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HomeMy WebLinkAbout2001-11 - Approving a Development Agreement for Koll Center Newport Office Site B [Development Agreement No. 16].ORDINANCE NO. 2001-11 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH APPROVING A DEVELOPMENT AGREEMENT FOR KOLL CENTER NEWPORT OFFICE SITE B [DEVELOPMENT AGREEMENT NO. 161 WHEREAS, Koll Center Newport Number A ( "Developer "), 1900 Main Street, Suite 350, Irvine, California, has applied to the City of Newport Beach ( "City ") for a General Plan Amendment (GPA 97 -3(B)) and a Planned Community Amendment for "Office Site B" of the Koll Center Newport (KCN) Planned Community in order to allow future additional development on Parcel 1 of PMB 114/22 -24 and Parcels 1, 2, and 7 of PMB 181/13 -19; and WHEREAS, the GPA 97 -3(B) would increase the allowable building floor area of KCN Office Site B by 250,000 gross square feet, to a maximum of 1,310,898 gross square feet; and WHEREAS, a Development Agreement was prepared, attached hereto as Exhibit "DA -1 "; and WHEREAS, the Development Agreement provides for certain rights, obligations, and assurances on the parts of both the City and the Developer; and WHEREAS, on August 3 and September 7, 2000 and June 7, 2001, the Planning Commission held duly- noticed public hearings, and, at the conclusion of the hearing and after considering the evidence and arguments submitted by the City staff, Developer, and all interested parties, adopted a resolution recommending that the City Council approve the Development Agreement; and WHEREAS, on June 26, 2001, the City Council held a public hearing and considered the Development Agreement, the recommendation of the Planning Commission, and the evidence and arguments submitted by the City staff, Developer, and all interested parties A notice of time, place and purpose of the public hearing was duly given and testimony was presented to and considered by the City Council at the public hearing. THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1: ENVIRONMENTAL REVIEW. Pursuant to CEQA and the CEQA Guidelines, an Environmental Impact Report (EIR) has been prepared for the project addressed by the Development Agreement. Subsequent to the preparation and distribution of the Draft EIR for public review and comment, the City of Newport Beach and the project applicant mutually agreed to enter into a Development Agreement for the proposed project. The Development Agreement provides additional mitigation for project impacts in the form of fees for road improvements and other items. Although this discretionary action was not identified in the project description contained in the Draft EIR, a review of its implications on the environmental analysis conclusively shows that its implementation will not result in any additional significant impacts beyond those addressed in the Draft EIR, result in a substantial increase in the severity of any significant impacts addressed in the Draft EIR, and/or require the incorporation of additional mitigation measures. Therefore, the environmental analysis presented in the Draft EIR adequately evaluated all of the potential impacts of project implementation, including those related to the approval and implementation of the Development Agreement. After reviewing the EIR, all comments received during the public review process, and all responses to those comments, the City Council has certified the EIR as complete, reflecting the independent judgment of the City of Newport Beach. All records pertaining to preparation, review, and comment on the EIR are retained in the Planning Department of the City of Newport Beach. SECTION 2: DEVELOPMENT AGREEMENT. a. The Development Agreement is, assuming voter approval of GPA 97 -3(B), consistent with the objectives, policies, general land uses, and programs of the General Plan of the City.. b. The City Council hereby approves and adopts the Development Agreement, attached hereto as Exhibit "DA -1 ". The Mayor is hereby authorized to execute the Agreement, and, assuming voter approval of GPA 97 -3(B), the City Clerk shall cause a copy thereof to be recorded with the Orange County Recorder. SECTION 3: The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. This Ordinance shall be published once in the official newspaper of the City, and the same shall not become effective until the City Clerk certifies to the City Council that the GPA 97 -3(B) has been approved by the electorate pursuant to Section 423 of the City Charter. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on July 10, 2001 and adopted on July 24, 2001 by the following vote, to wit: AYES, COUNCIL MEMBERS O'Neil, Ridgeway, Glover, Mayor Adams NOES, COUNCIL MEMBERS Heffernan, Bromberg, Proctor ABSENT COUNCIL MEMBERS None sk ITIRM a - Recording Requested By and When Recorded Return to: City Clerk City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92660 DEVELOPMENT AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND KOLL CENTER NEWPORT NUMBER A Approved July 24, 2001 Ordinance No. 2001 -11 DEVELOPMENT AGREEMENT This Development Agreement ( "Agreement ") is executed as of 2001, ( "Approval Date ") by and between the CITY OF NEWPORT BEACH ( "CITY "), and KOLL CENTER NEWPORT NUMBER A ( "OWNER "). 1. RECITALS. 1.1 Property /Ownership Status. OWNER owns all of the real property ( "Property ") described on Exhibit "A" and depicted on Exhibit "B," consisting of approximately five (5) acres. 1.2 Planning Status. The Property comprises a portion of Office Site B" known as "Professional and Business Office Site B" of the Koll Center Newport Planned Community, which is currently entitled with approximately one million (1,000,000) square feet of office development. 1.3 Project. OWNER has asked CITY to approve a general plan amendment, zoning amendment and related permits that would authorize the construction of approximately two hundred and thirty-five thousand (235,000) square feet of additional office use on the Property. 1.4 Hearings. The Newport Beach Planning Commission (Planning Commission) and the Newport Beach City Council (City Council) have conducted all required public hearings on the Project and certified an Environmental Impact Report for the Project that is in full compliance with CEQA and the CEQA Guidelines. All of these hearings were duly noticed in accordance with applicable provisions of State law and the Newport Beach Municipal Code. 1.5 General Findings. The Planning Commission and City Council have determined that the Project and all Project Approvals are consistent with all elements of the Newport Beach General Plan, the Newport Beach Municipal Code, CEQA and the CEQA Guidelines. The Project and all Project Approvals are also consistent with all other relevant plans, policies, ordinances, resolutions and regulations of the CITY. 1.6 Affordable Housing. The CITY and OWNER have determined that the Project does not constitute a residential development subject to the terms and conditions of the CITY's Housing Element. Accordingly, no present or subsequently enacted affordable housing requirement or housing in lieu fee shall be required of OWNER. 1.7 Purpose of Agreement. The purposes of this Agreement are as follows: F:\users\cat\shared\Burnham\Koll\DA062601.doc (a) To provide for the orderly completion of development of the Property consistent with the Project Approvals, Project Conditions and this Agreement. (b) To provide the CITY and OWNER with certainty that the Project will be developed and maintained as contemplated by the Project Approvals, Project Conditions and the Development Plan. (c) To provide assurance to OWNER that OWNER may proceed with the Project, subject to compliance with Project Conditions, in accordance with the laws, policies, rules, ordinances, resolutions and regulations of the CITY in effect as of the Approval Date. (d) To strengthen the public planning process, encourage private participation in comprehensive planning, reduce the economic cost of development, mitigate the impacts of development, and provide public benefits in excess of those normally secured through the planning process. 1.8 Authorization. This Agreement is authorized by, and is consistent with, the provisions of §§ 65864 et seq, of the Government Code of the State of California, and Chapter 15.45 of the Newport Beach Municipal Code. 1.9 Police Power. The City Council has determined that this Agreement; (a) Is in the best interests of the health, safety and general welfare of the CITY, its residents and the public; (b) Was entered into pursuant to, and is a valid exercise of, the CITY's police power; and (c) Has been approved in accordance with the provisions of State and local law that establish procedures for the approval of development agreements. 