HomeMy WebLinkAbout04 - Approving Newport Place Planned Community Development Plan Amendment; and Approving Development Agreement for the Residences at 1401 Quail Street (PA2023-0040)Q SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
April 23, 2024
Agenda Item No. 4
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Assistant City Manager/Community Development
Director - 949-644-3232, sjurjis@newportbeachca.gov
PREPARED BY: David Lee, Senior Planner - 949-644-3225,
dlee@newportbeachca.gov
TITLE: Ordinance No. 2024-10: Approving Newport Place Planned
Community Development Plan Amendment; and Ordinance
No. 2024-11: Approving Development Agreement for the Residences
at 1401 Quail Street (PA2023-0040)
ABSTRACT:
For the City Council's consideration is the second reading and adoption of Ordinance
No. 2024-10, approving an amendment for the Newport Place Planned Community
Development Plan and Ordinance No. 2024-11, approving a development agreement for
The Residences at 1401 Quail Street (Project) located at 1401 Quail Street, in the Airport
Area. The Project is to demolish an existing office building and develop 67 for -sale
condominium units, including a 146-space parking structure.
RECOMMENDATIONS:
a) Find Addendum No. 8 to the 2006 General Plan Update Program Environmental
Impact Report and 2008-2014 City of Newport Beach Housing Element Update Initial
Study/Negative Declaration prepared for the Residences at 1401 Quail Street Project
(PA2022-0040) in compliance with the California Environmental Quality Act (CEQA),
the State CEQA Guidelines, and City Council Policy K-3, and adopted by the City
Council on April 9, 2024, by Resolution No. 2024-25;
b) Conduct second reading and adopt Ordinance No. 2024-10, An Ordinance of the City
Council of the City of Newport Beach, California, Approving a Planned Community
Development Plan Amendment for the Residences at 1401 Quail Street Located at
1401 Quail Street (PA2023-0040); and
c) Conduct second reading and adopt Ordinance No. 2024-11, An Ordinance of the City
Council of the City of Newport Beach, California, Approving a Development
Agreement for the Residences at 1401 Quail Street Project Located at 1401 Quail
Street (PA2023-0040).
DISCUSSION:
On April 9, 2024, the City Council conducted a noticed public hearing on the proposed
Project. After taking public testimony, the City Council voted unanimously to take actions
related to the California Environmental Quality Act and to approve the Project.
4-1
Newport Place Planned Community Development Plan Amendment and
Development Agreement for the Residences at 1401 Quail Street (PA2023-0040)
April 23, 2024
Page 2
The City Council introduced and passed to a second reading Ordinance No. 2024-10,
amending the Newport Place Planned Community Development Plan, and Ordinance
No. 2024-11, that approves a development agreement between the City of Newport
Beach and Intracorp Socal-1, LLC related to project development. If the ordinances are
adopted, they will take effect 30 days after adoption.
FISCAL IMPACT:
A fiscal impact analysis has been prepared for the Project and is included in the April 9,
2024 City Council Staff Report as Attachment J.
ENVIRONMENTAL REVIEW:
Addendum No. 8 to the 2006 General Plan Update Program Environmental Impact Report
and 2008-2014 City of Newport Beach Housing Element Update Initial Study/Negative
Declaration was prepared for the Residences at 1401 Quail Street Project which included
an analysis of the proposed planned community amendment and development
agreement, in accordance with the implementing guidelines of CEQA, the State CEQA
Guidelines, and the City Council Policy K-3. The City Council adopted Addendum No. 8
at the April 9, 2024 meeting by Resolution No. 2024-25.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Ordinance No. 2024-10
Attachment B — Ordinance No. 2024-11
4-2
Attachment A
Ordinance No. 2024-10: Planned Community Development Plan Amendment
4-3
ORDINANCE NO. 2024-10
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, APPROVING A
PLANNED COMMUNITY DEVELOPMENT PLAN
AMENDMENT FOR THE RESIDENCES AT 1401 QUAIL
STREET LOCATED AT 1401 QUAIL STREET (PA2023-
0040)
WHEREAS, Section 200 of the City of Newport Beach ("City') Charter vests the
City Council with the authority to make and enforce all laws, rules, and regulations with
respect to municipal affairs subject only to the restrictions and limitations contained in
the Charter and the State Constitution, and the power to exercise, or act pursuant to
any and all rights, powers and privileges, or procedures granted or prescribed by any
law of the State of California;
WHEREAS, an application was filed by Intracorp Homes ("Applicant"), with
respect to the property located at 1401 Quail Street and legally described as Parcel 1 of
Resubdivision No. 341 ("Property");
WHEREAS, the Applicant is requesting approvals to demolish an existing office
building and develop 67 for -sale condominium units, including a 146-space parking
structure ("Project"), which requires the following approvals:
• General Plan Amendment ("GPA") — A request to amend the General Plan Land
Use Designation of the Property from General Commercial Office (CO-G) to
Mixed -Use Horizontal (MU-H2);
• Planned Community Development Plan Amendment ("PCDP Amendment") —
An amendment to the Newport Place Planned Community (PC-11)
Development Plan to include the Property within the Residential Overlay;
• Major Site Development Review ("SDR") - A site development review in
accordance with the Newport Place Planned Community (PC-11) and Section
20.52.080 (Site Development Reviews) of the Newport Beach Municipal Code
("NBMC") to construct the Project;
• Tentative Vesting Tract Map ("VTM") — A Vesting Tentative Tract Map No.
