HomeMy WebLinkAbout2007-21 - Approving Planned Community Development Amendment No. 2006-001 to Increase the Development Allocation for Professional and Business Offices of Site A by 24,016 Square Feet and Eliminate the Entire Retail Site #1, an Undeveloped Portion of RestauORDINANCE NO. 2007-21
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH APPROVING DEVELOPMENT
AGREEMENT NO. DA2007 -002 CONCERNING NORTH
NEWPORT CENTER
WHEREAS, The Irvine Company has filed an application with respect to its
property located in North Newport Center and consisting of the following sub - areas:
parts of Newport Center Block 500, Newport Center Block 600, parts of San Joaquin
Plaza, and Fashion Island ('Property').
WHEREAS, General Plan policy LU 6.14.8 requires development agreements for
mixed -use projects that use the 450 residential units identified in Table LU2, and
requires that development agreements define the improvements and benefits to be
contributed by the developer in exchange for the City's commitment for the number,
density and location of housing units.
WHEREAS, Newport Beach Municipal Code section 15.45.020 also requires a
development agreement for the North Newport Center project because it includes the
development of more than 50 residential units as well as new non- residential
development in Newport Center.
WHEREAS, Newport Beach Municipal Code section 15.45.040 requires that
development agreements include the term, permitted uses, density and intensity of
development, maximum height and size of proposed buildings, and provisions for
reservation or dedication of land for public purposes.
WHEREAS, as part of its application, The Irvine Company requests approval of
Development Agreement No. DA2007 -002, entitled the Zoning Implementation and
Public Benefit Agreement Between the City of Newport Beach and The Irvine Company
LLC Concerning North Newport Center (Fashion Island, Block 500, Block 600, and San
Joaquin Plaza), to allow future development on the Property.
1
WHEREAS, the Development Agreement was prepared and is attached as
Exhibit "A."
WHEREAS, during the term of the Development Agreement, and subject to any
approvals required under the development regulations applicable to the Property, as
specified in the Development Agreement, The Irvine Company shall have a vested right
to develop the following entitlements on the Property:
Land Use
Fashion
Block 500
Block 600
San
Total
Island
Joaquin
Plaza
Regional
1,619,525
0
0
0
1,619,525
Commercial
square feet
square feet
Movie Theatre
1,700 seats
0
0
0
1,700 seats
(27,500
(27,500
square feet)
square feet)
Hotel
0
(A)
425(A)
(A)
490
Residential
0
(B)
(B)
(B)
430
Office /comm
0
408,084
1,001,634
337,261
1,746,979
ercial
square feet
square feet
square feet
square feet
A. 65 hotel rooms may be located in either Block 500, Block
600 or San Joaquin Plaza.
B. Residential units are permitted in Block 500, Block 600 and San Joaquin Plaza so
long as the total number of units does not exceed 430 units.
WHEREAS, during the term of the Development Agreement, and subject to any
approvals required under the development regulations applicable to the Property, as
specified in the Development Agreement, The Irvine Company shall also have a vested
right to the transfer to Newport Center Block 500 of development rights for development
of approximately 277,161 square feet currently assigned to Newport Center Block 600
and designated for office, hotel, and supporting retail uses, of which up to 72,000
2
square feet may be utilized by the City for a City Hall building at a site in Newport
Center Block 500 if the City exercises the option to purchase that site, as specked in
the Development Agreement. Upon transfer to Newport Center Block 500, the
development rights will be designated only for uses permitted under the development
regulations applicable to the Property.
WHEREAS, the Development Agreement rescinds and cancels The Irvine
Company's remaining rights and obligations under the Circulation Improvement and
Open Space Agreement (CIOSA) and the Bonita Canyon Annexation and Development
Agreement.
WHEREAS, The Irvine Company has agreed to provide public benefits as
consideration for the Development Agreement, including the following: in -lieu park fees
in advance of the time that the fees otherwise would be due to provide matching funds
for the renovation of the Oasis Senior Center and to provide funds for other qualified
park uses, development fees to fund construction of a new City Hall building or other
municipal use, circulation enhancements, retrofit of sprinkler systems on Newport
Center Drive to low flow technology, a conditional dedication of a public right of way, the
dedication to City of an open space parcel within Newport Center and the dedication of
the Lower Castaways site to the City. The Irvine Company also has agreed to grant
City an option to acquire a site in Newport Center Block 500 for the purpose of
constructing a new City Hall building.
WHEREAS, the Planning Commission held a public hearing on November 15
and November 29, 2007, in the City Hall Council Chambers, 3300 Newport Boulevard,
Newport Beach, California, at which time the Planning Commission considered the
Development Agreement. A notice of time, place, and purpose of the meeting was duly
given in accordance with the Municipal Code. Evidence, both written and oral, was
presented to and considered by the Planning Commission at this meeting, meeting,
including the evidence and arguments submitted by the City staff, The Irvine Company,
and all interested parties.
3
WHEREAS, the Planning Commission voted to recommend approval of the
Development Agreement to the City Council.
WHEREAS, pursuant to Section 15.45 of the Newport Beach Municipal Code,
the City Council held a noticed public hearing on December 11, 2007, to consider the
recommendation of the Planning Commission.
WHEREAS, the City Council has reviewed and considered the information in the
Development Agreement and in the full administrative record, and found that:
1. The Development Agreement is entered into pursuant to, and constitutes a present
exercise of, the City's police power.
2. The Development Agreement is in the best interests of the health, safety, and
general welfare of the City, its residents, and the public.
3. The Development Agreement is compatible and consistent with the objectives,
policies, general land uses, and programs specified in the General Plan and does
not create any direct conflict with the General Plan. The Development Agreement is
therefore consistent with the General Plan.
4. The Development Agreement eliminates conflicts that exist between CIOSA and the
Bonita Canyon Annexation and Development Agreement, and the General Plan.
5. The Development Agreement is consistent with General Plan Policy LU 6.14.8,
which applies to Newport Center and requires the execution of development
agreements for residential projects and mixed -use development projects with a
residential component.
6. The Development Agreement is consistent with Ordinance No. 2007 -6, entitled
'Ordinance Amending Chapter 15.45 of City of Newport Beach Municipal Code
0
Regarding Development Agreements," which requires a development agreement for
certain types of projects, including: (1) projects that include development of 50 or
more residential units, and (2) projects that include new non - residential development
in Newport Center.
7. The Development Agreement is consistent with Newport Beach Municipal Code
section 15.45.040 and includes all the contents required for development
agreements by the City of Newport Beach.
8. The Development Agreement is consistent with provisions of state law (California
Government Code sections 65864 - 65869.5) and local law (Municipal Code chapter
15.45) that authorize binding agreements that: (i) encourage investment in, and
commitment to, comprehensive planning and public facilities financing; (ii)
strengthen the public planning process and encourage private implementation of the
local general plan; (iii) provide certainty in the approval of projects in order to avoid
waste of time and resources; and (iv) reduce the economic costs of development by
providing assurance to the property owners that they may proceed with projects
consistent with existing policies, rules, and regulations. More specifically, the
Development Agreement is consistent and has been approved consistent with
provisions of California Government Code section 65867 and Municipal Code
chapter 15.45.
9. The Development Agreement is consistent with the Final Environmental Impact
Report for the City of Newport Beach General Plan 2006 Update (State
Clearinghouse No. 2006011119) and the North Newport Center Addendum to the
Final Environmental Impact Report for General Plan 2006 Update (State
Clearinghouse No. 2006011119), both of which analyze the environmental effects of
the proposed development of the Property.
10.The Development Agreement provides significant public benefits to the City of
Newport Beach.
5
THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES HEREBY ORDAIN
AS FOLLOWS:
SECTION 1: Development Agreement No. DA2007 -002, including rescission and
cancellation of The Irvine Company s remaining rights and obligations under CIOSA and
the Bonita Canyon Annexation and Development Agreement, is approved.
SECTION 2: The Development Agreement shall not go into effect until the City
Council approves or adopts all of the following: (1) the North Newport Center Planned
Community Affordable Housing Implementation Plan; (2) the North Newport Center
Planned Community Development Plan; (3) the Block 500 Planned Community District
Regulations; (4) the San Joaquin Plaza Planned Community District Regulations; (5) the
North Newport Center transfer of development rights; and (6) the North Newport Center
Planned Community Affordable Housing Implementation Plan.
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 become effective thirty (30) days after the date of its
adoption.
0
This Ordinance was introduced at a regular meeting of the City Council of the
City of Newport Beach held on December 11, 2007, and adopted on the 18th day of
December, 2007, by the following vote, to wit:
ATTEST:
50
CITY CLERK
AYES, COUNCIL MEMBERS Henn, Curry, Rosandkv, Webb,
Daigle, Gardner, Mayor Selich
NOES, COUNCIL MEMBERS None
ABSENT COUNCIL MEMBERS None
MAYOR
W
"EXHIBIT A"
Development Agreement No. DA2007 -002
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663 -3884
Attn: City Clerk
(Space Above This Line Is for Recorder's Use
This Agreement is recorded at the request and for
the benefit of the City of Newport Beach and is
exempt from the payment of a recording fee
pursuant to Government Code §§ 6103 and 27383.
ZONING IMPLEMENTATION
AND PUBLIC BENEFIT AGREEMENT
between
CITY OF NEWPORT BEACH
and
THE IRVINE COMPANY LLC
CONCERNING PROPERTIES LOCATED IN NORTH NEWPORT CENTER
(BLOCK 600 AND PORTIONS OF FASHION ISLAND,
BLOCK 500, AND SAN JOAQUIN PLAZA)
TABLE OF CONTENTS
Page
1. Definitions .............................................................................................. ..............................4
1.1 " AHIP" ....................................................................................... ..............................4
1.2 "Bonita Canyon Development Agreement" ............................... ..............................4
1.3 " Cancellation" ............................................................................ ..............................4
1.4 " CEQA" ..................................................................................... ..............................4
1.5 " CIOSA" .................................................................................... ..............................4
1.6 "City Council" ........................................................................... ..............................4
1.7 "Development Fees" .................................................................. ..............................4
1.8 "Development Plan" .................................................................. ..............................4
1.9 "Development Regulations" ...................................................... ..............................5
1.10 "Effective Date" ......................................................................... ..............................5
:1.11 "Fair Share Traffic Contribution Ordinance" ............................ ..............................5
1.12 "Fair Share Traffic Fees" ........................................................... ..............................5
1.13 "First Building Permit" .............................................................. ..............................5
1.14 "First Residential Building Penmit" ........................................... ..............................5
1.15 "General Plan" ........................................................................... ..............................5
1.16 "Initial Fee Increase" ................................................................. ..............................6
1.17 "Initial Park Fee" ....................................................................... ..............................6
1.18 "Initial Public Benefit Fee" ........................................................ ..............................6
1.19 "Mortgage" ................................................................................ ..............................6
1.20 " Mortgagee" ............................................................................... ..............................6
1.21 "Option Agreement" .................................................................. ..............................6
1.22 "Option Period" ........................................................................ ..............................6
1.23 "Option Site" .............................................................................. ..............................6
1.24 "Park Fees" ................................................................................ ..............................6
1.25 "Parking Structure" .................................................................... ..............................6
1.26 "Parking Structure Provisions" .................................................. ..............................6
1.27 "Parking Structure Easement Agreement" ................................. ..............................6
1.28 "Parking Structure Site" ............................................................. ..............................7
1.29 . "Party' or " Parties" .................................................................... ..............................7
1.30 "Per Unit Park Fees" .................................................................. ..............................7
1.31 " Project" ..................................................................................... ..............................7
1.32 " Property ................................................................................... ..............................7
1.33 "Public Benefit Fee" .................................................................. ..............................7
1.34 "Term" ....................................................................................... ..............................7
1.35 "Traffic Phasing Ordinance" ...................................................... ..............................7
1.36 "Transfer of Development Rights" ............................................ ..............................7
2. General Plan Consistency, Zoning Implementation, and Extinguishment of Any of
Landowner's Remaining Development Rights Under the CIOSA and the Bonita
Canyon Development Agreement .......................................................... ..............................7
3. Affordable Housing Obligation ............................................................. ..............................7
i
4.
Public Benefits ....................................................................................... ..............................8
4.1
In -Lieu Park Fees for Renovation of Oasis Senior Center and for Park
Uses............................................................................................ ..............................8
4.2
Public Benefit Fee ...................................................................... ..............................9
4.3
Fair Share Traffic Fees ............................................................... ..............................9
4.4
Circulation Enhancements to Public Right of Way .................. .............................10
4.5
Dedication of Public Rights of Way ........................................ ..............................1 l
4.6
Conditional Open Space Dedication ........................................ ..............................1 l
4.7
Maintenance of CIOSA Pre -Paid Transportation Fund ............ .............................12
4.8
City's Option to Purchase New City Hall Site; Parking Structure ........................12
4.9
Retrofit Sprinkler Systems ........... ..........................Error! Bookmark not defined.
