HomeMy WebLinkAbout04 - Approving a Development Agreement for the Residences at 1600 Dove Street (PA2022-0297)Q SEW Pp�T
CITY OF
z NEWPORT BEACH
c<,FORN'P City Council Staff Report
September 10, 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: Liz Westmoreland, AICP, Senior Planner - 949-644-3234,
Westmoreland@newportbeachca.gov
TITLE: Ordinance No. 2024-18: Approving a Development Agreement for
the Residences at 1600 Dove Street (PA2022-0297)
ABSTRACT:
For the City Council's consideration is the second reading and adoption of Ordinance
No. 2024-18, adopting a development agreement for The Residences at 1600 Dove
Street Project located at 1600 Dove Street. The project comprises demolishing an existing
office building and developing a multi -unit residential project consisting of 282 dwelling
units (Project).
RECOMMENDATIONS:
a) Find Addendum No. 9 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 1600 Dove Street Project
(PA2022-0296) 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 August 27, 2024, by Resolution No. 2024-62; and
c) Conduct second reading and adopt Ordinance No. 2024-18, An Ordinance of the City
Council of the City of Newport Beach, California, Approving a Development
Agreement for the Residences at 1600 Dove Street Project Located at 1600 Dove
Street (PA2022-0297).
DISCUSSION:
On August 27, 2024, the City Council conducted a noticed public hearing on the proposed
Project. After conducting a public hearing, the City Council voted unanimously to approve
the Project. The City Council introduced and passed to a second reading Ordinance
No. 2024-18, approving a development agreement between the City of Newport Beach
and the applicant related to project development. If the ordinance is adopted, it will take
effect 30 days after adoption.
FISCAL IMPACT:
A fiscal impact analysis has been prepared for the Project and was included in the
August 27, 2024, City Council Staff Report as Attachment J.
4-1
Ordinance No. 2024-18: Approving a Development Agreement for the
Residences at 1600 Dove Street (PA2022-0297)
September 10, 2024
Page 2
ENVIRONMENTAL REVIEW:
Addendum No. 9 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 1600 Dove Street Project which included
an analysis of the 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. 9 at the August 27, 2024, meeting by
Resolution No. 2024-62.
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).
ATTACHMENT:
Attachment A — Ordinance No. 2024-18
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Attachment A
Ordinance No. 2024-18: Development Agreement
M
ORDINANCE NO. 2024-18
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, APPROVING A
DEVELOPMENT AGREEMENT FOR THE RESIDENCES
AT 1600 DOVE STREET PROJECT LOCATED AT 1600
DOVE STREET (PA2022-0297)
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 The Picerne Group ("Applicant"), with
respect to the property located at 1600 Dove Street and legally described in Exhibit "A,"
which is attached hereto and incorporated by reference ("Property");
WHEREAS, the Applicant is requesting approval to allow the future development
of a multi -unit residential project consisting of up to 282 dwelling units ("Project"), which
require the following approvals:
• General Plan Amendment ("GPA") - A request to add 49 dwelling units above
the current General Plan allowance for the Airport Area, and amend Anomaly
Number 12 of the General Plan Table LU2 (Anomaly Locations) allocating 49
residential dwelling units to the Property;
• Affordable Housing Implementation Plan ("AHIP") - A plan specifying how the
Project would meet the City's affordable housing requirements, in exchange for
a 50% increase in density including a request for three development standard
waivers related to height, park dedication requirements, and overall residential
density along with two development concessions related to the payment of park
in -lieu fees and affordable unit mix pursuant to Chapter 20.32 (Density Bonus)
of the Newport Beach Municipal Code ("NBMC") and Government Code Section
65915 et seq. ("State Density Bonus Law");
• Development Agreement (DA) - A development agreement, pursuant to Section
15.45.020 (Development Agreement Required) of the NBMC, which would
provide the vested right to develop the Project for a term of 10 years and
provide negotiated public benefits to the City;
sm
Ordinance No. 2024-
Page 2 of 7
• Traffic Study - A traffic study pursuant to Chapter 15.40 (Traffic Phasing
Ordinance) of the NBMC; and
• Addendum No. 9 to the 2006 General Plan Update Program Environmental
Impact Report and the 2008-2014 City of Newport Beach Housing Element
Update and Initial Study/Negative Declaration ("Addendum No. 9") - An
addendum which addresses reasonably foreseeable environmental impacts
resulting from the Project;
WHEREAS, the Property is designated Mixed -Use Horizontal 2 (MU-H2) by the
General Plan Land Use Element and located within the Newport Place Planned
Community (PC-11) Zoning District Professional and Business Office Site 7 with a
residential overlay;
WHEREAS, the Property is not located within the coastal zone, therefore
amending the Local Coastal Program or obtaining a coastal development permit is not
required;
WHEREAS, a public hearing was held by the Planning Commission on May 23,
2024, in the Council Chambers at 100 Civic Center Drive, Newport Beach, California. A
notice of the time, place, and purpose of the hearing was given in accordance with
Government Code Section 54950 et seq. ("Ralph M. Brown Act"), and Chapters 15.45
(Development Agreements) and 20.62 (Public Hearings) of the NBMC. Evidence, both
written and oral, was presented to and considered by, the Planning Commission at this
hearing;
WHEREAS, at the hearing, the Planning Commission adopted Resolution No.
