty (30) days after it receives the Notice of
Default, and thereafter diligently pursue said cure to completion.
8.2 Default by Property Owner.
A10-00773 v401.06,11 FINAL 14
i i i
If Property Owner is alleged to have committed a non -monetary Default and it disputes
the claimed Default, it may make a written request for an appeal hearing before the City Council
within ten (10) days of receiving the Notice of Default, and a public hearing shall be scheduled at
the next available City Council meeting to consider Property Owner's appeal of the Notice of
Default. Failure to appeal a Notice of Default to the City Council within the ten (10) day period
shall waive any right to a hearing on the claimed Default. If Property Owner's appeal of the
Notice of Default is timely and in good faith but after a public hearing of Property Owner's
appeal the City Council concludes that Property Owner is in Default as alleged in the Notice of
Default, the accrual date for commencement of the thirty (30) day Cure Period provided in
Section 8.1 shall be extended until the City Council's denial of Property Owner's appeal is
communicated to Property Owner.
8.3 Cites Option to Terminate Agreement
In the event of an alleged Property Owner Default, City may not terminate this
Agreement without first delivering a written Notice of Default and providing Property Owner
with the opportunity to cure the Default within the Cure Period, as provided in Section 8.1, and
complying with Section 8.2 if Property Owner timely appeals any Notice of Default with respect
to a non -monetary 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 Property Owner. Any such judicial challenge must
be brought within thirty (30) days of service on Property Owner, 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. It is the intention of the Parties that,
while the City Council may declare a default and initiate termination of this Agreement on the
basis of substantial evidence in the administrative record, if the declaration of default is
contested in court, the court will review the default claim de novo and base its decision on
whether the preponderance of evidence supports the City Council's finding of breach.
8.4 Default by City.
If Property Owner alleges a City Default and alleges that the City has not cured the
Default within the Cure Period, Property Owner may pursue any equitable remedy available to it
under this Agreement, 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 Property Owner's performance hereunder shall neither be a
Property Owner Default nor constitute grounds for termination or cancellation of this Agreement
by City and shall, at Property Owner's option (and provided Property Owner delivers written
notice to City within thirty (30) 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 either 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.
8.6 Specific Performance Remedy.
A10-00773 v4 01.06.11 FINAL 15
i i �
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 Property Owner 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. Property Owner 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 Property Owner or City for
such efforts. For the above reasons, City and Property Owner agree that damages would not be
an adequate remedy if either City or Property Owner fails to carry out its obligations under this
Agreement. Therefore, specific performance of this Agreement is necessary to compensate
Property Owner if City fails to carry out its obligations under this Agreement or to compensate
City if Property Owner falls to carry out its obligations under this Agreement.
8.7 Monetary Damages.
The Parties agree that monetary damages shall not be an available remedy for either 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 Property Owner as set forth herein; and (ii) nothing in this Section 8.7 is intended
or shall be interpreted to limit or restrict Property Owner'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.
8.8 Additional City Remedy for Property Owner's Default
In the event of any Default by Property Owner, 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 Property
Owner's Default without recourse from Property Owner 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.
8.10 Recovery of Legal Expenses by Prevailing Partin 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 recover all of its actual and reasonable 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 expert witness fees, attorneys' fees, and costs of investigation and preparation
before initiation of the Action. The right to recover these costs and expenses shall accrue upon
initiation of the Action, regardless of whether the Action is prosecuted to a final judgment or
decision.
Al0-00773 v4 01.06.11 FINAL 16
i •I
9. Force Majeure.
Neither 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 Property Owner's obligation to pay Public
Benefit Fees, be extended pursuant to this Section.