1.10 City Ordinance. On , 2001, after giving appropriate notice and holding all appropriate public hearings, the City Council conducted the first reading of Ordinance No. authorizing the CITY to enter into this Agreement. The City Council approved the Adopting Ordinance on , 2001, after giving appropriate notice and holding all appropriate public hearings. The Adopting Ordinance shall be considered effective as specified in Section 8.1. 1.11 CECIA Review. The City Council has independently reviewed, approved and certified the EIR for the Project. In so doing, the City Council determined, among other things, that the EIR was prepared in full compliance with CEQA and the CEQA Guidelines. The City Council also adopted all feasible mitigation measures, made 3 appropriate findings and adopted a statement of overriding considerations with respect to any significant effect that could not be mitigated to a level of insignificance. The City Council also adopted a Mitigation Monitoring Program for the Project as required by CEQA and the CEQA Guidelines. 2. DEFINITIONS. 2.1. "Adopting Ordinances" refers to: (a) Ordinance No. 2001- adopted by the City Council on , 2001, approving Zoning Amendment No. 905 and this Agreement; (b) Resolution No. 2001- adopted by the City Council on 2001, approving GPA 97 -3(B); (c) Resolution No. 2001- adopted by the City Council on 2001, approving Traffic study No. 119 and making findings pursuant to Chapter 15.40 of the Code; (d) Resolution No. 2001- adopted by the City Council on , 2001 certifying the EIR as fully compliant with CEQA and the CEQA Guidelines, adopting all feasible mitigation measures, and containing the statement of overriding considerations. 2.2. "Agreement" refers to this Development Agreement. 2.3 "Annual Review" refers to the review of OWNER'S and CITY's good faith compliance with this Agreement, as set forth in Section 7. 2.4 "Approval Date" means 2001, the date on which the City Council approved the Adopting Ordinances. 2.5 "Assign" means all forms of use of the verb "assign" and the nouns "assignment" and "Assignee" shall include all contexts of hypothecation, sales, conveyances, transfers, leases, and assignments. 2.6 "CEQA" and the "CEQA Guidelines" refers to the California Environmental Quality Act and the CEQA Guidelines promulgated by the Secretary of Resources of the State of California. 21 "CITY" refers to the City of Newport Beach, California. 2.8 "City Council" refers to the City Council of the CITY. 4 2.9 "Cure Period" refers to the period of time during which a Default may be cured pursuant to Article 10. 2.10 "Day" or "days" refers to a calendar day, unless expressly stated to be a business day. 2.11 "Default" refers to any material default, breach, or violation of the provisions of this Agreement. A "CITY Default" refers to a Default by the CITY, while an "OWNER Default' refers to a Default by OWNER. 2.12. "Develop" means all forms of use of the verb "develop" and the noun "Development', whether or not capitalized, means the improvement of the Property for the purposes of completing the structures, improvements and facilities comprising the Project including, but not limited to: grading; the construction of infrastructure and public facilities related to the Project whether located within or outside the Property; the construction of buildings and structures; and the installation of landscaping and parking facilities and improvements. "Develop" or "Development" also includes the maintenance, repair, alteration, reconstruction or redevelopment of any building, structure, improvement, landscaping or facility after the initial construction and completion so long as consistent with the Project Approvals, the Development Plan and this Agreement. "Develop" or "Development" also includes the use of the Property in a manner consistent with the permitted general, primary, and secondary uses as set forth in the PC Text and the Development Plan. 2.13. "Development Plan" means and constitutes the plan for the development of the Property, as embodied and stated in the Project Approvals, Project Conditions and this Agreement. 2.14. "Effective Date" shall be the date this Agreement becomes effective as specified in Section 8.1. 2.15. "EIR" refers to Environmental Impact Report 158 (State Clearinghouse No. 99091120) prepared for the Project and certified as fully compliant with CEQA and the CEQA Guidelines by the CITY Council on the Approval Date. 2.16. "Estoppel Certificate" refers to the document certifying the status of this Agreement required by Section 7.4. 2.17. "Exhibit" refers to an Exhibit to this Agreement. All Exhibits are incorporated as a substantive part of this Agreement. The Exhibits to this Agreement are as follows: Exhibit: Description: A Legal Description of the Property B Map depicting the Property 5 C Project Approvals comprising the Development Plan D List of Project Conditions 2.18. "Existing General Regulations" means those General Regulations approved by the CITY on or before the Approval Date (irrespective of their Effective Date) and not rescinded or superseded by CITY action taken on or before the Approval Date. 2.19. "Future General Regulations" means those General Regulations adopted or approved by the CITY in any way, after the Approval Date. 2.20. "General Plan" refers to the CITY's General Plan in effect on the Approval Date, plus all amendments to the General Plan adopted by the CITY on or before the Approval Date as part of the Project Approvals, Project Conditions or the Development Plan. 2.21. "General Plan Amendment" or "GPA" means General Plan Amendment 97 -3(B) amending the General Plan of the CITY as approved by the City Council on , 2001 if and when approved by the voters pursuant to Section 423 of the City Charter. 2.22. "General Regulations "means all laws, ordinances, resolutions, codes, rules, regulations and official policies of CITY governing the development and permitted uses of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the development of the Property and provisions relating to applicable fees, charges, assessments and levies. The foregoing includes the Traffic Phasing Ordinance (TPO), the Fair Share Traffic Contribution Fee Ordinance (Fair Share Ordinance) and water and sewer connection fee ordinances. General Regulations do not include any CITY ordinance, resolution, code, rule, regulation or official policy identified in or governing the following ( "Governmental Exceptions "): (a) The provisions of Titles 1, 3, 5, 6, 7, 9, 10, 11, 12, 13, 14, 15 (except Chapters 15.38 and 15.40) and of the Newport Beach Municipal Code; (b) Property taxes and assessments; (c) The control and abatement of Nuisances (subject to the provisions of Section 3.4); (d) The exercise of the power of eminent domain; 9 (e) The provision of, or charges for, water, sewer, refuse, police, fire and other municipal services that are generally applicable to all owners or lessees of commercial property in the CITY; and (f) The manner in which property is used that are related to the amount and time of noise from permitted activities, the use of alcohol, and the nature and timing of special events. 2.23. "Governmental Reservations" refers to those actions that CITY may take that may affect the Project or the operation of the Project, as follows: (a) Enforcement of the specific provisions, limitations and restrictions contained in the Project, Project Approvals, Development Plan and Project Conditions; (b) Enforcement of the provisions and conditions of this Agreement; (c) Enforcement of, or pursuant to, Governmental Exceptions or Governmental Reservations; and (d) Enforcement of Existing General Regulations 2.24. "Include" and all contexts and forms of the words "includes" and "including" shall be interpreted to also state "but not limited to." 2.25. "OWNER" refers to Koll Center Newport Number A, a California general partnership. 2.26. "Mortgagee" refers to the holder of a beneficial interest under any mortgage, deed of trust, sale - leaseback agreement, or other transaction under which all or a portion of OWNER's interest in the Property is used as security. 2.27. "Notice" refers to any written notice or demand between the Parties required or permitted by this Agreement. 2.28. "Parties' refers to the CITY and OWNER and a "Party" refers to the CITY or OWNER. 