PC2024-008 by a majority vote (4 ayes, 1 nay) 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 June 20, 2024, the ALUC determined the Project is inconsistent
with the AELUP;
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Ordinance No. 2024-
Page 3 of 7
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 July 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 hearing was given in accordance with CPUC
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. 2024-45 by unanimous vote (5 ayes, 2 recusals) to notify the ALUC and
State Department of Transportation Aeronautics Program ("Aeronautics Program") of
the City's intent to override the ALUC's inconsistency finding;
WHEREAS, a notice of the City's intent to override the ALUC inconsistency
determination, along with Resolution No. 2024-45 was sent via certified mail and
emailed to the ALUC and the Aeronautics Program on July 10, 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;
WHEREAS, a public hearing was held by the City Council on August 27, 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 the Ralph M. Brown Act, Chapters 15.45 (Development Agreements) and
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);
Ordinance No. 2024-
Page 4 of 7
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 into a development agreement;
WHEREAS, the DA satisfies the mandatory elements of Section 15.45.040
(Contents) of the NBMC in providing for the future development of 282 dwelling units,
inclusive of requested density bonus;
WHEREAS, the DA further satisfies other mandatory elements of Section
15.45.040 (Contents) of the NBMC as the DA specifies the permitted uses of the
property, the maximum height and size of the Project, and includes requirements for
subsequent discretionary actions, but the requirements do not prevent the development
of the land for the uses and to the density of development set forth in the agreement;
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 $285,760 public safety
fee, a $714,212 park in -lieu fee, and $3,555,268 public benefit fee, for a total of
$4,555,240 to be used by the City as specified in the DA.
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 recommend atior
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Ordinance No. 2024-
Page 5 of 7
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
in order to avoid waste of time and resources; and (iv) reduce the economic costs of
development by providing assurance to the property owners that they may proceed with
projects consistent with existing policies, rules, and regulations.
Additionally, the City Council finds that 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
"B," and incorporated herein by reference to accommodate the development of Project
and to enter the agreement for a term of ten years, is hereby approved.
Section 4: Environmental Impact Report Addendum No. 9 was prepared for
the Project in compliance with the California Environmental Quality Act (CEQA) set forth
in California Public Resources Code Section 21000 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.
Ordinance No. 2024-
Page 6 of 7
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.
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 27th day of August, 2024, and adopted on the 10th day of
September, 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
-t', E__ �'
AAr C. HAR , CITY ATTORNEY
Attachments: Exhibit A — Legal Description
Exhibit B — Development Agreement
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Exhibit "A"
Legal Description
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF
NEWPORT BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND
IS DESCRIBED AS FOLLOWS:
LOT 3 OF TRACT NO. 7770, IN THE CITY OF NEWPORT BEACH, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 299,
PAGES 15 AND 16 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA.
EXCEPTING THEREFROM THE FULL RIGHTS AND ALL MINERALS, PETROLEUM,
GAS AND OTHER HYDROCARBON SUBSTANCES EXISTING BELOW 500 FEET
FROM THE SURFACE OF SAID REAL PROPERTY DESCRIBED ABOVE;
PROVIDED, HOWEVER, THAT GRANTOR HEREBY EXPRESSLY WAIVES THE
RIGHT TO ENTER UPON THE SURFACE OF SAID REAL PROPERTY OR THE
PURPOSE OF EXPLORING FOR, OR PRODUCING THE MINERALS, PETROLEUM,
GAS AND OTHER HYDROCARBON SUBSTANCES AS RESERVED BY DEED
RECORDED IN BOOK 10328, PAGE 506 OF OFFICIAL RECORDS.
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Exhibit "B"
Development Agreement
4-12
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
1600 DOVE, LP and GS 1600 DOVE, LLC
and
THE PICERNE GROUP, INC.
CONCERNING
"THE RESIDENCES AT 1600 DOVE 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 _ day of , 2024 (the "Agreement Date"), and is being entered into by and between
the City of Newport Beach ("City"), 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, 1600 Dove, LP, a California limited partnership and GS 1600 Dove, LLC, a Delaware
limited liability company, (collectively referred to as "Property Owner"), and The Picerne Group,
Inc., a Delaware corporation ("Developer"). City, Property Owner, and Developer are sometimes
collectively referred to in this Agreement as the "Parties" and individually as a "Party."
RECITALS
A. Property Owner is the owner of that certain real property located in the City of
Newport Beach, County of Orange, State of California commonly referred to as 1600 Dove Street
and more particularly described in the legal description attached as Exhibit "A" and depicted on
the site map attached hereto as Exhibit `B" ("Pro e "). Developer has an equitable interest in
the Property by way of the Contribution Agreement and Joint Escrow Instructions ("Contribution
Agreement") between Property Owner and Developer which provides that Property Owner will
contribute the Property to a joint venture that includes Property Owner and Developer upon the
Closing Date as that term is defined in the Contribution Agreement. Developer 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 2.49 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 this Agreement for the construction of a seven -story,
apartment complex consisting of up to 282 apartment units (including affordable units).
E. As detailed in Section 3 of this Agreement, Property Owner and Developer agree
to provide the following significant public benefits as consideration for this Agreement: a public
benefit fee in the amount of Three Million Five Hundred Fifty -Five Thousand Two Hundred
4-
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Sixty -Eight Dollars and 00/100 ($3,555,268.00), a park in -lieu fee of Seven Hundred Fourteen
Thousand Two Hundred Twelve Dollars and 00/100 ($714,212.00), and a public safety fee in the
amount of Two Hundred Eighty -Five Thousand Seven Hundred Sixty Dollars and 00/100
($285,760.00).
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-112") 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) is consistent with the Project's Addendum No. 9 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 May 9, 2024, 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.
