City of Culver City, California
Agenda Item Report
Page 1 of 4
Meeting Date: 01/30/2012 Item Number: A-2
CITY COUNCIL ITEM: Consideration of an Owner Participation Agreement with the
Hayden Tract Owners Association, and Award of a Professional Services Contract
with KOA Corporation for Design, Construction Documents and Construction
Administration Services, to Convert the Hayden Tract Railroad Spur into a Parking
Lot/Green Belt.
Contact Person/Dept.:
Todd Tipton/CDD
Phone Number:
(310) 253-5783
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (US Postal Mail 01/16/12) All businesses and property owners in the
Hayden Tract. (E-Mail) Meetings and Agendas – Redevelopment Agency and City
Council, Redevelopment Agency Projects (01/27/12.)
Department Approval:
Sol Blumenfeld: (01/26/12)
City Attorney Approval:
Carol Schwab:
Agency General Counsel Approval:
Murray Kane: (01/25/12)
Chief Financial Officer Approval:
Jeff Muir(by N. Kimball)(01/26/12)
City Manager/Executive Director Approval:
John Nachbar: (01/26/12)
RECOMMENDATION:
Staff recommends the City Council approve: 1) an Owner Participation Agreement
with the Hayden Tract Owners Association, 2) award a professional services
contract to KOA, Corporation for design, construction documents and construction
administration services to convert the Hayden Tract Railroad Spur (the “Spur”) into a
parking lot/green belt, and 3) approve a budget amendment appropriating $50,000
from former Agency taxable bond funds to fully fund the project.
A budget amendment requires a 4/5ths vote.
BACKGROUND:
On March 7, 2011, the City Council authorized the sale of the City owned portion of
the Spur to the other Spur property owners at a price of $155,000.00 for the purpose
of converting the Spur into a landscaped linear parking lot with 121 stalls
On January 4, 2012, the other property owners which own an interest in the spur
i
filed Articles of Incorporation with the California Secretary of State, creating the
Hayden Tract Owners Association (the “Association”) as a non-profit, mutual benefit
corporation, formed primarily for the purpose of purchasing the City owned portion
and operating a shared parking lot on the Spur. City of Culver City, California
Agenda Item Report
Page 2 of 4
DISCUSSION:
If approved, the Owner Participation Agreement memorializes the terms of the sale
of the City’s portion of the Spur to the Association, and the terms of the joint effort
between the City and the Association to remake the Spur into a parking lot for the
use of the Association.
The significant terms of the transaction contained within the OPA with the
Association are as follows:
• The City will pay the costs to design, and bid the construction project (estimated
at $237,745);
• The City and the Association will split the construction cost 50%/50% (the total
cost estimated at $1,600,000);
• Upon completion of construction and execution of a Reciprocal Easement
Agreement among the Spur owners, the Association will purchase the City’s
portion of the Spur for $155,000 (appraised value);
• Each owner will be allowed to use the parking spaces created on its property,
with access guaranteed through the Reciprocal Easement Agreement, which will
also govern common maintenance and operational issues;
• The parking spaces within the formerly City owned portion will be owned by the
Association to make available as the Association may determine;
• The City will assist the Association with temporary parking during construction.
In order to fulfill its obligation under the proposed OPA, to design and bid the
construction of the parking lot improvements, the City Council is also asked to
approve a professional services agreement with KOA Corporation to design the
parking lot improvements; produce approved plans, specifications and a City bid
package; and, provide construction administration services during bidding, bid award
and construction phases.
KOA has been providing civil engineering and project management services to the
City and the Culver City Redevelopment Agency for a period of time with good
results. The proposed cost of the contract with KOA is not-to-exceed $211,245.
If the OPA is approved on January 30, 2012, the project is expected to commence in
February 2012 and conclude approximately one year later.
The Project will provide much needed parking on a cost effective basis for Hayden
Tract properties that have transitioned over the years from manufacturing to creative
office uses. It will eliminate the blighting effect of the unimproved former rail spur by
providing a green belt of approximately 120 trees and will also provide the first
opportunity for Hayden Tract property owners to work collectively on solving area
problems which may lead to other similar improvement projects in the area.
City of Culver City, California
Agenda Item Report
Page 3 of 4
FISCAL ANALYSIS:
When completed, the linear parking lot will provide approximately 121 parking
spaces for Association member use. The Association may at its discretion lease
these spaces to other Hayden Tract businesses. The City cost and revenue of the
project is listed below:
Summary of City Costs:
Design, construction documents and construction administration: $ 211,245
50% of Construction Cost (estimated): $ 800,000
Costs of sale (estimated title, escrow and recording fees) $ 12,500
Subtotal expenses: $1,237,745
Less sale proceeds (cost of the improved parking): ($ 155,000)|1010|
Net cost of the project to the City (estimated) $ 1,082,745
Estimated City net cost per stall (@ 121stalls) $8,948|1010|
Estimated Owner cost per stall (@ 121 stalls): $7,893|1010|
In order to fully fund this project, a budget amendment appropriating an additional
$50,000 from former Agency taxable bond funds is required in the Hayden Tract
Spur/MTA Spur project (48994110). There are sufficient 2011 taxable bond
proceeds available to fund the budget amendment.
A budget amendment requires a 4/5ths vote.
ATTACHMENTS:
1. Joint Council/Redevelopment Agency staff report of March 7, 2011
2. Minute excerpt of City Council Meeting, March 7, 2011
MOTION:
That the City Council:
|1010| On March 7, 2011 the City Council approved a sale price of $312,360, and was determined as the sum of the appraised
fair market value of the land plus 50% of the estimated per space construction cost for 24 spaces. This method of
calculation was an error because it results in the owners paying the full cost of construction (for the parking spaces on
the City’s parcel) instead of half of the cost of construction, as negotiated with the owners prior to the March 7, 2011
Council meeting. |1010| Agency net cost divided by total spaces created: $1,082,745/121=$8,948 |1010| Owner cost divided by total spaces created: $955,000/121=$7,893 City of Culver City, California
Agenda Item Report
Page 4 of 4
1. Approve a budget amendment appropriating $50,000 from former Agency
taxable bond funds in the Hayden Tract/MTA Spur Project (48994110); and
A budget amendment requires a 4/5ths vote.
2. Approve an Owner Participation Agreement with the Hayden Tract Owners
Association for the joint development of a parking lot on the Spur property
and the sale of the City owned portion of the Spur to the Association; and
3. Authorize the City Attorney to review/prepare the necessary documents; and,
4. Authorize the City Manager to execute such documents on behalf of the City;
and
5. Approve a professional services agreement with KOA Corporation at a cost
not-to-exceed $211,245, to prepare design and construction bid documents,
and to provide construction administration services for construction of a
parking lot in the Hayden Tract Spur; and
6. Authorize the City Attorney to review/prepare the necessary documents; and,
7. Authorize the City Manager to execute such documents on behalf of the City.
i
Not including Scott Martin, owner of 8461 Warner Drive, and the University of California Regents, owners of
3600 Hayden Avenue (which has agreed to a reciprocal easement agreement with the other owners.)
MEETING DATE: JANUARY 30, 2012
AGENDA ITEM: CITY COUNCIL ITEM: CONSIDERATION OF AN OWNER
PARTICIPATION AGREEMENT WITH THE HAYDEN TRACT
OWNERS ASSOCIATION, AND AWARD OF A PROFESSIONAL
SERVICES CONTRACT WITH KOA CORPORATION FOR
DESIGN, CONSTRUCTION DOCUMENTS AND CONSTRUCTION
ADMINISTRATION SERVICES, TO CONVERT THE HAYDEN TRACT
RAILROAD SPUR INTO A PARKING LOT/GREEN BELT.
ATTACHMENTS
PAGES
1. Joint Council/Redevelopment Agency staff report of 1-5
March 7,2011
2. Minute excerpt of City Council Meeting, March 7, 2011 6
3. ii:R.115-c- OPN ATTACHMENT I
Meeting Date: 03/07/11 Item Number: J-3
JOINT CITY COUNCIL AND REDEVELOPMENT AGENCY AGENDA ITEM:
(1) City
Council and Agency Board Approval of a Memorandum of Understanding; (2)
Agency Board Approval of a Budget Amendment Related Thereto; and (3) City
Council Approval of a Purchase and Sale Agreement for a Parking Lot Project
Located along the Former Metropolitan Transportation Authority Spur between
Hayden Avenue and EaStham Drive.
Contact Person/Dept: Contact Person/Dept.:
Joe Susca / Community Development 310-253-5763
Todd Tipton / Community Development 310-253-5783
Fiscal Impact: Yes [X] No I] General Fund: Yes [X] No []
Public Hearing: 0 Action Item: [X] Attachments: [X]
Commission Action Required: Yes N [X] Date:
Public Notification: (E-Mail) Meetings and Agendas — City Council (03/04111); (E-Mail)
Meetings and Agendas — Redevelopment Agency (03/04111); (E-Mail) Redevelopment
Agency — Projects (03/04/11); The (Former) Metro Spur Property Owners (03/04/11).
Department Approval: Agency Counsel , Approval:
•
Sol Blumenfeld: (03/02/11) Murray Kane: (03/02/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (03/04/11)
Chief Financial Officer Approval: City Manager/Executive Director Approval:
Jeff Muir (by N. Kimball) (03/04/11) John M. Nachbar (03/04/11)
RECOMMENDATION:
Staff recommends the Culver City Redevelopment Agency Board (Agency Board)
approve a Memorandum of Understanding (MOU) that funds $1,050,000 ($250,000 in
soft costs and half the construction costs estimated at $800,000) to improve the former
Metropolitan Transportation Authority (Metro) railroad Spur between Hayden Avenue
and Eastham Drive with a landscaped parking lot and allows the Agency to assign its
obligations under the IVIOU to the City of Culver City, without release of such obligations
without owners approval and approve a budget amendment related thereto.
AND
Staff recommends the City Council approve a Purchase and Sale Agreement for the
City-owned portion of the Spur to the Spur Property Owners
BACKGROUND:
Businesses located in the Hayden Tract generate significant tax revenues for the
City and Agency. The Agency Board has expressed strong interest in developing
needed parking for the Hayden Tract to support the area and foster its growth. ATTACHMENT 1
In 2006 the City sold the parking lot located at 8511 Warner Drive to Conjunctive
Points Warner Development. The sale did not include the adjacent 26 foot wide
portion of the former railroad Spur. When combined with the opposing property
owner, the entire Spur is approximately 52 feet wide and 1,000 feet long. In 2008,
Metro relinquished its railroad easement along the Spur, and control of the property
was returned to its owners. With the exception of one property owner, the Spur
remains unimproved and is a blighting influence in the Hayden Tract.
DISCUSSION:
For more than a year, staff has been discussing improvement of the former Metro
Spur with the Spur property owners by constructing a landscaped parking lot
creating approximately 121 spaces (the Project). 1 All but one Spur property owner is
willing to participate in the Project. 2 The Project will be constructed with Agency
participation and would subsequently be controlled / maintained by the 7 Spur
property owners through the formation of an Association. Using a "percentage of
Spur ownership" method of allocating the 121 parking spaces amongst the owners,
approximately 24 would be located on the City-owned portion of the Spur adjacent to
the Warner Lot. (See the attached Spur Parking Lot Conceptual Plan.) Approval by
Agency Board of the MOU will lead to the execution of an Owner Participation
Agreement between the Agency and the Spur owners,
Deal Points:
The proposed terms include a 50/50 construction cost sharing arrangement between
the Spur property owners and the Agency. The Agency will also furnish all of the
soft costs for design. The total Agency contribution is estimated to be $1,050,000
(see the Fiscal Analysis section of this report for a breakdown of the Project cost).