4.10
Cooperation of Landowner if City Hall Constructed on Property North of
Library....................................................................................... .............................17
4.11
Dedication of Lower Castaways ............................................... .............................17
5.
Fees
....................................................................................................... .............................17
5.1
Fees Applicable to Property ...................................................... .............................17
5.2
Permitted Increases in Development Fees Applicable to Property ........................ 18
6.
Development of Property ...................................................................... .............................19
6.1
Applicable Regulations ............................................................. .............................19
6.2
Landowner's Vested Rights ...................................................... .............................20
6.3
Description of Certain Project Components ............................. .............................20
6.4
Police Power ............................................................................. .............................21
6.5
Time -Share Developments ........................................................ .............................21
6.6
Available Use in Newport Center Block 500 for City Hall ...... .............................21
6.7
Available Use in Newport Center Block 500 if City Does Not Develop a
City Hall on the Option Site ......................................................
6.8
.............................22
Effect of Agreement on Applications for Land Use Approvals ............................22
6.9
Mello -Roos Community Facilities District ............................... ......................:......22
6.10
No Conflicting Enactments ....................................................... .............................23
6.11
Benefits to Landowner .............................................................. .............................23
6.12
Tentative Subdivision Maps ..................................................... .............................23
6.13
Compliance with California Government Code Section 65897.5(c) on
WaterSupply ............................................................................ .............................24
6.14
Cancellation of the CIOSA and the Bonita Canyon Development
Agreement................................................................................. .............................24
6.15
No Payments Due from City ..................................................... .............................24
7.
Compliance with Traffic Phasing Ordinance ........................................ .............................24
7.1
Scope of Traffic Study .............................................................. .............................24
7.2
Sufficiency of Traffic Study .....................................................
7.3
.............................24
Circulation Improvements ........................................................
.............................25
8.
Reservations of Authority .....................................................................
8.1
.............................25
Procedural Regulations
............................................................. .............................25
8.2
Consistent Future City Regulations .......................................... .............................25
8.3
Overriding Federal and State Laws and Regulations ................ .............................25
ii
8.4 Public Health and Safety ............................................:.............. .............................26
8.5 Uniform Building Standards ..................................................... .............................26
8.6 Public Works Improvements ..................................................... .............................26
9. Utility Capacity ..................................................................................... .............................26
10. Project as Private Undertaking .............................
11. Effective Date; Term ................ ...............................
12. Amendment or Cancellation of Agreement ..............
13. Enforcement ........................ ...............................
14. Periodic Review of Compliance ...........................
...... .............................27
...... .............................27
...... ......................:......27
...............27
............28
15. Events of Default .................................................................................. .............................28
15.1 Default by Landowner .............................................................. .............................28
15.2 Default by City .......................................................................... .............................28
15.3 Specific Performance and Damages Remedies ......................... .............................29
15.4 Limited Recovery of Legal Expenses by Prevailing Party in Any Action ............29
16. Cooperation ........................................................................................... .............................29
17. Force Majeure ....................................................................................... .............................30
18. Indemnity .............................................................................................. .............................30
19. Third Party Legal Challenge ................................................................. .............................30
20. Mortgagee Rights .................................................................................. .............................30
20.1 Encumbrances on Property ....................................................... .............................30
20.2 Mortgagee Protection ................................................................ .............................30
20.3 Mortgagee Not Obligated ......................................................... .............................31
20.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure .. .............................31
21. Transfers and Assignments ................................................................... .............................31
21.1 Right to Assign ......................................................................... .............................31
21.2 Agreement Binding on Successors and Assigns ....................... .............................32
22. Estoppel Certificate ............................................................................... .............................32
23. Further Actions and Instruments ........................................................... .............................32
24. Notices .................................................................................................. .............................32
25. Rules of Construction and Miscellaneous Terms ................................. .............................33
25.1 Rules of Construction ............................................................... .............................33
25.2 Time Is of the Essence .............................................................. .............................33
25.3 Waiver ....................................................................................... .............................33
lll
26.
27.
25.4
Counterparts .............................................................................. ..........................:..33
25.5
Entire Agreement .....................................................:................ .............................33
25.6
Severability ............................................................................... .............................34
25.7
Construction .............................................................................. .............................34
25.8
Constructive Notice and Acceptance ........................................ .............................34
25.9
No Third Party Beneficiaries .................................................... .............................34
25.10
Applicable Law and Venue ....................................................... .............................34
25.11
Non - Liability of City Officers and Employees ......................... .............................34
25.12
Section Headings ...................................................................... .............................35
25.13
Incorporation of Recitals and Exhibits ..................................... .............................35
Authorityto Execute .............................................................................
.............................35
Recordation........................................................................................... .............................35
iv
ZONING IMPLEMENTATION AND PUBLIC BENEFIT AGREEMENT
(Pursuant to California Government Code sections 65864-65869.5)
This ZONING IMPLEMENTATION AND PUBLIC BENEFIT AGREEMENT (the
"AgJement') is entered into on December 18, 2007, by and between: (1) CITY OF NEWPORT
BEACH ("CiW), and (2) THE IRVINE COMPANY LLC ( "Landowner ). City and Landowner
are sometimes collectively referred to in this Agreement as the "Parties" and individually as a
"
RECITALS
A. Landowner is the owner of the parcels of real property (collectively, the "Pro ) that
are described in the legal description attached hereto as Exhibit A and depicted on the site map
attached hereto as Exhibit B. The Property is under City's jurisdiction and is located in North
Newport Center. The Property consists of the following sub- areas:. portions of Newport Center
Block 500, Newport Center Block 600, portions of San Joaquin Plaza, and portions of Fashion
Island. No part of the Property is located in the coastal zone.
B. On September 14, 1992, the City Council of the City of Newport Beach ( "City Council")
adopted Ordinance No. 92 -35, through which City and Landowner entered into the Circulation
Improvement and Open Space Agreement pertaining to twelve (12) parcels of real property
located in City, including the four parcels owned by Landowner in North Newport Center that
comprise the Property subject to this Agreement. City subsequently adopted the Amendment to
the Circulation Improvement and Open Space Agreement dated May 12, 1996. The original
Circulation Improvement and Open Space Agreement and the May 12, 1996, Amendment are
collectively referred to herein as the " CIOSA."
C. Under the CIOSA, Landowner:
(1) committed to road improvements adjacent to proposed projects, made an interest -free
loan to City, and pre-paid required fair share road improvement fees that City used as
matching funds when obtaining outside transportation funding; and
(2) committed to dedicating more public open space than required for the twelve (12)
parcels under the City of Newport Beach General Plan and the City of Newport Beach
Park Dedication Ordinance, as detailed in Exhibit C.
D. The CIOSA provided Landowner with certain building entitlements with respect to the
properties addressed therein. Landowner has not utilized all of the building entitlements
provided by the CIOSA, including the building entitlements for Newport Center Block 600, as
detailed in Exhibit C.
E. Although Landowner did not utilize all of the building entitlements provided by the
CIOSA, it fulfilled all the public benefits listed in Recital C as if it had done so.
F. On November 10, 1997, the City Council adopted Ordinance 97 -77, through which City
and Landowner entered into the Bonita Canyon Annexation and Development Agreement
pertaining to the Bonita Canyon property (the `Bonita Canyon Development Agreement').
Approximately concurrent to adoption of Ordinance 97 -77, the Bonita Canyon property was
detached from the City of Irvine and annexed by City.
G. Under the Bonita Canyon Development Agreement, Landowner:
(1) constructed roads and other circulation improvements designed for the capacity of a
larger project that had previously been approved by the City of Irvine;
(2) sold some of the land that it agreed not to develop to City for open space purposes and
cooperated in the formation of a community facilities district to provide funding to City
for improvement of the park site between Ford Road and Bonita Canyon Road; and
(3) made park dedications.
H. The Bonita Canyon Development Agreement provided Landowner with certain building
entitlements with respect to the properties addressed therein, which entitlements were to be
implemented through a Planned Community Development Plan. Landowner has not utilized all
of the building entitlements provided by the applicable development plan, as detailed in Exhibit
C.
I. Although Landowner did not utilize all of the building entitlements provided by the
Bonita Canyon Development Agreement, it fulfilled all the public benefits listed in Recital G as
if it had done so.
J. This Agreement effectuates General Plan policies and goals by extinguishing
Landowner's remaining building entitlements under the CIOSA and the Bonita Canyon
Development Agreement. This Agreement provides for the rescission and cancellation of
Landowner's remaining rights and obligations under the CIOSA and the Bonita Canyon
Development Agreement on the Effective Date (collectively, the "Cancellation').
K. The Cancellation eliminates conflicts that exist among the CIOSA, the Bonita Canyon
Development Agreement, and the General Plan. The Cancellation, together with this Agreement,
also ensures that zoning implementation and utilization of the building entitlements applicable to
the Property are consistent with the General Plan's standards for land use, housing, circulation,
open space, noise, safety, and conservation, and with the General Plan's goals of improving and
providing transportation infrastructure, parks, public services, open space, water resources, and
environmental resources. Notably, existing utility capacity, circulation infrastructure, and other
public services, together with the circulation improvements to be constructed or installed by
Landowner, as referred to in this Agreement, support development consistent with the
Development Regulations.
L. As detailed in Section 4 of this Agreement, Landowner has agreed to provide public
benefits as consideration for this Agreement, including the following: in -lieu park fees in
advance of the time that the fees otherwise would be due to provide for matching funds for the
renovation of the Oasis Senior Center and to provide funds for other qualified park uses;
development fees to fund construction of a new City Hall or other municipal use; circulation
enhancements; dedication of public rights of way on the north side of San Miguel Drive between
MacArthur Boulevard and Avocado Avenue and on Avocado Avenue between San Nicolas
Drive and San Miguel Drive; the conditional dedication to City of an open space parcel bounded
FA
on the north by the Orange County Transportation Authority site, on the east by MacArthur
Boulevard, on the south by San Miguel Drive, and on the west by Avocado Avenue;
improvements to the existing sprinkler systems in the Newport Center Drive parkways and
medians to enhance water quality; and the dedication of the Lower Castaways site for non-
commercial municipal uses. Landowner has also agreed to grant City an option to acquire a site
in Newport Center Block 500 for the purpose of constructing a new City Hall.
M. On-March 13, 2007, the City Council adopted Ordinance No. 2007 -6, entitled "Ordinance
Amending Chapter 15.45 of City of Newport Beach Municipal Code Regarding Development
Agreements" (the "Development Agreement Ordinance"). This Agreement is consistent with the
Development Agreement Ordinance, which requires a development agreement for certain types
of projects, including: (1) projects that include development of 50 or more residential units, and
(2) projects that include new non - residential development in Newport Center.
N. This Agreement is consistent with the City of Newport Beach General Plan Policy LU
6.14.8, which applies to Newport Center and requires the execution of development agreements
for residential projects and mixed -use development projects with a residential component.
O. ThisAgreement is consistent with provisions of state law (California Government Code
sections 65864 - 65869.5) and local law (City of Newport Beach Municipal Code chapter 15.45)
that authorize binding agreements that: (1) encourage investment in, and commitment to,
comprehensiveplanning and public facilities financing; (2) strengthen the public planning
process and encourage private implementation of the local general plan; (3) provide certainty in
the approval of projects in order to avoid waste of time and resources; and (4) reduce the
economic costs of development by providing assurance to property owners that they may
proceed with projects consistent with existing policies, rules, and regulations.
P. The Parties intend that, concurrently with their approval of this Agreement, the Parties
Will approve and execute a separate Affordable Housing Implementation Plan ("AHIP') for the
Property, in the form attached hereto as Exhibit D, that reflects the terms of Section 3 of this
Agreement regarding Landowner's affordable housing requirements.
Q. hi recognition of the significant public benefits that this Agreement provides, the City
Council has found that this Agreement:
(1) is consistent with the City of Newport Beach General Plan as of the date of this
Agreement;
(2) is in the best interests of the health, safety, and general welfare of City, its residents,
and the public;
(3) is entered into pursuant to, and constitutes a present exercise o% City's police power;
(4) is consistent and has been approved consistent with the Final Environmental Impact
Report for the City of Newport Beach General Plan 2006 Update (State Clearinghouse
No. 2006011119) and the North Newport Center Addendum to the EIR for General Plan
2006 Update (State Clearinghouse No. 2006011119), both of which analyze the
environmental effects of the proposed development of the Project on the Property; and
(5) is consistent and has been approved consistent with provisions of California
Government Code section 65867 and City of Newport Beach Municipal Code chapter
15.45.