1. On August 27, 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, Developer, Property Owner, and members of the public. On September
10, 2024, consistent with applicable provisions of the Development Agreement Statute and
Development Agreement Ordinance, the City Council adopted its Ordinance No. 2024- (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, Property Owner, and Developer agree as follows:
Definitinnq_
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:
FA
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"Action" shall have the meaning ascribed in Section 8.10 of this Agreement.
"Adopting Ordinance" shall mean City Council Ordinance No. 2024- approving and
adopting this Agreement.
"Agreement" shall mean this Development Agreement, as the same may be amended from
time to time.
"Agreement Date" shall mean September 10, 2024, which date is the date the City Council
adopted the Adopting Ordinance.
"CEQA" 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.
"Developer" shall mean the Piceme Group,
successor or assignee to all or any portion of its right,
all or a portion of the Property and/or the Project.
Inc., a Delaware corporation, and any
title, and/or interest in and to ownership of
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4-16
"Development Agreement Ordinance" shall mean Chapter 15.45 of the City of Newport
Beach Municipal Code.
"Development Agreement Statute" shall mean California Government Code Sections
65864-65869.5, inclusive.
"Development Exactions" shall mean any requirement of City in connection with or
pursuant to any ordinance, resolution, rule, or official policy for the dedication of land, the
construction or installation of any public improvement or facility, or the payment of any fee or
charge in order to lessen, offset, mitigate, or compensate for the impacts of Development of the
Project on the environment or other public interests.
"Development Plan" shall mean all of the land use entitlements, approvals and permits
approved by the City for the Project on or before the Agreement Date, as the same may be amended
from time to time consistent with this Agreement. Such land use entitlements, approvals and
permits include, without limitation, the following: (1) the Development rights as provided under
this Agreement; (2) General Plan Amendment adopted pursuant to Resolution No. 2024-; (3)
Affordable Housing Implementation Plan adopted pursuant to Resolution No. 2024-; and (4)
Traffic Study adopted pursuant to Resolution No. 2024-_
"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 and Developer'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 and Developer 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
0
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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
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 sec ., as amended
("CERCLA"); the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq., as amended ("RCRA"); the Emergency
Planning and Community Right to Know Act of 1986, 42 U.S.C. Sections 11001 et seq., as
amended; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., as
amended; the Clean Air Act, 42 U.S.C. Sections 7401 et seq., as amended; the Clean Water Act,
33 U.S.C. Section 1251, et SeMc ., as amended; the Toxic Substances Control Act, 15 U.S.C.
Sections 2601 et seq., as amended; the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 136 et seq., as amended; the Federal Safe Drinking Water Act, 42 U.S.C. Sections
300f et seq., as amended; the Federal Radon and Indoor Air Quality Research Act, 42 U.S.C.
Sections 7401 et seq., as amended; the Occupational Safety and Health Act, 29 U.S.C. Sections
651 et 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 by Resolution No. 2024-51 and any other
amendments through the Agreement Date but excluding any amendment after the Agreement Date
that impairs or restricts the Property Owner and Developer's rights set forth in this Agreement,
unless such amendment is expressly authorized by this Agreement or is specifically agreed to by
the Property Owner and/or Developer.
"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.
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"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.
"Part-" or "Parties" shall mean City, Property Owner, and/or Developer as determined by
the context.
"Project" shall mean the development of a seven -story, apartment complex consisting of
up to 282 apartment units including all on -site and off -site improvements that Property Owner
and/or Developer is/are 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 1600 Dove, LLP and GS 1600, LLC 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 and/or Developer is/are 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 Imvlementation.
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.
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2.3 Property Owner and Developer's Representations and Warranties Regarding Ownership of
the Property and Related Matters Pertaining to this Agreement.
Property Owner, Developer and each person executing this Agreement on behalf of
Property Owner and/or Developer hereby represent and warrant to City as follows: (i) that Property
Owner is the owner of the fee simple title of the Property; (ii) that Property Owner and Developer
entered into the Contribution Agreement and that the Property shall be transferred to a joint venture
that includes Property Owner and Developer; (iii) if Property Owner and/or Developer or any co-
owner comprising Property Owner and/or Developer is/are a legal 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 and/or Developer or any co-owner comprising Property Owner and/or Developer is/are 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
and/or Developer to enter into this Agreement have been taken and that Property Owner and
Developer have the legal authority to enter into this Agreement; (v) Property Owner and
Developer's entering into and performing its obligations set forth in this Agreement will not result
in a violation of any obligation, contractual or otherwise, that Property Owner and/or Developer
or any person or entity comprising Property Owner and/or Developer has/have to any third party;
(vi) that neither Property Owner and/or Developer nor any co-owner comprising Property Owner
and/or Developer is/are the subject of any voluntary or involuntary petition in bankruptcy; and (vi)
Property Owner and/or Developer has/have 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 20_, 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
Parties, in which event the Parties shall have no further rights or obligations hereunder except that
Property Owner and Developer's indemnity obligations set forth in Article 10 shall remain in full
force and effect and shall be enforceable, and the Development Regulations applicable to the
Project and the Property only (but not those general Development Regulations applicable to other
properties in the City) shall be repealed by the City after delivery of said notice of termination
except for the Development Regulations that have been disapproved by City's voters at a
referendum election and, therefore, never took effect.
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The Termination Date shall be the earliest of the following dates: (i) the tenth (loth)
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 and Developer's complete
satisfaction, performance, and payment, as applicable, of all Development Exactions, the issuance
of all required final occupancy permits, and acceptance by City or applicable public agency(ies)
or private entity(ies) of all required offers of dedication.