City/Agency:
• Provide temporary parking lost during construction of the Project (special
permit parking at no cost to the Spur property owners) along the adjacent
streets or phase the Project so that parking can be provided onsite as
construction progresses (which somewhat increases Project costs but
reduces parking inconvenience during construction). Further engineering
study is required to determine the feasibility of phasing.
• Fund soft costs for the Project estimated at $250,000 and one-half the
construction costs estimated at $800,000 (a total of $1,050,000);
•
Offer 24 City-owned parking spaces for sale to the Spur property owners for
$13,015 per stall ($6,557 per stall construction cost plus $6,458 land cost). 3
• Upon consummation of the land sale, the Agency will commence with the
preparation of Project plans and construction.
2 ATTACHMENT I
• Provide a 5-year secured loan at 6% interest to any Spur property owners
who elect to receive a loan to cover their portion of the construction costs.
Spur Property Owners:
• Enter into reciprocal easements to allow use and access to common parking.
• Form an association (at owners' cost) for the purpose of insuring and
maintaining the improvements once built.
• Fund one half of the pro rata cost to construct the Project, estimated at
$800,000.
There is a significant undersupply of parking in the Hayden Tract due to the area's
transition from manufacturing to creative office uses. The proposed Project provides
an important first step to address the area's parking needs. The Project will also
eliminate blight and provide needed additional area parking that is privately owned
and operated at approximately one-half the cost of above-ground spaces and three
times less costly than subterranean parking.
Environmental Determination for the City Land Sale:
Staff has determined that the Purchase and Sale Agreement is a project subject to
the environmental review requirements of the California Environmental Quality Act
(CEQA). Staff has further determined that the Purchase and Sale Agreement has no
potentially significant adverse impacts on the environment and is therefore
Categorically Exempt pursuant to Section 15312 of CEQA from further
environmental impact assessment, because the project consists of the sale of
surplus government property which (1) does not have a significant value for wildlife
habitat or other environmental purpose and (2) the property, due to size, shape and
accessibility, is incapable of independent development or use, and the application of
that categorical exemption is not barred by one of the exceptions set forth in CEQA
Guidelines Section 15300.2. Accordingly, pursuant the State CEQA Guidelines, a
Notice of Exemption will be filed.
Environmental Determination for the Project:
Staff has determined that the Project pursuant to the MOU is a project subject to the
environmental review requirements of CEQA. The Project pursuant to the MOU is a
linear landscaped parking lot creating approximately 121 parking spaces along the
former MTA railroad spur. Consequently, staff has determined that the Project
pursuant to the MOU is an exempt project pursuant to State CEQA Guidelines
Section 15332 in that the Project is an in-fill development and is consistent with the
City's General Plan and Zoning Ordinance; occurs on a project site of no more than
five acres and is surrounded by urban uses; the Project site has no value as habitat
for endangered, rare or threatened species; approval of the Project does not result in
any significant effects relating to traffic, noise, air quality, or water quality; the Project
site can adequately be served by all required utilities and public services; and the
3 ATTACHMENT 1
application of that categorical exemption is not barred by one of the exceptions set
forth in CEQA Guidelines Section 15300.2. Accordingly, pursuant to the State
CEQA Guidelines, a Notice of Exemption will be filed.
FISCAL ANALYSIS:
The Project's estimated costs are summarized as follows:
Item Cost Agency Property Owners
Design/Plans $200,000
ALTA Survey $ 50,000
Total Soft Costs: $250,000 $250,000 $0
Construction/Estimated: $1,600,000 $800,000 $800,000
(50%) (50%)
Total Costs: $1,850,000 $1,050,000 $800,000
Estimated Cost per Space: $8,606 $6,557
Net Cost if all 24 City spaces were sold: $737,640
($1,050,000- $312,360) 4
Net Cost per Space: $6,100
Since most of the parking spaces will be for private business use or leased to other
existing businesses, tax exempt bond funds may not be used to fund this project.
Taxable proceeds from the 2011 Bond issue will be used to fund this project. A
budget amendment is needed to appropriate the funds.
Once revenue from sale of the City spaces ($312,360) is deducted from the total
Agency cost of $1,050,000, the net cost of the Project is $737,640. The Project will
generate minimal City taxes and Agency tax increment.
ATTACHMENTS:
1. Spur Parking Lot Conceptual Plan
2. Parking Space Allocation Plan
3. Memorandum of Understanding
4. Notice of Categorical Exemption
4 ATTACHMENT 1
MOTIONS:
That the Agency Board:
1. Approve a budget amendment appropriating $1,050,000 from the 2011
Taxable Bond issue for the Hayden Tract Spur parking improvements; and,
2. Approve a Memorandum of Understanding that funds $1,050,000 ($250,000
in soft costs and $800,000 for half the construction costs) to improve the
former Metropolitan Transportation Authority (Metro) railroad Spur between
Hayden Avenue and Eastham Drive with a landscaped parking lot; and,
3. Authorize the Agency Executive Director to execute all documents necessary
and appropriate to carry out and implement the MOU and to administer the
Agency's obligations, responsibilities and duties to be performed under the
MOU on behalf of the Agency; and
4. Authorize the Agency General Counsel to review/prepare the necessary
documents; and
5. Authorize the Executive Director to execute such documents on behalf of the
Agency.
That the City Council:
1. Approve a Purchase and Sale Agreement for the City-owned portion of the
Spur to the Spur Property Owners in an amount of $312,360; and,
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City.
NOTES:
'The Spur is zoned Transportation, which allows a parking lot to be built upon its surface. The
Project will be built in a green manner and include grading, stormwater drainage, concrete
pavement, lighting, security fencing, and enhanced tree and ground cover landscaping.
2The owner of 8461 Warner Drive is not willing to participate in the Project and instead, will
improve his portion of the Spur with parking.
3 A March 2010 appraisal placed the fair market value of the City-owned Spur at $155,000 if it
was not assembled with the adjacent 8511 Warner parcel. $155,000/24 spaces are $6,458 each.
4The sale per space is $13,015 for the City's 24 spaces (50% of the construction costs
amounting to $6,557 + $6,458 for the land) = $312,360 total. ATTACHMENT 2
March 7, 2011
Item J-3
GO City Council and Agency Board Approval of a Memorandum of
Understanding; (2) Agency Board Approval of a Budget Amendment
Related Thereto; and (3) City Council Approval of a Purchase
and Sale Agreement for a Parking Lot Project Located along the
Former Metropolitan Transportation Authority Spur between
Hayden Avenue and Eastham Drive.
Sol Blumenfeld, Community Development Director, provided a
summary of the material of record.
Councilmember O'Leary invited public comment.
There was no response.
Discussion ensued between the City Council and staff regarding
clarification that the action would provide some much needed
parking for the area; the transition from industrial to
technology and the arts that demand more parking; a phasing
feasibility study; soft costs; the re-draft of the Memorandum
of Understanding; and cost sharing.
MOVED BY MAYOR ARMENTA, SECONDED BY COUNCILMEMBER COOPER AND
UNANIMOUSLY CARRIED, THAT THE CITY COUNCIL:
1. APPROVE A PURCHASE AND SALE AGREEMENT FOR THE CITY-OWNED
PORTION OF THE SPUR TO THE SPUR PROPERTY OWNERS IN AN AMOUNT OF
$312,360.00; AND,
2. AUTHORIZE THE CITY ATTORNEY TO REVIEW/PREPARE THE NECESSARY
DOCUMENTS; AND,
3. AUTHORIZE THE CITY MANAGER TO EXECUTE SUCH DOCUMENTS ON
BEHALF OF THE CITY.
o0o
15
6 OWNER PARTICIPATION AGREEMENT
This Owner Participation Agreement (this "Agreement") is entered into by and between
the CITY OF CULVER CITY, a chartered city of the State of California (the "City"), and the
HAYDEN TRACT OWNERS' ASSOCIATION, a California non-profit mutual benefit
corporation (the "Association"). This Agreement is dated, for reference purposes, as of the date
the City executes this Agreement. The City and the Association agree as follows:
PART 1. SUBJECT OF AGREEMENT
Section 101 Purpose of the Agreement
The purpose of this Agreement is to effectuate the Redevelopment Plan for the Culver
City Redevelopment Project approved• and adopted by the City Council of Culver City on
November 23, 1998 by Ordinance No. 98-105 and amended on January 12, 2004, and on
September 12, 2005 (the "Redevelopment Plan") and is made with reference to the following
facts:
a. With the exception of the Feldman/Willows School, the individual members of
the Association (the "Members") each own certain parcels of real property (the "Member
Parcels"), portions of which are along the former Metropolitan Transportation Authority railroad
spur located between Hayden Avenue and Eastham Drive in the Hayden Tract of Culver City,
California as more particularly depicted on Attachment No. 1 (the "Site Map"). In addition, the
Regents of the University of California (the "Regents") own certain real property located at 8535
Warner Drive (the "Regents Parcel") as depicted on the Site Map.
b. The City owns an approximately 26 foot wide portion of real property abutting
the parking lot located at 8511 Warner Drive as described in the legal description attached hereto
as Attachment No. 2 (the "City Parcel") and depicted in the Site Map. Collectively, those
portions of the Member Parcels, that portion of the Regents Parcel and the City Parcel that
depicted on the Site Map are referred to herein as the "Hayden Tract Site".
c. The parties hereto desire to redevelop the Hayden Tract Site as a linear
landscaped parking lot creating approximately 121 parking spaces for use by the Association (the
"Project").
d. The City intends to contribute up to $1,050,000 for the costs of the Project,
including all of the soft costs for design and one-half of the construction costs and thereafter sell
the City Parcel to the Association for $155,000 under the tems and conditions set forth herein
below. The Association intends to contribute to the construction costs up to $800,000 (with a
pro rata share contributed by the Regents) for the Project and thereafter purchase the City Parcel
and maintain the improvements on the Hayden Tract Site under the terms and conditions set
forth herein below.
e. The Hayden Tract Site is located within the geographical area of the
Redevelopment Plan for the Culver City Redevelopment Project, Component Area 3 (the
Owner Participation Agreement
Page 1 of 31 "Project Area"). The redevelopment of the Hayden Tract Site, and the fulfillment generally of
this Agreement, are in the vital and best interests of the City and the health, safety, morals and
welfare of its residents, and in accord with the public purposes and provisions of applicable state
and local laws and requirements under which the redevelopment of the Project Area is being
undertaken.
Section 102 Definitions
For purposes of this Agreement, the following capitalized terms shall have the following
meanings:
"Affiliate" shall mean (1) any Person directly or indirectly controlling, controlled by, or
under common control with another Person; (2) any Person owning or controlling ten percent
(10%) or more of the outstanding voting securities of such other Person; or (3) if that other
Person is an officer, director, member or partner, of any company for which such Person acts in
any such capacity. The term "control" as used in the immediately preceding sentence, shall
mean the power to direct the management or the power to control election of the board of
directors. It shall be a presumption that control with respect to a corporation or limited liability
company is the right to exercise or control, directly or indirectly, more than fifty percent (50%)
of the voting rights attributable to the controlled corporation or limited liability company, and,
with respect to any individual, partnership, trust, other entity or association, control is the
possession, indirectly or directly, of the power to direct or cause the direction of the management
or policies of the controlled entity.