R. On November 15, 2007, and November 29, 2007, City's Planning Commission held a
public hearing on this Agreement, made findings and determinations with respect to this
Agreement, and recommended to the City Council that the City Council approve this Agreement.
S. On December 11, 2007, the City Council also held a public hearing on this Agreement
and considered the Planning Commission's recommendations and the testimony and information
submitted by City staff, Landowner, and members of the public. On December 18, 2007,
pursuant to the applicable state law (California Government Code sections 65864 - 65869.5) and
local law (City of Newport Beach Municipal Code chapter 15.45), the City Council adopted its
Ordinance No. _, finding this Agreement to be consistent with the City of Newport Beach
General Plan and approving this Agreement.
AGREEMENT
NOW, THEREFORE, City and Landowner agree as follows:
I. Definitions. The following terms when used in this Agreement shall have the meanings
set forth below:
L I "AHIP" shall mean the Affordable Housing Implementation Plan that is attached
hereto as Exhibit D which has been approved and executed by Landowner and is being
considered for approval by the City Council of City concurrently with its consideration of
this Agreement.
1.2 "Bonita Canvon Development Agreement" shall have the meaning ascribed in
Recital F of this Agreement.
1.3 "Cancellation" shall have the meaning ascribed in Recital J of this Agreement.
1.4 "CEM' shall mean the California Environmental Quality Act (California Public
Resources Code sections 21000-21177).
1.5 "CIOSA" shall have the meaning ascribed in Recital B of this Agreement.
1.6 "Cily-Council" shall mean the governing body of City.
1.7 "Development Fees" shall have the meaning ascribed in Section 5.1 of this
Agreement.
1.8 "_Development Plan" shall mean the North Newport Center Planned Community
Development Plan, including design regulations, that is being approved by the City
Council concurrently with its approval of this Agreement, excluding any.amendments
after the Effective Date unless specifically agreed to by Landowner in writing or
authorized by Sections 8 or 9.
4
1.9 " Development Regulations" shall mean the following regulations as they are in
effect as of the Effective Date, excluding any amendments after the Effective Date unless
specifically agreed to by Landowner in writing or authorized by Sections 8 or 9: the
General Plan; the Development Plan, including the design regulations; the AHIP; the
Transfer of Development Rights; and, to the extent not expressly superseded by the
Development Plan or this Agreement, all other land use and subdivision regulations
governing the permitted uses, density and intensity of use, design, improvement and
construction standards and specifications, procedures for obtaining required City permits
and approvals for development,, payment of Development Fees, and similar matters that
may apply to development of the Project on the Property during the Term of this
Agreement that are set forth in Title 15 of the Municipal Code (buildings and
construction), Title 19 of the Municipal Code (subdivisions), and Title 20 of the
Municipal Code (planning and zoning), but specifically excluding all other sections of the
Municipal Code, including without limitation Title 5 of the Municipal Code (business
licenses and regulations).
1.10 `Effective Date" shall have the meaning ascribed in Section I I of this Agreement.
1.11 "Fair Share Traffic Contribution Ordinance" shall mean City's Fair Share Traffic
Contribution Ordinance, codified in Chapter 15.38 of City's Municipal Code, together
with resolutions implementing said ordinance.
L12 "Fair Share Traffic Fees" shall have the meaning ascribed in Section 4.3 of this
Agreement.
1.13 "First Building Permit" shall mean the first building permit that is issued for
either: (i) the Parking Structure; or (ii) residential, office, or hotel development on any
portion of the Property located in Newport Center Block 500, Newport Center Block 600,
or San Joaquin Plaza, provided the building permit (A) is for new development that did
not exist as of the date of this Agreement on the property for which the permit is being
issued, (B) is not for the renovation, repair, or improvement of an existing building that
does not increase the building's square footage, and (C) is not for a parking structure that
is intended to serve, in whole or in part, any such new development (other than the
Parking Structure, which is specifically included pursuant to clause (i)).
L14 "First Residential Building Pennit' shall mean the first building permit issued for
residential development in any portion of the Property located in Newport Center Block
500, Newport Center Block 600, or San Joaquin Plaza, provided the building permit is for
new development and is not for the renovation, repair, or improvement of an existing
residential unit that does not increase the unit's square footage.
1.15 "General Plan' shall mean City's 2006 General Plan adopted by the City Council
on July 25, 2006, by Resolution No. 2006 -76, excluding any amendments after the
Effective Date unless specifically agreed to by Landowner in writing or authorized by
Sections 8 or 9. The Land Use Plan of the Land Use Element of the General Plan was
approved by City voters in a general election on November 7, 2006.
5
1.16 "Initial Fee Increase" shall have the meaning ascribed in Section 4.3 of this
Agreement
1.17 "hritial Park Fee" shall mean the portion of the Park Fees that is to be paid by
Landowner to City upon the issuance of the First Residential Building Permit, as more
fully explained in Section 4.1 of this Agreement.
1.18 "Initial Public Benefit.Fee" shall mean the portion of the Public Benefit Fee that
is to be paid by Landowner to City upon the issuance of the First Building Permit, as
more fully explained in Section 4.2 of this Agreement
1.19 "Mortgage" shall mean a mortgage, deed of trust, sale and leaseback arrangement,
or any other form of conveyance in which the Property, or a part or interest in the
Property, is pledged as security and contracted for in good faith and for fair value.
1.20 "Mortgagee' shall mean the holder of a beneficial interest under a Mortgage or
any successor or assignee of the Mortgagee.
121 "Option Agreement" shall mean that certain Option Agreement in the form
substantially the same as that attached hereto as Exhibit F to be entered into by City and
Landowner, which agreement provides for Landowner to grant to City an option to
acquire the Option Site, as more fully explained in Section 4.8.1 of this Agreement
1.22 "Option Period" shall mean the period of time during which City may exercise the
option to acquire the Option Site, as more fully explained in Section 4.8.1 of this
Agreement
1.23 "Option Site" shall mean that certain real property that will be the subject of the
Option Agreement and that is defined in Section 4.8.1 of this Agreement.
1.24 "Park Fees" shall collectively refer to the Initial Park Fee and the Per Unit Park
Fees, payable in accordance with Section 4.1 of this Agreement.
1.25 "Parking Structure" shall mean the multilevel parking structure to be developed
on the Parking Structure Site in the event City exercises its option to acquire the Option
Site, including without limitation the spaces on the ground level within the multilevel
parking structure.
1.26 "Parking Structure Provisions" shall mean the rights and obligations of the Parties
with respect to the construction and operation of the Parking Structure, as more fully
explained in Section 4.8.2 of this Agreement.
1.27 "Parking Structure Easement Agreement" shall mean a separate recorded
agreement between Landowner and City to set forth their respective rights and
obligations under the Parking Structure Provisions described in Section 4.8.2 of this
Agreement.
0
1.28 "Parking Structure Site" shall mean that certain real property located adjacent to
the Option Site and depicted on Exhibit E attached hereto, as further described in Section
4.8.2 of this Agreement.
1.29 "LaTV' or "Parties" shall mean either City or Landowner or both, as determined
by the context.
1.30 "Per Unit Park Fees" shall mean the portion of the Park Fees that are to be paid by
Landowner to City upon the issuance of residential building permits for development of
any portion of the Property located within Newport Center Block 500, Newport Center
Block 600, or San Joaquin Plaza, as more fully explained in Section 4.1 of this
Agreement.
1.31 "Proroject" shall mean all on -site and off -site improvements (including new
development and replacement development for existing buildings that may be
demolished) that Landowner is authorized and/or required to construct with respect to
each parcel of the Property, as provided in this Agreement and the Development
Regulations.
1.32 "Proper is described in Exhibit A and depicted on Exhibit B.
1.33 "Public Benefit Fee" shall have the meaning ascribed in Section 4.2 of this
Agreement.
1.34 "Term" shall have the meaning ascribed in Section 11 of this Agreement.
1.35 "Traffic Phasing Ordinance" shall mean City's Traffic Phasing Ordinance,
codified in Chapter 15.40 of City's Municipal Code and including Appendix A to
Chapter 15.40.
1.36 "Transfer of Development Rights" shall mean the resolution approving the
transfer to Newport Center Block 500 of development rights for development of
approximately 277,161 square feet currently assigned to Newport Center Block 600 (of
which up to 72,000 square feet may be utilized by City for the City Hall to be situated on
the Option Site if City exercises the Option), that the City Council is considering for
approval concurrently with its approval of this Agreement.
2. General Plan Consistency. Zoning Implementation, and Extinguishment of Any of
Landowner's Remaining Development Rights Under the CIOSA and the Bonita Canyon
Development Agreement, This Agreement and the Development Regulations applicable to the
Property will cause City's zoning and other land use regulations for the Property to be consistent
with the General Plan. Although development already completed under the CIOSA and the
Bonita Canyon Development Agreement remains vested as a conforming use, the CIOSA and the
Bonita Canyon Development Agreement provided for vested development rights that Landowner
has not yet used and that are inconsistent with the General Plan. The Cancellation of those
agreements on the Effective Date will eliminate this inconsistency.
3. Affordable Housing Obligation The Parties agree that Landowner's compliance with the
AHIP satisfies any obligation of Landowner to City under the City of Newport Beach General
7
Plan Housing Program 2.2.1 with respect to the development of the Property pursuant to and
during the Term of this Agreement. This Agreement does not authorize Landowner to transfer
any affordable housing credits to any property that is outside the Property. The Parties also
agree that the AHIP and this Agreement shall be interdependent and neither shall be effective
unless each is approved and the Effective Date occurs. The adopted AHIP may be amended by
the mutual consent of the Parties without requiring an amendment to this Agreement.
4. Public Benefits.
4.1 In -Lieu Park Fees for Renovation of Oasis Senior Center and for Park Uses.
Landowner agrees to pay to City the Initial Park Fee and the Per Unit Park Fees as set
forth in this Section 4.1 (collectively, the "Park Fees'). Regardless of whether a
subdivision map is approved for any or all of the residential units, and prior to and as a
condition to City's issuance of the First Residential Building Permit, but in no event
earlier than the Effective Date, Landowner shall pay to City the greater of (i) the sum of
$3,733,333.33 (which is 1/3 of the total Park Fees to be paid to City under this
Agreement) (the "Initial Park Fee') or (ii) the applicable Per Unit Park Fees (if the First
Residential Building Permit includes more than one hundred forty-three (143) residential
units.).
Landowner's payment of the Initial Park Fee shall entitle Landowner to a credit
against payment of the Per Unit Park Fees for the first one hundred forty-three (143)
residential units to be developed on the Property. Prior to and as a condition to City's
issuance of a building permit for development of the one hundred forty - fourth (140
residential unit on any portion of the Property located in Newport Center Block 500,
Newport Center Block 600, or San Joaquin Plaza, Landowner shall pay to City the sum
of $17,364.11 (the difference between the Initial Park Fee and the total Per Unit Park
Fees for 144 residential units) and prior to and as a condition to City's issuance of each
subsequent building permit for residential development within that portion of the
Property Landowner shall pay to City the sum of $26,046.51 per unit ("Per Unit Park
Fees').
In addition, if Landowner sells any residential unit developed within the Property
to a third party purchaser in other than a bulk sale of all of the units in a single residential
building, then Landowner shall pay to City at the time of such sale of an individual
residential unit the then - applicable park fee for such unit as may be in effect at that time
within the City of Newport Beach, less a credit for the amount of the Per Unit Park Fee
paid prior to that time. Landowner's obligation to pay such additional fee upon
individual sale of a residential unit or units within the Property shall be described in a
memorandum to be recorded against the title of each unit at the time that a subdivision
map creating the condominium airspace units is recorded by Landowner, in a form
acceptable to City. The obligation to pay said additional fee, if applicable, shall survive
the termination of this Agreement and shall apply to any bulk sale purchaser of all or any
portion of the residential units.
In addition to the foregoing, and notwithstanding any other provision set forth in
this Section 4. 1, it on the date that City awards a contract for renovation of the Oasis
Senior Center, the total sum of both the Initial Park Fee and the Per Unit Park Fees paid
M
by Landowner to City to date is less than the sum of $5,600,000 (the amount of the
matching challenge grant referred to below), then within five (5) days after City's award
of the contract, Landowner shall pay to City the difference ("Park Fee Advancement").