Notwithstanding any other provision 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 and/or
Developer 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 and Developer 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 Three Million Five Hundred Fifty -Five Thousand
Two Hundred Sixty -Eight Dollars and 00/100 ($3,555,268.00) 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 and Developer acknowledge 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
Property Owner and Developer's vested rights to be acquired hereunder, and that Property Owner
and Developer expressly waive 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
and/or Developer's default, if Property Owner and/or Developer shall fail to timely pay any portion
of the Public Benefits identified in this Section 3.1 when due, City shall have the right to withhold
issuance of any further building permits, occupancy permits, or other development or building
permits for the Project.
3.2 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 second 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
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Index figures such that, for example, if the Effective Date of this Agreement falls on July 1 and
the most recently available CPI Index figure on the first Adjustment Date (January 1 of the
following year) is the CPI Index for November of the preceding year, the percentage increase in
the CPI Index for that partial year (a 6-month period) shall be calculated by comparing the CPI
Index for November of the preceding year with the CPI Index for May of the preceding year (a 6-
month period). In no event, however, shall application of the CPI Index reduce the amount of the
Public Benefit Fee (or unpaid portion thereof) below the amount in effect prior to any applicable
Adjustment Date.
3.2 Other Public Benefits.
3.2.1 In addition to the Public Benefit Fee, the direct and indirect benefits City shall receive
pursuant to this Development Agreement are as follows:
3.2.2 Park In -Lieu Fee. The Property Owner and Developer 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 Seven Hundred
Fourteen Thousand Two Hundred Twelve Dollars and 00/100 ($714,212.00), for the purpose of
acquisition and improvement of other properties as parklands to serve the Airport Area (the "Park
In -Lieu Fee"). The Park In -Lieu Fee shall be due and payable prior to the issuance of the first
building permit for any portion of the Project.
3.2.3 Public Safety Fee. The Property Owner and Developer shall pay a public safety fee in the
amount of Two Hundred Eighty -Five Thousand Seven Hundred Sixty Dollars and 00/100
($285,760.00) 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 "Public Safety Fee"). The Public
Safety Fee shall be due and payable prior to the issuance of the first building permit for any portion
of the Project.
3.2.4 Apportionment of Fees. Property Owner, Developer and City hereby acknowledge and
agree that the amounts of the Public Benefit Fee (Section 3.1), Park In -Lieu Fee (Section 3.2.2),
and Public Safety Fee (Section 3.2.3) assessed herein are predicated on the Project being developed
as a 282-unit, seven- story residential development project. In the event Property Owner and/or
Developer receive(s) land use approval from the City amending the development plan for the
Project that includes fewer residential units, the amounts owed by Property Owner and Developer
to City for the Public Benefit Fee, Park In -Lieu Fee, and Public Safety Fee shall each be reduced
on a proportional basis.
4. Development of Proiect.
4.1 Applicable Regulations; Property Owner and Developer's Vested Rights and City's
Reservation of Discretion With Respect to Subsequent Development Approvals.
Other than as expressly set forth in this Agreement, during the Term of this Agreement, (i)
Property Owner and Developer shall have the vested right to Develop the Project on and with
respect to the Property in accordance with the terms of the Development Regulations and this
Agreement and (ii) City shall not prohibit or prevent development of the Property on grounds
inconsistent with the Development Regulations or this Agreement. Notwithstanding the foregoing,
nothing herein is intended to limit or restrict City's discretion with respect to (i) review and
approval requirements contained in the Development Regulations, (ii) exercise of any
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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 and/or Developer, if any, 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 and/or Developer'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 and/or Developer has/have 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 and Developer represent and City
acknowledges that Property Owner and Developer would not make these expenditures without this
Agreement, and that Property Owner and/or Developer is/are and will be making these
expenditures in reasonable reliance upon obtaining vested rights to Develop the Project as set forth
in this Agreement.
Property Owner and/or Developer 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 and/or Developer 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
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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 and Developer 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 and Developer deem appropriate within the exercise of Property
Owner and Developer's sole subjective business judgment, provided that such Development
occurs in accordance with this Agreement and the Development Regulations, notwithstanding
adoption by City's electorate of an initiative to the contrary after the 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 and Developer's vested rights in this Agreement or otherwise conflicts with the express
provisions of this Agreement.
4.3 Reservations of Authority.
Notwithstanding any other provision set forth in this Agreement to the contrary, the laws,
rules, regulations, and official policies set forth in this Section 4.3 shall apply to and govern the
Development of the Project on and with respect to the Property.
4.3.1 Procedural Regulations. Procedural regulations relating to hearing bodies,
petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals, and
any other matter of procedure shall apply to the Property, provided that such procedural regulations
are adopted and applied City-wide or to all other properties similarly situated in City.
4.3.2 Processing and Permit Fees. City shall have the right to charge and Property
Owner and Developer shall be required to pay all applicable processing and permit fees to cover
the reasonable cost to City of processing and reviewing applications and plans for any required
Subsequent Development Approvals, building permits, excavation and grading permits,
encroachment permits, and the like, for performing necessary studies and reports in connection
therewith, inspecting the work constructed or installed by or on behalf of Property Owner and
Developer, and monitoring compliance with any requirements applicable to Development of the
Project, all at the rates in effect at the time fees are due.