"Association Deposit" or "Deposit" shall mean as set forth in Section 304 of this
Agreement.
"Association REA" or "REA" shall mean that certain Declaration of Restrictions and
Reciprocal Easement Agreement as set forth in Section 701 of this Agreement.
"City Parcel" shall have the same meaning as set forth in Section 101(b) of this
Agreement.
-Closing" or "Close of Escrow" shall mean the point in time when all conditions
precedent to the Closing as set forth this Agreement, including, but not limited to Section 213
have been satisfied.
"Closing Date" shall mean the date on which the Closing is scheduled to take place, as
provided in the Schedule of Performance.
"Completion" shall mean the point in time when all of the following shall have occurred:
(1) certification by the project architect that construction of all of the Improvements (with the
exception of minor "punch list" items) has been completed in a good and workmanlike manner
and substantially in accordance with City approved plans and specifications; and (2) any
mechanic's liens that have been recorded or stop notices that have been delivered for any of the
Owner Participation Agreement
Page 2 of 31 "Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company or other entity, domestic or foreign.
"Project" shall mean the financing, planning, construction, development and use of the
Improvements in accordance with this Agreement, including, but not limited to, the Scope of
Development.
"Project Budget" shall mean the project budget attached to this Agreement as
Attachment No. 8 which is hereby incorporated herein by this reference, as it may be updated
from time to time as described herein.
"Project Costs" shall mean the total cost of developing the Hayden Tract Site and
constructing the Improvements thereon, as required by this Agreement and as set forth in the
Project Budget.
"Redevelopment Plan" shall have the meaning set forth in Section 103 of this
Agreement.
"Right of Entry" shall mean the instrument referred to in Section 508(b) of this
Agreement. "Schedule of Performance" shall mean the document attached to this Agreement as
Attachment No. 3 which is hereby incorporated herein by this reference.
"Scope of Development" shall mean the document attached to this Agreement as
Attachment No. 4 which is hereby incorporated herein by this reference.
"Site Map" shall mean the document attached to this Agreement as Attachment No. 1
which is hereby incorporated herein by this reference.
"Title Company" shall mean First American Title Insurance Company or another title
insurance company acceptable to City.
"Regents Easement" shall mean the instrument to be recorded in accordance with
Section 702 of this Agreement.
"Regents" shall mean the "Regents of the University of California" and/or its duly
authorized and designated representative.
Section 103 The Redevelopment Plan
a. This Agreement is subject to the provisions of the Redevelopment Plan for the
Project Area, which was approved and adopted by the City Council of Culver City on November
23, 1998 by Ordinance No. 98-105 and amended on January 12, 2004, and on September 12,
2005. The Redevelopment Plan is incorporated herein by reference and made a part hereof as
though fully set forth herein. The proposed Project is consistent with the Redevelopment Plan.
b. Any amendments hereafter to the Redevelopment Plan (as so approved and
adopted) which change the uses or development permitted on the Hayden Tract Site as proposed
Owner Participation Agreement
Page 4 of 31 "Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company or other entity, domestic or foreign.
"Project" shall mean the financing, planning, construction, development and use of the
Improvements in accordance with this Agreement, including, but not limited to, the Scope of
Development.
"Project Budget" shall mean the project budget attached to this Agreement as
Attachment No. 8 which is hereby incorporated herein by this reference, as it may be updated
from time to time as described herein.
"Project Costs" shall mean the total cost of developing the Hayden Tract Site and
constructing the Improvements thereon, as required by this Agreement and as set forth in the
Project Budget.
"Redevelopment Plan" shall have the meaning set forth in Section 103 of this
Agreement.
"Right of Entry" shall mean the instrument referred to in Section 508(b) of this
Agreement. "Schedule of Performance" shall mean the document attached to this Agreement as
Attachment No. 3 which is hereby incorporated herein by this reference.
"Scope of Development" shall mean the document attached to this Agreement as
Attachment No. 4 which is hereby incorporated herein by this reference.
"Site Map" shall mean the document attached to this Agreement as Attachment No. 1
which is hereby incorporated herein by this reference.
"Title Company" shall mean First American Title Insurance Company or another title
insurance company acceptable to City.
"Regents Easement" shall mean the instrument to be recorded in accordance with
Section 702 of this Agreement.
"Regents" shall mean the "Regents of the University of California" and/or its duly
authorized and designated representative.
Section 103 The Redevelopment Plan
a. This Agreement is subject to the provisions of the Redevelopment Plan for the
Project Area, which was approved and adopted by the City Council of Culver City on November
23, 1998 by Ordinance No. 98-105 and amended on January 12, 2004, and on September 12,
2005. The Redevelopment Plan is incorporated herein by reference and made a part hereof as
though fully set forth herein. The proposed Project is consistent with the Redevelopment Plan.
b. Any amendments hereafter to the Redevelopment Plan (as so approved and
adopted) which change the uses or development permitted on the Hayden Tract Site as proposed
Owner Participation Agreement
Page 4 of 31 in this Agreement, or otherwise change the restrictions or controls that apply to the Hayden Tract
Site, or otherwise affect the Association's obligations or rights with respect to the Hayden Tract
Site, shall require the written consent of the Association. Amendments to the Redevelopment
Plan, applying to other property in Component Area No. 3 of the Culver City Redevelopment
Project, shall not require the consent of the Association.
Section 104 Parties to the Agreement
a. The City is a chartered city of the State of California. The principal office of the
City is located at 9770 Culver City Boulevard, Culver City, California 90232-0507. "City" as
used in this Agreement includes and the City of Culver City any assignee of or successor to its
rights, powers and responsibilities.
b. Association is a mutual benefit corporation. The principal office of the
Association is , Culver City, California 90232. Wherever the term
"Association" is used herein, such term shall include any permitted nominee, assignee or
successor in interest as herein provided.
Section 105 Special Limited Obligation
The obligation of the City to pay any costs in connection with this Agreement shall be a
special limited obligation of the City payable exclusively from funds paid by the Redevelopment
Agency of Culver City, a public body, corporate and politic (the "Agency") and its successors.
Nothing contained herein shall be construed to create any obligation payable from the City of
Culver City's general fund.
Section 106 Prohibition Against Change In Ownership, Management and Control of
Association
a. The qualifications and identity of the Association, and its principals, are of
particular concern to the community and the City. The Association further recognizes that it is
because of such qualifications and identity that the City is entering into this Agreement with the
Association. No voluntary or involuntary successor in interest of the Association shall acquire
any rights or powers under this Agreement except as expressly set forth herein.
b. The Association shall not assign all or any part of this Agreement without the
prior written approval of the City.
c. Except for assignments duly approved by the City or permitted as provided above,
the Association represents and agrees for itself, and any successor in interest of itself, that prior
to conveyance of the City Parcel to the Association and without the prior written approval of the
City, there shall be no significant change in the ownership of the Association or in the relative
proportions thereot or with respect to the identity of the parties in control of the Association or
the degree thereof, by any method or means.
d. The Association shall promptly notify the City of any and all changes whatsoever
in the identity of the parties in control of the Association or the degree thereof, of which it or any
Owner Participation Agreement
Page 5 of 31 of its officers have been notified or otherwise have knowledge or information. Subject to the
notice and cure provisions in Sections 501, this Agreement may be terminated by the City if
there is any significant change (voluntary or involuntary) in membership, management or
control, of the Association (other than such changes occasioned by the death or incapacity of any
individual or as approved by the City or permitted as provided above) prior to the conveyance of
the City Parcel to the Association as hereinafter provided.
PART 2. DISPOSITION OF THE CITY PARCEL
Section 201 Sale and Purchase
a. In accordance with and subject to all the terms, covenants, and conditions of this
Agreement, within the times set forth in the Schedule of Performance, the City agrees to sell to
the Association and the Association agrees to purchase the City Parcel as shown on the Site Map
(Attachment No. 1) and as more precisely described in the Legal Description (Attachment No. 2).
b. The Association shall pay to the City as the total purchase price for the City
Parcel, One Hundred Fifty Five Thousand Dollars ($155,000) (the "Purchase Price") upon the
Close of Escrow. The Purchase Price shall be in the form of cash, certified or cashiers check or a
wire transfer to the account of the Escrow Agent.
c. Subject to the terms and conditions of this Agreement, by the time required for
the Close of Escrow, the construction of the Improvements on the Hayden Tract Site (including
the City Parcel) shall be completed by the City in accordance with the Scope of Development as
more particularly described in Attachment No. 4.
Section 202 Escrow
a. The City agrees to open an escrow ("Escrow") for conveyance of the City Parcel
with First American Title Insurance Company, located at 777 S. Figueroa, 4 th Floor, Los
Angeles, California 90071, or such other escrow company or escrow agent as may be acceptable
to both the City and the Association (the "Escrow Agent"), within the time provided in the
Schedule of Performance, which is incorporated herein and attached hereto as Attachment No. 3.
Part 1, Part 2, and Part 3 of this Agreement shall constitute the joint escrow instructions of the
City and the Association, and a duplicate original of this Agreement shall be delivered to the
Escrow Agent upon the opening of the Escrow. The City and the Association shall provide such
additional Escrow instructions consistent with this Agreement as shall be necessary. The Escrow
Agent hereby is empowered to act under such instructions, and upon indicating its acceptance
thereof in writing, delivered to the City and to the Association upon opening of the Escrow, the
Escrow Agent shall carry out its duties as Escrow Agent hereunder. If there is any inconsistency
between such additional instructions and this Agreement, then this Agreement shall control.
b. Upon delivery of the Grant Deed for the City Parcel to the Escrow Agent by the
City pursuant to Section 206 of this Agreement, the Escrow Agent shall record such Grant Deed
in accordance with these escrow instructions, provided that the title to the City Parcel can be
vested in the Association in accordance with the terms and provisions of this Agreement. The
Owner Participation Agreement
Page 6 of 31 Escrow Agent shall buy, affix., and cancel any transfer stamps required by law. Any insurance
policies governing the City Parcel are not to be transferred.
c. The Association shall pay in Escrow to the Escrow Agent the following fees,
charges and costs promptly after the Escrow Agent has notified the Association of the amount of
such fees, charges and costs, at least two (2) working days, but not earlier than ten (10) days,
prior to the scheduled date for the conveyance of the City Parcel:
1. One-half of the escrow fee;
2. All fees, charges and costs related to that certain Association REA;
3. All fees, charges and costs related to that certain Regents Easement; and
4. Costs associated with any premium for the ALTA extended coverage title
insurance policy as well as any extended coverage or special endorsements
to be paid by the Association pursuant to Section 208 of this Agreement.
d. The Association shall also deposit the Purchase Price and/or proof of payment of
the Purchase Price for the City Parcel with the Escrow Agent in accordance with the provisions
of Section 207 of this Agreement.
e. Except for any fees, charges and costs related to that certain Association REA
which shall be paid by solely by Association, the City shall pay, through debit(s) against the
Purchase Price, the following fees, charges and costs promptly after the Escrow Agent has
notified the City of the amount of such fees, charges and costs, at least two (2) working days, but
not earlier than ten (10) days, prior to the scheduled date for the conveyance of the City Parcel:
1. One-half of the escrow fee;
2. Costs necessary to place the title to the City Parcel in the condition for
conveyance required by the provisions of this Agreement;
3. Cost of drawing the Grant Deed;
4. Recording fees;
5. Notary fees;
6. Any State, County, or City documentary stamps or transfer tax; and
7. Costs associated with that portion of the title insurance premium related to
the CLTA owner's title insurance for the City Parcel in the amount of the
Purchase Price. Any additional premiums, extended coverage or special
endorsements shall be paid by Association.