2.29. "PC Text" refers to the "Koll Center Newport Planned Community Development Plan" as amended by the City Council on the Approval date and any subsequent modification of the PC Text with respect to the Property that are approved by the City Council and to which OWNER consents. Except for the modifications expressly permitted by the terms of this Agreement, OWNER shall be under no obligation to consent to modifications of the PC Text 2.30. "Plannina Commission" refers to the Planning Commission of the CITY. 7 2.31. " Project" refers to the existing and proposed development of the Property pursuant to, and consistent with the Project Approvals, consistent with and subject to Project Conditions, and as described in the Development Plan. The Project includes those improvements existing on the Property as of the Approval Date. 2.32. "Project Approvals" refers to all approvals, amendments, permits, licenses, consents, rights and privileges, and other actions required or authorized to be approved, issued or taken by CITY in connection with development of the Property, including but not limited to the following discretionary actions: (a) General Plan Amendment No. 97 -3(B); (b) Zoning Code Amendment No. 898 (Koll Center Newport Planned Community Development Plan); (c) Traffic Study No. 119; and (d) Environmental Impact Report No. 158 (State Clearinghouse No. 99091120). Project Approvals also means any grants of easements, vacations, subdivisions, resubdivisions, lot line adjustments or other actions necessary to the implementation of the Project. Project Approvals also include any and all discretionary or ministerial permits related to construction of the Project including grading permits, building permits, and occupancy permits. 2.33. "Project Conditions" means all conditions to OWNER's right to proceed with Development pursuant to the Project Approvals, including the provisions of this Agreement, the PC Text, the mitigation measures identified in the EIR and adopted by the City Council, conditions to approval of the Traffic Study, conditions to Project Approvals, Existing General Regulations and Governmental Reservations. The Project Conditions are generally described in Exhibit D. The term Project Conditions does not included the requirement for voter approval pursuant to Section 423 of the City Charter. 2.34. "Property" refers to the real property described on Exhibit "A" and depicted on Exhibit "B ". 2.35. "Subsequent Development Permits" means all Project Approvals granted or issued by the CITY subsequent to the Approval Date in connection with development of the Property. 2.36. "Vested Entitlement" or "Entitlement" refers to the development rights granted OWNER pursuant to this Agreement and the Project Approvals that are subject to Project Conditions. 11 3. DEVELOPMENT OF THE PROPERTY 3.1 Development Program. Upon the Effective Date, this Agreement vests OWNER's right to proceed with the development described in the Project Approvals and Development Plan. OWNER acknowledges that its right to proceed with the Vested Entitlement is subject to the Project Conditions. OWNER acknowledges that City grants no assurance that OWNER will receive necessary permits or approvals from any other public agency with jurisdiction over the Project or that Project Approvals will not be subject to and affected by legal or other challenges or procedures initiated by third parties. (a) Permitted Uses. The Property shall be used and developed only in the manner provided in the Project Approvals and the Development Plan. CITY acknowledges that, from time to time, OWNER may seek and obtain, in accordance with applicable provisions of State and local law, minor amendments to the Development Plan and the Project Approvals. The Planning Director of the CITY ( "Planning Director") shall determine, subject to appeal by OWNER to the Planning Commission, whether a proposed amendment is a "minor amendment" for purposes of this Agreement. A minor amendment is one that does not increase vehicular trips or other environmental impacts associated with Project Approvals or the Development Plan. (b) Permitted Density of Development. OWNER shall have the vested right to develop the Property and receive the CITY's approval of all Project Approvals consistent with the permitted density and level of intensity authorized by the Project Approvals and as described in the Development Plan. The CITY shall not impose any condition on any Project Approval that reduces the permitted density and level of intensity allowed in the Development Plan and discretionary Project Approvals. CITY acknowledges that the boundaries of the parcels shown on the Development Plan and the Project Approvals are approximate and are subject to minor variation prior to recordation of final map(s) for the Project, provided OWNER complies with the applicable procedures for subdivision maps. CITY may impose standard conditions of approval on any subdivision or resubdivision requested by OWNER so long as the condition(s) do not reduce the permitted density or intensity, or substantially increase the cost of the development, allowed in the Project Approvals and described in the Development Plan. (c) Maximum Height and Size of Structures. OWNER shall have the vested right to develop the Property with the maximum height and size of structures as set forth in the Development Plan and the Project Approvals. 3.2 Compliance with Project Conditions. OWNER acknowledges that City Council approval of the Project Approvals, the Development Plan and this Agreement is subject to compliance with the Project Conditions. The Project Conditions are, among other things, designed to minimize or eliminate any adverse impacts of the Project and protect and enhance the environment. In certain instances, the Project Conditions exceed those that might otherwise be appropriate under "nexus" and "rough proportionality" tests recently articulated by the courts. By entering into this Agreement, OWNER agrees to be bound by, and waives any protest of, any Project Conditions. Any Project Conditions imposed by the CITY after the Effective Date shall be consistent with the Project Approvals, Development Plan and this Agreement. Owner also agrees to abide by any conditions or modifications to the design of the Project resulting from Project Conditions that authorize review by the City subsequent to the Approval Date. 3.3 Compliance with General Regulations. OWNER shall comply with the Existing General Regulations. Except as otherwise specified in this Agreement, OWNER shall not be obligated to comply with any Future General Regulations that are in conflict with the Development Plan or this Agreement. Any Future General Regulation(s) that are inconsistent with this Agreement and /or the Development Plan and which do not fall within the definition of Governmental Reservations or Governmental Exceptions shall not be applicable to the development or use of the Property. With respect to Existing General Regulations that require the payment of fees, costs, and expenses, the applicable fee, cost, or expense shall be that in effect on the Approval Date subject to any automatic increases or decreases mandated by the text of the Existing General Regulation as of the Approval Date. OWNER shall, however, comply with: (a) any Future General Regulation that does not impair or affect its ability to develop the Property in accordance with the Development Plan or increase OWNER's cost or cause delays in timing. OWNER shall also comply with all provisions of the Uniform Codes for building, fire, plumbing, mechanical and electrical, whether adopted before or after the Approval Date by the CITY, which are in effect at the time applications for specific Project Approvals are submitted. 3.4 Public Health and Safety/Uniform Codes. This Agreement shall not prevent the CITY from adopting, and applying to the Project, Future General Regulations, including Uniform Codes (as referred to above), that are based on recommendations of a multi -state professional organization relating to the specifications for the constructions of improvements ( "Building Codes ") and become applicable throughout CITY. This Agreement shall not prevent the CITY from adopting, and applying to the Project, conditions inconsistent with the Development Plan or Project Approvals, when the conditions are adopted by the City Council after a noticed public hearing and pursuant to a determination by the City Council that the conditions are necessary to abate a public nuisance (Nuisance). In no event shall the CITY impose any condition pursuant to a determination of Nuisance unless the OWNER has been given notice of, and the right to present evidence at, a public hearing. Any 10 determination of Nuisance, and the rational relationship between the Nuisance and the conditions imposed, must be supported by substantial evidence in the record of the hearing. 4. BENEFITS TO OWNER. 