19261 pursuant to Title 19 (Subdivisions) of the NBMC for 67 condominium
dwelling units;
Ordinance No. 2024-
Page 2 of 8
• Affordable Housing Implementation Plan ("AHIP") — A plan specifying how the
Project would meet the City's affordable housing requirements, in exchange
for a request of 27.5% increase in density including a request for four
development standard waivers related to park land dedication, building
setbacks, and building height along with two development concessions
related to the mix of affordable units and a partial payment of the park in -lieu
fees pursuant to Chapter 20.32 (Density Bonus) of the NBMC and
Government Code Section 65915 et seq. ("State Density Bonus Law");
• Development Agreement ("DA") — A development agreement, between the
Applicant and the City, pursuant to Section 15.45.020 (Development Agreement
Required) of the NBMC, which would provide the Applicant with vested right to
develop the Project for a term of ten years and provide negotiated public
benefits to the City; and
• Addendum No. 8 to the 2006 General Plan Update Program Environmental
Impact Reports and the 2008-2014 City of Newport Beach Housing Element
Update and Initial Study/Negative Declaration ("Addendum No. 8") — An
addendum which addresses reasonably foreseeable environmental impacts
resulting from the Project;
WHEREAS, the Property is designated General Commercial Office (CO-G) by the
General Plan Land Use Element and located within the Newport Place Planned
Community (PC-11) Zoning District in the Industrial Site 3A sub -area;
WHEREAS, the Property is not located within the coastal zone; therefore,
amending the Local Coastal Program and obtaining a coastal development permit are not
required;
WHEREAS, a public hearing was held by the Planning Commission on December
21, 2023 in the Council Chambers at 100 Civic Center Drive, Newport Beach, California. A
notice of time, place and purpose of the hearing was given in accordance with
Government Code Section 54950 et seq. ("Ralph M. Brown Act"), and Chapter 15.45
(Development Agreements), Chapter 19.20 (Vesting Tentative Map), Chapter 20.56
(Planned Community District Procedures), and Chapter 20.62 (Public Hearings) of the
NBMC. Evidence, both written and oral, was presented to, and considered by, the
Planning Commission at this hearing;
4-5
Ordinance No. 2024-
Page 3 of 8
WHEREAS, at the hearing, the Planning Commission adopted Resolution No.
PC2023-047 by a majority vote (6 ayes, 0 nays, 1 absent) recommending the City
Council approve the Project;
WHEREAS, California Public Utilities Code ("CPUC") Section 21676(b) requires
the City to refer the Project to the Orange County Airport Land Use Commission
("ALUC") to review for consistency with the 2008 John Wayne Airport Environs Land
Use Plan ("AELUP");
WHEREAS, on January 18, 2024, the ALUC determined the Project is
inconsistent with the AELUP;
WHEREAS, pursuant to Sections 21670 and 21676 of CPUC, the City Council
may, after a public hearing, propose to overrule the ALUC with a two-thirds vote, if it
makes specific findings that the Project is consistent with the purpose of Section 21670
of the CPUC to protect the public health, safety, and welfare by ensuring the orderly
expansion of airports and the adoption of land use measures that minimize the public's
exposure to excessive noise and safety hazards within areas around public airports to
the extent that these areas are not already devoted to incompatible uses;
WHEREAS, a public hearing was held by the City Council on February 13,
2024, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach,
California. A notice of time, place, and purpose of the hearing was given in accordance
with CPUC Code Section 21676(b) and the Ralph M. Brown Act. Evidence, both written
and oral, was presented to, and considered by, the City Council at this hearing;
WHEREAS, at the conclusion of the hearing, the City Council adopted
Resolution No. 2024-10 by unanimous vote (7 ayes, 0 nays) to notify the ALUC and
State Department of Transportation Aeronautics Program ("Aeronautics Program") of
the City's intent to override ALUC's inconsistency finding;
WHEREAS, notice of the City's intent to override the ALUC inconsistency
determination, along with Resolution No. 2024-10 was sent via certified mail and
emailed to the ALUC and the Aeronautics Program on February 14, 2024;
WHEREAS, the City received timely comments in response to the notice of the
City's intent to override the ALUC inconsistency determination from the ALUC, and the
Aeronautics Program in accordance with CPUC Section 21676; and
Ordinance No. 2024-
Page 4 of 8
WHEREAS, a public hearing was held by the City Council on April 9, 2024, in
the City Council Chambers located at 100 Civic Center Drive, Newport Beach,
California. A notice of time, place and purpose of the public hearing was given in
accordance with the Ralph M. Brown Act, Chapter 15.45 (Development Agreements),
Chapter 19.20 (Vesting Tentative Maps), Chapter 20.56 (Planned Community District
Procedures), and Chapter 20.62 (Public Hearings) of the NBMC, and CPUC Section
21676(b). Evidence, both written and oral, was presented to, and considered by, the
City Council at this meeting.
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 determined that modifications to the Project made by the City
Council, if any, are not major changes that require referral back to the Planning
Commission for consideration and recommendation.
Section 2: The PCDP Amendment to the Newport Place Planned Community
(PC-1 1) is a legislative act. Neither the Newport Place Planned Community (PC-1 1),
Chapters 20.56 (Planned Community District Procedures) and 20.66 (Amendments) of
the NBMC, nor Section 65000 et seq. of the California Government Code set forth any
required findings for approval of such amendments. Notwithstanding the foregoing, the
PCDP Amendment complies with Part III (Residential Overlay) of the Newport Place
Planned Community (PC-11)based on the following findings:
1. The Project allocates 15% of the base units (eight dwelling units) as affordable
units. Of the eight units, six are restricted to very -low-income households and two
are restricted to low-income households.
2. Given the location of the Property in the Airport Area which includes a mixture of
service uses, hotels, John Wayne Airport and commercial support services,
professional offices, and new residential developments that cumulatively contain
the ingredients of a planned community, the PCDP Amendment would not disrupt
the existing uses within the Newport Place Planned Community (PC-1 1) and
would add to this diversity of uses, assisting the City in larger scale community
planning and the provision of additional housing opportunities.
3. The Property is located within 85 feet of the Residential Overlay set forth in the
Newport Place Planned Community (PC-1 1). The property nearest to the site
4-7
Ordinance No. 2024-
Page 5 of 8
within the Residential Overlay is 1300 Bristol Street, across Spruce Street. The
property at 1300 Bristol has been approved but not yet constructed as a
residential apartment project. The Project would be consistent with the
anticipated future development of 1300 Bristol and the proposed Residences at
1400 Bristol Project as well other adjacent properties within the Residential
Overlay of Newport Place Planned Community (PC-11).