The City shall timely and properly execute, acknowledge and deliver a Grant
Deed in substantially the form established in Section 204 of this Agreement, conveying to the
Owner Participation Agreement
Page 7 of 31 Association title to the City Parcel in accordance with the requirements of Section 205 of this
Agreement, together with an estoppel certificate certifying that the Association has completed all
acts (except deposit of the Purchase Price and/or proof of payment of the Purchase Price),
necessary to entitle the Association to such conveyance, if such be the fact.
The Escrow Agent is authorized to:
1. Pay, and charge the City and the Association, respectively, for any fees,
charges and costs payable under this Section 202 of this Agreement Before such payments are
made, the Escrow Agent shall notify the City and the Association of the fees, charges and costs
necessary to clear title and close the escrow.
2. Disburse funds and deliver the Grant Deed and other documents to the
parties entitled thereto when the conditions of this escrow have been fulfilled by the City and the
Association. The Purchase Price shall not be disbursed by the Escrow Agent unless and until it
has recorded the Grant Deed to the City Parcel, and has delivered to the Association a title
insurance policy insuring title and conforming to the requirements of Section 208 of this
Agreement.
3. Cause the Association REA and Regents Easement and any other
documents which the parties may mutually direct, to be recorded in the Official Records of the
County Recorder of Los Angeles County, and obtain conformed copies thereof for distribution to
City and Association in accordance with the terms and provisions of the escrow instructions
portion of this Agreement (Part 1, Part 2, and Part 3).
h. All funds received in this escrow shall be deposited by the Escrow Agent in a
general escrow account with any state or national bank doing business in the State of California
and reasonably approved by the Association and the City, and may be combined in such with
other escrow funds of the Escrow Agent
i. If this escrow is not in condition to either (i) record the Association REA and
Regents Easement, respectively or (ii) close with respect to the City Parcel on or before the time
for conveyance established in Section 203 of this Agreement, either party who then shall have
fiffly performed the acts to be performed before the conveyance of title may, in writing, demand
the return of its money, papers, or documents from the Escrow Agent. No demand for return
shall be recognized until ten (10) days after the Escrow Agent (or the party making such
demand) shall have mailed copies of such demand to the other party or parties at the address of
its principal place of business. Objections, if any, shall be raised by written notice to the Escrow
Agent and to the other party within the 10-day period, in which event the Escrow Agent is
authorized to hold all money, papers, and documents with respect to the City Parcel until
instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent
jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible.
j. If objections are raised as above provided for, the Escrow Agent shall not be
obligated to return any such money, papers, or documents except upon the written instructions of
both the City and the Association, or until the party entitled thereto has been determined by a
final decision of a court of competent jurisdiction. If no such objections are made within said
Owner Participation Agreement
Page 8 of 31
g. 10-day period, the Escrow Agent shall immediately return the demanded money, papers, or
documents.
k. Any amendment to the escrow instructions shall be in writing and signed by both
the City and the Association. At the time of any amendment the Escrow Agent shall agree to
carry out its duties as Escrow Agent under such amendment.
1. All communications from the Escrow Agent to the City or the Association shall
be directed to the addresses and in the manner established in Section 601 of this Agreement for
notices, demands, and communications between the City and the Association.
m. The parties understand they may be required to execute additional standard form
escrow instructions required by the Escrow Agent ("General Instructions"). In the event of a
conflict between this Agreement and any such General Instructions, this Agreement shall control.
The parties agree, however, that they will refuse to sign General Instructions which (1) purport to
relieve the Escrow Agent of liability for negligence or intentional wrong-doing; (2) excuse the
Escrow Agent from strict compliance with each and all of the provisions of this document and
the General Instructions; or (3) purport to authorize the Escrow Agent to follow the instructions
or directive of any person not a direct signatory party (or designee of such signatory party) to this
Agreement.
n. The liability of the Escrow Agent under this Agreement is limited to performance
of the obligations imposed upon it under Part 1 and Part 2, inclusive, of this Agreement.
Section 203 Conveyance of Title and Delivery of Possession
a. Subject to any mutually agreed upon extension of time, conveyance to the
Association of title to the City Parcel in accordance with the provisions of Section 205 of this
Agreement shall be completed on or prior to the date specified in the Schedule of Performance
(Attachment No. 3) or such later date mutually agreed to in writing by the City and the
Association and communicated in writing to the Escrow Agent.
b. Except as otherwise provided herein, possession of the City Parcel shall be
delivered to the Association concurrently with the conveyance of title. The Association shall
accept title and possession to the City Parcel on the dates established in this Section 203.
Section 204 Form of Deed
The City shall convey to the Association title to the City Parcel in the condition provided
in Section 205 of this Agreement by grant deed substantially conforming in form and substance
under the terms and conditions of this Agreement Said Grant Deed to the City Parcel shall
contain covenants necessary or desirable to carry out this Agreement.
Section 205 Condition of Title
The City shall convey to the Association fee simple merchantable title to the City Parcel,
free and clear of all liens, encumbrances, assessments, easements, leases and taxes; except those
Owner Participation Agreement
Page 9 of 31 which are set forth in this Agreement and those which are otherwise consistent with this
Agreement and which are acceptable to the Association, including the Association REA and
Regents Easement. Title to the City Parcel shall be subject to the exclusion therefrom (to the
extent now or hereafter validly excepted and reserved by the parties named in deeds, leases and
other documents of record) of all oil, gas, hydrocarbon substances and minerals of every kind
and character lying more than 500 feet below the surface, together with the right to drill into,
through, and to use and occupy all parts of the City Parcel lying more than 500 feet below the
surface thereof for any and all purposes incidental to the exploration for and production of oil,
gas, hydrocarbon substances or minerals from the City Parcel, but without, however, any right to
use or disturb either the surface of the City Parcel or any portion thereof within 500 feet of the
surface for any purpose or purposes whatsoever.
Section 206 Time For and Place For Delivery of Deed
Subject to any mutually agreed upon extension of time, the City shall deposit the Grant
• Deed for the City Parcel with the Escrow Agent on or before the date established for the
conveyance of the City Parcel in the Schedule of Performance (Attachment No. 3).
Section 207 Payment of the Purchase Price and Recordation of the Deed
Subject to the satisfaction of the conditions precedent set forth in Section 213 below, the
Escrow Agent shall deliver the Purchase Price to the City immediately following the delivery to
the Association of a title insurance policy insuring title in conformity with Section 208 of this
Agreement and the filing of the Grant Deed for recordation among the land records in the Office
of the County Recorder for Los Angeles County.
Section 208 Title Insurance
a. Concurrently with recordation of the Grant Deed, the Title Company shall provide
and deliver to the Association an ALTA extended coverage title insurance policy issued by the
Title Company, insuring that title to the City Parcel is vested in the Association in the condition
required by Section 205 of this Agreement. The Title Company shall provide the insurance
policy and the title insurance policy shall be in the amount of the Purchase Price of the City
Parcel or in such greater amount as the Association may specify as hereinafter provided.
b. City shall only pay for a CLTA owner's title insurance policy in the amount of the
Purchase Price. The Association shall pay for all additional premiums including those the ALTA
extended coverage and/or special endorsements which it requests.
Section 209 Taxes and Assessments
Ad valorem taxes and assessments, if any, on the City Parcel, and taxes upon this
Agreement or any rights hereunder, levied, assessed or imposed for any period, commencing
after conveyance of title or possession of the City Parcel to the Association, shall be borne by the
Association. Ad valorem taxes and assessments levied, assessed or imposed, if any, for any
period prior to conveyance of title to the City Parcel to the Association shall be paid by the City.
Owner Participation Agreement
Page 10 of 31 Section 210 Occupants of the City Parcel
City agrees that title to the City Parcel shall be conveyed free of any possession or right
of possession except that of the Association, unless waived by the Association in writing.
Section 211 "As Is" Transaction; Waiver
a. Association acknowledges that it is purchasing the City Parcel in reliance solely
on: (I) Association's inspection of the City Parcel and all personal property and improvements
being sold in connection with the City Parcel; and (2) the opinions and advice of consultants and
attorneys engaged by the Association concerning the City Parcel.
b. ASSOCIATION SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
CITY IS SELLING AND ASSOCIATION IS PURCHASING THE CITY PARCEL ON AN
"AS IS WITH ALL FAULTS" BASIS AND THAT ASSOCIATION IS NOT RELYING ON
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS
OR IMPLIED, FROM CITY, ITS INDIVIDUAL MEMBERS, AGENTS, ATTORNEYS OR
BROKERS AS TO ANY MATTERS CONCERNING THE CITY PARCEL, INCLUDING
WITHOUT LIMITATION: (a) the quality, nature, adequacy, and physical condition of soils,
geology and any groundwater; (b) the existence, quality, nature, adequacy and physical condition
of utilities serving the City Parcel; (c) the development potential of the City Parcel, and the City
Parcel's use, merchantability, or fitness, or the suitability, value or adequacy of the City Parcel
for any particular purpose; (d) the zoning or other legal status of the City Parcel or any other
public or private restrictions on use of the City Parcel; (e) the compliance of the City Parcel with
any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any governmental or quasi-governmental entity or of any other person or entity; (I)
the presence of "Hazardous Substances" (as defined in Section 102) on, under or about the City
Parcel; (g) the quality of any labor and materials used in any improvements; and (h) the
condition of title to the City Parcel.
c. Association hereby waives any contingency regarding the soil (or groundwater)
condition of the City Parcel (including improvements), or any part of the City Parcel, or the
presence of any Hazardous Substances or its suitability for the purposes for which the City
Parcel is to be put pursuant to this Agreement. The Association therefore explicitly
acknowledges that following acquisition and also following any development of the City Parcel
it will assume and bear all future liability for any necessary mitigation measures for Hazardous
Substances and any residual Hazardous Substances that may remain, and will hold the City
harmless therefrom.
Section 212 Association's Warranty
Association hereby represents the following to the City, for the purpose of inducing the
City to enter into this Agreement and to consummate the transactions contemplated hereby, all of
which shall be true as of the Closing:
Owner Participation Agreement
Page 11 of 31 1. Association has the legal power, right and authority to enter into this Agreement a
and the instruments and documents referenced herein to which Association is a
party (which have been executed by Association), to consummate the transactions
contemplated hereby, to take any steps or actions contemplated hereby, and to
perform its obligations hereunder.
2. All requisite action has been taken by Association and all requisite consents have
been obtained in connection with the entering into this Agreement and the
instruments and documents referenced herein to which Association is a party
(which have been executed by Association), and the consummation of the
transaction contemplated hereby comply with all applicable laws, statutes,
ordinances, rules and governmental regulations.
3. This Agreement is duly executed by Association, and all agreements, instruments
and documents to be executed by Association pursuant to this Agreement shall, at
such time as they are required to be executed hereunder, be duly executed by
Association, and each such agreement heretofore or concurrently executed by
Association is valid and legally binding upon Association and enforceable in
accordance with its terms and the execution and delivery thereof shall not, with
due notice or the passage of time, constitute a default under or violate the terms of
any indenture, agreement or other instrument to which Association is a party.
4. There is no pending litigation or, to Association's best knowledge, threatened
litigation which would prevent Association from performing its duties and
obligations hereunder.