10. Indemnity Obligations of Property Owner.
10.1 Indemnity Arising From Acts or Omissions of Property Owner.
Property Owner shall indemnify, defend, and hold harmless City and City's officials,
employees, agents, attorneys, and contractors (collectively, the "City's Affiliated Parties") from
and against all suits, claims, liabilities, losses, damages, penalties, obligations, and expenses
(including but not limited to attorneys' fees and costs) (collectively, a "Claim") that may arise,
directly or indirectly, from the acts, omissions, or operations of Property Owner or Property
Owner's agents, contractors, subcontractors, agents, or employees in the course of Development
of the Project or any other activities of Property Owner relating to the Property or pursuant to
this Agreement. City shall have the right to select and retain counsel to defend any Claim filed
against City and/or any of City's Affiliated Parties, and Property Owner shall pay the reasonable
cost for defense of any Claim. 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, Property Owner shall
indemnify, defend, and hold harmless City and City's Affiliated Parties from and against any
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. Said indemnity obligation shall include payment of attorney's fees, expert
witness fees, and court costs. City shall promptly notify Property Owner of any such Claim and
City shall cooperate with Property Owner in the defense of such Claim. If City fails to promptly
notify Property Owner of such Claim, Property Owner shall not be responsible to indemnify,
defend, and hold City harmless from such Claim until Property Owner is so notified and if City
fails to cooperate in the defense of a Claim Property Owner 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 defense costs for its separate counsel shall be included in
Property Owner's indemnity obligation, provided that such counsel shall reasonably cooperate
with Property Owner in an effort to minimize the total litigation expenses incurred by Property
A10-00773 0 01.06.11 FINAL 1
18-91
Owner. In the event either City or Property Owner recovers any attorney's fees, expert witness
fees, costs, interest, or other amounts from the party or parties asserting the Claim, Property
Owner shall be entitled to retain the same (provided it has fully performed its indemnity
obligations hereunder). 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 EnvironmentalIndemnity.
In addition to its indemnity obligations set forth in Section 10.1, from and after the
Agreement Date Property Owner 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 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 Property Owner in connection with Property Owner's
Development of the Project. The foregoing indemnity obligations shall not apply to any
Hazardous Substance placed or stored on a separate legal lot within the Property after the Lot
Termination Date for said lot, as provided in Section 2.4 of this Agreement. The indemnity
provisions in this Section 10.3 shall commence on the Agreement Date, regardless of whether the
Effective Date occurs, and shall survive the Termination Date.
11. Assignment.
Went.
Property Owner shall have the right to sell, transfer, or assign (hereinafter, collectively, a
"Transfer") Property Owner's fee interest in to the Property, in whole or in part, to any person,
partnership, joint venture, firm, or corporation (which successor, as of the effective date of the
Transfer, shall become the "Property Owner" 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 Property Owner'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
Property Owner's rights or interest under this Agreement shall be made unless made together
with the Transfer of all or a part of the Property; and (ii) prior to the effective date of any
proposed Transfer, Property Owner (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 Property Owner and in a form subject to the reasonable
approval of the City Attorney of City (or designee), pursuant to which the transferring Property
Owner assigns to the successor Property Owner and the successor Property Owner assumes from
the transferring Property Owner all of the rights and obligations of the transferring Property
Owner with respect to 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 off of the
Al0-00773 0 01.06.11 FINAL 18
18-92
portion of the Property so Transferred that are a condition precedent to the successor Property
Owner's right to develop the portion of the Property so Transferred.
Notwithstanding any Transfer, the transferring Property Owner shall continue to be
jointly and severally liable to City, together with the successor Property Owner, to perform all of
the transferred obligations set forth in or arising under this Agreement unless the transferring
Property Owner is given a release in writing by City, which release shall be only with respect to
the portion of the Property so Transferred in the event of a partial Transfer. City shall provide
such a release upon the transferring Property Owner's full satisfaction of all of the following
conditions: (i) the transferring Property Owner 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 Property Owner 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 Property Owner 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 Property Owner either (A) provides
City with substitute security equivalent to any security previously provided by the transferring
Property Owner to City to secure performance of the successor Property Owner's obligations
hereunder with respect to the Property or the portion of the Property so Transferred or (B) if the
transferred obligation in question is not a secured obligation, the successor Property Owner
either provides security reasonably satisfactory to City or otherwise demonstrates to City's
reasonable satisfaction that the successor Property Owner 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.