4. The Project would be subject to the appropriate site and project specific
setbacks, density, and height limits for this urban location. All required parking is
provided on -site. The Project complies with the development standards identified
for the Residential Overlay, except as modified by the allowed development
standard waivers identified in the Affordable Housing Implementation Plan. The
Residential Overlay provides a density range for proposed projects and
references the Section 20.32 (Density Bonus) of the NBMC that prescribes the
maximum density bonus and incentives allowed. The Project includes a density
bonus of 27.5%, where the PCDP Amendment references a maximum density
bonus of 35%. Therefore, the Project is consistent with the intent of the density
bonus assumptions in the Residential Overlay.
5. The Newport Place Planned Community (PC-11) requires an SDR in accordance
with Section 20.52.080 (Site Development Reviews) of the NBMC. The Project
includes an SDR, and all required findings are addressed in a separate
resolution.
6. The PCDP Amendment requires the density for a residential development to be
between 30 and 50 dwelling units per acre. The Project includes 52 base units,
not including density bonus units. Since the Property is 1.71 acres in size, there
is a base density of 30 dwelling units per acre. With density bonus, there is a
total of 67 dwelling units, which results in 39 units per acre. Both the density with
and without the density bonus units are consistent with the PCDP Amendment
density requirement.
7. The Property is located near existing office buildings within the Airport Area and
is not negatively impacted by noise, dust, smoke, vibration, odor, toxic or noxious
matter that may be generated by existing commercial or industrial uses nearby.
8. Residential dwellings are permitted as replacement of existing nonresidential
uses, and the number of peak hour trips generated by the Project is not to
exceed the number of trips of the underlying permitted nonresidential use. The
UM
Ordinance No. 2024-
Page 6 of 8
Property is developed with an existing one-story commercial office building
totaling 22,956 square feet. A standardized conversion rate of 2.29 dwelling units
per 1,000 square feet of commercial floor area, as provided by the City Traffic
Engineer, is required. This results in a total of 52 dwelling units, which is the
proposed based density of the Project. With a 27.50% density bonus or 15
dwelling units request, a total of 67 (52+15) dwelling units are proposed for the
Project.
9. The Property is fully developed and does not support any natural resources and
all potential environmental impacts associated with the Project are appropriately
addressed through standard building permit procedures, conditions of approval,
and the General Plan Policies identified in Addendum No. 8.
Section 3: The City Council hereby approves the Newport Place Planned
Community (PC-11) Development Plan Amendment, as set forth in Exhibit 'A," which is
attached hereto and incorporated herein by reference and finds that the PCDP
Amendment complies with the purpose set forth in Section 20.56.010 (Purpose) of the
NBMC, with all other provisions of the existing Planned Community District Regulations
and exhibits remaining unchanged and in full force and effect.
Section 4: Environmental Impact Report Addendum No. 8 was prepared for
the Project in compliance with the California Environmental Quality Act ("CEQA") set
forth in California Public Resources Code Section 2100 et seq.; CEQA's implementing
regulations set forth in CCR Title 14, Division 6 Chapter 3 ("CEQA Guidelines") and City
Council Policy K-3 (Implementation Procedures for the California Environmental Quality
Act) to ensure that the Project will not result in new or increased environmental impacts.
On the basis of the entire environmental record, the Project will not result in any new
significant impacts that were not previously analyzed in the PEIR for the General Plan
2006 Update (SCH No. 2006011119) and the City of Newport Beach Housing Element
Initial Study/Negative Declaration. The potential impacts associated with this Project
would either be the same or less than those described in the PEIR and the City of
Newport Beach Housing Element Initial Study/Negative Declaration. In addition, there
are no substantial changes to the circumstances under which the Project would be
undertaken that would result in new or more severe environmental impacts than
previously addressed in the PEIR or the City of Newport Beach Housing Element Initial
Study/Negative Declaration, nor has any new information regarding potential for new or
more severe significant environmental impacts been identified.
Ordinance No. 2024-
Page 7 of 8
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.
Section 5: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 6: 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.
4-10
Ordinance No. 2024-
Page 8 of 8
Section 7: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published pursuant to City Charter Section 414. This ordinance shall be effective thirty
(30) calendar days after its adoption.
This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 9th day of April, 2024, and adopted on the 23rd day of
April, 2024, by the following vote, to -wit:
AYES:
NAYS:
ABSENT:
WILL O'NEILL, MAYOR
ATTEST:
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
AAIkON C. HARP, CITY ATTORNEY
Attachment: Exhibit "A" — Newport Place Planned Community (PC-11) Development
Plan Amendment
4-11
Exhibit "A"
Newport Place Planned Community (PC-11) Development Plan Amendment
4-12
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4-13
Attachment B
Ordinance No. 2024-11: Development Agreement
4-14
ORDINANCE NO. 2024-11
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, APPROVING A
DEVELOPMENT AGREEMENT FOR THE RESIDENCES
AT 1401 QUAIL STREET PROJECT LOCATED AT 1401
QUAIL STREET (PA2023-0040)
WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the
City Council with the authority to make and enforce all laws, rules, and regulations with
respect to municipal affairs subject only to the restrictions and limitations contained in
the Charter and the State Constitution, and the power to exercise, or act pursuant to
any and all rights, powers and privileges, or procedures granted or prescribed by any
law of the State of California;
WHEREAS, an application was filed by Intracorp Homes ("Applicant"), with
respect to the property located at 1401 Quail Street and legally described as Parcel 1 of
Resubdivision No. 341 ("Property");
WHEREAS, the Applicant is requesting approvals to demolish an existing office
building and develop 67 for -sale condominium units, including a 146-space parking
structure ("Project"), which requires the following approvals:
• General Plan Amendment ("GPA") — A request to amend the General Plan Land
Use Designation of the Property from General Commercial Office (CO-G) to
Mixed -Use Horizontal (MU-H2);
• Planned Community Development Plan Amendment ("PCDP Amendment") —
An amendment to the Newport Place Planned Community (PC-11)
Development Plan to include the Property within the Residential Overlay;
• Major Site Development Review ("SDR") - A site development review in
accordance with the Newport Place Planned Community (PC-11) and Section
20.52.080 (Site Development Reviews) of the Newport Beach Municipal Code
("NBMC") to construct the Project;
• Tentative Vesting Tract Map ("VTM") — A Vesting Tentative Tract Map No.