5. Association is not the subject of a bankruptcy proceeding.
Section 213 Conditions Precedent to Close of Escrow
The Close of Escrow and the obligations of the City and Association are subject to the
satisfaction prior to the Close of Escrow (unless otherwise provided), of the following
conditions, and the obligations of the parties with respect to such conditions are as follows:
1. Construction Contract. City shall have executed the general construction
contract between the City and a licensed general contractor, covering all construction required by
this Agreement and the approved final working drawings.
2. Title Insurance Policies. Title Company shall be committed to issue the
Title Insurance Policy, as provided in this Agreement
3. Documents. City and Association have executed and delivered into
Escrow (i) the Grant Deed conveying title to the City Parcel to the Association, in recordable
fowl, to be recorded against the City Parcel; (ii) the Association REA, in recordable form, to be
recorded in the area encompassing the Hayden Tract Site, as depicted in the Site Map; (iii) the
Owner Participation Agreement
Page 12 of 31 (b)
(c)
Regents Easement, in recordable form, to be recorded in the area encompassing the Hayden
Tract Site, as depicted in the Site Map; the Funding Control Agreement.
4. Representations, Warranties and Covenants
(a) Association shall have duly performed each and every pre-closing
obligation to be performed by Association pursuant to this
Agreement and Association's representations, warranties and
covenants set forth in this Agreement shall be true and correct as of
the date of the Close of Escrow.
(b) City shall have duly performed each and every pre-closing
obligation to be performed by City pursuant to this Agreement and
City's representations, warranties and covenants set forth in this
Agreement shall be true and correct as of the date of the Close of
Escrow_
5. Deliveries
(a) Association shall have deposited into Escrow the Purchase Price
and delivered the items to be delivered by Association, when and
as required in this Agreement.
Association shall have deposited into Escrow the Final Deposit as
described in Section 304(b).
City shall have deposited into Escrow the balance of the City
Project Funds as described in Section 302 not previously disbursed
towards the Project.
(d) City shall have delivered the items to be delivered by City, when
and as required by this Agreement.
6. Closing Certificate. City and Association have submitted to Escrow a
certificate stating that all conditions precedent to Close of Escrow have
been satisfied or waived, respectively.
7. Closing Cost Statement_ Escrow Agent has delivered a closing statement
of costs.
8. Supplementary Escrow Instructions. City and Association have prepared
such Supplemental Escrow Instructions as may be needed, respectively.
9. No Defaults. Association shall not be in default of any of its obligations
under this Agreement.
Owner Participation Agreement
Page 13 of 31 Section 214 Failure of Conditions to Close Escrow
a. Subject to any rights provided in this Agreement, including notices of default and
the opportunity to timely cure any default, in the event any of the conditions precedent to the
Close of Escrow are not timely satisfied or waived, for a reason other than the default of City or
Association, the following shall apply:
1. Either party shall have the right to terminate this Agreement and the
Escrow;
2. Escrow Agent is hereby instructed to promptly return to Association and
City all funds, if any, and documents deposited by the respective parties
into Escrow which are held by Escrow Agent on the date of the
termination; provided, however, the amount of funds to be returned to the
entitled party shall be reduced by the cancellation charges, if any, required
to be paid by such party under paragraph (b) below; and
3. Neither party shall have any further rights or obligations pursuant to this
Agreement except as otherwise provided in this Agreement.
b. Cancellation Fees and Expenses. In the event this Escrow terminates because of
the non-satisfaction of any condition for a reason other than the default of City or Association
under this Agreement, the cancellation charges, if any, required to be paid by and to Escrow
Agent and the Title Company shall be borne by the party incurring same.
Section 215 Recordation of Documents
a_ City and Association, respectively, agree to perform all acts necessary to
recordation and delivery of such documents in sufficient time for escrow to be closed in
accordance with the foregoing provisions.
b. At the Close of Escrow, the following documents shall be recorded against the
City Parcel ("Recorded Documents"):
1. Grant Deed (City Parcel).
2. Association REA. Association causes the Association REA, first
approved in writing by the City Manager or designee and City Attorney,
substantially conforming in form and substance as contemplated herein, to
be recorded in senior position to all encumbrances, liens or encumbrances
on the Member Parcels and the City Parcel; and
3. Regents Easement. Association causes the Regents Easement, first
approved in writing by the City Manager or designee and City Attorney,
substantially conforming in form and substance as contemplated herein, to
be recorded in senior position to all encumbrances, liens or encumbrances
on the Regents Parcel, the Member Parcels and the City Parcel.
Owner Participation Agreement
Page 14 of 31 c. All documents to be recorded shall be recorded in the Office of the Los Angeles
County Registrar-Recorder/County Clerk ("County Recorder").
PART 3. IMPROVEMENTS
Section 301 Improvements
Prior to the Close of Escrow, City, the Association and the Regents (collectively, the
"Participants") shall cooperate in a process for the design, improvement and maintenance of the
Hayden Tract Site within the times set forth in the Schedule of Performance, as follows:
a. Budget for Improvements. The improvements to the Hayden Tract Site shall be
constructed within a budget established by the City based on an anticipated budget for such
Improvements of $1,850,000 as more particularly set forth in the Project Budget attached hereto
as Attachment No. 8, subject to the City redesign procedures set forth in subsection (e) herein
below. Thereafter, any change order to the project budget in excess of $50,000 shall require the
approval of the parties hereto, which shall not be unreasonably withheld if a proposed change order
is limited to a reallocation of budgeted Project Funds (defined below) among project budget line
items without any increase in the total project budget and the following conditions are met: (i)
the funds in the line item(s) to be reduced remain sufficient for Completion of the Improvements,
and (ii) the requested increase in one or more line item(s) is to be used to pay approved costs in
accordance with the terms and conditions of this Agreement.
b. Design Consultants. The City shall retain the services of an engineer, landscape
architect and other consultants as required who shall design and prepare plans and specifications
for the Improvements in accordance with the Project Budget. The Participants shall
communicate and consult informally as frequently as is necessary to insure that the formal
submittal of any documents to the City can receive timely consideration. The Participants shall
have the right to review and approve all design drawings and plans for the Project. All plans for
construction of the Project shall be subject to applicable City design review and approval
procedures in its governmental capacity, and shall be consistent with the logical evolution of the
approved Scope of Development, except as otherwise approved by the parties.
c. Plans and Specifications.
1. The design, plans and specifications for the Improvements shall be
prepared or cause to be prepared by the City within the respective times provided therefor in the
Schedule of Performance, including the following items:
(A) A topographic survey of the Hayden Tract Site and map with spot
elevations at locations for existing and proposed improvements on
the Hayden Tract Site (the "Survey") and as generally depicted in
the Site Map. Within the time set forth in the Schedule of
Performance and this Agreement, the City shall execute a Right of
Entry substantially conforming in form and substance mutually
approved by the parties hereto and otherwise consistent with this
Owner Participation Agreement
Page 15 of 31 Agreement for the purpose of allowing the surveyor to enter the
City Parcel.
(B) Documentation of the location of all surface and underground
utilities, existing and proposed;
(C) Improvement drawings for landscaping and surface improvements,
including:
(1) Grading and drainage plans
(2) Horizontal control plans
(3) Paving and landscape plans
(4) Lighting and circuitry plans
(5) Landscape planting plans
(6) Irrigation plans
(7) Landscape and hardscape construction details, including all
elements necessary to go to bid
(8) Striping and signage plan;
(D) A fixed level of construction cost estimate for items (C)(1) through
(8), above.
2. The Final (100% Complete) Construction Drawings shall be submitted by
the City's consultants as a bid solicitation package that meets all requirements for the public
bidding process.
d. Solicitation of Bids. Following City approval of the Final (100% Complete)
Construction Drawings for the Improvements, the City shall use the bid package prepared by the
City's consultants to solicit bids for the construction of the Improvements through the public
bidding process.
e. Right of Revision. City shall submit to the Participants progressively more
detailed plans and specifications for the Improvements and with each submission (including the
City's submission of the bid solicitation package required to be prepared by the City), shall
provide a fixed level of construction costs estimate by an independent qualified cost estimator
which shall not exceed $1,600,000. If, at the time the City solicits bids using the bid solicitation
package prepared by the City, the lowest responsive and responsible bid is in excess of
$1,600,000, then the City shall either increase the City's Project Funds (defined below) for the
Improvements, or the City shall revise the plans and specifications and/or adjust bid alternates, at
its sole cost and in its sole discretion, to enable the City to award a bid within the City's
authorized budget.
Owner Participation Agreement
Page 16 of 31 f. Award of Contract for Improvements. In accordance with all applicable public
bidding requirements, within the times set forth in the Schedule of Performance, the City shall
promptly award and enter into a contract for the construction of the Improvements to the Hayden
Tract Site with the lowest responsive and responsible bidder; provided, however the Participants
shall have the right to approve, which approval shall not be unreasonable conditioned, withheld
or delayed, the contractor(s) and the construction contract(s), including warranties against
defective work for a period of not less than one (1) year, and the right to have all warranties and
causes of actions assigned to the Association at Association's request following Completion of
construction.
Section 302 Project Funds
a. City Project Funds. In accordance with and subject to all the terms, covenants,
and conditions of this Agreement, the City agrees to provide an amount not to exceed $1,050,000
in financial assistance towards the Project (the "City Project Funds") in consideration for
Association's agreement to complete the Improvements in accordance with the Scope of
Development.
b. Association Project Funds. In accordance with and subject to all the terms,
covenants, and conditions of this Agreement, the Association agrees to provide an amount not to
exceed $800,000 in financial assistance towards the Project (the "Association Project Funds")
in consideration for the City's obligations in this Agreement. In accordance with and subject to
all the terms, covenants, and conditions of this Agreement, the parties hereto agree to cooperate
and execute all necessary documents for the Regents to provide to either the Association or the
City its pro rata share of the Project Costs as outlined in the letter dated September 22, 2011 and
attached to this Agreement as Exhibit A to Attachment No_ 5. Such funds provided by the
Regents shall comprise and be considered as part of the Association Project Funds. The City
Project Funds and the Association Project Funds (including the pro rata share as provided by the
Regents) are sometimes collectively referred to herein as the "Project Funds".
Section 303 Allocation of Project Funds
a. Soft construction costs, including but not limited to designs, plans and surveys,
are estimated at $250,000, one hundred percent (100%) of which shall be paid for with City
Project Funds. The parties hereby acknowledge and agree that any increase in said costs above
the amounts heretofore projected or assumed shall be at the sole financial risk of the City.
b. Hard construction costs, including, but not limited to: grading, drainage, lighting,
gate control access, security fence, and landscaping, are estimated at $1,600,000, of which fifty
percent (50%) shall be paid with City Project Funds and the remaining fifty percent (50%) in an
amount not to exceed $800,000 shall be paid with Association Project Funds.