4.1 Right to Develop. Upon the Effective Date and during the term of this Agreement, OWNER shall have a vested right to develop, and receive building and occupancy permits for construction on, the Property to the full extent permitted by the Project Approvals and the Development Plan subject to the Project Conditions. CITY shall only take action with respect to the Property that complies and is consistent with the Project Approvals and the Development Plan unless OWNER gives its written consent to the action or CITY is permitted to take the action pursuant to this Agreement. OWNER may refuse to grant consent in OWNER's sole and absolute discretion. CITY shall not impose or increase any condition or requirement (whether in the form of a fee, tax, requirement for dedication or reservation of and, or any other type of exaction) on the Project, except as expressly permitted by this Agreement, Existing General Regulations, Governmental Reservations or Governmental Exceptions. However, CITY may impose or increase a condition or requirement when such action is required (as opposed to permitted) by State or federal law and then only to the minimum extent and duration necessary to comply with State or federal law. Except as otherwise provided by this Agreement, the ordinances, plans, resolutions, and policies governing the permitted use and development of the Property shall be those described in the Project Approvals and the Development Plan. 4.2 Reservations or Dedications of Land. No dedication or reservation of any portion of the Property shall be required of OWNER in conjunction with the application or issuance of any Project Approval except as may be provided in the Project Approvals, Project Conditions, Development Plan or this Agreement. 4.3 No Additional Traffic Related Fees or Conditions. OWNER's satisfaction of the provisions of Article 5 shall be deemed full compliance with all Existing General Regulations, Future General Regulations and CEQA relative to traffic impacts or traffic fees. Except as provided in Article 5, CITY shall not impose or increase the amount of any traffic- related fee, charge, dedication, or improvement relative to, or as a condition to, development of the Project. 4.4 Storm Drain. The CITY shall provide storm drain capacity to the exterior boundaries of the Property to the extent, and subject to the same conditions, that capacity is provided to similarly situated commercial property in the CITY. OWNER agrees to accept, during the term of this Agreement, all storm drain inflow from facilities in place as of the Effective Date. 4.5 Park Fees. OWNER and CITY acknowledge that the Project may generate some incidental demand for, and usage of, park and open space land within 11 the CITY but that the Project is exempt from the Park Dedication Ordinance (Chapter 19.50 of the Newport Beach Municipal Code) and any Existing General Regulation relating to the dedication of land for park or open space purposes or the payment of park or open space fees. 4.6 Future Impact Fees, Conditions, and Exactions. So long as OWNER is not in default under this Agreement, CITY will not impose, or increase the amount of, any impact fee, condition, mitigation measure, or exaction other than as expressly required by the Project Approvals, Project Conditions, Existing General Regulations, the Development Plan, or this Agreement. CITY shall not, without the written consent of OWNER, form, or cause the formation of, any new governmental entity for the purpose of imposing fees, conditions or exactions the CITY could not directly impose pursuant to this Section. CITY may form or cause the formation of an assessment district (or similar vehicle) comprised of the Property and other property in the area for the purpose of funding public improvements that provide a special benefit to the Property. However, CITY may not include the Property in any assessment district formed to fund construction of public improvements that CITY is prohibited from imposing on OWNER because of this Agreement. 41 Time for Construction and Completion of Project. OWNER shall have the right to develop the Project in the manner and at the time that OWNER deems appropriate in the exercise of its business judgment. The Parties acknowledge that OWNER cannot predict the timing of the development of the Project because of numerous factors not within the control of OWNER, such as market demand, economic conditions, interest rates and competition. Subject to compliance with the provisions of this Agreement and Project Conditions, OWNER shall, at any time during the term of this Agreement, be entitled to apply for, and receive, Project Approvals consistent with the Development Plan. 4.8 Development Standards. Because the Development Plan has been prepared to meet the unique design parameters of this Project, the City Council has determined that rigid consistency with the Existing General Regulations and Future General Regulations is neither necessary nor appropriate. The terms and provisions of the Project Approvals, Development Plan or this Agreement shall prevail in the event of any conflict with Existing General Regulations or Future General Regulations. 4.9 Tentative Maps. (a) Improvement Security. As a condition of approving a final subdivision map or any future resubdivision for all or a portion of the Property, the CITY may require the furnishing of appropriate and reasonable improvement agreements and security pursuant to the Municipal Code and the Subdivision Map Act. Nothing in this Agreement shall be construed as altering or relieving OWNER of any obligation imposed pursuant to the Municipal Code or the Subdivision Map Act. The improvement requirements, exactions or ih other conditions of approval of a subdivision map, parcel map or lot line adjustment shall be consistent with this Agreement but CITY may impose standard conditions of approval generally applicable to similar projects subject to the provisions Section 3.1(b). (b) Expiration. Any current or future tentative maps for resubdivision of the Property shall expire concurrently with the termination of this Agreement or after the maximum period for the expiration of tentative maps authorized by Government Code § 66452.6, whichever is later. Should the time periods authorized by Government Code § 66452.6 be lengthened after the execution of this Agreement, OWNER shall be entitled to further extensions of any tentative subdivision map applicable to the Property, to the maximum extent authorized by law. (c) Resubdivisions. The Parties acknowledge that resubdivisions, lot line adjustments, or similar modifications may be necessary to develop the Project and are contemplated by this Agreement. These modifications or adjustments shall be approved provided they are in substantial conformance with the Development Plan and the Project Approvals. 4.10 Processing and Issuance of Permits. (a) Processing of Permits. As a material term of this Agreement benefiting OWNER, the CITY shall promptly accept for processing /review, and expeditiously approve, permit applications for the development and use of the Property that are in substantial conformance with the Project Approvals, Development Plan, Existing General Regulations, and this Agreement. (b) Issuance of Ministerial Project Approvals. CITY shall issue to OWNER all necessary use, building, occupancy, and other permits and approvals upon request, provided that applications are submitted in accordance with the Existing General Regulations and are in substantial conformance with the Project Approvals, Development Plan and this Agreement. (c) Vesting of Project Approvals. Any permit, license or approval issued pursuant to this Agreement shall be vested and deemed a Project Approval when granted. 4.11 Future Approvals. The future approval or issuance of any Project Approval that is consistent with the Development Plan, including any permit, license or authorization to proceed, subdivisions, resubdivisions, lot line adjustments, vacations and similar actions shall not require an amendment of this Agreement 13 S. PUBLIC IMPROVEMENTS 5.1 Regional Transportation Facilities Fees. OWNER acknowledges that CITY is bound by provisions of ordinances, agreements, rules and regulations related to the financing, construction and operation of major transportation improvements that benefit large areas of Orange County including the Property. OWNER shall comply with the provisions of all such ordinances, agreements, rules and regulations, including the payment of fees required by the San Joaquin Hills Transportation Corridor Joint Powers Agreement and /or the Transportation Corridor Agency (collectively, the "TCA "). OWNER acknowledges that it is required to comply with Chapter 15.42 of the Newport Beach Municipal Code. OWNER shall have the right to appeal or contest the imposition and /or amount of fees through any procedure adopted or used by the TCA for that purpose. OWNER shall also have the right to commence litigation relative to the amount, method of calculating or timing of any fees or the procedure utilized by the TCA or other agency to resolve disputes relative to fees. OWNER shall hold CITY harmless with respect to any loss, damage claim or liability arising out of any litigation commenced by OWNER that is related to this Section. OWNER agrees that satisfaction of the provisions of this Section is a condition to any discretionary or ministerial Project Approval. CITY shall not be required to issue any discretionary or ministerial Project Approval until OWNER provides proof that all fees required to be paid to the TCA, whether pursuant to ordinance, settlement or judgment, have been paid. 5.2 Fair Share Traffic Fees. OWNER shall pay two hundred and thirty -five thousand, five hundred and seventy dollars ($235,570) in fees required pursuant to Chapter 15.38 of the Code (Project Fair Share Fees). The Project Fair Share Fees are based on the one thousand seven hundred and seventy (1770) additional average daily trips generated by the Project multiplied by the current per trip fee of one hundred thirty three dollars and nine cents ($133.09). The Project Fair Share Fees shall be paid at the time specified in Chapter 15.38 of the Code. 5.3 TPO Improvements. OWNER shall contribute funds to be used by CITY for the construction of the circulation system improvements identified in Traffic Study 119 (TPO Improvements). OWNER's contributions to the funding of the TPO Improvements equal or exceed the requirements of the TPO and OWNER's contributions to the funding of the TPO Improvements is in addition to all other fees, charges or contributions required by this Agreement and /or existing General Regulations. OWNER's contribution to the TPO Improvements shall be the sum of seventy thousand dollars ($70,000) to fund construction of a second northbound (MacArthur) left turn lane, the construction of a second southbound (MacArthur) left turn lane and the construction of a second northbound (MacArthur) right turn lane at the MacArthur /Jamboree intersection (MacArthur Project). City has prepared preliminary 14 plans, specifications and cost estimates for the MacArthur Project. The MacArthur Project fully mitigates the impacts of Project trips at the MacArthur /Jamboree intersection as required by the TPO. The MacArthur Project is anticipated to cost one million seven hundred and sixty thousand dollars ($1,760,000). OWNER's contribution to the MacArthur Project represents four percent (4 %) of the cost of the TPO improvements and has been calculated as specified in the TPO. CITY agrees to provide any supplemental funds necessary to ensure that construction of the MacArthur Project is complete no later than one year after occupancy of any development authorized by the Project Approvals. 5.4 Long Range Traffic Improvements. (a) Introduction. The EIR evaluated the "long term" impacts of the Project on major intersections in Newport Beach and Irvine (Long -range Analysis). The Long -range Analysis assumed construction of all entitlement and all circulation system improvements authorized in the Land Use and Circulation Elements of the Newport Beach General Plan (including the TPO Improvements). The Long -range Analysis also assumed the construction of entitlement and circulation system improvements contemplated for the year 2020 in the Land Use and Circulation Elements of the Irvine General Plan. The Long- range Analysis concluded that the Project would, depending on the construction of the J5 Ramp, have significant long -range adverse traffic impacts on four (4) or five (5) major intersections. The potential cost of mitigating the long - range impacts of the Project on intersections in the airport area could be significant. For example, mitigation of the impact of Project trips on service levels may require the construction of a grade separation and access ramps at the MacArthur /Jamboree intersection. The CITY has prepared conceptual plans for a grade separation at the Jamboree /MacArthur intersection and very preliminary cost estimates indicate that improvement costs, exclusive of right -of -way could be in the range of fifteen million dollars ($15,000,000) to twenty million dollars ($20,000,000). Moreover, the approval of the Project will result in an increase in average daily trips in the vicinity of the Project that may require other property owners to make improvements pursuant to the TPO that would not be necessary but for the Project. (b) OWNER Commitments. OWNER agrees to do the following: (i) Pay the CITY, within sixty (60) days after the Effective Date, forty -five cents ($.45) per square foot of additional entitlement granted pursuant to the Project Approvals to be used by the CITY solely for the purpose of funding a Planning Study for the Airport Area. 15 (ii) Pay the CITY the sum of eight dollars ($8.00) per square foot of additional entitlement authorized by the Project Approvals (Mitigation Fee). In the event a building permit is not issued within twelve (12) months after the Effective Date, the amount of the Mitigation Fee shall be increased by fifty cents ($.50) every twelve months after the Effective Date. (c) Payment. OWNER shall pay the Mitigation Fee prior to the issuance of any building permit for the Project. (d) Compliance. OWNER's compliance with the provisions of this Section shall relieve OWNER of any obligation to participate in any circulation system funding program developed and implemented by the CITY including a specific area plan or major thoroughfare program for the airport area. OWNER's compliance with the provisions of this Article shall constitute full and complete satisfaction of any obligation to make or fund, in whole or in part, any CITY circulation system improvement as a condition to development of the Project. 5.5 Fire Station Fee. The EIR concludes that fire suppression service to the Project will not meet CITY response time standards in the event of the closure of OCFA Station 27. CITY has conducted studies of fire service needs in the airport area and options for providing fire suppression and paramedic services consistent with CITY standards. The options for providing fire suppression and paramedic services include the construction, equipping and staffing a new fire station in the airport area or immediately south of Bristol Street in Santa Ana Heights (New Fire Station). The current estimated cost of constructing and equipping a New Fire Station is two million dollars ($2,000,000). OWNER shall pay CITY a fire suppression impact fee (FSIF) of sixty thousand dollars ($60,000) to be used solely to fund the acquisition of a fire station site, the construction of the New Fire Station, and /or the equipping /staffing of the station. OWNER shall pay the FSIF within ten (10) days after obtaining any permit for grading or construction on the Property pursuant to this Agreement. Payment of the FSIF shall fully discharge OWNER from any obligation to pay any fee pursuant to fire suppression facility impact fee program (Program) for area served by the New Fire Station. 5.6 Circulation Study. Prior to the issuance of a building permit, OWNER shall prepare a study to evaluate the adequacy of on -site circulation and the impact of , that circulation and vehicle ingress and egress on traffic flow on or through adjacent roadways and intersections. The study shall be conducted under the direction, and to the satisfaction, of the Transportation and Development Services Manager. OWNER shall, at OWNER's sole cost and prior to occupancy, incorporate all feasible study recommendations relative to ensuring adequate on -site circulation. OWNER shall also, at OWNER's sole cost and prior to occupancy, make all feasible improvements to mitigate any significant impact of vehicle stacking on traffic flow on or through adjacent roadways or intersections. 16 6. SPECIAL PROVISIONS 6.1 Sales Tax Principles. OWNER has the right, pursuant to the Bradley Burns Uniform Local Sales and Use Tax Law (Tax Law) to make a direct sales or use tax (Tax) payment through a "direct pay permit" for certain purchases, leases and sales (Eligible Transactions). CITY receives substantially more Tax from OWNER if OWNER directly pays the Tax on all Eligible Transactions. 6.2 Tax Program. OWNER shall, within thirty (30) days after the Effective Date, prepare, and submit to the Revenue Manager of CITY for approval, a Sales and Use Tax Program (Program) that, at a minimum, has the following components: (a) OWNER's commitment to, during the term of this Agreement, maintain a direct pay permit or similar authorization to directly pay Tax on all Eligible Transactions; (b) procedures that Owner will implement to maximize the amount of Tax paid to the City with respect to construction of the Project. (c) procedures pursuant to which OWNER will provide City with information identifying all buyers and sellers with whom OWNER and /or OWNER's contractors do business. The Program shall also contain other information relevant to OWNER's compliance with the terms and conditions of this Agreement pertaining to the direct payment of Tax. OWNER shall, within thirty (30) days after the Effective Date, submit the Program to the Revenue Manager of CITY for approval. OWNER shall modify the Program in accordance with any and all reasonable recommendations of the Revenue Manager that are consistent with the intent of this Section. OWNER shall, during the term of this Agreement, fully implement the Program approved by the Revenue Manager. 7. ANNUAL REVIEW. 