19261 pursuant to Title 19 (Subdivisions) of the NBMC for 67 condominium
dwelling units;
4-15
Ordinance No. 2024-
Page 2 of 7
• Affordable Housing Implementation Plan ("AHIP") - A plan specifying how the
Project would meet the City's affordable housing requirements, in exchange
for a request of 27.5% increase in density including four development
standard waivers related to park land dedication, building setbacks, and
building height along with two development concessions related to the mix of
affordable units and a partial payment of the park in -lieu fees pursuant to
Chapter 20.32 (Density Bonus) of the NBMC and Government Code Section
65915 et seq. ("State Density Bonus Law");
• Development Agreement ("DA") — A development agreement, between the
Applicant and the City, pursuant to Section 15.45.020 (Development Agreement
Required) of the NBMC, which would provide the Applicant with vested right to
develop the Project for a term of ten years and provide negotiated public
benefits to the City; and
• Addendum No. 8 to the 2006 General Plan Update Program Environmental
Impact Reports and the 2008-2014 City of Newport Beach Housing Element
Update and Initial Study/Negative Declaration ("Addendum No. 8") — An
addendum which addresses reasonably foreseeable environmental impacts
resulting from the Project;
WHEREAS, the Property is designated General Commercial Office (CO-G) by the
General Plan Land Use Element and located within the Newport Place Planned
Community (PC-11) Zoning District in the Industrial Site 3A sub -area;
WHEREAS, the Property is not located within the coastal zone; therefore,
amending the Local Coastal Program and obtaining a coastal development permit are not
required;
WHEREAS, a public hearing was held by the Planning Commission on December
21, 2023 in the Council Chambers at 100 Civic Center Drive, Newport Beach, California. A
notice of time, place and purpose of the hearing was given in accordance with
Government Code Section 54950 et seq. ("Ralph M. Brown Act"), and Chapter 15.45
(Development Agreements), Chapter 19.20 (Vesting Tentative Map), Chapter 20.56
(Planned Community District Procedures), and Chapter 20.62 (Public Hearings) of the
NBMC. Evidence, both written and oral, was presented to, and considered by, the
Planning Commission at this hearing;
4-16
Ordinance No. 2024-
Page 3 of 7
WHEREAS, at the hearing, the Planning Commission adopted Resolution No.
PC2023-047 by a majority vote (6 ayes, 0 nays, 1 absent) recommending the City
Council approve the Project;
WHEREAS, California Public Utilities Code ("CPUC") Section 21676(b) requires
the City to refer the Project to the Orange County Airport Land Use Commission
("ALUC") to review for consistency with the 2008 John Wayne Airport Environs Land
Use Plan ("AELUP");
WHEREAS, on January 18, 2024, the ALUC determined the Project is
inconsistent with the AELUP;
WHEREAS, pursuant to Sections 21670 and 21676 of CPUC, the City Council
may, after a public hearing, propose to overrule the ALUC with a two-thirds vote, if it
makes specific findings that the Project is consistent with the purpose of Section 21670
of the CPUC to protect the public health, safety, and welfare by ensuring the orderly
expansion of airports and the adoption of land use measures that minimize the public's
exposure to excessive noise and safety hazards within areas around public airports to
the extent that these areas are not already devoted to incompatible uses;
WHEREAS, a public hearing was held by the City Council on February 13,
2024, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach,
California. A notice of time, place, and purpose of the hearing was given in accordance
with CPUC Code Section 21676(b) and the Ralph M. Brown Act. Evidence, both written
and oral, was presented to, and considered by, the City Council at this hearing;
WHEREAS, at the conclusion of the hearing, the City Council adopted
Resolution No. 2024-10 by unanimous vote (7 ayes, 0 nays) to notify the ALUC and
State Department of Transportation Aeronautics Program ("Aeronautics Program") of
the City's intent to override ALUC's inconsistency finding;
WHEREAS, a notice of the City's intent to override the ALUC inconsistency
determination, along with Resolution No. 2024-10 was sent via certified mail and
emailed to the ALUC and the Aeronautics Program on February 14, 2024;
WHEREAS, the City received timely comments in response to the notice of the
City's intent to override the ALUC inconsistency determination from the ALUC and the
Aeronautics Program in accordance with CPUC Section 21676;
4-17
Ordinance No. 2024-
Page 4 of 7
WHEREAS, a public hearing was held by the City Council on April 9, 2024, in
the City Council Chambers located at 100 Civic Center Drive, Newport Beach,
California. A notice of time, place and purpose of the public hearing was given in
accordance with the Ralph M. Brown Act, Chapter 15.45 (Development Agreements),
Chapter 19.20 (Vesting Tentative Maps), Chapter 20.56 (Planned Community District
Procedures), and Chapter 20.62 (Public Hearings) of the NBMC, and CPUC Section
21676(b). Evidence, both written and oral, was presented to, and considered by, the
City Council at this meeting;
WHEREAS, a development agreement is required by Chapter 15.45
(Development Agreements) of the NBMC in that the Project would add more than 50
dwelling units within Statistical Area L4 (Airport Area);
WHEREAS, Section 15.45.040 (Contents) of the NBMC requires inclusion of the
permitted use of the property, density or intensity of use, maximum height and size of
proposed building in a development agreement;
WHEREAS, the DA satisfies the mandatory elements of Section 15.45.040
(Contents) of the NBMC in providing for the development of 67 dwelling units, inclusive
of the requested density bonus;
WHEREAS, the DA further satisfies other mandatory elements of Section
15.45.040 (Contents) of the NBMC in that the definition of the Newport Place Planned
Community (PC-11) Development Plan incorporates all land use approvals required for
the Project;
WHEREAS, the DA also provides other non -mandatory elements, including a
term of 10 years for completion of the Project along with providing public benefits that
are appropriate to support conveying the vested development rights consistent with the
City of Newport Beach General Plan, NBMC, and Government Code Sections 65864 et
seq.; and
WHEREAS, the public benefits include the payment of a $141,600 public safety
fee, a $513,300 park in -lieu fee, and $1,628,400 public benefit fee, for a total of
$2,283,300 to be used by the City Council as specified in the DA.