Section 304 Deposit of Association Project Funds
a. Initial Deposit_ Within the time established in the Schedule of
Performance (Attachment No. 3), the Association shall deposit with the hereinafter defmed
Owner Participation Agreement
Page 17 of 31 Funding Control Agent (i) an electronic wire transfer or (ii) a cashier's or certified check in an
amount equal to Four Hundred Thousand Dollars ($400,000) (the "Initial Deposit") (including
the Regents' pro rata share) of the Association Project Funds before City is obligated to enter
into any contracts for engineering or construction work; provided, however, the Association shall
not be obligated to deposit the Initial Deposit prior to the Participants approval of the results of
the Survey and a mutual determination the Project is capable of being completed under the terms
and conditions of this Agreement. Deposit of the Initial Deposit shall be confirmation of said
approval. The City shall be under no obligation to pay or earn interest on the Initial Deposit, but,
if interest shall accrue or be payable thereon, such interest (when received by the City) shall be
the property of the Association and the Regents, proportionately, shall be promptly paid to
Association and the Regents.
b. Final Deposit. Within the time established in the Schedule of Performance
(Attachment No. 3), the Association shall deposit with the Funding Control Agent (i) an
electronic wire transfer or (ii) a cashier's or certified check in an amount equal to Four Hundred
Thousand Dollars ($400,000) (the "Final Deposit") (including the Regents' pro rata share) of the
balance of the Association Project Funds due before City is obligated consider awarding the bid
for the Project.
e. Retention of Initial Deposit. In the event that this Agreement is
terminated under the terms and conditions herein, the Initial Deposit shall be retained by the City
as liquidated damages; provided, however, that the amount to be retained by the City will not
exceed fifty percent (50%) of the total out-of-pocket soft costs incurred by the City up until the
date it receives notice from the Association that it has elected to terminate the Agreement.
Section 305 Disbursement of Project Funds
With the exception of the first $250,000 of City Project Funds which disbursement shall
be at the sole and absolute discretion of the City in accordance with Section 303(a), disbursement
of the Project Funds shall be pursuant to the terms of a funding control agreement between the
Participants and a bonded funding control agent (the "Funding Control Agent") mutually
acceptable to the Participants (the "Funding Control Agreement"). Project Funds shall be
disbursed pursuant to draw requests submitted to the Funding Control Agent in accordance with
the terms of said executed Funding Control Agreement and shall be subject to the conditions set
forth below:
1. The Participants shall, within twenty (20) business days after receipt of a
draw request, determine the amount of the draw request to be approved, notify City in writing
(which may be via electronic email) and approve the draw request through the Funding Control
Agent.
2. Any item in the draw request which is not specifically approved within
twenty (20) business days shall be deemed disapproved. In the event a Participant disapproves
any portion of the amount requested by City in a draw request, the Participant shall promptly
notify the City of the disapproved amount and the reason therefor via electronic email and first
class mail.
Owner Participation Agreement
Page 18 of 31 3. In the event that any item shall be disapproved or deemed disapproved, the
Participants shall meet to promptly and in good faith attempt to resolve the matter to their mutual
satisfaction.
4. In the event of any dispute, the Participants shall approve the amount of
the draw request not in dispute and fund any disputed amounts promptly upon resolution of the
dispute.
5. The Participants shall have the right to inspect the City Parcel. Inspection
of the City Parcel shall be for the sole purpose of protecting the interests of the Participants and
is not to be construed in any manner as an acknowledgment by the Participants that there has
been compliance with the plans approved for the Project or that the Project is free of faulty
materials or workmanship. The Participants may make or cause to be made such other
independent inspections as the Participants may desire for its own protection.
6. The Participants shall have the right to condition any disbursement upon
the receipt and approval of such documentation, evidence or information that the Participants
may reasonably request, including, but not limited to, estimated or final closing or settlement
statements, vouchers, and invoices, in addition, the Participants shall have the right in its sole
discretion to make disbursements directly to third parties entitled to such payment.
Section 306 Conditions Precedent to Disbursement of City Protect Funds
With the exception of the first $250,000 of City Project Funds which disbursement shall
be at the sole and absolute discretion of the City in accordance with Section 303(a), until
satisfaction of the conditions precedent set forth below, as reasonably determined by the City
Manager or designee, the City shall not be obligated to disburse City Project Funds:
1. Deposit by the Association to the City of the Initial Deposit in
accordance with Section 304 hereof;
2. The Participants have executed the Funding Control Agreement in
accordance with Section 305 hereof and the terms and conditions of this
Agreement;
3. City and the owner of each Member Parcel, respectively, and the Regents
shall have executed a Right of Entry in accordance with Section 308(b)
hereunder.
Subject to the notice and cure provisions of Part 5 and the force majeure provisions of Section
604 of this Agreement, the City at its option may terminate this Agreement if any of the
conditions precedent to disbursement of City Project Funds set forth above are not satisfied by
the Association or waived in writing by the City within the time limits set forth in the Schedule
of Performance. Thereafter, this Agreement shall be terminated with respect to the Hayden Tract
Site, by written notice thereof to the other, and neither the City nor the Association shall have
any further rights against or liability to the other under this Agreement except that the City shall
Owner Participation Agreement
Page 19 of 31 promptly refund the Initial Deposit to Association subject to and in accordance with Section
304(0,
Section 307 Schedule of Performance
Each party to this Agreement shall perform the obligations to be performed by such party
pursuant to this Agreement within the respective times provided in the Schedule of Performance,
subject to the extensions of time set forth in Section 604 of this Agreement, and if no such time
is provided, within a reasonable time. Without limiting the foregoing, the City Manager shall
have the authority to extend any date(s) set forth in the Schedule of Performance or in this
Agreement or refer the approval of said extensions to the City Council for approval.
Section 308 Rights of Access; Right of Entry
a. Representatives of the Association shall have the reasonable right of access to the
City Parcel without charges or fees, at normal construction hours during the period of
construction for the purposes of this Agreement, including, but not limited to, the inspection of
the work being performed in constructing the improvements.
b. Within the time set forth in the Schedule of Performance and this Agreement, the
Association shall cause the owners of the Member Parcels, respectively, and Regents to execute
a Right of Entry substantially conforming in form and substance mutually approved by the
parties hereto and otherwise consistent with this Agreement for the purpose of City's
development of the Improvements.
Section 309 Land Use Requirements
a. This Agreement does not (i) grant any land use entitlement to Association, (ii)
supersede, nullify or amend any condition which may be imposed by the City in connection with
approval of the development described herein, (iii) guarantee to Association or any other party
any profits from the development of the Hayden Tract Site, or (iv) amend any City laws, codes
or rules. This Agreement is not a "Development Agreement" as provided in Section 65864 et
seq. of the California Government Code.
b. To the extent permitted by law, Association shall defend the City and Agency,
and their respective agents, contractors, officers and employees harmless from liability from any
and all actions, claims, damages, injuries, challenges and/or costs of liabilities arising from the
approval of any and all entitlements or permits arising from the Project by the City and/or the
Agency. Association further agrees that such indemnification and hold harmless shall include all
defense-related fees and costs associated with the defense of the City and the Agency by counsel
selected by the City and the Agency. This indemnification shall not terminate upon the
termination of this Agreement or the Close of Escrow but shall survive all applicable causes of
action.
Section 310 Due Diligence Period
Owner Participation Agreement
Page 20 of 31 Association shall have a period of thirty (30) days from and after the last to occur of the
date upon which City gives Association access to the City Parcel, or the Effective Date, in which
to determine whether (i) the physical condition of the City Parcel (e.g., environmental,
geotechnical analyses) is suitable for the Association's intended use of the City Parcel, all title
and survey matters are acceptable, and (ii) the Developer will be able to obtain all necessary
approvals, permits and/or consents for all signage the Developer determines is necessary for the
Project. The thirty (30) day period is hereinafter referred to as the "Due Diligence Period."
The Association shall receive an updated title report and, within ten (10) days of the
Effective Date, copies of all documentation regarding the environmental condition of the City
Parcel within the Agency's possession. During the Due Diligence Period, the Association shall
have inspection rights and access to and entry upon the City Parcel.
The Association shall notify the City on or before the end of the Due Diligence Period, in
writing, whether the Association has approved or disapproved the results of its investigation,
such approval or disapproval to be given or withheld in the Association's sole and absolute
discretion. If the Association disapproves the results of the investigation, such disapproval shall
terminate this Agreement, in which case the parties shall have no further obligations to the other
under this Agreement. If the Association approves the results of its investigations, this
Association shall remain in full force and effect, and the parties hereto shall have all of its rights
and obligations as set forth herein. Failure of the Association to notify the City of its approval or
disapproval before the end of the Due Diligence Period shall be deemed an approval hereunder.
Section 311 Release
Association, on behalf of themselves and any and all successors and assigns, hereby fully
and finally waives, releases and discharges the City, the Agency, and their respective members,
officers, employees, agents, contractors and consultants, from any and all present and future
claims, demands, suits, legal and administrative proceedings, and from all liability for damages,
losses, costs, liabilities, fees and expenses (including, without limitation, attorneys' fees) arising
out of or in any way connected with the City's or Association's use, maintenance, ownership or
operation of the Hayden Tract Site, any Hazardous Substances on the Hayden Tract Site, or the
existence of Hazardous Substances contamination in any state on the Hayden Tract Site, however
the Hazardous Substances came to be placed there, known or unknown, except that arising out of
the gross negligence or willful misconduct of the City or its employees, officers or agents. The
parties agree that, with respect to the release of claims as set forth above, all rights under Section
1542 of the California Civil Code and any similar law of any state or territory of the United
States are expressly waived. Association acknowledges that it is aware of and familiar with the
provisions of Section 1542 of the California Civil Code which provides as follows:
"A general release does not extend to claims which the creditor does not know
or suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor."
Owner Participation Agreement
Page 21 of 31 To the extent of the release set forth in this Section 311, Association hereby waives and
relinquishes all rights and benefits which it may have under Section 1542 of the California Civil
Code.
Association's Initials
PART 4. USE OF THE HAYDEN TRACT SITE
Section 401 Uses
The Association covenants and agrees for itself, its successors, its assigns and every
successor in interest to the City Parcel or any part thereof, that during construction and thereafter
the Association, its successors and assignees shall cause the Hayden Tract Site to be devoted to
the uses specified in the Redevelopment Plan, the Scope of Development, the Grant Deed, the
Association REA, the Regents Easement and this Agreement_
Section 402 Maintenance of the Hayden Tract Site
The Association shall cause the improvements on the Hayden Tract Site to be maintained
and shall cause Hayden Tract Site to be kept free from any acCumulation of debris or waste
materials pursuant to this Agreement, the Grant Deed, the Regents Easement and the Association
REA. The Association shall also cause the landscaping required to be planted under the Scope
of Development to be maintained in a healthy condition.
Section 403 Obligation to Refrain from Discrimination
The Association covenants and agrees for itself, its successors, its assigns and every
successor in interest to the City Parcel or any part thereof, there shall be no discrimination
against or segregation of any person, or group of persons, on account of sex, sexual orientation,
marital status, race, color, creed, religion, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the City Parcel nor shall the Association itself or
any person claiming under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees, or vendees of the City Parcel.
Section 404 Form of Nondiscrimination and Nonsegregation Clauses
Association shall refrain from restricting the rental, sale or lease of the City Parcel on the
basis of race, color, religion, ancestry, national origin, sex, or marital status of any person. All
such deeds, leases or contracts shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
a. In deeds: "The grantee herein covenants by and for himself or herself, his or her
heirs, executors, administrators, and assigns, and all persons claiming under or through them,
that there shall be no discrimination against or segregation of, any person or group of persons on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
Owner Participation Agreement
Page 22 of 31 those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed,
nor shall the grantee or any person claiming under or through him or her, establish or permit any
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises
herein conveyed. The foregoing covenants shall run with the land."