Landowner's payment of the Park Fee Advancement shall entitle Landowner to a credit
against the Initial Park Fee (if not paid by the time the Park Fee Advancement is paid)
and against the next Per Unit Park Fees that otherwise would be due and payable to City
until the entire credit is exhausted. After such credit is exhausted, prior to and as a
condition to City's issuance of each subsequent building permit for residential
development of any portion of the Property located in Newport Center Block 500,
Newport Center Block 600, or San Joaquin Plaza, Landowner shall continue to pay the
Per Unit Park Fees as residential building permits are issued.
City shall earmark $5,600,000 of the Park Fees to be paid by Landowner (one-
half of the total Park Fees) as a matching challenge grant to apply toward contributions to
the renovation of the Oasis Senior Center. City shall apply any Park Fees not spent by
City on the renovation of the Oasis Senior Center to any park use as determined by City.
Landowner acknowledges that the actual amount of funds raised through the matching
challenge may be less than $5,600;000 and that the amount raised shall not affect the
amount of Park Fees payable by Landowner to City.
4.2 Public Benefit Fee. Landowner shall pay to City the sum of $27,090,000 as set
forth in this Section 4.2 ("Public Benefit Fee"). Prior to and as a condition to the
issuance of the First Building Permit, Landowner shall pay to City the sum of
$13,545,000, which is one -half of the Public Benefit Fee ("Initial Public Benefit Fee').
The balance of the Public Benefit Fee shall be paid to City upon the issuance of building
permits for the 430 residential units authorized for development within the Property. The
amount payable by Landowner to City for each such residential unit shall be the sum of
$31,500.
. City shall use the Public Benefit Fee for any of the following expenses: the
design, engineering, and construction of a new City Hall anywhere within the City of
Newport Beach, the costs to acquire the Option Site if City exercises the option under the
Option Agreement, City's pro rata share of the costs to design and construct the Parking
Structure if City builds a City Hall on the Option Site, and any other municipal purpose
as determined by City.
4.3 Fair Share Traffic Fees. Landowner acknowledges that the Property is subject to
City's Fair Share Traffic Contribution Ordinance, which requires the payment of certain
fair share traffic fees for development ( "Fair Share Traffic Fees'). Landowner further
Acknowledges that City is in the process of considering updates and amendments to its
Fair Share Traffic Contribution Ordinance and its Fair Share Traffic Fees and that as a
result of such updates and amendments the Fair Share Traffic Fee charged by City may
be increased (the "Initial Fee Increase"). Notwithstanding any other provision set forth in
this Agreement to the contrary, Landowner agrees that Landowner and the Property shall
be subject to the modified Fair Share Traffic Contribution Ordinance including the
increased fees payable pursuant to the Initial Fee Increase, provided that (i) these fees are
generally applicable to all substantially similar new development within City on the same
basis that they are applicable to the Property, or (ii) if City elects to impose Fair Share
N
Traffic Fees on a zone -by -zone basis, these fees are generally applicable to all
substantially similar new development within the zone within which the Property is
located on the same basis that they are applicable to the Property. After the Initial Fee
Increase is approved by City and becomes effective, however, Landowner's
responsibility to pay any additional increases to City's Fair Share Traffic Fees shall be
limited to an amount not in excess of the percentage increase in the California
Department of Transportation Highway Construction Cost Index from and after the date
that the Initial Fee Increase becomes effective to the date Landowner pays the applicable
Fair Share Traffic Fees. If at any time the California Department of Transportation
Construction Index is discontinued or is no longer available, City shall substitute an
official index that is most nearly equivalent thereto. Nothing herein is intended to
preclude Landowner from satisfying its obligation to pay Fair Share Traffic Fees through
in -lieu contributions, subject to and in accordance with the Fair Share Traffic
Contribution Ordinance and any modifications thereto, which Landowner acknowledges
requires the approval of City's Planning Commission. The improvements and dedication
to be made by Landowner at the intersection of MacArthur Boulevard and San Joaquin
Hills Road pursuant to Section 7.3 of this Agreement shall be eligible for consideration as
an in -lieu contribution under the Fair Share Traffic Contribution Ordinance. Otherwise,
the improvements and dedications to be made under this Agreement shall not be eligible
for consideration as an in -lieu contribution under the Fair Share Traffic Contribution
Ordinance. City acknowledges that the Fair Share Traffic Fees cover all fair share traffic
fees associated with development of the Property, and that during the Term of this
Agreement, City shall not require additional fair share traffic fees associated with
development of the Property other than the Fair Share Traffic Fees described in this
Agreement.
4.4 Circulation Enhancements to Public Right of Way. Landowner shall contribute to
City the sum of Two Million Five Hundred Thousand Dollars ($2,500,000.00)
( "Circulation Enhancement Contribution") to reimburse City for City's expenses incurred
for the design and construction of one or more of the following circulation improvements
as determined by the City's Director of Public Works, should City choose to approve the
circulation enhancements after its environmental review and approval process and in
compliance with CEQA:
(1) widening of Avocado Avenue between San Miguel Drive and San Nicolas
Drive;
(2) widening, operational improvements and/or other capacity enhancements to
San Miguel Drive between MacArthur Boulevard and Avocado Avenue;
(3) installation of a traffic signal at the intersection of Newport Center Drive and
San Nicolas Drive;
(4) installation of a traffic signal at the intersection of Newport Center Drive and
Center Drive; and
(5) other improvements as may be mutually agreed upon by City's Director of
Public Works and Landowner.
10
Landowner shall pay the Circulation Enhancement Contribution to City from time
to time after the Effective Date, within thirty (30) days after receipt of written request for
reimbursement from City, with any balance to be paid to City on the date that is sixty
(60) months after the Effective Date regardless of whether City has incurred the cost for
the foregoing improvements. Alternatively, Landowner and City may mutually agree
upon arrangements for Landowner to use the Circulation Enhancement Contribution to
construct the foregoing improvements subject to City's approval.
Landowner's commitment to contributing the Circulation Enhancement
Contribution is in addition to Landowner's obligation to pay Fair Share Traffic Fees
under the Farr Share Traffic Contribution Ordinance, to mitigate traffic impacts under the
Traffic Phasing Ordinance, and to any actions Landowner takes to improve access to
private property in Newport Center.
4.5 Dedication of Public Rights of Way. Landowner shall provide an offer of
dedication to City for the additional public rights of way necessary for circulation
improvements on the north side of San Miguel Drive between MacArthur Boulevard and
Avocado Avenue and on Avocado Avenue between San Nicolas Drive and San Miguel
Drive, at such time as City provides legal descriptions for the public rights of way, which
descriptions shall be consistent with the design of the circulation improvements for said
public right of way. Landowner shall convey the public right of way to City (through the
recordation of an offer of dedication without any restrictions or qualifications) free and
clear of all recorded and unrecorded monetary liens, any delinquent property taxes or
assessments, and all tenancies, lessees, occupants, licensees; and all possessory rights of
any kind or nature. In addition, upon the conveyance, there shall not be any violation of
any law, rule, or regulation affecting the public right of way or its use, including any
environmental law or regulation, and Landowner shall be responsible for causing said
condition to be satisfied. Landowner shall have the right, to the extent necessary and
subject to obtaining an encroachment agreement from City, to install, maintain, repair,
and replace a Newport Center entry sign at a location mutually acceptable to City and
Landowner.
Landowner's offer of dedication to City of the public rights of way described in
this Section 4.5 is in addition to Landowner's obligation to pay Fair Share Traffic Fees
under the Fair Share Traffic Contribution Ordinance, to mitigate traffic impacts under the
Traffic Phasing Ordinance, and to any actions Landowner takes to improve access to
private property in Newport Center.
4.6 Open Space Dedication Landowner shall dedicate to City (through the
recordation of a grant deed) the open space parcel in Newport Center comprised of
approximately 3.18 acres of land area, bounded on the north by the Orange County
Transportation Authority site, the east by MacArthur Boulevard, the south by San Miguel
Drive, and the west by Avocado Avenue ("Open Space Parcel'), within thirty (30) days
after the earliest of the following: (i) City has awarded a construction contract for the
construction of City Hall at any location within the City or (ii) the option to purchase the
Option Site has terminated as provided in Section 4.8.1 of this Agreement. Landowner
shall convey the Open Space Parcel for open space or public facilities purposes, to City
free and clear of all recorded and unrecorded monetary liens, any delinquent property
11
taxes or assessments, and all tenancies, lessees, occupants, licensees, and all possessory
rights of any land or nature. In addition, upon the conveyance, there shall not be any
violation of any law, rule, or regulation affecting the Open Space Parcel or its use,
including any environmental law or regulation, and Landowner shall be responsible for
causing said condition to be satisfied. Landowner shall, at its sole cost and expense,
cause a title company selected by City to issue to City an owner's policy of title insurance
for the Open Space Parcel with liability in an amount reasonably determined by City (but
not exceeding the fair market value of the Open Space Parcel) showing fee title to the
Open Space Parcel vested in City, free and clear of the liens, rights, and encumbrances
referred to above. If the Open Space Parcel is dedicated to City, Landowner shall have
the right, to the extent necessary and subject to obtaining an encroachment agreement
from City, to install, maintain, repair, and replace a Newport Center entry sign at a
location mutually acceptable to City and Landowner.
4.7 Maintenance of CIOSA Pre -Paid Transportation Fund. The Cancellation referred
to in Section 6.14 of this Agreement terminates the Parties' remaining rights and
obligations under the CIOSA, including any obligation of City to repay Landowner for
funds that Landowner provided pursuant to the CIOSA. In connection therewith,
Landowner agrees that City may retain any balance of pre -paid transportation funds City
may be holding as a result of unused CIOSA mitigation. City may use any such
remaining balance of prepaid transportation fiords for transportation improvements in
accordance with the Protocol Agreement for the Circulation Improvement and Open
Space Agreement dated December 11, 1995, and the Protocol Agreement Memorandum
dated December 11, 2001.
4.8 City's Option to Purchase New City Hall Site, Structure.
4.8.1 Option to Purchase Qption Site. No later than ten (10) days after the
Effective Date, Landowner and City shall enter into the Option Agreement, which
provides for Landowner to grant to City an option to acquire the Option Site for the sum
of One Hundred Forty-Five Dollars ($.145.00) per square foot of net land area for the
purpose of constructing a new City Hall thereon. The Option Site is not yet subdivided.
For purposes of this Agreement, until such time as the exact boundaries of the Option
Site are established, the term "0
rion Site" shall be deemed to mean that certain real
property consisting of approximately 46,175 square feet depicted in Exhibit E
Parcel"), plus any contiguous property adjacent to the Legal Parcel. City shall have the
right to establish the boundaries of the Option Site within the land area described in the
preceding sentence provided that the Option Site shall not exceed 54,000 square feet of
net land area as further explained in the Option Agreement. Once the boundaries of the
Option Site are established by City, the term "Option Site" shall be deemed to refer to the
land located with the boundaries of the established Option Site. The term of the option to
be granted by Landowner to City under the Option Agreement (the "Option Period ") will
commence on the Effective Date and will expire on the earliest of the following dates: (i)
the date that is forty-eight (48) months after the Effective Date; (ii) upon City's
termination of the Option Agreement by delivery of written notice of termination to
Landowner, which notice City shall have the right to deliver at any time during the
Option Period prior to City's exercise of the Option; or (iii) the date City's electorate
'approves and City implements an initiative restricting the location of a new City Hall to a
12
site outside of Newport Center Block 500, with such initiative to be deemed implemented
upon issuance of a certificate of occupancy for City Hall at that site. As more fully
explained in the Option Agreement, City's right to exercise the option is subject to the
Effective Date occurring and to City awarding a contract for the construction of a new
City Hall on the Option Site. If City exercises the option during the Option Period and
acquires the Option Site, this Agreement shall terminate as to the Option Site and shall be
removed as an encumbrance upon title to the Option Site upon City's acquisition thereof
4.8.2 Parking Structure Provisions. If a new City Hall is developed on the
Option Site, the parking for the City Hall shall be located on the Parking Structure Site,
and Landowner and City shall perform and implement the provisions set forth in this
Section 4.8.2 (collectively, the "Parking Structure Provisions"):
(i) Landowner shall construct and operate a new multilevel parking structure on
the Parking Structure Site ( "Parking Structure').
(ii) The obligations of Landowner and City with respect to the operation,
maintenance, repair, and replacement of the Parking Structure and other matters
included in the Parking Structure Provisions identified in this Agreement shall be
evidenced by a separate recordable document, substantially similar to the
easement attached as an exhibit to the Option Agreement, that runs with the land
and benefits and burdens all of the property owned by Landowner in Block 500
and the Option Site ( "Parking Structure Easement Agreement'.