4.3.3 Consistent Future City Regulations. City ordinances, resolutions,
regulations, and official policies governing Development which do not conflict with the
Development Regulations, or with respect to such regulations that do conflict, where Property
Owner and Developer have 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 and Developer shall be required to satisfy and pay all Development
Exactions at the time performance or payment is due to the same extent and in the same amount(s)
that would apply to Property Owner, Developer 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
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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 and Developer'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 and/or Developer against the obligation to pay any of the
following (which are not included within the definition of "Development Exactions") in the full
amount that would apply in the absence of this Agreement: (i) City's normal fees for processing,
environmental assessment and review, tentative tract and parcel map review, plan checking, site
review and approval, administrative review, building permit, grading permit, inspection, and
similar fees imposed to recover City's costs associated with processing, reviewing, and inspecting
project applications, plans, and specifications; (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 and/or Developer's vested rights set forth in this
Agreement shall apply to the Property, together with any City ordinances, resolutions, regulations,
and official policies that are necessary to enable City to comply with the provisions of any such
overriding federal or state laws and regulations, provided that (i) Property Owner and Developer
do not waive its right to challenge or contest the validity of any such purportedly overriding
federal, state, or City law or regulation; and (ii) upon the discovery of any such overriding federal,
state, or City law or regulation that prevents or precludes compliance with any provision of this
Agreement, City, Property Owner or Developer shall provide to all Parties 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, Property Owner, and Developer shall meet and confer
in good faith in a reasonable attempt to determine whether a modification or suspension of this
Agreement, in whole or in part, is necessary to comply with such overriding federal, state, or City
law or regulation. In such negotiations, City, Property Owner, and Developer agree to preserve
the terms of this Agreement and the rights of Property Owner and Developer as derived from this
Agreement to the maximum feasible extent while resolving the conflict. City agrees to cooperate
with Property Owner and Developer at no cost to City in resolving the conflict in a manner which
minimizes any financial impact of the conflict upon Property Owner and/or Developer. City also
agrees to process in a prompt manner Property Owner and/or Developer's proposed changes to the
Project and any of the Development Regulations as may be necessary to comply with such
overriding federal, state, or City law or regulation; provided, however, that the approval of such
changes by City shall be subject to the discretion of City, consistent with this Agreement.
4.3.6 Public Health and Safety. Any City ordinance, resolution, rule, regulation,
program, or official policy that is necessary to protect persons on the Property or in the immediate
vicinity from conditions dangerous to their health or safety, as reasonably determined by City,
shall apply to the Property, even though the application of the ordinance, resolution, rule
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regulation, program, or official policy would result in the impairment of Property Owner and
Developer's vested rights under this Agreement.
4.3.7 Uniform Building Standards. Existing and future building and building -
related standards set forth in the 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 and/or
Developer construct(s) or install(s) 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, Developer or the Property any utility capacity, service, or facilities that may be needed to
serve the Project, whether domestic or reclaimed water service, sanitary sewer transmission or
wastewater treatment capacity, downstream drainage capacity, or otherwise, and City shall have
the right to limit or restrict Development of the Project if and to the extent that City reasonably
determines 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
15.45.070 or by unilateral termination by City in the event of an uncured default of Property Owner
and/or Developer.
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 any of the Parties 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 Pronertv Owner and Developer's Compliance With Agreement.
7.1 General.
City shall review this Agreement once during every twelve (12) month period following
the Effective Date for compliance with the terms of this Agreement as provided in Government
Code Section 65865.1. Property Owner and Developer (including any successor to the Property
Owner and Developer 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.
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7.2 Property Owner and Developer's Obligation to Demonstrate Good Faith Compliance.
During each annual review by City, Property Owner and Developer are required to
demonstrate good faith compliance with the terms of the Agreement. Property Owner and
Developer agree 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 or Developer has,
for the period under review, complied with the terms of this Agreement. If the Zoning
Administrator finds that Property Owner and Developer have so complied, the annual review shall
be concluded. If the Zoning Administrator finds, on the basis of substantial evidence, that Property
Owner and Developer have not so complied, written notice shall be sent to Property Owner and
Developer by first class mail of the Zoning Administrator's finding of non-compliance, and
Property Owner and Developer shall be given at least ten (10) calendar days to cure any
noncompliance that relates to the payment of money and thirty (30) calendar days to cure any other
type of noncompliance. If a cure not relating to the payment of money cannot be completed within
thirty (30) calendar days for reasons which are beyond the control of Property Owner and
Developer, Property Owner and Developer must commence the cure within such thirty (30)
calendar days and diligently pursue such cure to completion. If Property Owner and Developer
fails to cure such noncompliance within the time(s) set forth above, such failure shall be considered
to be a Default and City shall be entitled to exercise the remedies set forth in Article 8 below.
7.4 Annual Review a Non -Exclusive Means for Determining and Requiring Cure of Property
Owner and/or Developer's Default.
The annual review procedures set forth in this Article 7 shall not be the exclusive means
for City to identify a Default by Property Owner and/or Developer or limit City's rights or remedies
for any such Default.
8. Events of Default.
8.1 General Provisions. In the event of any material default, breach, or violation of the terms
of this Agreement ("Default"), the Party alleging a Default shall deliver a written notice (each, a
"Notice of Default") to the defaulting Party. The Notice of Default shall specify the nature of the
alleged Default and a reasonable manner and sufficient period of time (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 or Developer notice of default and may
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immediately pursue remedies for a Property Owner or Developer Default that result in an
immediate threat to public health, safety or welfare.
8.2 Default by Property Owner or Developer.
If Property Owner or Developer 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 or Developer'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 or Developer's appeal of the Notice of Default is timely and in good faith but after a public
hearing of Property Owner or Developer's appeal the City Council concludes that Property Owner
or Developer 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 or Developer's appeal is communicated to Property Owner or Developer
in writing.