7.1 CITY and OWNER Responsibilities. Each Party shall review the other Party's good faith substantial compliance with this Agreement once each year (the "Annual Review "). As part of the Annual Review, OWNER shall submit to CITY an annual review statement describing its actions in compliance with this Agreement and the Development Plan. 7.2 Procedure. In connection with the Annual Review, each Party shall have a reasonable opportunity to advise the other of alleged or potential breaches of this Agreement or the Development Plan, to explain the basis for that Party's position, and to receive from the other Party a statement of its position. A Party may issue a written "Notice of Non - Compliance" specifying the factual basis for the notice if, on the basis of the Annual Review, that Party concludes that the other Party has not complied in good 17 faith with the terms of this Agreement or the Development Plan. The Party receiving a Notice of Non - Compliance shall have thirty (30) days to respond in writing. If a Notice of Non - Compliance is contested, the Parties shall have up to sixty (60) days to arrive at a mutually acceptable resolution of the matter(s) occasioning the Notice. In the event that the Parties are not able to arrive at a mutually acceptable resolution of the matter(s) by the end of the sixty (60) day period, the Party alleging the non - compliance may pursue the remedies provided in this Agreement. 7.3 Mitigation Monitoring, The Annual Review shall include an analysis of compliance with the various conditions and mitigation measures related to the Project. 7.4 Estoppel Certificate. Either Party may at any time deliver written Notice to the other Party requesting an estoppel certificate (the "Estoppel Certificate ") stating: (a) The Agreement is in full force and effect and is a binding obligation of the Parties. (b) The Agreement has not been amended or modified either orally or in writing or, if amended, identifying the amendments. (c) To the best of the signing Party's knowledge, no Default in the performance of the requesting Party's obligations under the Agreement exists or, if a Default does exist, the nature of the Default. A Party receiving a request for an Estoppel Certificate shall provide a signed certificate to the requesting Party within thirty (30) days after receipt of the request. The City Manager may sign an Estoppel Certificate on behalf of the CITY. 7.5 Failure to Conduct Annual Review. The failure to conduct an Annual Review shall not constitute a Default of either Party or be asserted as a Default by either Party. 8. GENERAL PROVISIONS 8.1 Effective Date. This Agreement shall bind the Parties as of the Approval Date subject to the Adopting Ordinance becoming effective. The Parties acknowledge and agree that none of the Project Approvals becomes effective unless the voters approve GPA 97 -3(B) pursuant to the provisions of Section 423 of the City Charter. The Adopting Ordinances shall be deemed effective when and if the City Clerk certifies to the City Council the results of any election conducted pursuant to Section 423 of the City Charter. 8.2 Term of Agreement The term of this Agreement (the 'Term ") shall begin on the Effective Date and continue for a term of twenty-five (25) years unless otherwise terminated or modified pursuant to this Agreement, or extended pursuant to the provisions and conditions of Section 11. f:3 8.3 Assianment. OWNER has the absolute right to assign its rights and /or delegate its obligations under this Agreement and the Development Plan as part of an assignment of all or a portion of the Property. Any assignment shall be subject to the provisions of this Agreement. As long as OWNER owns /leases any part of the Property, OWNER may (at its election) assign the benefits of this Agreement without delegating the obligations for the portion of the Property assigned. If that occurs, however, the benefits assigned shall remain subject to the performance by OWNER of the corresponding obligations. Upon any assignment of all or a portion of the Property, OWNER shall be released from all obligations under this Agreement that relate to the portion of the Property being transferred as of the date the assignment is effective. Where an assignment includes the delegation of the corresponding obligations, those obligations become solely the obligations of the Assignee. If an Assignee is in Default, then as to OWNER or any Assignees not in Default, the Default shall not: (i) constitute their Default; (ii) give grounds for termination of their rights under this Agreement; or (iii) be a basis for an enforcement action against them. 8.4 Amendment of Agreement. (a) Consent. Subject to the provisions of Subsection 8.4(b), this Agreement may be amended from time to time by the mutual consent of the Parties, or their successors in interest, but only in the manner provided by the Government Code, the Newport Beach Municipal Code and this Agreement. After any amendment, the term "Agreement' shall refer to the amended Agreement. (b) Amendments. The Parties acknowledge that OWNER may determine that amendments to the Development Plan and /or Project Approvals are appropriate and desirable. In such event, OWNER may apply in writing for an amendment to prior Project Approvals or the Development Plan. CITY shall process and act on the application. CITY shall have no obligation to grant any application that amends the permitted land uses, the overall intensity or density of the Project, or otherwise is an amendment of the Development Plan that could have one or more significant adverse environmental impacts. Any approved amendment shall be incorporated into this Agreement by reference and may be further amended from time to time as provided in this Section. 8.5 Enforcement. This Agreement is enforceable by each of the Parties and their respective successors and assigns, provided, however, in the event of a Default the remedies shall be limited to those specified in Section 10.7. 8.6 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events: iE (a) Expiration of the term in accordance with Section 8.2; (b) Entry, after all appeals have been exhausted, of a final judgment or issuance of a final order directing the CITY to set aside, withdraw, or abrogate the CITY's approval of this Agreement or any material part of the Project or Project Approvals; or (c) The effective date of a Party's election to terminate the Agreement as provided in Section 10.3 of this Agreement. 8.7 Right to Terminate Upon Specified Events. Notwithstanding any other provision of this Agreement, OWNER retains the right to terminate this Agreement upon thirty (30) days written notice to CITY in the event that OWNER reasonably determines that continued development of the Project consistent with the Development Plan has become economically infeasible due to changed market conditions, increased development costs, burdens imposed by the CITY or other governmental entity as conditions to future discretionary approvals of the Project consistent with this Agreement, the CITY's exercise of the Governmental Reservations in a way deemed by OWNER to be inconsistent with the Development Plan, or similar factors. 9. CONFLICTS OF LAW. 9.1 Conflict with State and Federal Laws and Regulations. Where State or federal law or regulation prevents compliance with one or more provisions of this Agreement, those provisions shall be modified to the minimum extent necessary to comply with the State or federal laws or regulations, and the modified Agreement shall remain in effect, subject to the following: (a) The CITY shall not request modification of this Agreement pursuant to this provision unless and until the City Council makes a finding, based on substantial evidence in the record of a public hearing where OWNER has notice and an opportunity to present evidence, that the modification is required (as opposed to permitted) by State and federal law or regulation; (b) The modifications must be limited to those required (as opposed to permitted) by the State or federal law or regulation; (c) The modified Agreement must be consistent with the State or federal law or regulation requiring the modification; (d) The intended material benefits of this Agreement must still be received by each of the Parties after modification; and Pro, (e) The modification and any applicable local, State, or federal law or regulation does not render the modified Agreement impractical to enforce; 9.2 Controlling Law. This Agreement shall be governed by the laws of the State of California. 10. DEFAULT, REMEDIES AND TERMINATION. 10.1 General Provisions. In the event of a Default the Party alleging a Default shall give the other Party a written Notice of Default. The Notice of Default shall specify the nature of the alleged Default, and a reasonable manner and sufficient period of time (not less than thirty (30) days) in which the Default must be cured (the "Cure Period "). During the Cure Period, the Party charged shall not be considered in default for the purposes of termination of the Agreement or institution of legal proceedings. If the alleged Default is cured within the Cure Period then a Default shall be deemed not to exist. Neither Party shall initiate nor pursue legal proceedings if the Default in question is not susceptible of cure within the applicable Cure Period, and the Defaulting Party commences its cure within the Cure Period and diligently pursues the cure to completion. 