(iii) As part of the Parking Structure Easement Agreement, Landowner shall grant
to City an easement for exclusive use of 300 to 375 parking spaces for parking for
the City Hall or the uses that may be established on the Option Site, without
charge (except as otherwise provided herein), with the exact number of City
parking spaces to be determined by City in its sole discretion but not to exceed
375 spaces, and provided that a minimum of 4.17 parking spaces per 1,000 square
feet of "Floor Area" (as hereinafter defined) on the Option Site shall be provided.
The easement shall provide that City or its successor beneficiary shall pay its pro
rata share of the operations and maintenance costs and cost of a capital
replacement reserve for the Parking Structure as set forth in clauses (viii) and (ix)
below. Landowner shall designate the location of the required spaces within an
area located within the first three floors of the Parking Structure (including the
ground level) at locations within the Parking Structure nearest to the City Hall.
City's parking spaces shall be segregated from the rest of the parking though
specific markings, signs, and/or barriers. City shall have the right to establish
rules and regulations governing the use of its designated spaces. For purposes of
this Agreement, the term "Floor Area" shall mean "Net Floor Area" as defined in
City of Newport Beach Municipal Code section 20.03.030.
(iv) As part of the Parking Structure Easement Agreement, Landowner shall grant
to City appropriate non - exclusive easements in the Parking Structure and on,
over, and across the Parking Structure Site between the Parking Structure and the
adjacent public streets and rights of way to enable City to access its parking
spaces. Such easements shall provide for City or its successor beneficiaries to pay
13
a pro rata share of the operations and maintenance costs for the areas subject to
such access easements, including charges for maintenance and operation of access
gates that control access to such areas.
(v) For cost reference purposes, the design of the Parking Structure shall be
generally in accordance with the parking structure constructed in 2007 on the
north side of Fashion Island ("Fashion Island 2007 Parking Structure'), including
without limitation the level of landscaping, elevators, and quality of materials
used.
(vi) No later than ninety (90) days after City occupies the City Hall on the Option
Site, City shall pay a pro rata share of Landowner's actual and reasonable out -of-
pocket costs incurred to design and construct the Parking Structure, including
costs of required utility relocation and costs for offsite improvements necessary to
provide access to the Parking Structure, but not including any charge for: (a) the
value of the land comprising the Parking Structure Site; (b) the cost of relocating
or replacing the parking spaces currently located on the Option Site or the surface
parking spaces currently located on the Parking Structure Site; (c) any
administrative overhead charge of Landowner, (d) any construction management
fee, developer fee, or profit allocation, by whatever name called, other than as
paid to independent third party contractors and consultants in which Landowner
has no direct or indirect ownership interest; or (e) any other charge or payment
similar to the charges and payments referred to in clauses (a) -(d). City's pro rata
share shall be based on the ratio that the number of City- designated parking
spaces bears to the total number of parking spaces in the Parking Structure. City
shall have the right to review and approve the costs incurred by Landowner for
which Landowner seeks reimbursement for City's pro rata share. It is understood
and agreed that City shall have no obligation to pay for any of the costs to
construct, maintain, operate, or repair the Parking Structure if City does not
acquire the Option Site. City's obligation to pay its pro rata share shall be
included as an obligation in the Parking Structure Easement Agreement.
(vii) Regardless of Landowner's timing for any development in the vicinity of the
Property, Landowner shall commence and complete construction of the Parking
Structure such that it is operational by the time construction of a new City Hall at
the Option Site is completed and ready for occupancy, and the Parties shall
cooperate in keeping one another informed of their plans and construction
schedules as needed to enable Landowner to satisfy such obligation.
(viii) Landowner shall maintain and operate the Parking Structure. Pursuant to
the Parking Structure Easement Agreement, City shall pay a pro rata share of
Landowner's actual and reasonable maintenance and operation costs based on the
ratio that the number of City- designated parking spaces bears to the total number
of parking spaces in the Parking Structure. Reasonable maintenance and
operation costs shall include the annual property taxes paid for the Parking
Structure Site (except to the extent that City has obtained an exemption for such
property taxes due to its status as a government entity), the costs to maintain the
landscaping within the Parking Structure Site and within the Parking Structure,
14
contract maintenance of the Parking Structure, the cost of repairs to the Parking
Structure, sweeping, utilities, insurance, security, parking enforcement, and
parking attendants (to the extent that the cost of such attendants are not paid by
net parking revenues), and excluding costs of administration, accounting,
overhead, or other charges for Landowner's staff.
(ix) Landowner shall establish a capital replacement reserve account for the repair
and replacement of the Parking Structure. The amount of the capital replacement
reserve shall be mutually determined by the Parties and shall be consistent with
the capital replacement reserve maintained for the Fashion Island 2007 Parking
Structure. The funds in the capital replacement reserve shall be placed in a
separate account of Landowner and shall not be commingled with any other
funds. City's contribution to the capital replacement reserve shall be based on the
ratio that the number of City- designated parking spaces bears to the total number
of parking spaces in the Parking Structure. Landowner shall fund or cause to be
funded the balance of the capital replacement reserve. Funds in the capital
replacement reserve, including all interest earned thereon, shall be used solely and
exclusively for the repair and replacement of the Parking Structure or as may
otherwise be mutually agreed to by the Parties in writing. Landowner agrees to
account to City with respect to the capital replacement reserve fund, including
without limitation the amount of contributions thereto, interest earnings,
expenditures from the fund, and the balance in the fund, upon City's reasonable
request.
(x) Landowner shall, at its sole cost and expense, satisfy any parking obligations
it may have to other property owners or parties that may be affected by the
development of the Parking Structure on the Parking Structure Site, without
creating a burden on City or City's rights to exclusive use of the City- designated
parking spaces within the Parking Structure and without any cost to City.
(xi) The foregoing rights and obligations shall terminate upon the expiration or
termination of City's option under the Option Agreement if City does not exercise
the option.
Although the rights and obligations of the Parties under the Parking Structure
Provisions are intended to be final and binding, from and after the Effective Date, the
Parties shall exercise diligent efforts to enter into agreements to implement, and set forth
in greater detail, these Parking Structure Provisions. Any such implementation
agreements likewise shall terminate in the event City does not exercise the option during
the Option Period or the Option Agreement otherwise terminates prior to City's exercise
of the option. The City Manager, with approval of the City Attorney, is authorized to
negotiate, approve, and execute the Parking Structure Easement Agreement and the
implementation agreements provided for above, so long as they are consistent with the
provisions of this Agreement.
4.8.3 Design Requirements and Consultation for Parking Structure and Citv
H11. City shall retain the ultimate authority to design the City Hall, but shall provide
Landowner with the opportunity to review and comment upon the proposed design of the
15
City Hall. Landowner shall retain the ultimate authority to design the Parking Structure
but shall provide City with the opportunity to review and comment upon the design of the
Parking Structure. In addition, City, acting in its regulatory capacity as the agency with
authority to review proposed building plans, shall have the same rights to review and
approve or disapprove the plans for the Parking Structure as it would for any other
parking structure proposed within. City. City and Landowner acknowledge that it is
mutually beneficial for the Parking Structure and the City Hall to be compatible in design
and functionality. The Parties recognize that the City Hall is a unique civic building that
should have a distinctive architectural style, but that the style of the City Hall, although
distinctive, should incorporate elements of the design vocabulary referenced in the North
Newport Center design regulations. Although the design that City selects need not
resemble an office building and may be distinctive, City agrees that the City Hall shall
not be constructed in a post modem. "deconstructivist" style out of character with the
existing architectural style of North Newport Center. City and Landowner agree to work
in good faith to invite review and comment from the other Party at major design
milestones of each facility.
4.8.4. Landowner's Indemnification Regarding Title. Landowner hereby agrees
to indemnify, protect, defend and hold harmless City against claims from third parties
that: (i) challenge the legal right of Landowner to construct the Parking Structure on the
Parking Structure Site as contemplated by this Agreement or (ii) assert rights in or to the
Parking Structure Site or the Option Site that preclude use by City of the Option Site or
the easement rights granted to City in the Parking Structure Site. Landowner further
agrees to reimburse City for the costs of any condemnation action where required for the
City to acquire any property interest held by a third party that conflicts with City's ability
to acquire and use the property interests granted by Landowner to City under this
Agreement.
4.9. Retrofit Sprinkler Systems
A. Landowner shall retrofit the existing sprinkler systems in a) the Newport
Center Drive parkways and medians and b) in the landscape areas within Fashion
Island to low flow technology with the following specifications:
(1) The control system must monitor and adjust itself not less than daily, using
either evapotranspiration rates for the Corona del Mar microclimate or soil
moisture levels monitored at enough locations in the irrigation area as to cover
each soil and slope type in Newport Center;
(2) The control system must adjust to rain conditions to limit or eliminate
watering during rain events;
(3) The sprinkler heads must eliminate overspray onto roads, sidewalks, and other
hardscape either by using highly targeted heads that only water the plant material
or by using a sprinkler -like wicking system, such as the Jardiniere system; and
16
(4) The performance of the sprinkler systems must be monitored on a regular
basis. Landowner agrees to install flow meters to detect line and/or sprinkler head
breaks when wireless flow meter technology is proven and commercially
available.
The Newport Center Drive system retrofit shall be completed by dune 2008. The Fashion Island
retrofit shall be completed in phases in conjunction with the water quality enhancements in
Section 4.9B. The specifications listed above will enhance water quality by reducing surface
runoff into storm drains in Newport Center.
B. Fashion Island Parking Arm. City and Landowner acknowledge that new
development / redevelopment activity within Fashion Island will trigger required water
quality improvements associated with those projects. In addition to these required
improvements, Landowner commits to expend a minimum of $1 million to enhance the
water quality treatment (which could include biofiltration, media filtration or other
technology) of those surface parking areas of Fashion Island which are not otherwise
included within the new development or redevelopment projects. Landowner has full
discretion as to the treatment methods utilized and improvement phasing, to ensure that
the improvements integrate with the water quality treatment plans of the new
development areas. Landowner agrees to make annual reports to the City regarding the
progress of these enhancements including the work performed and the amount expended.
4.10 Cooperation of Landowner if City Hall Constructed on Property North of Library.
If City elects to construct a new City Hall on the property located on the east side of
Avocado Avenue, north of the Central Library, Landowner shall cooperate in good faith
with City to implement any necessary land use regulations, including zoning
amendments, and to release and terminate the use restrictions contained in the deed for
the property to allow for and accommodate construction of a new City Hall on that site.
4.11 Dedication of Lower Castaways Upon issuance of the First Building Permit,
Landowner shall dedicate to City the Lower Castaways site, depicted in Exhibit G, for
municipal or municipally sponsored uses allowed under the General Plan's Recreational
Marine Commercial designation, such as a park, marine educational facility,
marine research and conservation facility, or marine and harbor dependent service and
support uses and other similar uses in furtherance of the Tidelands Trust. The property
shall have a deed restriction in favor of Landowner which shall restrict the City's use of
the property to such uses, and allow the City to contract with a for profit or non -profit
entity to operate certain municipal facilities or to use the property in furtherance of such
uses; provided that the city may not transfer the property, by sale or long term lease to
any private, for - profit company for any commercial boat marina.
5. Fees.
5.1 Fees Applicable to Property. During the Term of this Agreement, the
Development Fees assessable against the Property shall be Park Fees, the Public Benefit
Fee, and the Fair Share Traffic Fees, and City shall not levy or require any additional
17
Development Fees for the development of the Properly. Notwithstanding the foregoing,
if and to the extent that the Development Regulations applicable to the Property are
amended after the Effective Date of this Agreement and Landowner is authorized under
the modified Development Regulations to develop any additional density or intensity of
use beyond what is allowed as of the Effective Date, City shall retain the right to require
Landowner to pay all City fees for such additional density or intensity of use to the extent
such fees would be applicable in the absence of this Agreement. As used herein, the term
"DevejgRment Fees" shall mean the monetary exactions charged by City in connection
with a development project for the purpose of defraying all or a portion of the cost of
public facilities related to development of the project. The Parties acknowledge that the
following fees, taxes, and charges do not constitute Development Fees and that nothing in
this Agreement is intended or shall be construed to release Landowner from the
obligation to pay such fees, taxes, and charges, including increases, if and when they
become due:
(1) City's normal fees for processing, environmental assessment and review,
tentative tract and parcel map review, plan checking, site review and approval,
administrative review, building permit, grading permit, inspection, and similar
fees imposed to recover City's costs associated with processing, reviewing, and
inspecting project applications, plans, and specifications; and
(2) fees and charges levied by any other public agency, utility, district, or joint
powers authority, regardless of whether City collects those fees and charges; and
(3) community facility district special taxes or special district assessments or
similar assessments, business license fees, bonds or other security required for
public improvements, transient occupancy taxes, sales taxes, property taxes,
sewer lateral connection fees, water service connection fees, new water meter
fees, and the Property Development Tax payable under Section 3.12 of City's
Municipal Code.