MRA
Ordinance No. 2024-
Page 5 of 7
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 determined that modifications to the Project made by the City
Council, if any, are not major changes that require referral back to commission for
consideration and recommendation.
Section 2: The City Council finds the Development Agreement 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 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
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.
Additionally, the City Council finds the Development Agreement is entered into
pursuant to, and constitutes a present exercise of, the City's police power and is in the
best interest of the health, safety, and general welfare of the City, residents, and the
public.
Section 3: The Development Agreement which is attached hereto as Exhibit
"A," and incorporated herein by reference between the City of Newport Beach and the
Applicant to accommodate the development of Project and to enter the agreement for a
term of ten years, is hereby approved.
4-19
Ordinance No. 2024-
Page 6 of 7
Section 4: Environmental Impact Report Addendum No. 8 was prepared for
the Project in compliance with the California Environmental Quality Act ("CEQA") set
forth in California Public Resources Code Section 2100 et seq.; CEQA's implementing
regulations set forth in CCR Title 14, Division 6 Chapter 3 ("CEQA Guidelines") and City
Council Policy K-3 (Implementation Procedures for the California Environmental Quality
Act) to ensure that the Project will not result in new or increased environmental impacts.
On the basis of the entire environmental record, the Project will not result in any new
significant impacts that were not previously analyzed in the PEIR for the General Plan
2006 Update (SCH No. 2006011119) and the 2008-2014 City of Newport Beach
Housing Element Initial Study/Negative Declaration. The potential impacts associated
with this Project would either be the same or less than those described in the PEIR. In
Addition, there are no substantial changes to the circumstances under which the Project
would be undertaken that would result in new or more severe environmental impacts
than previously addressed in either the PEIR, nor has any new information regarding
potential for new or more severe significant environmental impacts been identified.
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.
Section 5: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 6: 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.
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Ordinance No. 2024-
Page 7 of 7
Section 7: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published pursuant to City Charter Section 414. This ordinance shall be effective thirty
(30) calendar days after its adoption.
This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 9th day of April, 2024, and adopted on the 23rd day of
April, 2024, by the following vote, to -wit:
NAYS:
ABSENT:
WILL O'NEILL, MAYOR
ATTEST:
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
AAIRON C. HARP, CITY ATTORNEY
Attachment: Exhibit "A" — Development Agreement
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Exhibit "A"
Development Agreement
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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 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
INTRACORP SOCAL-1, LLC
CONCERNING
"THE RESIDENCES AT 1401 QUAIL STREET"
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DEVELOPMENT AGREEMENT
(Pursuant to California Government Code Sections 65864-65869.5)
This DEVELOPMENT AGREEMENT (the "Agreement") is dated for reference purposes
as of the 23rd day of April, 2024 (the "Agreement Date"), and is being entered into by and between
the City of Newport Beach, a California municipal corporation and charter city, organized and
existing under and by virtue of its Charter and the Constitution, and the laws of the State of
California, ("City"), and Intracorp Socal-1, LLC, a Delaware limited liability company ("Pro e
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 has entered into a Purchase and Sale Agreement and Escrow
Instructions, dated April 13, 2022, as amended (collectively, "Purchase Agreement"), to purchase
that certain real property located in the City of Newport Beach, County of Orange, State of
California commonly referred to as 1401 Quail Street and more particularly described in the legal
description attached as Exhibit "A" and depicted on the site map attached hereto as Exhibit `B"
("Property") and has submitted an application to the City for the Development Plan, defined in
Section 1 (Definitions) below to develop the Property. The Property consists of approximately
1.71 acres and is a part of the Newport Place Planned Community shown on the City's Zoning
Map.
B. To encourage investment in, and commitment to, comprehensive planning and
public facilities financing, strengthen the public planning process and encourage private
implementation of the local general plan, provide certainty in the approval of projects 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. The Parties wish to enter into Agreement to demolish an existing office building
and construct 67 condominium units (including affordable units) atop of 146-space parking
structure.
E. As detailed in Section 3 of this Agreement, Property Owner has agreed to provide
the following significant public benefits as consideration for this Agreement: a public benefit fee
in the amount of One Million Six Hundred Twenty -Eight Thousand Four Hundred Dollars and
00/100 ($1,628,400.00), a park in -lieu fee of Five Hundred Thirteen Thousand Three Hundred
Dollars and 00/100 ($513,300.00) and a public safety fee in the amount of One Hundred Forty -
One Thousand Six Hundred Dollars and 00/100 ($141,600.00).
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F. 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
Mixed Use Horizontal 2 ("MU-H2") which provides for a horizontal intermixing of uses that may
include regional commercial office, multifamily residential, vertical mixed -use buildings,
industrial, hotel rooms, and ancillary neighborhood commercial uses and the Newport Place
Planned Community that was adopted in 1970 by Ordinance No. 1369, and amended from time to
time, in order to establish appropriate zoning to regulate land use and development of property
within the general boundaries of the Newport Place Planned Community.
G. In recognition of the significant public benefits that this Agreement provides, the
City Council finds 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) Project's Addendum No. 8 to the Environmental
Impact Report (SCH# 2006011119) ("PEIR") that was certified by the City Council on July 25,
2006 for the 2006 General Plan Update and the Initial Study/Negative Declaration prepared in
accordance with CEQA for the Newport Beach Housing Element Update (General Plan
Amendment No. GP2008-003) adopted by the City Council on November 22, 2011 (the PEIR and
Initial Study/Negative Declaration are collectively referred to herein as the "PEIR"), all of which
analyze the environmental effects of the proposed development of the Project on the Property, and
all of the findings, conditions of approval and mitigation measures related thereto; and (v) is
consistent and has been approved consistent with provisions of California Government Code
Section 65867 and City of Newport Beach Municipal Code chapter 15.45.
H. On December 21, 2023, City's Planning Commission held a public hearing on this
Agreement, and made findings and determinations with respect to this Agreement, and
recommended to the City Council that the City Council approve this Agreement.
I. On April 9, 2024, the City Council held a public hearing 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 April 23, 2024, consistent
with applicable provisions of the Development Agreement Statute and Development Agreement
Ordinance, the City Council adopted its Ordinance No. 2024-11 (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. 2024-11 approving and
adopting this Agreement.