12. Mortgagee Rights.
12.1 Encumbrances on Property.
The Parties agree that this Agreement shall not prevent or limit Property Owner 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 Property
Owner or other affirmative covenants of Property Owner, or to guarantee this performance
A10-00773 v4 01.06.11 FINAL 19
18-93
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 Property Owner 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 Mortga eg e_Ri t 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 Property Owner of its obligations set forth in this Agreement.
Each Mortgagee shall have a further right, but not an obligation, to cure the Default
within ten (10) days after receiving a Notice of Default with respect to a monetary Default and
within thirty (30) days after receiving a Notice of Default with respect to a non -monetary
Default. If the Mortgagee can only remedy or cur 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 thirty (30) 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 thirty (30)-day period. In the case of a non -monetary Default
that cannot with diligence be remedied or cured within thirty (30) 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 thirty (30) days and diligently
prosecutes the cure to completion.
A10-00773 v4 01.06.11 FINAL 20
13. Miscellaneous Terms.
13.1 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
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, California 92663-3884
Attn: City Manager
With a copy to: City Attorney
City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, California 92663-3884
TO PROPERTY OWNER: Golf Realty Fund
One Upper Newport Plaza
Newport Beach, California 92660
Attn: Robert O Hill
With a copy to: Tim Paone
Cox Castle & Nicholson, LLP
19800 MacArthur Blvd., Suite 500
Irvine, CA.. 92612
Either Party may change the address stated in this Section 13.1 by delivering notice to the
other Party in the manner provided in this Section 13.1, and thereafter notices to such Party 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 (iii) three
business days after deposit in the mail as provided above.
13.2 Private Undertaking.
Any future Development of the Project is a private undertaking. Neither Party will be
acting as the agent of the other in any respect, and each Party will be 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
relationship between the Parties is that of a government entity regulating the Development of
private property by the owner or user of the Property.
A10-00773 v4 01.06.11 FINAL 21
18-95
13.3 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.
13.4 Estoppel Certificates.
At any time, either Party may deliver written notice to the other Party requesting that 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.
The Party requested to furnish an estoppel certificate shall execute and return the
certificate within thirty (30) days following receipt. Requests for the City to furnish an estoppel
certificate shall include reimbursement for all administrative costs incurred by the City including
reasonable attorneys fees incurred by the City in furnishing an estoppels certificate.
13.5 Rules of Construction.
The singular includes the plural; the masculine and neuter include the feminine; "shall" is
mandatory; and "may" is permissive.
13.6 Time Is of the Essence.
Time is of the essence regarding each provision of this Agreement as to which time is an
element.
13.7 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.
13.8 Counterparts.
This Agreement may be executed in two 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 and the same agreement.
A10-00773 v4 01.06.11 FINAL 22
i �•
13.9 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.
13.10 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 neither 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 Property Owner shall not receive
any of the benefits of this Agreement if any of Property Owner'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 Property Owner shall cooperate as required, despite this Agreement, should third party
litigation result in the nonperformance of Property Owner's obligations under this Agreement.
The provisions of this Section 13.10 shall apply regardless of whether the Effective Date occurs
and after the Termination Date.
13.11 Construction.
This Agreement has been drafted after negotiation and revision. Both City and Property
Owner are sophisticated parties who were represented by independent counsel throughout the
negotiations or City and Property Owner had the opportunity to be so represented and voluntarily
chose to not be so represented. City and Property Owner 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 applicable principle or presumptions of contract construction or
interpretation, if any, shall be used to construe the whole or any part of this Agreement in favor
of or against either Party.
13.12 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. All provisions of this
Agreement shall be enforceable as equitable servitudes and constitute covenants running with the
land. Each covenant to do or refrain from doing some act hereunder with regard to Development
of the Property: (i) is 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 13.12 applies regardless of whether the instrument by
Al0-00773 v4 01.06.11 FINAL 23
18-97
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 Section 11.