10.2 Option to Institute Legal Proceedings or to Terminate. The noticing Party must give the Defaulting Party a Notice of intent to terminate this Agreement if the noticing Party intends to terminate the Agreement and the alleged Default is not cured within the Cure Period. The City Council shall, no later than forty-five (45) days after a Notice of intent is served on either Party, hold a public hearing in the manner specified in the Government Code and /or the Municipal Code to consider and review the alleged Default. 10.3 Notice of Termination. After the public hearing described in Section 10.2, the Party alleging the Default, at its option, may give written Notice of termination of the Agreement to the other Party. The Agreement shall be terminated immediately upon giving the Notice. A termination shall be valid only if good cause exists and a preponderance of the evidence presented to the City Council at the public hearing establishes the continued existence of a Default after the Cure Period. The findings of the City Council as to the existence of a Default shall have no weight in any legal proceeding brought to determine the existence of a Default. The validity of any termination may be challenged pursuant to Section 12.17, in which case the court shall render an independent judgment as to the existence of a Default and good cause for termination. Termination may result only from a material Default of a material provision of this Agreement. 10.4. Waiver. Failure or delay in giving Notice of Default shall not waive a Party's right to give future Notice of the same or any other Default. 10.5 Default by OWNER. Subject to and after termination of this Agreement in compliance with Sections 10.1 through 10.3, if OWNER Defaults, the CITY shall have 21 no obligation to perform any of CITY's obligations under this Agreement (as opposed to the CITY's obligations under the Development Plan and the General Regulations), unless otherwise ordered by a court of competent jurisdiction. The CITY's election not to perform as permitted by this provision shall not constitute a Default. 10.6 Default by the CITY. Subject to and after termination of this Agreement in compliance with Sections 10.1 through 10.3, if the CITY Defaults, OWNER shall have no obligation to perform any of OWNER's obligations under this Agreement, unless otherwise ordered by a court of law. However, OWNER shall not be entitled to receive Project Approvals or take any other action inconsistent with provisions of the Development Plan, the Newport Beach General Plan, or relevant zoning ordinances unless otherwise permitted by law. OWNER's election not to perform as permitted by this provision shall not constitute a Default. 10.7 Specific Performance. (a) The Parties agree that, except as provided in Subsection 9.7.b., the loss by either of them of their respective rights under this Agreement would not be compensable through monetary damages. Therefore, the remedy for a Default for each Party shall be limited to specific performance and /or injunctive relief. (b) Notwithstanding the foregoing, in the event any development fees or taxes are imposed on development of the Property other than those authorized pursuant to this Agreement or the Development Plan, OWNER shall be entitled to recover from CITY restitution of all improperly assessed fees or taxes, together with interest thereon at the maximum allowable non - usurious rate from the date such sums were paid to CITY to the date of restitution. 10.8 Effect of Termination. The termination of this Agreement shall not affect the rights, duties and obligations, if any, of any successor to OWNER to comply with the Project Approvals. . 11. ENCUMBRANCES AND RELEASES ON PROPERTY. 11.1 Discretion to Encumber. This Agreement shall not prevent or limit OWNER, in any manner, at OWNER's sole discretion, from encumbering the Property or any portion thereof or any improvement on the Property by any mortgage, deed of trust, or other security device securing financing with respect to the Property or its improvements. 11.2 Entitlement to Written Notice of Default. A Mortgagee shall, upon written request to CITY, be entitled to receive from CITY written notification of any default by Owner of the performance of OWNER's obligations under this Agreement 22 which has not been cured within thirty (30) days following the date of the Notice of such default. (a) Notwithstanding OWNER's default, this Agreement shall not be terminated by CITY as to any Mortgagee to whom Notice is to be given and to which either of the following is true: (i) The Mortgagee cures any default by OWNER involving the payment of money within sixty (60) days after the Notice of default; provided, however, that if any such default cannot, with diligence, be cured within the sixty (60) day period, then the Mortgagee shall have additional time as may be reasonably necessary to cure the default if the Mortgagee commences the cure within the sixty (60) day period and diligently pursues the cure to completion. (ii) As to defaults requiring title or possession of all or a portion of the Property to cure: (i) the Mortgagee agrees in writing, within sixty (60) days after receipt from CITY of the written Notice of default, to perform the proportionate share of OWNER's obligations under this Agreement allocable to that part of Property in which the Mortgagee has an interest conditioned upon the Mortgagee's acquisition of the required portion of the Property by foreclosure (including a trustee sale) or by a deed in lieu of foreclosure; (ii) the Mortgagee commences foreclosure proceedings to reacquire title to the Property or applicable portion thereof within the sixty (30) days and thereafter diligently pursues foreclosure to completion; and (iii) the Mortgagee promptly and diligently cures the default after obtaining title or possession. Subject to the foregoing, in the event of any Mortgagee records a Notice of default as to its mortgage or deed of trust, CITY shall consent to the assignment of all of OWNER's rights and obligations under this Agreement to the Mortgagee or to any purchaser of OWNER's interest at a foreclosure or trustee sale and OWNER shall remain liable for such obligations unless released by CITY or unless the applicable portion of OWNER's Property is transferred. (b) Notwithstanding Subsection 11.2.a. of this Agreement, if any Mortgagee is prohibited from commencing or prosecuting foreclosure or other appropriate proceedings including by any process of injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceedings involving OWNER, the times specified in Subsection 11.2.a of this Agreement for commencing or prosecuting foreclosure or other proceedings shall be tolled during the period of the prohibition. (c) OWNER's execution or breach of this Agreement shall not defeat, render invalid, diminish or impair the lien of any existing or future 23 mortgage or deed of trust on OWNER's Property made in good faith and for value. 11.3. Mortgagee Not Obligated. Except as provided in this Agreement, no Mortgagee shall have an obligation or duty under this Agreement to perform the obligations of OWNER or other affirmative covenants of OWNER or to guarantee such performance. No Mortgagee shall be liable for any Default or monetary obligations of OWNER arising prior to acquisition of title to the Property by the Mortgagee or their respective successors or assigns. However, to the extent any covenant to be performed by OWNER is a condition to the performance of a covenant by CITY, the performance shall continue to be a condition precedent to CITY's performance. In the event a Mortgagee elects to develop the Property in accordance with the Development Plan, the Mortgagee shall be required to assume and perform the obligations or other affirmative covenants of OWNER under this Agreement. 12. MISCELLANEOUS PROVISIONS. 12.1 Notices. All Notices shall be written and delivered by personal delivery (including Federal Express and other commercial express delivery services providing acknowledgments or receipt), registered, certified, or express mail, or telegram to the addresses set forth below. Receipt shall be deemed complete as follows: (a) For personal delivery, upon actual receipt; and, (b) For registered, certified, or express mail, upon the delivery date or attempted delivery date as shown on the return receipt. Notices shall be addressed as follows: To the CITY: City Manager - City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92660 Attention: City Manager To OWNER: Koll Center Newport Number A 4343 Von Karman Ave. Newport Beach, CA 92660 Attn: Don Koll CC: Starpointe Ventures Either party may give the other a "Notice of a New Address" to modify this Subsection. 