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"Agreement" shall mean this Development Agreement, as the same may be amended from
time to time.
"Agreement Date" shall mean April 23, 2024, 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 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, Bureau of Labor Statistics for all urban consumers (all items)
for the Los Angeles -Long Beach -Anaheim, California Area, All Urban Consumers, All Items,
Base Period (1982-84=100), 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
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charge in order to lessen, offset, mitigate, or compensate for the impacts of Development of the
Project on the environment or other public interests.
"Development Plan" shall mean all of the land use entitlements, approvals and permits
approved by the City for the Project on or before the Agreement Date, as the same may be amended
from time to time consistent with this Agreement. Such land use entitlements, approvals and
permits include, without limitation, the following: (1) the Development rights as provided under
this Agreement; (2) the amendment to the Newport Place Planned Community (PC-11) adopted
pursuant to Ordinance No. 1369 and as amended by Ordinance No. 2024-10; (3) General Plan
Amendment adopted pursuant to Resolution No. 2024-26; (4) Site Development Review adopted
pursuant to Resolution No. 2024-26; (5) Affordable Housing Implementation Plan adopted
pursuant to Resolution No. 2024-26; and Tentative Tract Map adopted pursuant to Resolution No.
2024-26.
"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 the 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 the 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 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, the Development Plan, or any of the Development Regulations approved on or before
the Agreement Date is timely qualified for the ballot and a referendum election is held concerning
the Adopting Ordinance or any of such Development Regulations, the date on which the
referendum is certified resulting in upholding and approving the Adopting Ordinance and the
Development Regulations; or (iii) if a lawsuit is timely filed challenging the validity 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, the Development Plan and/or the
applicable Development Regulations, which such finality is achieved by a final non -appealable
judgment, voluntary or involuntary dismissal (and the passage of any time required to appeal an
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involuntary dismissal), or binding written settlement agreement. Promptly after the Effective Date
occurs, the Parties agree to cooperate in causing an appropriate instrument to be executed and
recorded against the Property memorializing the Effective Date.
"Environmental Laws" means all federal, state, regional, county, municipal, and local laws,
statutes, ordinances, rules, and regulations which are in effect as of the Agreement Date, and all
federal, state, regional, county, municipal, and local laws, statutes, rules, ordinances, rules, and
regulations which may hereafter be enacted and which apply to the Property or any part thereof,
pertaining to the use, generation, storage, disposal, release, treatment, or removal of any Hazardous
Substances, including without limitation the following: the Comprehensive Environmental
Response Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601, et SeMc ., 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 SeMc ., 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 SeMc ., as
amended; the Clean Air Act, 42 U.S.C. Sections 7401 et sea., as amended; the Clean Water Act,
33 U.S.C. Section 1251, et SeMc ., as amended; the Toxic Substances Control Act, 15 U.S.C.
Sections 2601 et sea., as amended; the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 136 et sea., as amended; the Federal Safe Drinking Water Act, 42 U.S.C. Sections
300f et sea., as amended; the Federal Radon and Indoor Air Quality Research Act, 42 U.S.C.
Sections 7401 et seq., 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 SeMc .
"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 the Property Owner's rights set forth
in this Agreement, unless such amendment is expressly authorized by this Agreement, 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.
"Partv" or "Parties" shall mean either City or Property Owner or both, as determined by
the context.
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BM
"Project" shall mean the demolition of an existing office building and construct 67
condominium units (including affordable units) atop of 146-space parking structure including all
on -site and off -site improvements that Property Owner is authorized and/or may be required to
construct on 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".
"Property Owner" shall mean Intracorp Socal-1, a Delaware limited liability company and
any successor or assignee to all or any portion of the right, title, and interest 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 Consistencv. Zoning ImDlementation.
This Agreement and the Development Regulations applicable to the Property are consistent
with the General Plan and the Newport Place Planned Community Development Plan (PC-11) as
amended by the approvals in the Development Plan adopted concurrently herewith (including but
not limited to the amendment to the General Plan and Newport Place Planned Community
Development Plan (PC-11).
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's 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) that Property Owner is the equitable owner
pursuant to the Purchase and Sale Agreement and Escrow Instructions, dated April 13, 2022, as
amended (collectively, "Purchase Agreement"), and upon closing of escrow shall be legal owner
of the Property; (ii) if Property Owner or any co-owner comprising Property Owner is a legal
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entity and that such entity is duly formed and existing and is authorized to do business in the State
of California; (iii) if Property Owner or any co-owner comprising Property Owner is a natural
person that such natural person has the legal right and capacity to execute this Agreement; (iv) that
all actions required to be taken by all persons and entities comprising Property Owner to enter into
this Agreement have been taken and that Property Owner has the legal authority to enter into this
Agreement; (v) 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; (vi) that neither
Property Owner nor any co-owner comprising Property Owner is the subject of any voluntary or
involuntary petition in bankruptcy; and (vii) 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
continue until April 23, 2034, unless otherwise terminated or modified pursuant to its terms.
Notwithstanding any other provision set forth in this Agreement to the contrary, if any
Party reasonably determines that the Effective Date 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, and/or any of the Development Regulations for the Project
approved on or before the Agreement Date such that this Agreement and/or any of such
Development Regulations is/are invalid and unenforceable in whole or in such a substantial part
that the judgment substantially impairs such Party's rights or substantially increases its obligations
or risks hereunder or thereunder, then such Party, in its sole and absolute discretion, shall have the
right to terminate this Agreement upon delivery of a 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 be repealed by the City after delivery of said notice of termination except for the
Development Regulations that have been disapproved by City's voters at a referendum election
and, therefore, never took effect.
The Termination Date shall be the earliest of the following dates: (i) the tenth (10`h)
anniversary of the Effective Date; (ii) such earlier date that this Agreement may be terminated in
accordance with Article 5, and/or Section 8.3 of this Agreement and/or Sections 65865.1 and/or
65868 of the Development Agreement Statute; or (iii) completion of the Project in accordance
with the terms of this Agreement, including 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.