8.3 City's Option to Terminate Agreement.
In the event of an alleged Property Owner or Developer Default, City may not terminate
this Agreement without first delivering a written Notice of Default and providing Property Owner
and Developer with the opportunity to cure the Default within the Cure Period, as provided in
Section 8.1, and complying with Section 8.2 if Property Owner or Developer timely appeals any
Notice of Default. A termination of this Agreement by City shall be valid only if good cause exists
and is supported by evidence presented to the City Council at or in connection with a duly noticed
public hearing to establish the existence of a Default. The validity of any termination may be
judicially challenged by Property Owner or Developer. Any such judicial challenge must be
brought within thirty (30) days of service on Property Owner, or Developer by first class mail,
postage prepaid, of written notice of termination by City or a written notice of City's determination
of an appeal of the Notice of Default as provided in Section 8.2.
8.4 Default by City_.
If Property Owner or Developer alleges a City Default and alleges that the City has not
cured the Default within the Cure Period, Property Owner or Developer 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 or Developer's
performance hereunder shall neither be a Property Owner or Developer Default nor constitute
grounds for termination or cancellation of this Agreement by City and shall, at Property Owner or
Developer's option (and provided Property Owner or Developer 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 any Party in delivering a Notice of Default shall not waive that Party's
right to deliver a future Notice of Default of the same or any other Default.
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8.6 Specific Performance Remedv.
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, Property Owner, Developer and City may be foreclosed from other choices
they may have had to plan for the development of the Property, to utilize the Property or provide
for other benefits and alternatives. Property Owner, Developer, and City have invested significant
time and resources and performed extensive planning and processing of the Project in agreeing to
the terms of this Agreement and will be investing even more significant time and resources in
implementing the Project in reliance upon the terms of this Agreement. It is not possible to
determine the sum of money which would adequately compensate Property Owner, Developer or
City for such efforts. For the above reasons, City, Property Owner and Developer agree that
damages would not be an adequate remedy if City, Property Owner or Developer fails to carry out
its obligations under this Agreement. Therefore, specific performance of this Agreement is
necessary to compensate Property Owner and Developer if City fails to carry out its obligations
under this Agreement or to compensate City if Property Owner or Developer fails 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 a 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
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 or Developer's Default.
In the event of any Default by Property Owner or Developer, in addition to any other
remedies which may be available to City, whether legal or equitable, City shall be entitled to
receive and retain any Development Exactions applicable to the Project or the Property, including
any fees, grants, dedications, or improvements to public property which it may have received prior
to Property Owner or Developer's Default without recourse from Property Owner, Developer, or
eithers successors or assigns.
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8.9 No Personal Liabilitv of City Officials, Emplovees, 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.
No Party shall be deemed to be in Default where failure or delay in performance of any of
its obligations under this Agreement is caused, through no fault of the Party whose performance
is prevented or delayed, by floods, earthquakes, other acts of God, fires, wars, riots or similar
hostilities, strikes or other labor difficulties, state or federal regulations, or court actions. Except
as specified above, nonperformance shall not be excused because of the act or omission of a third
person. In no event shall the occurrence of an event of force majeure operate to extend the Term
of this Agreement. In addition, in no event shall the time for performance of a monetary obligation,
including without limitation Property Owner and/or Developer's obligation to pay Public Benefit
Fees, be extended pursuant to this Section.
10. Indemnity Oblivations of Pronertv Owner.
10.1 Indemnity Arisiniz From Acts or Omissions of Pronertv Owner or Developer.
Property Owner and Developer 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 Developer
or Property Owner or Developer's agents, contractors, subcontractors, agents, or employees in the
course of Development of the Project or any other activities of Property Owner or Developer
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 and Developer shall pay the reasonable cost for defense of
any Claim. In the event City, Property Owner or Developer recovers any attorneys' fees, expert
witness fees, costs, interest, or other amounts from the party or parties asserting the Claim,
Property Owner and Developer shall be entitled to retain the same (provided it has fully performed
its indemnity obligations hereunder). The indemnity provisions in this Section 10.1 shall
commence on the Agreement Date, regardless of whether the Effective Date occurs, and shall
survive the Termination Date.
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10.2 Third PartyLitigation.
In addition to its indemnity obligations set forth in Section 10.1, Property Owner and
Developer 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
and Developer of any such Claim and City shall cooperate with Property Owner and Developer in
the defense of such Claim. If City fails to promptly notify Property Owner and Developer of such
Claim, Property Owner and Developer shall not be responsible to indemnify, defend, and hold
City harmless from such Claim until Property Owner and Developer are so notified and if City
fails to cooperate in the defense of a Claim Property Owner and Developer shall not be responsible
to defend, indemnify, and hold harmless City during the period that City so fails to cooperate or
for any losses attributable thereto. City shall be entitled to retain separate counsel to represent City
against the Claim and the City's defense costs for its separate counsel shall be included in Property
Owner and Developer's indemnity obligation, provided that such counsel shall reasonably
cooperate with Property Owner and Developer in an effort to minimize the total litigation expenses
incurred by Property Owner and Developer. In the event City Property Owner, or Developer
recovers any attorney's fees, expert witness fees, costs, interest, or other amounts from the party
or parties asserting the Claim, Property Owner and Developer 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 Environmental Indemnity.
In addition to its indemnity obligations set forth in Section 10.1, from and after the
Agreement Date, Property Owner and Developer shall indemnify, defend, and hold harmless City
and City's Affiliated Parties from and against any and all Claims for personal injury or death,
property damage, economic loss, statutory penalties or fines, and damages of any kind or nature
whatsoever, including without limitation 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 or Developer in connection with Property Owner and/or
Developer'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.