13.13 No Third Party Beneficiaries.
The only Parties to this Agreement are City and Property Owner. 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.
13.14 Applicable Law and Venue.
This Agreement shall be construed and enforced consistent with the internal 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.
13.15 Section Headings.
All section headings and subheadings are inserted for convenience only and shall not
affect construction or interpretation of this Agreement.
13.16 Incorporation of Recitals and Exhibits
All of the Recitals are incorporated into this Agreement by this reference. Exhibits A and
B are attached to this Agreement and incorporated by this reference as follows:
EXHIBIT I DESCRIPTION
DESIGNATION
A I Legal Description of Property
B I Depiction of the Property
13.17 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
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.
A10-00773 v4 01.06.11 FINAL 24
i �i
SIGNATURE PAGE TO
DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
el
By:
Its:
By:
Its:
"CITY"
CITY OF NE - ORT`BEAC
By:
Its: Mayor
A 1 EST-
0 /-�
o�
City Clerk''
P ROVED AS TO FORM:
/' ``� Aaron Harp, City Attorney
A10-00773 v4 01.06.11 FINAL 25
18-99
STATE OF CALIFORNIA
COUNTY OF ORANGE
On N1 c) V j 2 v \'> , before me, -� tV �', ( C. t<. �N i� ili�;� �` -1 , a Notary Public
in and for said State, personally appeared �r1, ,� c -i �(�;i�3 L�11���i\; IZ. ,
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 signatures(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.
Notary Publ c in and i
said 19.ou v and State
STATE OF CALIFORNIA
COUNTY OF ORANGE
JENNIFER ANN MULVEY
Commission # 2045022
z :�� Notary Public - California z
z ` "�' Orange County
My Comm. Ex ices Oct 12, 2017+
ACKNOWLEDGMENT
On , before me, , a Notary
Public in and for said State, 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 signatures(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.
Notary Public in and for
said County and State
18-100
SIGNATURE PAGE TO
DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
Its:
By:
Its:
"CITY"
CITY OF NEWPORT BEACH
i
By:
Its: Mayor
ATTEST:
City Clerk
ROVED AS TO FORM:
aron Harp, City Attorney
AIO-00773 v4 01.06.11 FINAL 25
18-101
STATE OF CALIFORNIA
COUNTY OF ORANGE
On (i .q -�i ,t7 t .�}— , before me, ;� ,—,��� ,-�n; , a Notary Public
in and for said State, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(%) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/sloe/t%eyexecuted the same
in his/hof/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument
the person(, 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.
4
Witness my hand and official seal. SHANE THOMAS JOHNSON
Commission # 1991314
a Notary Public - Ca!ifornia D
6, z F.�;� .. y
Orange County
My Comm. Expires Sep 16, 2016
Notary Public in and for
said County and State
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF ORANGE
On , before me, , a Notary
Public in and for said State, 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 signatures(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.
Notary Public in and for
said County and State
18-102
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The Property:
Parcel 1 and Parcel 2 of Parcel Map 94-102, in the City of Newport Beach, County of Orange,
State of California, as per Map filed in Book 316, Pages 3 to 6, inclusive, of Parcel Maps, in the
office of the County Recorder of Orange County.
A10-00773 v4 01.06.11 FINAL
18-103
Page
EXHIBIT B
DEPICTION OF PROPERTY
TO BE INSERTED
AIO.00773 v4 01.06.11 FINAL 1
18-104
EXHIBIT B
DEPICTION OF PROPERY
MASTER PLAN
•THETENNIS CLUB- Sub -Area
1 new stadium court
Tennis Clubhouse
• THE VILLAS - Sub Area
5 single family homes
• THE BUNGALOWS -Sub Area
27 guest rental units
• THE GOLF CLUB - Sub Area
NOT A PART
— NBCC
Planned Community
- - s t e e r es s
EXHIBI
AF.CHITECTURE
1OF1
18-105