This Agreement does not authorize Landowner to transfer any fees paid to any other
property outside the Property that is the subject of this Agreement; nor does this
Agreement authorize Landowner to claim a fee credit based on this Agreement that is
transferable to any other property or project outside the Property. Once the Term of this
Agreement has ended, Landowner shall not receive any credit for future planned
development of the Property based on the fees paid pursuant to this Agreement.
5.2 Pmnitted Increases in Development Fees Applicable to Property. During the
Term of this Agreement, City shall not increase the amount of the Public Benefit Fee, nor
shall City increase the amount of the Park Fees or the Fair Share Traffic Fees (the three
Development Fees applicable to the Property after the Effective Date) except as set forth
in Sections 4.1 and 4.3 of this Agreement. This Agreement does not vest Landowner
against increases in any other fees other than Development Fees that are payable by
Landowner, including without limitation the Property Development Tax referred to in
subparagraph (3) of Section 5.1 of this Agreement.
LE
6. Development of Propeity.
6.1 AvOicable Regulations. Other than as expressly set forth in this Agreement,
during the Term of this Agreement, the terms and conditions of development applicable
to the Property, including but not limited to the permitted uses, the density and intensity
of use, and the maximum height, size, and location of proposed buildings, shall be those
set forth in the Development Regulations and this Agreement. The permitted uses,
density and intensity of development, and the maximum height, location, and size of
proposed buildings permitted under the Development Regulations conform with the
development studied and contemplated by the Final Environmental Impact Report for the
City of Newport Beach General Plan 2006 Update (State Clearinghouse No.
2006011119) and the North Newport Center Addendum to EIR for General Plan 2006
Update (State Clearinghouse No. 2006011119). During the Term of this Agreement, the
Development Fees applicable to the Property, and increases in said fees, shall be as set
forth in Sections 4.1, 4.2, 4.3, and 5.2 of this Agreement. Any affordable housing
requirements applicable to the Property shall be as set forth in the AHIP.
During the Term of this Agreement, City shall not prevent development of the
Property that is in compliance with the Development Regulations, or require Landowner
to modify or redesign any building which complies with the Development Regulations,
regardless of whether City exercises the option to acquire the Option Site.
Landowner may apply to City for permits or approvals necessary to modify or
amend the development specified in the Development Regulations, provided that the
request does not propose an increase in the maximum density, intensity, height, or size of
proposed structures, or a change in use that generates more peak hour traffic or more
daily traffic and, in addition, Landowner may apply to City for approval of minor
amendments to existing tentative tract maps, tentative parcel maps, or associated
conditions of approval, consistent with City of Newport Beach Municipal Code section
19.12.090. This Agreement does not constitute a promise or commitment by City to
approve any such permit or approval, or to approve the same with or without any
particular requirements or. conditions, and City's discretion with respect to such matters
shall be the same as it would be in the absence of this Agreement.
City acknowledges that the Development Regulations provide a process for the
transfer of development rights among parcels within the Property, consistent with City's
General Plan Policy LU 6.14.3, and that if Landowner eliminates any of the existing uses
on the Property which are set forth in Exhibit H and the associated development rights,
Landowner shall retain the right to rebuild the use and development rights elsewhere on
the Property or transfer the development rights among parcels within the Property,
subject to and consistent with the Development Regulations and said policy.
Notwithstanding any other provision in this Agreement to the contrary, if at any time
during the Term of this Agreement, Landowner transfers a development right from a
building or buildings anywhere within the Property to any other building within the
Property, the building(s) from which the development right is transferred must be
demolished and cleared or transformed into an authorized non - habitable use that does not
count as development intensity under the General Plan before Landowner can obtain final
building permit approval or a certificate of occupancy for the new building(s). Nothing
19
set forth herein is intended to prohibit or restrict the transfer of development rights
elsewhere in Newport Center, consistent with and subject to City's normal rules and
regulations.
6.2 Landowner's Vested Rights. During the Term of this Agreement, except to the
extent City reserves its discretion as expressly set forth in this Agreement or in the
applicable Development Regulations, Landowner shall have the vested right to exercise
its discretion within the limits and constraints of the Development Regulations in
designing any buildings, structures, streets, sidewalks, buildings, and development within
the Property. City shall not exercise or require any.design review approval for
Landowner's use of the Property unless expressly set forth in the Development
Regulations. In connection therewith, Landowner acknowledges that nothing in this
Agreement is intended to override any review and approval requirements contained in the
Development Regulations or to preclude City from the exercise of any discretionary
authority it has under the Development Regulations, provided that pursuant to
Government Code section 65865.2, "such conditions, terms, restrictions, and
requirements for subsequent discretionary actions shall not prevent development of the
land for the uses and to the density or intensity of development" set forth in this
Agreement.
In addition to the foregoing, Landowner aclmowledges and agrees that nothing
herein is intended to vest Landowner with any environmental approvals that may be
required in connection with the future development of the Property, and that Landowner
must submit, process, and obtain the approval of all documentation and information
required to comply with the California Environmental Quality Act (California Public
Resources Code § 21000 et seq.) with regard to any development of the Property. The
Parties acknowledge that the environmental approvals for the improvements described in
Section 6.3 of this Agreement are being processed concurrently with this Agreement.
6.3 Description of Certain Project Components. Without limiting the generality of
the vested rights described in Section 6.2 of this Agreement, during the Tenn of this
Agreement, subject to any approvals required under the Development Regulations, the
Parties acknowledge that the vested rights described in Section 6.2 of this Agreement
provide that Landowner has a vested right to develop the following improvements on the
Property:
(1) 75,000 square feet in Fashion Island. This square footage will be available for
uses, including hotel and retail, that are consistent with the Development
Regulations.
(2) 430 residential units in Newport Center Block 500, Newport Center Block
600, or San Joaquin Plaza; provided, however, that to the extent Landowner
desires to develop any of said residential units in Newport Center Block 500 or
San Joaquin Plaza, it shall be required to comply with the Traffic Phasing
Ordinance relative to potential impacts associated with such change in location.
(3) The transfer to Newport Center Block 500 of development rights for
development of approximately 277,161 square feet currently assigned to Newport
all
Center Block 600 and designated for office, hotel, and supporting retail uses, of
which up to 72,000 square feet may be utilized by City for the City Hall to be
situated on the Option Site if City exercises the Option. Upon transfer to Newport
Center Block 500, the development rights will be designated only for uses
permitted under the Development Regulations and, to the extent City exercises the
option to acquire the Option Site, for a City Hall on the Option Site.
The foregoing development and/or transfer of development rights will occur in new or
modified buildings that comply with the Development Regulations. Consistent with the
City of Newport Beach General Plan Policy LU 6.14.3, the transfer of the foregoing
development rights is consistent with the General Plan and will not result in any adverse
traffic impacts.
6.4 Police Power. In all respects not provided for in this Agreement, City shall retain
full rights to exercise its police power to regulate the development of the Property. Any
uses or developments requiring a use permit, tentative tract map, or other discretionary
permit or approval in accordance with the Development Regulations shall require a
permit or approval pursuant to this Agreement, and, notwithstanding any other provision
set forth herein, this Agreement is not intended to vest Landowner's right to the issuance
of such permit or approval nor to restrict City's exercise of discretion with respect
thereto, provided that pursuant to Government Code section 65865.2, "such conditions,
terms, restrictions, and requirements for subsequent discretionary actions shall not
prevent development of the land for the uses and to the density or intensity of
development" set forth in this Agreement. Not by way of limitation of the foregoing, it is
specifically understood that City reserves the right to amend, pursuant to procedures
provided by law and this Agreement, City laws, rules, regulations, and policies applicable
to the Property as to which Landowner's rights are not expressly vested and such
amendment or amendments shall be binding on the Property except to the extent that the
same conflict with the express provisions of this Agreement, which provide, inter alia,
that no amendment to the Development Regulations shall be applicable if not agreed to
by Landowner in writing or authorized by Sections 8 and 9 of this Agreement.
6.5 Time -Share Developments. If Landowner desires to establish time -share
developments within the Property in the future, Landowner shall be required to comply
with the City of Newport Beach Time -Share Developments Ordinance (City of Newport
Beach Municipal Code chapter 20.84), including the requirement for a separate
development agreement under the City of Newport Beach Municipal Code section
20.84.050. City retains its full discretion with respect to such matters, including without
limitation, the imposition of an in -lieu of transient occupancy tax fee in accordance with
City of Newport Beach Municipal Code section 20.84.050, and nothing herein constitutes
a promise or commitment by City to approve such use or enter into any such
development agreement.
6.6 _Available Use in Newport Center Block 500 for City Hall. If a new City Hall is
developed on the Option Site, the development intensity for the Property available to
Landowner will not be reduced by more than 72,000 square feet, regardless of whether
the size of the City Hall exceeds 72,000 square feet. As of the date of this Agreement,
City intends that any new City Hall constructed on the Option Site will contain
21
approximately 72,000 square feet of building area; provided, however, that nothing in
this Agreement shall be deemed to prohibit City from constructing a smaller City Hall or
from constructing a.larger building as long as such bi llding maintains the minimum
parking ratio provided for in Section 4.8 of this Agreement. If City acquires the Option
Site, City shall be responsible for conducting a traffic analysis and providing traffic
mitigation if required to comply with the Traffic Phasing Ordinance with respect to the
construction of a City Hall on the Option Site. City acknowledges and agrees that
Landowner shall not be responsible for the payment of any fees for any development by
City on the Option Site.
6.7 Available Use in Newport Center Block 500 if City Does Not Develop a Citv Hall
on the Option Site. If City does not exercise the option to acquire the Option Site during
the Option Period, then the 72,000 square feet of development intensity available to
Landowner that otherwise would have been utilized on the Option Site shall remain part
of the development intensity designated for office use in Newport Center Block 500, to
which Landowner has an exclusive vested right in accordance with this Agreement. In
addition, if City acquires the Option Site and the City Hall developed on the Option Site
is less than 72,000 square feet, then the unused square footage remains part of the
development intensity designated for office use in Newport Center Block 500 and to
which Landowner has an exclusive vested right in accordance with this Agreement. If
City does not exercise the option to acquire the Option Site during the Option Period, or
if City acquires the Option Site and the City Hall developed on the Option Site is less
than 72,000 square feet, then Landowner shall be.responsible for conducting a traffic
analysis and providing traffic mitigation as may be required in compliance with the
Traffic Phasing Ordinance and paying applicable Fair Share Traffic Fees with regard to
the square footage not used for the City Hall and referred to herein.
6.8 Effect of Agreement on Applications for Land Use Approvals. In connection
with any approval that City is required, permitted, or has the right to give relating to the
Project, or otherwise under its ordinances, resolutions, and codes, including without
limitation the approval of a tentative tract map under the Subdivision Map Act
(California Government Code sections 66410 - 66499.58), City shall not impose any
condition or restriction that prevents Landowner from developing and subdividing the
Property with the uses, density, intensity, maximum height, and size of proposed
structures permitted by the Development Regulations. Subject to review for
completeness, City shall accept for processing and shall timely review and act on all
applications for further land use entitlement approvals with respect to the Project called
for or required under this Agreement. Unless expressly required by the Subdivision Map
Act, the Development Regulations, or overriding federal or state law, City in considering
any proposed tentative tract map shall not require any decrease or increase in density,
intensity, size, relocation, or setback of a proposed development or require any
modification of the design of any buildings, condominiums, parcels, units, or other uses
located in the proposed subdivision.
6.9 Mello -Roos Community Facilities District. Pursuant to the Mello -Roos
Community Facilities Act of 1982 (California Government Code sections 53311-
53368.3), Landowner may petition the City Council to establish one or more community
facilities districts including some or all of the Property for the purpose of financing
22
Landowner's obligations under this Agreement. City shall have the sole discretion to
determine whether to establish a community facilities district, the improvements to be
financed, and the method of financing these improvements.