Notwithstanding the paragraph, with respect to familial status, paragraph (1) shall not be
construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall also apply to the
above paragraph
b. In leases: "The lessee herein covenants by and for himself or herself, his or her
heirs, executors, administrators, and assigns, and all persons claiming under or through him or
her, and this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision
(m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the premises herein leased nor shall the lessee himself or herself, or any
person claiming under or through him or her, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the
premises herein leased."
Notwithstanding the above paragraph, with respect to familial status, paragraph (1) shall
not be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the above
paragraph.
c. In contracts: "There shall be no discrimination against or segregation of any
person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment
of the land, nor shall the transferee itself or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation with reference
Owner Participation Agreement
Page 23 of 31 to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees of the land."
Section 405 Effect and Duration of Covenants
The covenants established in this Agreement shall run with the land and, without regard
to technical classification and designation, be binding for the benefit and in favor of the City, its
successors and assigns, and the City for such periods as set forth herein. The non-discrimination
covenants set forth in Section 403 shall remain in effect in perpetuity. Those certain covenants
also contained in the Grant Deed, the Right of Entry, the Environmental Indemnity, the
Association REA, and the Regents Easement shall remain in effect for the periods specified
therein.
PART 5. DEFAULTS, REMEDIFS AND TERMINATION
Section 501 Defaults — General
a. Subject to Force Majeure Delay, as such term is defined in this Agreement, failure
or delay by either party to perform any term or provision of this Agreement constitutes a default
under this Agreement. The party who fails or delays must immediately commence to cure,
correct or remedy such failure or delay and shall complete such cure, correction or remedy with
reasonable diligence.
b. The non-defaulting party shall give written notice of default to the party in
default, specifying the default complained of by the non-defaulting party. Failure or delay in
giving such notice shall not constitute a waiver of any default, nor shall it change the time of
default. Except as otherwise expressly provided in this Agreement, any failures or delays by
either party in asserting any of its rights and remedies as to any default shall not operate as a
waiver of any default or of any such rights or remedies. Delays by either party in asserting any
of its rights and remedies shall not deprive either party of its right to institute and maintain any
actions or proceedings which it may deem necessary to protect, assert or enforce any such rights
or remedies_
c. If a monetary event of default occurs, prior to exercising any remedies hereunder,
the non-defaulting party shall give the party in default written notice of such default. The party
in default shall have a period of thirty (30) days after such notice is given within which to cure
the default prior to exercise of remedies by the injured party.
d. If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the non-defaulting party shall give the party in default notice of such default. If the
default is reasonably capable of being cured within thirty (30) days, the party in default shall
have such period to effect a cure prior to exercise of remedies by the non-defaulting party. If the
default is such that it is not reasonably capable of being cured within thirty (30) days, and the
party in default (i) initiates corrective action within said thirty (30) day period, and (ii)
continually, and in good faith works to effect a cure as soon as possible, then the party in default
shall have such additional time as is reasonably necessary to cure the default prior to exercise of
Owner Participation Agreement
Page 24 of 31 any remedies by the non-defaulting party, but in no event shall such period exceed ninety (90)
days from the date such notice is received or deemed received. In no event shall the non-
defaulting party be precluded from exercising remedies if its security becomes or is about to
become materially jeopardized by any failure to cure a default.
Section 502 Legal Actions
In addition to any other rights or remedies, either party may institute legal action to cure,
correct or remedy any default, to recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Such legal actions must be instituted in the
Superior Court of the County of Los Angeles, State of California, in any other appropriate court
of that county, or in the Federal District Court in the Southern District of California.
Section 503 Applicable Law
The laws of the State of California shall govern the interpretation and enforcement of this
Agreement.
Section 504 Acceptance of Service of Process
a. In the event that any legal action is commenced by the Association against the
City, service of process on the City shall be made by personal service upon the City Manager or
Mayor, or in such other manner as may be provided by law.
b. In the event that any legal action is commenced by the City against the
Association, service of process on the Association shall be made by personal service upon the
designated agent of Association for service of process and shall be valid whether made within or
without the State of California, or in such manner as may be provided by law.
Section 505 Rights and Remedies are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party
of one or more of such rights or remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the
other party.
Section 506 Damages
Subject to the notice and cure periods set forth herein, if either party defaults with regard
to any of the provisions of this Agreement, the defaulting party shall be liable to the non-
defaulting party for any damages caused by such default, and the nondefaulting party may, after
such notice and opportunity to cure (but not before) commence an action for damages against the
defaulting party with respect to such default.
Owner Participation Agreement
Page 25 of 31 Section 507 Specific Performance
Subject to the notice and cure periods set forth herein, if either party defaults with regard
to any of the provisions of this Agreement, the nondefaulting party, at its option, may, after such •
notice and opportunity to cure (but not before, unless necessary to prevent immediate harm)
commence an action for specific performance of the terms of this Agreement pertaining to such
default.
Section 508 Remedies and Rights of Termination
Prior to the Close of Escrow and subject to the notice and cure provisions of Section 501,
either party hereto shall have the right to terminate this Agreement by providing written notice to
the other in the event that either party is in violation of this Agreement. Thereafter, at the option
of either party, this Agreement shall be terminated with respect to the Hayden Tract Site, by
written notice thereof to the other, and the City shall promptly refund the Initial Deposit to
Association subject to and in accordance with Section 304(c); provided, however, that
notwithstanding the foregoing, nothing in this Section 508 shall limit or prohibit the right of
either party to pursue any legal right or remedy against the other for the failure to perform its
obligations under this Agreement, including without limitation, the right of specific performance
to the fullest extent permitted by applicable law.
PART 6. GENERAL PROVISIONS
Section 601 Notices, Demands, and Communications Between the Parties
Notices, demands and communications between the City and the Association shall be
sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt
requested, to the principal offices of the City and the Association, as designated in Section
104(a) and Section 104(b) respectively. Such written notices, demands and communications
rnay be sent in the same manner to such other addresses as either party may from time to time
designate by mail as provided in this Section 601. Any notice may be transmitted by electronic
facsimile transmission followed by delivery of a "hard" copy as provided herein, and shall be
deemed delivered upon its transmission. Any notice may be personally delivered (including by
means of professional messenger service), shall be deemed received on the documented date of
receipt by the recipient. Any notice that is sent by registered or certified mail, postage prepaid,
return receipt required shall be deemed received on the date of receipt thereof
Section 602 Conflicts of Interest
a. No member, official or employee of the City shall have any personal interest,
direct or indirect, in this Agreement nor shall any such member, official or employee participate
in any decision relating to this Agreement which affects his or her personal interests or the
interests of any corporation, partnership or association in which he or she is, directly or
indirectly, interested.
Owner Participation Agreement
Page 26 of 31 b. The Association warrants that it has not paid or given, and will not pay or give,
any third party any money or other consideration for obtaining this Agreement.
Section 603 Nonliability of City Officials and Employees
No member, official, employee or consultant of the City shall be personally liable to the
Association, or any successor in interest, in the event of any default or breach by the City or for
any amount which may become due to the Association or to its successor, or on any obligations
under the terms of this Agreement.
Section 604 Enforced Delay
In addition to specific provisions of this Agreement, perforinance by either party
hereunder shall not be deemed to be in default where delays or defaults are due to war,
insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, Acts of God, acts of
the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation,
governmental restrictions or priority, litigation, or challenges to entitlements within applicable
statute of limitations periods, unusually severe weather, inability to secure necessary labor,
materials or tools, delays of any contractor, subcontractor or supplies, acts of the other party, acts
or failure to act of the City or any other public or governmental agency or entity (other than that
acts or failure to act of the City shall not excuse performance by the City) or any other causes
beyond the control or without the fault of the party claiming an extension of time to perform. An
extension of time for any such cause shall be for the period of the enforced delay and shall
commence to run from the time of the commencement of the cause, if notice by the party
claiming such extension is sent to the other party within thirty (30) days of knowledge of the
commencement of the cause.
Section 605 Inspection of Books and Records
The City has the right at all reasonable times to inspect the books and records of the
Association pertaining to the Hayden Tract Site as pertinent to the purposes of this Agreement
for a period of five (5) years from the Close of Escrow.
Section 606 Approvals
a. Except where this Agreement expressly provides for the approval of either party
in its discretion, approvals required of the City or the Association shall not be unreasonably
withheld, conditioned or delayed.
b. Except as otherwise expressly provided in this Agreement, approvals required of
the City shall be deemed granted by the written approval of the City Manager or designee. City
agrees to provide notice to Association of the name of the City Manager or designee on a timely
basis, and to provide updates from time to time. Notwithstanding the foregoing, the City
Manager or designee may, in his or her sole discretion, refer to the governing body of the City
any item requiring City approval; otherwise, "City approval" shall mean and refer to approval by
the City Manager or designee.
Owner Participation Agreement
Page 27 of 31 Section 607 Real Estate Commissions
The City shall not be liable for any real estate commissions, brokerage fees or finders
fees which may arise herefrom. The Association agrees to defend and hold the City harmless
from any claim by any broker, agent or finder retained by the Association. Each party represents
to the other party that it has not incurred any liability for the payment of any real estate
commission or brokerage or finder's fee in connection with this Agreement.
Section 608 Working Days/Business Days
As used in this Agreement, the term "working days" and/or "business days" shall mean
days other than Saturdays, Sundays, and legal holidays and closures observed by the City, and
"days" means calendar days. If the time for performance of an obligation under this Agreement
falls on other than a working day, the time for performance shall be extended to the next working
day.
PART 7. SPECIAL PROVISIONS
Section 701 Association Reciprocal Easement Agreement
Within the time set forth in the Schedule of Performance, Association shall cause to be
executed and delivered to the City in recordable form, a Declaration of Restrictions and
Reciprocal Easement Agreement substantially conforming in form and substance to the "Outline
of Easements" attached hereto as Attachment No. 5 (the "Association REA"), or as otherwise
reasonably approved by the City Manager and City Attorney. The Association shall use diligent
and good faith efforts to obtain all third party signatures required for an effective consent to the
recordation of the Association REA in senior position to any encumbrances, liens or
encumbrances on the Member Parcels and the City Parcel. Association hereby acknowledges
and agrees that Association shall pay all costs incurred in connection with facilitating,
processing, approval and recordation of the Association REA as required herein, including, but
not limited to, all processing fees, recording fees, Culver City Community Development
Department Planning Division fees and any other fees necessary to satisfy the Association
obligations set forth in this Section 701.
Section 702 Regents Easement
Within the time set forth in the Schedule of Performance, Association shall cause to be
executed and delivered to the City in recordable form, an Easement Agreement substantially
conforming in form and substance to the "Outline of Easements" attached hereto as Attachment
No. 5 (the "Regents Easement"), or as reasonably approved by the City Manager and City
Attorney. The Association shall use diligent and good faith efforts to obtain all third party
signatures required for an effective consent to the recordation of the Regents Easement in senior
position to any encumbrances, liens or covenants on the Regents Parcel. Association hereby
acknowledges and agrees that Association shall pay all costs incurred in connection with
facilitating, processing, approval and recordation of the Regents Easement as required herein,
including, but not limited to, all processing fees, recording fees, Culver City Community
Owner Participation Agreement
Page 28 of 31 Development Department Planning Division fees and any other fees necessary to satisfy the
Association obligations set forth in this Section 702.