Notwithstanding any other provision set forth in this Agreement to the contrary, the
provisions set forth in Article 10 and Section 14.11 (as well as any other Property Owner
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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 to (herein, the "Public
Benefit Fee") in the total sum of One Million Six Hundred Twenty Eight Thousand and Four
Hundred Dollars and 00/100 ($1,628,400.00) which shall be due and payable prior to the issuance
of the first building permit for any portion of the Project.
The City has not designated a specific project or purpose for the Public Benefit Fee.
Property Owner acknowledges by its approval and execution of this Agreement that it is
voluntarily agreeing to pay the Public Benefit Fee and 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 Owner's
vested 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 the Public Benefits identified in this Section 3.1 on any ground
whatsoever, including without limitation pursuant to the Fifth and Fourteenth Amendments to the
United States Constitution, California Constitution Article I Section 19, the Mitigation Fee Act
(California Government Code Section 66000 et seq.), or otherwise. In addition to any other
remedy set forth in this Agreement for Property Owner's default, if Property Owner shall fail to
timely pay any portion of the Public Benefits identified in this Section 3.1 when due, City shall
have the right to withhold issuance of any further building permits, occupancy permits, or other
development or building permits for the Project.
3.2 Consumer Price Index (CPI) Increases. Any fee provided in this Article 3 (Public
Benefits) shall be increased based upon percentage increases in the CPI Index as provided herein.
The first CPI adjustment shall occur on the first anniversary of the City Council's adoption of the
Adopting Ordinance (the first "Adjustment Date") and subsequent CPI adjustments shall occur on
each anniversary of the first Adjustment Date thereafter until expiration of the Term of this
Agreement (each, an "Adjustment Date"). The amount of the CPI adjustment on the applicable
Adjustment Date 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 I 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.
3.2 Other Public Benefits. In addition to the Public Benefit Fee, the direct and indirect benefits
City shall receive pursuant to this Development Agreement are as follows:
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3.2.1 Park In -Lieu Fee. The Property Owner shall pay a park land dedication in -lieu fee pursuant
to the City General Plan Land Use Policy 6.15.13 in the amount of Five Hundred Thirteen
Thousand Three Hundred Dollars and 00/100 ($513,300.00), for the purpose of acquisition and
improvement of other properties as parklands to serve the Airport Area. The fee shall be due and
payable prior to the issuance of the first building permit for any portion of the Project.
3.2.2 Public Safety Fee. The Property Owner shall pay a public safety fee in the amount of One
Hundred Forty -One Thousand Six Hundred Dollars and 00/100 ($141,600.00) to be used, at the
City's discretion, to fund the cost of staffing, services, and equipment necessary for fire related
public safety purposes. The fee shall be due and payable prior to the issuance of the first building
permit for any portion of the Project.
4. Development of Proiect.
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 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.
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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 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
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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 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 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
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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, 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.
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.
5. Amendment or Cancellation of Agreement. This Agreement may be amended or canceled
in whole or in part only by mutual written and executed consent of the Parties in compliance with
California Government Code Section 65868 and Newport Beach Municipal Code Section
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15.45.070 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 Propertv Owner's Compliance With_geement.
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's Obligation to Demonstrate Good Faith Compliance.
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 Zoning Administrator 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 Zoning Administrator finds that
Property Owner has so complied, the annual review shall be concluded. If the Zoning
Administrator 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 Zoning Administrator's
finding of non-compliance, and Property Owner shall be given at least ten (10) calendar days to
cure any noncompliance that relates to the payment of money and thirty (30) calendar days to cure
any other type of noncompliance. If a cure not relating to the payment of money cannot be
completed within thirty (30) calendar days for reasons which are beyond the control of Property
Owner, Property Owner must commence the cure within such thirty (30) calendar 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.
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Events of Default.
8.1 General Provisions. In the event of any material default, breach, or violation of the terms
of this Agreement ("Default"), the Party alleging a Default shall deliver a written notice (each, a
"Notice of Default") to the defaulting Party. The Notice of Default shall specify the nature of the
alleged Default and a reasonable manner and sufficient period of time (ten (10) calendar days if
the Default relates to the failure to timely make a monetary payment due hereunder and not less
than thirty (30) calendar days in the event of non -monetary Defaults) in which the Default must
be cured ("Cure Period"). During the Cure Period, the Party charged shall not be considered in
Default for the purposes of termination of this Agreement or institution of legal proceedings. If
the alleged Default is cured within the Cure Period, then the Default thereafter shall be deemed
not to exist. If a non -monetary Default cannot be cured during the Cure Period with the exercise
of commercially reasonable diligence, the defaulting Party must promptly commence to cure as
quickly as possible, and in no event later than thirty (30) calendar days after it receives the Notice
of Default, and thereafter diligently pursue said cure to completion. Notwithstanding the
foregoing, the City is not required to give Property Owner notice of default and may immediately
pursue remedies for a Property Owner Default that result in an immediate threat to public health,
safety or welfare.
8.2 Default by Property Owner.
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 in
writing.
8.3 City's 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. 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.
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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.
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. In no event shall damages be awarded against the City upon an event of default
or upon termination of this Agreement. Property Owner expressly agrees that the City, any City
agencies and their respective elected and appointed councils, boards, commissions, officers,
agents, employees, volunteers and representatives (collectively, for purposes of this Section 8.7,
"City") shall not be liable for any monetary damage for a Default by the City or any claims against
City arising out of this Agreement. Property Owner hereby expressly waives any such monetary
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damages against the City. The sole and exclusive judicial remedy for Property Owner in the event
of a Default by the City shall be an action in mandamus, specific performance, or other injunctive
or declaratory relief.
8.8 Additional City Remedy for 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 Party in Any Action.
In any judicial proceeding, arbitration, or mediation (collectively, an "Action") between
the Parties that seeks to enforce the provisions of this Agreement or arises out of this Agreement,
the prevailing Party shall not recover any of its costs and expenses, regardless of whether they
would be recoverable under California Code of Civil Procedure Section 1033.5 or California Civil
Code Section 1717 in the absence of this Agreement. These costs and expenses include, but are
not limited to, court costs, expert witness fees, attorneys' fees, City staff costs (including
overhead), and costs of investigation and preparation before initiation of the Action.