6.10 No Conflictinte Enactments. Except to the extent City reserves its discretion as
expressly set forth in this Agreement, during the Term of this Agreement City shall not
apply to the Project any ordinance, policy, rule, regulation, or other measure relating to
development of the Project that is enacted or becomes effective after the Effective Date to
the extent it conflicts with this Agreement. This Section 6.10 shall not restrict City's
ability to enact an ordinance, policy, rule, regulation, or other measure applicable to the
Project pursuant to California Government Code section 65866 consistent with the
procedures specified in Section 8 of this Agreement. In Pardee Construction Co. v. City
of Camarillo (1984) 37 Cal.3d 465, the California Supreme Court held that a construction
company was not exempt from a city's growth control ordinance even though the city and
construction company had entered into a consent judgment (tantamount to a contract
under California law) establishing the company's vested rights to develop its property
consistent with the zoning. The California Supreme Court reached this result because the
consent judgment failed to address the timing of development. The Parties intend to
avoid the result of the Pardee case by acknowledging and providing in this Agreement
that Landowner shall have the vested right to develop the Property at the rate, timing, and
sequencing that Landowner deems appropriate within the exercise of Landowner's sole
subjective business judgment provided that such development occurs in accordance with
this Agreement and the Development Regulations, notwithstanding adoption by City's
electorate of an initiative to the contrary after the Effective Date. No City moratorium or
other similar limitation relating to the rate, timing, or sequencing of the development or
construction of all or any part of the Project and whether enacted by initiative or another
method, affecting subdivision maps, building permits, occupancy certificates, or other
entitlement to use, shall apply to the Project to the extent such moratorium or other
similar limitation restricts Landowner's vested rights in this Agreement or otherwise
conflicts with the express provisions of this Agreement.
6.11 Benefits to Landowner. Landowner has expended and will continue to expend
substantial amounts of time and money on the planning of the Project and construction of
infrastructure for and in conjunction with the Project. Landowner represents and City
acknowledges that Landowner would not make these expenditures without this
Agreement, and that Landowner makes these expenditures in reliance upon this
Agreement. A benefit to Landowner under this Agreement is the assurance that
Landowner will preserve the right to develop the Property in accordance with the terms
of this Agreement. City acknowledges that Landowner will be investing money and
planning efforts in the Project in reliance on City's covenants and representations in this
Agreement. City agrees that Landowner may reasonably and justifiably rely on City's
covenants and representations in this Agreement and on the enforceability of this
Agreement.
6.12 Tentative Subdivision Maus. City agrees that Landowner may file and process
new and existing vesting tentative maps for the Property consistent with California
Government Code sections 66498.1- 66498.9 and City of Newport Beach Municipal Code
chapter 19.20. Pursuant to the applicable provision of the California Subdivision Map
23
Act (California Government Code section 66452.6(a)), any tentative subdivision map
approved for the Property, whether designated a "vesting tentative map" or otherwise,
shall be extended for the Term of this Agreement.
6.13 Compliance with California Government Code Section 65897.5(c) on Water
Smnly. Pursuant to California Government Code section 65897.5(c), the tentative map
prepared for any subdivision of the Property shall comply with the provisions of
California Government Code section 66473.7 relating to the availability of water supply,
as enacted as of the Effective Date.
6.14 Cancellation of the CIOSA and the Bonita Canyon Development Agreement.
Pursuant to the ordinance adopted by the City Council approving this Agreement, the
CIOSA and the Bonita Canyon Development Agreement shall automatically terminate on
the Effective Date ("Cancellation'). Within ten (10) days after the Effective Date, the
Parties shall cooperate in executing and recording against the properties owned by
Landowner that are encumbered by the CIOSA and the Bonita Canyon Development
Agreement a written instrument memorializing the termination of said agreements in
such form as to permit the agreements to be removed as encumbrances upon title. The
Cancellation shall not affect the rights and obligations of any third parties under the
CIOSA or the Bonita Canyon Development Agreement.
6.15 No Payments Due from City. The Parties acknowledge that City is not required
to make any reimbursement payments to Landowner and that no funding is otherwise due
from City to Landowner for improvements made by or at the direction of Landowner to
Back Bay View Park, located at Jamboree Road and Pacific Coast Highway.
7. Compliance. with Traffic Phasing Ordinance.
7.1 Scope of Traffic Study. The traffic study prepared in conjunction with this
Agreement covers all development authorized by this Agreement (including new
development and replacement development for existing buildings that may be
demolished), with the exception of. (i) construction of a City Hall in Newport Center
Block 500 if and to the extent that City is required to comply with the Traffic Phasing
Ordinance if City exercises the option to acquire the Option Site and constructs the City
Hall thereon; (ii) construction of any residential units in Newport Center Block 500 or
San Joaquin Plaza; (iii) the development by Landowner of 72,000 square feet of office
space within Newport Center Block 500 if City does not acquire the Option Site and the
development rights to said site revert to Landowner, as provided herein; and (iv) the
development by Landowner of any part of the 72,000 square feet of office space within
Newport Center Block 500 that is not used for the City Hall if City acquires the Option
Site, the City Hall developed on the Option Site is less than 72,000 square feet, and the
development rights to the square footage not used for the City Hall revert to Landowner,
as provided herein.
7.2 Sufficiency of Traffic Study. City acknowledges that the traffic study for the
Property prepared prior to the Effective Date satisfies the provisions of the Traffic
Phasing Ordinance. Specifically, City acknowledges that the traffic study establishes that
the project considered in the traffic study meets the requirements for a Comprehensive
24
Phased Land Use Development and Circulation System Improvement Plan with all
phases not anticipated to be complete within 60 months of project approval and subject to
a development agreement that requires circulation improvements, as defined in City of
Newport Beach Municipal Code section 15.40.030(B)(2). With the exception of the
traffic studies referred to in Section 7.1 of this Agreement, City shall not require any
additional traffic studies in conjunction with any application for approvals or permits
necessary to construct development authorized by this Agreement as long as the
application is consistent with the provisions of this Agreement and the relevant
Development Regulations.
7.3 Circulation Improvements No later than the earlier of (i) the date City issues the
certificate of occupancy for any new development under the First Building Permit (but
specifically excluding the building permit for the Parking Structure), or (ii) the date that
is sixty (60) months after the Effective Date, Landowner shall, in compliance with all
City requirements, complete construction of a third eastbound left turn lane at the
intersection of MacArthur Boulevard and San Joaquin Hills Road (within the existing
right of way except for any needed dedication at the southwest comer), to mitigate traffic
impacts pursuant to the Traffic Phasing Ordinance.
8. Reservations of Authority. Notwithstanding any provisions set forth in this Agreement to
the contrary, the laws, rules, regulations, and official policies set forth in this Section 8
shall apply to and govern the development of the Property.
8.1 Procedural Regulations. Procedural regulations relating to hearing bodies,
petitions, applications, notices, findings, records, hearings, reports, recommendations,
appeals, and any other matter of procedure shall apply to the Property, provided that they
are adopted and applied City-wide or to all other properties similarly situated in City.
8.2 Consistent Future Citv Regulations. City ordinances, resolutions, regulations, and
official policies governing development and building which do not conflict with the
Development Regulations, or with respect to such regulations that do conflict, where
Landowner has consented in writing to the regulations, shall apply to the Property.
8.3 Overriding Federal and State Laws and Regulations. Federal and state laws and
regulations that override Landowner's vested rights set forth in this Agreement shall
apply to the Property, together with any City ordinances, resolutions, regulations, and
official policies that are necessary to enable City to comply with the overriding federal
and state laws and regulations, provided that:
(1) Landowner does not waive its right to challenge or contest the validity of any
such federal, state, or local laws, regulations, or official policies; and
(2) Upon the discovery of a federal or state law or regulation (or City ordinance,
resolution, regulation, or official policy undertaken pursuant to those laws and
regulations), that prevents or precludes compliance with any provision of this
Agreement, City or Landowner shall provide the other Party with written notice
of the state or federal law or regulation, provide a copy of the law or regulation,
and a written statement of conflict(s) with the provisions of this Agreement.
25
Promptly thereafter City and Landowner shall meet and confer in good faith in a
reasonable attempt to determine whether a modification or suspension of this
Agreement; in whole or in part, is necessary to comply with such federal or state
law or regulation. In such negotiations, City and Landowner agree to preserve the
terms of this Agreement and the rights of Landowner as derived from this
Agreement to the maximum feasible extent while resolving the conflict. City
agrees to cooperate with Landowner at no cost to City in resolving the conflict in
a manner which minimizes any financial impact of the conflict upon Landowner.
City also agrees to process in a prompt manner Landowner's proposed changes to
the Project and any of the Development Regulations as may be necessary to
comply with such federal or state law; provided, however, that the approval of
such changes by City shall be subject to the discretion of City, consistent with this
Agreement.
8.4 Public Health and Safety. Any City ordinance, resolution, rule, regulation,
program, or official policy, that is necessary to protect persons on the Property or in the
immediate community from conditions dangerous to their health or safety shall apply to
the Property, even though the application of the ordinance, resolution, rule regulation,
program, or official policy would result in the impairment of Landowner's vested rights
under this Agreement.
8.5 Uniform Building Standards. Existing and future building and building - related
standards set forth in the uniform codes adopted and amended by City from time to time,
including building, plumbing, mechanical, electrical, housing, swimming pool, and fire
codes, and any modifications and amendments thereof.
8.6 Public Works improvements. To the extent Landowner constructs or installs
public works or facilities, the City standards in effect for such public works or facilities at
the time of City's issuance of a permit, license, or other authorization for construction or
installation of same shall apply.
9. Utility Capacity. With respect to utility services provided by an entity other than City, in
the event of a reduction of interruption of said service by the utility provider, City shall require
no greater reduction in utility service to any parcel of the Property than the general provider of
the service requires. Nothing in this Agreement limits City's ability to impose reasonable
conditions on any future development or building permits or approvals that require Landowner to
install utility lines and appurtenances servicing the Property. City shall not take any action to
obstruct development on the Property on the basis of utility capacity, provided that City is not
guaranteeing water supply or the Orange County Sanitation District's ability to provide
wastewater treatment services for new development planned for the Property.
If, as a result of City Action and after Landowner has paid the Initial Park Fee and/or
Initial Public Benefit Fee to City, sufficient sewer and water hookups, water supplies, and
sewage treatment capacity ( "Sewer and Water Service') is not available to allow building
permits and/or certificates of occupancy to be issued for construction or occupancy of the
residential units authorized for development under this Agreement, City shall refund to
Landowner all or a portion of the Initial Park Fee and/or the Initial Public Benefit Fee, as
applicable. The amount of the refund shall be equal to the applicable per unit fee ($26,046.51
26
and/or $63,000) for each such residential unit for which such fees have been paid and for which
building permits and/or certificates of occupancy are not available. As used herein, the term
"City Action' shall mean affirmative action taken by City to reduce the Sewer and Water Service
currently available, and shall not include any action or event that is outside City's control,
including without limitation, any action taken or regulation adopted by any other governmental
agency or City ordinances, resolutions, regulations, and official policies that are necessary to
enable City to comply with any overriding federal or state laws and regulations. The refunds
referred to in this Section 9 shall be made at the time Landowner is otherwise entitled to issuance
of the building permit or certificate of occupancy, whichever is applicable, and City is not able to
issue the permit because of the City Action taken.
10. Project as Private Undertaking. The development of the Project is a private undertaking.
Neither Party is acting as the agent of the other in any respect, and each Party is an independent
contracting entity with respect to the terms, covenants, and conditions contained in this
Agreement. This Agreement forms no partnership, joint venture, or other association of any
kind. The only relationship between the Parties is that of a government entity regulating the
development of private property by the owner of the property.
11. Effective Date: Term. This Agreement shall not become effective and neither Party shall
have any rights or obligations hereunder, with the exception of the obligations in Section 4.8 of
this Agreement to execute the Option Agreement, until the "Effective Date," which for purposes
of this Agreement shall mean the thirty -first (3V) day following the approval or adoption of the
last Regulation by the City Council, or such other date that the last Regulation becomes effective
in accordance with applicable law. As used herein, the term "Regulation" shall mean this
Agreement; the AHIP; the Development Plan, including the design regulations; and the Transfer
of Development Rights Resolution. The Parties shall cooperate by executing in recordable form
an appropriate memorandum providing notice of the occurrence of the Effective Date as soon as
the Effective Date has occurred. The Parties acknowledge that the resolutions and ordinances
adopting the AHIP; the Development Plan, including the design regulations; and the Transfer of
Development Rights provide that the foregoing plans and regulations do not become operative
until the Effective Date of this Agreement.