PART 8. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
a. This Agreement shall be executed in four (4) duplicate originals each of which is
deemed to be an original. This Agreement and the Attachment hereto constitute the entire
understanding and agreement of the parties.
b. This Agreement integrates all of the terms and conditions mentioned herein or
incidental hereto, and supersedes all negotiations or previous agreements between the parties
with respect to all or any part of the Hayden Tract Site.
c. None of the terms, covenants, agreements or conditions set forth in this
Agreement shall be deemed to be merged with the Grant Deed conveying title to the City Parcel_
d. All waivers of the provisions of this Agreement must be in writing and signed by
the appropriate authorities of the City or the Association, and all amendments hereto must be in
writing and signed by the appropriate authorities of the City and the Association. This
Agreement and any provisions hereof may only be amended by mutual written agreement by the
Association and the City.
PART 9. TIME FOR ACCEPTANCE OF AGREEMENT BY CITY; DATE OF
AGREEMENT
This Agreement, when executed by the Association and delivered to the City, must be
authorized, executed and delivered by the City within ninety (90) days after this Agreement is
signed by the Association, or this Agreement may be terminated by the Association on written
notice to the City. The date of this Agreement shall be the date it is signed by the City.
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[SIGNATURES ON FOLLOWING PAGE]
Owner Participation Agreement
Page 29 of 31 HAYDEN TRACT OWNERS ASSOCIATION
By:
Its:
By:
Its:
Owner Participation Agreement
Page 30 of 31 CITY OF CULVER CITY
Dated: By:
JOHN NACHBAR, City Manager
APPROVED AS TO CONTENT:
By:
SOL BLUMENFELD, Community Development Director
APPROVED AS TO FORM:
By:
CAROL SCHWAB, City Attorney
APPROVED AS TO FORM:
By:
THEODORE M. BALLMER, Special Counsel
Owner Participation Agreement
Page 31 of 31 ATTACHMENT NO. 1
SITE MAP
[Behind this page.] ATTACHMENT NO. 2
LEGAL DESCRIPTION
[Behind this page.] ATTACHMENT NO. 3
SCHEDULE OF PERFORMANCE
1. Execution of the Agreement by the City Not later than January 31, 2011
2. Commencement of Due Diligence Period
Not later than the Effective Date of
the Agreement.
3. End of Due Diligence Period Not later than ninety (90) days after
commencement of the Due Diligence
Period.
4. Submission of the Rights of Entry by the Not later than ten (10) days after the
Association (and the Regents) to the City; end of the Due Diligence Period.
and the City, if applicable.
5. Completion of Survey and approval by Not later than thirty (30) days after
the Participants. the end of the Due Diligence Period.
6. Execution by the Participants of the Not later than thirty (30) days after
Funding Control Agreement and Deposit completion of the Survey.
by Association of the Initial Deposit of
the Association Project Funds.
7. Commencement of design process of the Not later than sixty (60) days after the
Project by the City. Commencement shall Effective Date of the Agreement.
include a survey of the Hayden Tract Site
in accordance with the Agreement.
8. Completion of the design process of the Not later than sixty (60) days after
Project, including a survey of the Hayden commencement of the design process.
Tract Site.
9. Commencement of drafting of Not later than sixty (60) days after
Association REA and UCLA Easement commencement of the design process.
by the Association in accordance with the
Agreement.
10. Commencement of preparation of bid Not later than sixty (60) days after
package documents by the City. completion of the design process.
11. Deposit with the Funding Control Agent Not later than ten (10) days prior to
of the Final Deposit by the Association. consideration by the City Council for
the authorization to go out to bid for , the Project.
12. Subject to the approval of the City Not later than sixty (60) days after
Council, authorization by the City commencement of bid package
Council to go out to bid for the Project. documents by the City.
13. Advertise bid towards Project. Not later than five (5) days after
authorization by the City Council to
go out to bid for the Project.
14. Pre-bid job walk. Not later than twenty (20) days after
advertisement of bid.
15. Bid opening. Not later than twenty (20) days after
pre-bid job walk.
16. Commencement of bid review. Not later than five (5) days after bid
opening.
17. Commencement of draft staff report for Not later than twenty (20) days after
approval of bid award by the City commencement of bid review.
Council.
18. Satisfaction of the conditions precedent Not later than ten (10) days prior to
by the Association to the Close of City Council consideration of the
Escrow. award of the bid for the Project.
_
19. Subject to the approval of City Council, Not later than thirty (30) days after
award of the bid by the City Council. commencement of drafting of staff
report.
20. Deposit by the City into Escrow of the Not later than three (3) days prior to
deliverables and Purchase Price. the Close of Escrow.
21. Commencement of contract execution Not later than three (3) days after
period, consideration and award of the bid by
the City Council.
22. Close of Escrow. Deposit by the City of Not later than ten (10) days after
City's share of the Project Funds with the completion of the contract execution
Funding Control Agent. period.
23. Notice to proceed issued; Commencement Not later than thirty (30) days after
of construction of the Project. completion of the contract execution
period. 24. Construction period ends_
Not later than three (3) months after
commencement of construction.
25. Subject to approval by the City Council, Not later than thirty (30) days after
acceptance by the City Council of the the construction period ends.
work.
26. Notice of completion filed; Completion of Not later than five (5) days after
Construction. acceptance by the City Council of the
work. ATTACHMENT NO. 4
SCOPE OF DEVELOPMENT
In accordance with this Agreement, the parties hereto shall redevelop the approximately 50 foot
wide abandoned railway spur right of way located between Hayden Avenue and Eastham Drive
and lying midway between Stellar Drive on the north and Warner Drive on the south (the
"Hayden Tract Site") as depicted on the Site Map (Attachment No. 1). The Hayden Tract Site
straddles the rear lot lines of Lots 18 through 37 of Tract No. 13503. The properties participating
would be: 3578 Hayden Avenue, 8500 Stellar Drive, 8476 Stellar Drive, 8454 Stellar Drive,
8432 Stellar Drive, 3623 Eastham Drive, 8439 Warner Drive, and the City-owned 25 ft. by 379
ft. parcel lying within the Hayden Tract Site. The Hayden Tract Site would be converted to a
landscaped paved parking lot with approximately 121 parking spaces with a one-way, one-lane
drive lane from Hayden Avenue (on the west side) to Eastham Drive (on the east side), including
providing a green belt of approximately 120 trees. The Hayden Tract Site will be managed by the
Association following construction (project construction will be managed by the City). ATTACHMENT NO. 5
OUTLINE OF ASSOCIATION RECIPROCAL EASEMENT AGREEMENT
1. Project summary. In accordance with this Agreement, the parties hereto shall redevelop the
approximately 50 foot wide abandoned railway spur right of way located between Hayden Avenue
and Eastham Drive and lying midway between Stellar Drive on the north and Warner Drive on the
south (the "Hayden Tract Site") as depicted on the Site Map (Attachment No. 1). The Hayden Tract
Site straddles the rear lot lines of Lots 18 through 37 of Tract No. 13503. The properties
participating would be: 3578 Hayden Avenue, 8500 Stellar Drive, 8476 Stellar Drive, 8454 Stellar
Drive, 8432 Stellar Drive, 3623 Eastham Drive, 8439 Warner Drive, and the City-owned 25 ft. by
379 ft. parcel lying within the Hayden Tract Site. The Hayden Tract Site would be converted to a
landscaped paved parking lot with approximately 121 parking spaces with a one-way, one-lane drive
lane from Hayden Avenue (on the west side) to Eastham Drive (on the east side), including
providing a green belt of approximately 120 trees. The Hayden Tract Site will be managed by the
Association following construction (project construction will be managed by the City).
2. Owner's association. The City shall sell the City Parcel to the Association. The Association
will then grant a reciprocal easement over the City Parcel to the participating owners for access
through the Hayden Tract Site and manage the project for the benefit of the participating owners.
3. Participating owners. Each participating owner will grant a reciprocal easement over its
parcel to each of the other participating owners for access along the Hayden Tract Site. Each
participating owner will grant an exclusive easement over its portion of the Hayden Tract Site to the
Association to operate, manage, maintain, repair, and replace the improvements within the Hayden
Tract Site. Each participating owner will have the exclusive use of a designated number of parking
stalls located within the Hayden Tract Site on its parcel as more particularly described in Schedule I
attached hereto and incorporated herein. Each participating owner will covenant to pay the
Association its share of the annual costs of operating the project and the Association. The reciprocal
easement agreement will provide that in the event a participating owner defaults in the performance
of its obligations the Association will have, among its rights to enforce performance, the right to cure
the default and place a lien on the defaulting owner's parcel for the costs to cure the default.
*Additionally, the owner of 8476 Stellar Drive will have to grant limited parking rights to the
owners of 8454 Stellar Drive and 3623 Eastham Drive/8439 Warner Drive for several parking
spaces, and the owner of 8454 Stellar Drive will have to grant limited parking rights to the owner of
3623 Eastham Drive/8439 Warner Drive for several parking spaces.
4. Benefits to participating owners. The Hayden Tract Site within each participating owner's
parcel will be improved with paving, parking stalls, lighting, landscaping, and vehicle access from
Hayden Avenue through to Eastham Drive. Management and maintenance of the project will be
centralized in the Association. Property values will be enhanced.
5. Burdens on participating owners. Each participating owner's parcel will be burdened with
(A) a reciprocal easement (across approximately the rear 25 ft. of the parcel) granted to the Association and the other participating owners for access along the Hayden Tract Site, (B) the rights
granted to the Association to manage and maintain the project, and (C) the obligation to participate
in the Association, pay the periodic assessments assessed by the Association, and abide by the rules
and regulations promulgated by the Association for the governance of the project.
6. Requirements regarding lenders. The project will enhance the value of each lender's security
by increasing the value of the property. In order to accomplish the project, each lender will have to
(A) consent to the proposed construction and the grant of reciprocal easements, and (B) subordinate
its deed of trust to the reciprocal easement agreement and agree to be bound by and perform the
obligations under the reciprocal easement agreement in the event that lender acquires title as a result
of the borrower's default. The reciprocal easement agreement will contain lender protection
provisions so as to satisfy the lenders' concerns, subject to approval by the City Manager and City
Attorney, in their sole and absolute discretion, including rights of lenders to cure defaults by
participating owners, subordination of any Association liens to the lien of the first trust deed,
sending copies of notices of default to lender, and other matters.
7. Regents Easement. As set forth in the letter from Mr. Brad A. Erickson dated September 22,
2011 and attached hereto as Exhibit A, Regents has expressed its desire to participate in the Project
under the basic terms as described in the February 14, 2011 letter (attached thereto). City and the
Association mutually agree to cooperate and use commercially reasonable efforts to ensure Regents
participates under the terms set forth therein and as otherwise consistent with the terms and
conditions of this Agreement. EXHIBIT A
REGENTS LETTER
[Behind this page.] ATTACHMENT NO. 8
PROJECT BUDGET
Item Cost City Association
Design/Plans $200,000
ALTA Survey $ 50,000
Total A&E: $250,000 $250,000 $0
Construction/Estimated: $1,600,000* $800,000 $800,000
(50%) (50%)
• Grading
• Drainage
• Paving
• Lighting
• Gate Control Access
• Security Fence
• Landscaping
Total Costs: $1,850,000 $1,050,000 $800,000
Estimated Cost Per Stall (including soft costs) $8,678 $6,612
Annual Operation & Maintenance $0.00 $11,800
Annual Liability Insurance $0.00 $3,103
Consultant to Form Association $0.00 $7,500
*Constniction Cost based on 121 concrete parking spaces at $13,233 each SCHEDULE 1
ALLOCATION OF PARKING SPACES
[Behind this page.]