9. Force Maieure.
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 Oblieations of Pronertv 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
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of the Project or any other activities of Property Owner relating to the Property or pursuant to this
Agreement. City shall have the right, in its sole discretion, 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, City staff costs, 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 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 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.
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11. Assignment.
Property Owner shall have the right to sell, transfer, or assign (hereinafter, collectively, a
"Transfer") Property Owner's interest in or fee title 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 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. Any Permitted Transferee shall have all of the same rights, benefits,
duties, obligations, and liabilities of Property Owner under this Agreement with respect to the
portion of, or interest in, the Property sold, transferred, and assigned to such Permitted Transferee;
provided, however, that in the event of a Transfer of less than all of the Property, or interest in the
Property, no such Permitted Transferee shall have the right to enter into an amendment of this
Agreement that jeopardizes or impairs the rights or increases the obligations of the Property Owner
with respect to the balance of the Property, without Property Owner's written consent.
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
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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.
Any determination by the City in regards to the second paragraph of Section 11 subpart (iv) (A)
and/or (B) shall be documented in writing.
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 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 cure a non -monetary Default by obtaining possession of the
Property, then the Mortgagee shall have the right to seek to obtain possession with diligence and
continuity through a receiver or otherwise, and to remedy or cure the non -monetary Default within
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
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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.
13. Bankruptcy. The obligations of this Agreement shall not be dischargeable in bankruptcy.
14. Miscellaneous Terms.
14.1 Reserved.
14.2 Notices.
Any notice or demand that shall be required or permitted by law or any provision of this
Agreement shall be in writing. If the notice or demand will be served upon a Party, it either shall
be personally delivered to the Party; deposited by a reliable courier service that provides a receipt
showing date and time of delivery with courier charges prepaid. The notice or demand shall be
addressed as follows:
TO CITY: City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Manager
With a copy to:
TO PROPERTY OWNER:
With a copy to:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Attorney
Intracorp Socal-1, LLC
895 Dove Street, Ste. 400
Newport Beach, CA 92660
Either Party may change the address stated in this Section 14.2 by delivering notice to the other
Party in the manner provided in this Section 14.2, 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.
14.3 Project as a 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
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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.
14.4 Cooperation.
Each Party shall cooperate with and provide reasonable assistance to the other Party to the
extent consistent with and necessary to implement this Agreement. Upon the request of a Party at
any time, the other Party shall promptly execute, with acknowledgement or affidavit if reasonably
required, and file or record the required instruments and writings and take any actions as may be
reasonably necessary to implement this Agreement or to evidence or consummate the transactions
contemplated by this Agreement.
14.5 Estonnel 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
attorney's fees incurred by the City in furnishing an estoppels certificate.
14.6 Rules of Construction.
The singular includes the plural; the masculine and neuter include the feminine; "shall" is
mandatory; and "may" is permissive.
14.7 Time Is of the Essence.
Time is of the essence regarding each provision of this Agreement as to which time is an
element.
14.8 Waiver.
The failure by a Party to insist upon the strict performance of any of the provisions of this
Agreement by the other Party, and failure by a Party to exercise its rights upon a Default by the
other Party, shall not constitute a waiver of that Party's right to demand strict compliance by the
other Party in the future.
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14.9 Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be
identical and may be introduced in evidence or used for any other purpose without any other
counterpart, but all of which shall together constitute one (1) and the same agreement.
14.10 Entire Agreement.
This Agreement constitutes the entire agreement between the Parties and supersedes all
prior agreements and understandings, both written and oral, between the Parties with respect to the
subject matter addressed in this Agreement.
14.11 Severability.
The Parties intend that each and every obligation of the Parties is interdependent and
interrelated with the other, and if any provision of this Agreement or the application of the
provision to any Party or circumstances shall be held invalid or unenforceable to any extent, it is
the intention of the Parties that the remainder of this Agreement or the application of the provision
to persons or circumstances shall be rendered invalid or unenforceable. The Parties intend that
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 14.11 shall apply regardless of whether the Effective Date occurs
and after the Termination Date.
14.12 Construction.
This Agreement has been drafted after 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.
14.13 Successors and Assiarns: Constructive Notice and Accentance.
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
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with the Property and each portion thereof; and (iii) is binding upon each Party and each successor
in interest during its ownership of the Property or any portion thereof. Every person or entity who
now or later owns or acquires any right, title, or interest in any part of the Project or the Property
is and shall be conclusively deemed to have consented and agreed to every provision of this
Agreement. This Section 14.13 applies regardless of whether the instrument by which such person
or entity acquires the interest refers to or acknowledges this Agreement and regardless of whether
such person or entity has expressly entered into an assignment and assumption agreement as
provided for in Article 11.
14.14 No Third Party Beneficiaries.
The only Parties to this Agreement are City and 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.
14.15 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.
14.16 Section Headings.
All section headings and subheadings are inserted for convenience only and shall not affect
construction or interpretation of this Agreement.
14.17 Incorporation of Recitals and Exhibits.
All of the Recitals are incorporated into this Agreement by this reference. Exhibits A and
B are attached to this Agreement and incorporated by this reference as follows:
EXHIBIT
DESCRIPTION
DESIGNATION
A
Legal Description of Property
B
Depiction of the Property
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14.18 Recordation.
The City Clerk of City shall record this Agreement and any amendment, modification, or
cancellation of this Agreement in the Office of the County Recorder of the County of Orange
within the period required by California Government Code section 65868.5 and City of Newport
Beach Municipal Code section 15.45.090. The date of recordation of this Agreement shall not
modify or amend the Effective Date or the Termination Date.
[SIGNATURE PAGE FOLLOWS]
24
In . A
SIGNATURE PAGE TO
DEVELOPMENT AGREEMENT
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
Aaron C. Harp, City Attorney
"PROPERTY OWNER"
Intracorp Socal-1, LLC, a Delaware limited
liability company
By: _
Name:
Title:
By: _
Name:
Title:
"CITY"
CITY OF NEWPORT BEACH, a municipal
corporation and charter city
Will O'Neill, Mayor
25
sm
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
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
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
(seal)
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)
-26-
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Parcel 1 of Resubdivision No. 341
4-50
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