11. Assignment.
Property Owner or Developer shall have the right to sell, transfer, or assign (hereinafter,
collectively, a "Transfer") its interest in or fee title to the Property, in whole or in part, to any
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person, partnership, joint venture, firm, or corporation (which successor, as of the effective date
of the Transfer, shall become the "Property Owner" under this Agreement) at any time from the
Agreement Date until the Termination Date; provided, however, that no such Transfer shall violate
the provisions of the Subdivision Map Act (Government Code Section 66410 et seq.) or City's
local subdivision ordinance and any such Transfer shall include the assignment and assumption of
Property Owner or Developer's rights, duties, and obligations set forth in or arising under this
Agreement as to the Property or the portion thereof so Transferred and shall be made in strict
compliance with the following conditions precedent: (i) no transfer or assignment of any of
Property Owner or Developer'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 or Developer (as transferor) shall notify City, in writing, of
such proposed Transfer and deliver to City a written assignment and assumption, executed in
recordable form by the transferring and successor Property Owner or Developer and in a form
subject to the reasonable approval of the City Attorney of City (or designee), pursuant to which
the transferring Property Owner or Developer 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 or Developer under this Agreement with respect to
the portion of, or interest in, the Property sold, transferred, and assigned to such Permitted
Transferee; provided, however, that in the event of a Transfer of less than all of the Property, or
interest in the Property, no such Permitted Transferee shall have the right to enter into an
amendment of this Agreement that jeopardizes or impairs the rights or increases the obligations of
the Property Owner with respect to the balance of the Property, without Property Owner or
Developer's written consent.
Notwithstanding any Transfer, the transferring Property Owner or Developer 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 or Developer 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 or Developer's full
satisfaction of all of the following conditions: (i) the transferring Property Owner or Developer no
longer has a legal or equitable interest in the portion of the Property so Transferred other than as a
beneficiary under a deed of trust; (ii) the transferring Property Owner or Developer is not then in
Default under this Agreement and no condition exists that with the passage of time or the giving
of notice, or both, would constitute a Default hereunder; (iii) the transferring Property Owner or
Developer has provided City with the notice and the fully executed written and recordable
assignment and assumption agreement required as set forth in the first paragraph of this Section
11; and (iv) the successor Property Owner either (A) provides City with substitute security
equivalent to any security previously provided by the transferring Property Owner or Developer
to City to secure performance of the successor Property Owner's obligations hereunder with
respect to the Property or the portion of the Property so Transferred or (B) if the transferred
obligation in question is not a secured obligation, the successor Property Owner either provides
security reasonably satisfactory to City or otherwise demonstrates to City's reasonable satisfaction
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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 or
Developer in any manner from encumbering the Property, any part of the Property, or any
improvements on the Property with any Mortgage securing financing with respect to the
construction, development, use, or operation of the Project.
12.2 Mortgagee Protection.
This Agreement shall be superior and senior to the lien of any Mortgage. Nevertheless, no
breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any Mortgage
made in good faith and for value. Any acquisition or acceptance of title or any right or interest in
the Property or part of the Property by a Mortgagee (whether due to foreclosure, trustee's sale,
deed in lieu of foreclosure, lease termination, or otherwise) shall be subject to all of the terms and
conditions of this Agreement. Any Mortgagee who takes title to the Property or any part of the
Property shall be entitled to the benefits arising under this Agreement.
12.3 Mortgagee Not Obligated.
Notwithstanding the provisions of this Section 12.3, a Mortgagee will not have any
obligation or duty under the terms of this Agreement to perform the obligations of Property Owner
or Developer or other affirmative covenants of Property Owner or Developer, or to guarantee this
performance except that: (i) the Mortgagee shall have no right to develop the Project under the
Development Regulations without fully complying with the terms of this Agreement; and (ii) to
the extent that any covenant to be performed by Property Owner or Developer is a condition to the
performance of a covenant by City, that performance shall continue to be a condition precedent to
City's performance.
12.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure.
Each Mortgagee shall, upon written request to City, be entitled to receive written notice
from City of. (i) the results of the periodic review of compliance specified in Article 7 of this
Agreement, and (ii) any default by Property Owner or Developer of its obligations set forth in this
Agreement.
Each Mortgagee shall have a further right, but not an obligation, to cure the Default within
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
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health or safety, City may not exercise any of its judicial remedies set forth in this Agreement to
terminate or substantially alter the rights of the Mortgagee until expiration of the thirty (30) day
period. In the case of a non -monetary Default that cannot with diligence be remedied or cured
within thirty (30) days, the Mortgagee shall have additional time as is reasonably necessary to
remedy or cure the Default, provided the Mortgagee promptly commences to cure the non -
monetary Default within thirty (30) days and diligently prosecutes the cure to completion.
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: City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Attorney
TO PROPERTY OWNER John Saunders
1600 Dove, LP and GS 1600 Dove, LLC
4040 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
With a copy to:
TO DEVELOPER: Greg Nakahira
The Piceme Group
5000 Birch Street, Ste. 600
Newport Beach, CA 92660
With a copy to: Kevin Ashe
Holland & Knight LLP
4675 MacArthur Court, Ste. 900
Newport Beach, CA 92660
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Any Party may change the address stated in this Section 14.2 by delivering notice to the other
Parties in the manner provided in this Section 14.2, and thereafter notices to such Party 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. No Party will be acting
as the agent of the other in any respect, and each Party will be an independent contracting entity
with respect to the terms, covenants, and conditions set forth in this Agreement. This Agreement
forms no partnership, joint venture, or other association of any kind. The only relationship between
the Parties is that of a government entity regulating the Development of private property by the
owner or user of the Property.