12.2 Enforcement Delay: Extension of Time of Performance. Neither Party shall be deemed to be in Default where delays or non - performance are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, oil spills, casualties, acts of nature, unavailability of materials, governmental restrictions imposed or mandated by 24 governmental entities other than CITY, suspension of rights in accordance with the existence of unforeseen circumstances, governmental moratorium other than a moratorium enacted by CITY, litigation, or similar bases for excused performance. An extension of time for performance shall be deemed granted for the period of the delay, or longer as may be mutually agreed upon, but in no case shall the extension of time for performance exceed six (6) months. 12.3 Severability. If any material part of the Agreement is found by a court to be invalid, void, or illegal, the Parties shall modify the Agreement to implement the prior intent of the Parties. These steps may include the waiver by either of the Parties of their right under the unenforceable provision. If, however, the Agreement objectively cannot be modified to implement the prior intent of the Parties and the Party substantially benefited by the material provision does not waive its rights under the unenforceable provisions, the entire Agreement shall become void. For purposes of this Section, and without excluding the possible materiality of other provisions of this Agreement, all provisions of Sections 3, 4 and 5 are deemed "material ". 12.4 Entire Agreement. This Agreement constitutes the entire understanding and Agreement of the Parties regarding the subject matter. This Agreement supersedes all negotiations and previous offers and understandings between the Parties regarding the subject matter. 12.5 Waivers. All waivers of the provisions of this Agreement must be in writing and signed by the Party making the waiver. 12.6 Incorporation of Recitals. The Recitals in Section 1 are part of this Agreement. 12.7 Covenant of Good Faith and Fair Dealing. Neither Party shall do anything that has the effect of harming or injuring the right of the other Party to receive the benefits of this Agreement. 12.8 Covenant of Cooperation. The CITY shall cooperate with OWNER to obtain any permits from other public agencies that may be required for development of the Project. OWNER may challenge any ordinance, measure, moratorium, or other limitation in a court of law if litigation is necessary to protect the development rights vested in the Property pursuant to this Agreement. 12.9 Justifiable Reliance. CITY acknowledges that, OWNER will reasonably be relying on CITY's performance of its covenants in this Agreement when OWNER invests money and effort in construction of the Project. 12.10 Further Actions and Instruments. Upon the request of either Party, the other Party shall promptly execute documents, with acknowledgment or affidavit if reasonably required, and take any other action reasonably necessary to implement the 25 terms and conditions of this Agreement or permit development of the Project in accordance with the Development Plan. 12.11 Successors and Assigns. Subject to Section 8.3 above, the burdens of this Agreement shall be binding upon, and the benefits of the Agreement inure to, all successors -in- interest and assigns of the Parties. 12.12 Construction of Agreement. All language in all parts of this Agreement shall be construed as a whole and given its fair meaning. The captions of the Sections and Subsections are for convenience only and shall not be considered or referred to in resolving questions of construction. This Agreement does not, and is not intended to, impermissibly contract away the police power, legislative authority or governmental functions of the CITY in general or with respect to the Property. 12.13 Authority to Execute. The person executing this Agreement on behalf of OWNER warrants and represents that he/she has the authority to do so and the authority to bind OWNER to the performance of OWNER's obligations under this Agreement. 12.14 Consent. Any consent required by the Parties in carrying out the terms of this Agreement shall not be unreasonably withheld. 12.15 Effect on Title. This Agreement shall not continue as an encumbrance against any portion of the Property as to which this Agreement has terminated. 12.16 Recording. The City Clerk shall cause a copy of this Agreement to be executed by the CITY and recorded in the Official Records of Orange County no later than ten (10) days after the Effective Date. The recordation of this Agreement 6 is a ministerial act and the failure of the CITY to record the Agreement as required by this Section and Government Code § 65868.5 does not make the Agreement void or ineffective. 12.17 Institution of Legal Action. In addition to any other rights or remedies, either Party may institute legal action to cure, correct, or remedy any Default, to enforce any provision of this Agreement, to enjoin any threatened or attempted violation of this Agreement, or'to obtain any remedies consistent with the purpose of this Agreement. Legal actions shall be instituted in the Superior Court of the County of Orange, State of California. 12.18 Attorneys' Fees. In any arbitration, quasi - judicial, administrative, or judicial proceeding between the Parties initiated with respect to this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and all costs, expenses, and disbursements in connection with such action. 26 12.19 Relationship of the Parties. The contractual relationship between CITY and OWNER arising out of the Agreement is one of independent contractor and not agency. This Agreement does not create any third party beneficiary rights. 12.20 Indemnification. OWNER and CITY agree to cooperate in the defense of any legal action filed and prosecuted by any person or entity other than the Parties that challenges the validity or manner of approval of this Agreement, the Project Approvals or the Project Conditions (Third Party Lawsuit). CITY will promptly notify OWNER of any Third Party Lawsuit upon service. CITY may retain counsel to defend the Third Party Lawsuit and, in such event, OWNER shall pay all attorneys fees and costs incurred by the CITY in the defense of the Third Party Lawsuit. OWNER shall also indemnify and hold harmless the CITY and its officers and employees with respect to any costs, expenses, judgment, damages or award, including an award of attorney fees and /or costs to any third party, arising out of any Third Party Lawsuit. OWNER acknowledges and agrees that CITY has fully complied with all applicable statutes, ordinances, including the provisions of CEQA, the State Zoning and Planning Act, and Existing General Regulations in the initiation, processing, evaluation and approval of all Project Approvals. OWNER's obligations pursuant to this Section shall commence as of the Approval Date and continue for the period specified in Section 8.2 or until this Agreement terminates, whichever occurs first. The obligation of OWNER to defend, indemnify and hold CITY harmless shall not apply to the fraud or willful misconduct of the CITY or its officers or employees that occurred on or before the Approval Date. The obligation of OWNER to defend, indemnify and hold CITY harmless shall not apply to the fraud, willful misconduct or violation of law by the CITY or its officers and employees that occurs after the Approval Date. 12.21 Payments. Any payment due pursuant to this Agreement shall bear interest at the rate of ten percent (10 %) per annum on the unpaid balance from the date due until paid with interest compounded monthly. Dated: .2000 CITY OF NEWPORT BEACH By: Mayor Dated: 2000 KOLL CENTER NEWPORT NUMBER A By: Its: 27 STATE OF CALIFORNIA } COUNTY OF ORANGE CITY OF NEWPORT BEACH } I, LAVONNE M. HARKLESS, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing ordinance, being Ordinance No. 2001 -11 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 24th day of July 2001, and that the same was so passed and adopted by the following vote, to wit: Ayes: O'Neil, Ridgeway, Glover, Mayor Adams Noes: Heffernan, Bromberg, Proctor Absent: None Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 25th day of July 2001. (Seal) � :r ✓i � ° / ". III /,2^ -r / /� -i City Clerk City of Newport Beach, California CERTIFICATE OF PUBLICATION STATE OF CALIFORNIA } COUNTY OF ORANGE CITY OF NEWPORT BEACH } I, LAVONNE M. HARKLESS, City Clerk of the City of Newport Beach, California, do hereby certify that Ordinance No. 2001 -11 has been duly and regularly published according to law and the order of the City Council of said City and that same was so published in The Daily Pilot, a daily newspaper of general circulation on the following date, to wit: July 28, 2001. In witness whereof, I have hereunto subscribed my name this day of &I U,5 12001. City Clerk City of Newport Beach, California