14.4 Cooperation.
Each Party shall cooperate with and provide reasonable assistance to the other Party to the
extent consistent with and necessary to implement this Agreement. Upon the request of a Party at
any time, the other Party shall promptly execute, with acknowledgement or affidavit if reasonably
required, and file or record the required instruments and writings and take any actions as may be
reasonably necessary to implement this Agreement or to evidence or consummate the transactions
contemplated by this Agreement.
14.5 Estoppel Certificates.
At any time, a 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 Parry 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.
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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.
14.9 Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be
identical and may be introduced in evidence or used for any other purpose without any other
counterpart, but all of which shall together constitute one (1) and the same agreement.
14.10 Entire Agreement.
This Agreement constitutes the entire agreement between the Parties and supersedes all
prior agreements and understandings, both written and oral, between the Parties with respect to the
subject matter addressed in this Agreement.
14.11 Severability.
The Parties intend that each and every obligation of the Parties is interdependent and
interrelated with the other, and if any provision of this Agreement or the application of the
provision to any Party or circumstances shall be held invalid or unenforceable to any extent, it is
the intention of the Parties that the remainder of this Agreement or the application of the provision
to persons or circumstances shall be rendered invalid or unenforceable. The Parties intend that no
Party shall receive any of the benefits of the Agreement without the full performance by such Party
of all of its obligations provided for under this Agreement. Without limiting the generality of the
foregoing, the Parties intend that Property Owner and Developer shall not receive any of the
benefits of this Agreement if any of Property Owner or Developer's obligations are rendered void
or unenforceable as the result of any third party litigation, and City shall be free to exercise its
legislative discretion to amend or repeal the Development Regulations applicable to the Property
and Property Owner and Developer shall cooperate as required, despite this Agreement, should
third party litigation result in the nonperformance of Property Owner or Developer's obligations
under this Agreement. The provisions of this Section 14.11 shall apply regardless of whether the
Effective Date occurs and after the Termination Date.
14.12 Construction.
This Agreement has been drafted after negotiation and revision. City, Property Owner,
and Developer are sophisticated parties who were represented by independent counsel throughout
the negotiations and Property Owner and Developer had the opportunity to be so represented and
voluntarily chose to not be so represented. City, Property Owner, and Developer agree and
acknowledge that the terms of this Agreement are fair and reasonable, taking into account their
23
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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 any Party.
14.13 Successors and Assigns; Constructive Notice and Acceptance.
The burdens of this Agreement shall be binding upon, and the benefits of this Agreement
shall inure to, all successors in interest to the Parties to this Agreement. All provisions of this
Agreement shall be enforceable as equitable servitudes and constitute covenants running with the
land. Each covenant to do or refrain from doing some act hereunder with regard to Development
of the Property: (i) is for the benefit of and is a burden upon every portion of the Property; (ii) runs
with the Property and each portion thereof; and (iii) is binding upon each Party and each successor
in interest during its ownership of the Property or any portion thereof. Every person or entity who
now or later owns or acquires any right, title, or interest in any part of the Project or the Property
is and shall be conclusively deemed to have consented and agreed to every provision of this
Agreement. This Section 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, Property Owner, and Developer. This
Agreement does not involve any third -party beneficiaries, and it is not intended and shall not be
construed to benefit or be enforceable by any other person or entity.
14.15 Applicable Law and Venue.
This Agreement shall be construed and enforced consistent with the 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:
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EXHIBIT
DESCRIPTION
DESIGNATION
A
Legal Description of Property
B
Depiction of the Property
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]
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SIGNATURE PAGE TO DEVELOPMENT AGREEMENT
"PROPERTY OWNER"
1600 DOVE LP, a Nevada limited partnership
By: _
Name:
Title:
By: _
Name:
Title:
GS 1600 DOVE LLC, a Delaware limited
liability company
By: _
Name:
Title:
By: _
Name:
Title:
ATTEST:
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
IA(2,- w===
Aaron 14. Harp, Ciu Attorney
Jennifer Hernandez, Attorney for Property Owner
"DEVELOPER"
THE PICERNE GROUP, INC., a Delaware
corporation
By: _
Name:
Title:
By: _
Name:
Title:
"CITY"
CITY OF NEWPORT BEACH, a municipal
corporation and charter city
Will O'Neill, Mayor
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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 (seal)
ACKNOWLEDGMENT
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of
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)
..8
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF
NEWPORT BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
LOT 3 OF TRACT NO. 7770, IN THE CITY OF NEWPORT BEACH, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 299, PAGES
15 AND 16 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA.
EXCEPTING THEREFROM THE FULL RIGHTS AND ALL MINERALS, PETROLEUM,
GAS AND OTHER HYDROCARBON SUBSTANCES EXISTING BELOW 500 FEET
FROM THE SURFACE OF SAID REAL PROPERTY DESCRIBED ABOVE;
PROVIDED, HOWEVER, THAT GRANTOR HEREBY EXPRESSLY WAIVES THE
RIGHT TO ENTER UPON THE SURFACE OF SAID REAL PROPERTY OR THE
PURPOSE OF EXPLORING FOR, OR PRODUCING THE MINERALS, PETROLEUM,
GAS AND OTHER HYDROCARBON SUBSTANCES AS RESERVED BY DEED
RECORDED IN BOOK 10328, PAGE 506 OF OFFICIAL RECORDS.
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10
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EXHIBIT B
DEPICTION OF PROPERTY
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