The term of this Agreement (' I'erm'� shall commence on the Effective Date and shall
continue thereafter until the earlier of the following: (i) the date that is twenty (20) years after
the Effective Date; or (ii) the date this Agreement is terminated pursuant to Sections 12 or 15.1
of this Agreement.
12. Amendment or Cancellation of Agreement. Other than modifications of this Agreement
under Section 8.3 of this Agreement, this Agreement may be amended or canceled in whole or in
part only by mutual written and executed consent of the Parties in compliance with California
Government Code section 65868 and City of Newport Beach Municipal Code section 15.45.060
or by unilateral termination by City in the event of an uncured default of Landowner.
13. Enforcement. Unless amended or canceled as provided in Section 12 of this Agreement,
or modified or suspended pursuant to California Government Code section 65869.5, this
Agreement is enforceable by either Party despite any change in any applicable general or specific
plan, zoning, subdivision, or building regulation or other applicable ordinance or regulation
0041
adopted by City (including by City's electorate) that purports to apply to any or all of the
Property.
14. Periodic Review of Compliance. The Parties shall review this Agreement at least once
every 12 months from the Effective Date consistent with California Government Code sections
65865 and 65865.1 and City of Newport Beach Municipal Code section 15.45.070. At the
reviews, Landowner shall demonstrate its good faith compliance with this Agreement and shall
document the current status of its entitlement use and its provision of the public benefits referred
to in Section 4 of this Agreement. Landowner also agrees to furnish evidence of good faith
compliance as City may require in the reasonable exercise of its discretion and after reasonable
notice to Landowner.
15. Events of Default.
15.1 Default by Landowner. Pursuant to California Goverment Code section
65865. 1, if City determines following a noticed public hearing and on the basis of
substantial evidence that Landowner has not complied in good faith with Landowner's
obligations pursuant to this Agreement, City shall by written notice to Landowner specify
the manner in which Landowner has failed to comply and state the steps Landowner must
take to bring itself into compliance. If Landowner does not commence all steps
reasonably necessary to bring itself into compliance as required and diligently pursue
steps to completion within thirty (30) days after receipt of the written notice from City
specifying the manner in which Landowner has failed to comply, then Landowner shall
be deemed to be in default under the terms of this Agreement. City may then: (1) seek a
modification of this Agreement, (2) terminate this Agreement, or (3) seek any other
available remedies as provided in Section 15.3 of this Agreement.
15.2 Default by City. If City has not complied with any of its obligations and
limitations under this Agreement, Landowner shall by written notice to City specify the
manner in which City has failed to comply and state the steps necessary for City to bring
itself into compliance. If City does not commence all steps reasonably necessary to bring
itself into compliance as required and diligently pursue steps to completion within thirty
(30) days after receipt of the written notice from Landowner specifying the manner in
which City has failed to comply, then City shall be deemed to be in default under the
terms of this Agreement. Landowner may then exercise any or all of the following
remedies: (1) seek a modification of this Agreement; (2) withhold the following
payments that might be otherwise due to City under this Agreement: the Per Unit Park
Fee, the Initial Public Benefit Fee, the Initial Pack Fee, and/or the Circulation
Enhancement Contribution until such default has been cured; and/or (3) seek a specific
performance or similar equitable remedy as provided in Section 15.3 of this Agreement.
Except as provided below, if City adopts or enforces any moratorium, de facto or de jure,
or other similar limitation (whether relating to the rate, timing, or sequencing of the
development or construction of all or any part of the Project and whether enacted by
initiative or otherwise) affecting the processing or approval of subdivision maps, building
permits, occupancy certificates, or other entitlement to use which is applied to the
Project, then Landowner may exercise any or all of the following remedies : (1)
immediately seek a modification of this Agreement; (2) withhold the following payments
that might be otherwise due to City under this Agreement: the Initial Public Benefit Fee,
ii
the Initial Park Fee, and/or the Circulation Enhancement Contribution, until City reverses
its enactment of such moratorium or limitation; and/or (3) seek any other available
remedy as provided in Section 15.3 of this Agreement. City shall not be in default
pursuant to this Section if:
(1) It adopts a temporary City-wide moratorium on development due to its
inability to supply sufficient water, sewer or other utilities to then- current
customers as necessary to maintain minimum levels of health, safety, and
sanitation;
(2) It is required to enforce a moratorium because of a law, rule, regulation, or
plan identified in Section 8.3 of this Agreement; or
(3) The enactment of the moratorium or other limitation is the result of a court
order.
15.3 Specific Performance and Damages Remedies. Due to the size, nature, and scope
of the Project and the potential impracticality or impossibility of restoring the Property to
its natural condition once implementation of this Agreement has begun, the Parties
acknowledge that, except as provided in this Section 15.3 and in Section 15.4 of this
Agreement, money damages and remedies at law generally are inadequate and that
specific performance is appropriate for the enforcement of this Agreement. The remedy
of specific performance or, in the alternative, a writ of mandate, shall be the sole and
exclusive remedy available to either Party in the event of the. default or alleged default by
the other, with the exception that City shall be entitled to damages against Landowner for
Landowner's breach or its obligations under Sections 18 or 19 of this Agreement, and
Landowner shall be entitled to recover the amount of any refund due for City's failure to
provide any refund due under Section 9 of this Agreement but shall not be entitled to
recover any other damages. The limitations on the remedy of damages in this Agreement
shall not prevent City from enforcing Landowner's monetary obligations hereunder, nor
shall it affect the ability of either Party to recover damages for breach of any of the
separate agreements contemplated by this Agreement, including without limitation the
Parking Structure Easement Agreement and City Hall Option Agreement.
15.4 Limited Recovery of Legal Expenses by Prevailing Party in Any Action. In any
judicial proceeding, arbitration, or mediation (collectively, "Action') between the Parties
that seeks to enforce the provisions of this Agreement, the prevailing Party shall recover
all of its actual and reasonable costs and expenses, regardless of whether they would be
recoverable under California Code of Civil Procedure section 1033.5 or California Civil
Code section 1717 in the absence of this Agreement. These costs and expenses include
expert witness fees, attorneys' fees, and costs of investigation and preparation before
initiation of the Action. The right to recover these costs and expenses shall accrue upon
initiation of the Action, regardless of whether the Action is prosecuted to a final
judgment or decision.
16. Cooperation Each Parry covenants to take reasonable actions and execute all documents
that may be necessary to achieve the purposes and objectives of this Agreement.
Bill
17. Force Maieure. Neither Party shall be deemed to be in default where failure or delay in
performance of any of its obligations under this Agreement is caused, through no fault of the
Party whose performance is prevented or delayed, by floods, earthquakes, other acts of God,
fires, wars, riots or similar hostilities, strikes or other labor difficulties, state or federal
regulations, or court actions. Except as specified above, nonperformance shall not be excused
because of the act or omission of a third person. In no event shall the occurrence of an event of
force majeure operate to extend the Term of this Agreement.
18. Indemnity. Landowner agrees to indemnify, defend, and hold harmless City, City's
designee, and their respective elected and appointed councils, boards, commissions, officers,
agents, and employees from all actions, suits, claims, liabilities, losses, damages, penalties,
obligations, and expenses (including but not limited to attorneys' fees and costs) that may arise,
directly or indirectly, from the acts, omissions, or operations of Landowner or Landowner's
agents, contractors, subcontractors, agents, or employees pursuant to this Agreement. City shall
have the right to select and retain counsel to defend any actions, and Landowner shall pay the
reasonable cost for this defense. The indemnity provisions in this. Section 18 shall survive
termination of this Agreement.
19. Third Party Legal Challenge. If a third party brings a legal action challenging the validity
or enforceability of any provision of this Agreement or the Project approvals under the
Development Regulations ("Third Party Legal Challenge'), City shall defend the Third Party
Legal Challenge, and Landowner shall be responsible for the reasonable legal expenses incurred
by City in connection with the challenge. As long as Landowner is not in default under this
Agreement, City shall not allow any default or judgment to be taken against it or compromise the
defense of the action without Landowner's prior written approval. Landowner shall also have
the right to settle a Third Party Legal Challenge, provided that nothing in this Agreement shall
authorize Landowner to settle the Third Party Legal Challenge on terms that would constitute an
amendment or modification of this Agreement or the AHIP; the Development Plan, including the
design regulations; or the Transfer of Development Rights Resolution unless City approves the
amendment or modification consistent with applicable legal requirements. City reserves its fall
legislative discretion to make this approval.
20. Mortgagee Rights.
20.1 Encumbrances on Property. The Parties agree that this Agreement shall not
prevent or limit Landowner in any manner from encumbering the Property, any part of
the Property, or any improvements on the Property with any Mortgage securing financing
with respect to the construction, development, use, or operation of the Project.
20.2 Mortgagee Protection. This Agreement shall he superior and senior to the lien of
any Mortgage. Nevertheless, no breach of this Agreement shall defeat, render invalid,
diminish, or impair the lien of any Mortgage made in good faith and for value. Any
acquisition or acceptance of title or any right or interest in the Property or part of the
Property by a Mortgagee (whether due to foreclosure, trustee's sale, deed in lieu of
foreclosure, lease termination, or otherwise) shall be subject to all of the terms and
conditions of this Agreement. Any Mortgagee who takes title to the Property or any part
of the Property shall be entitled to the benefits arising under this Agreement.
Kill
20.3 Mortgagee Not Obligated. Notwithstanding the provisions of this Section 20.3, a
Mortgagee will not have any obligation or duty under the terns of this Agreement to
perform the obligations of Landowner or other affirmative covenants of Landowner, or to
guarantee this performance except that:
(1) The Mortgagee shall have no right to develop the Property under the
Development Regulations without fully complying with the terms of this
Agreement; and
(2) To the extent that any covenant to be performed by Landowner is a condition
to the performance of a covenant by City, that performance shall continue to be a
condition precedent to City's performance.
20.4 Notice of Default to Mortgagee; Rigbt of Mortgagee to Cure. Each Mortgagee
shall, upon written request to City, be entitled to receive written notice from City of
(1) The results of the periodic review of compliance specified in Section 14 of this
Agreement, and
(2) Any default by Landowner of its obligations set forth in this Agreement.
Each Mortgagee shall have a further right, but not an obligation, to cure the default
within ten (10) days after receiving notice of monetary defaults and within thirty (30)
days after receiving notice of non - monetary defaults. If Mortgagee can only remedy or
cure the default by obtaining possession of the Property, then Mortgagee shall have the
right to seek to obtain possession with diligence and continuity through a receiver or
otherwise, and to remedy or cure the default within thirty (30) days after obtaining
possession. Except in case of emergency or to protect the public health or safety, City
may not exercise any of its judicial remedies set forth in this Agreement until expiration
of the thirty (30) -day period. But in the case of a default that cannot with diligence be
remedied or cured within thirty (30) days, the Mortgagee shall have additional time as is
reasonably necessary to remedy or cure the default, provided Mortgagee promptly
commences to cure the default within thirty (30) days and diligently prosecutes the cure
to completion. Landowner shall not be released from performing its obligations in
Sections 3 and 4 of this Agreement in the event of a foreclosure by a Mortgagee.
21. Transfers and Assignments.
21.1 Right to Assign. Subject to the last sentence of this Section 21.1, Landowner
shall have the right to sell, lease, transfer, or assign the Property in whole or in part to any
person, partnership, joint venture, fine, or corporation at any time during the Term of this
Agreement without the consent of City, provided that no partial transfer shall violate the
Subdivision Map Act (California Government Code sections 66410 - 66499.58). Upon the
effective date of any such sale, lease, transfer, or assignment of the Property, the
transferor /assignor shall notify of the name and address of the transferee. Any
assignment of this Agreement must be pursuant to a sale or transfer of the Property. Any
sale or transfer of the Property shall include the assignment and assumption of the rights,
duties, and obligations arising from this Agreement to the transferee with respect to that
part of the Property transferred. Landowner shall no longer be obligated under this
31
Agreement for the part of the Property that was sold or transferred if Landowner is not in
default under this Agreement at the time of the sale or transfer. In no event, however,
shall Landowner be relieved from its obligations under this Agreement to pay the Public
Benefit Fee, Park Fees, and Fair Share Traffic Fees or to fulfill its obligations under
Sections 3 and 4 of this Agreement. Notwithstanding the foregoing, from and after the
date of this Agreement, Landowner shall not have the right to sell, lease, transfer, or
assign (i) the Option Site until the expiration of the Option Period without City having
elected to exercise the option to acquire the Option Site, or (ii) the Parking Structure Site
until the expiration of the Option Period without City having elected to exercise the
option, or if City does exercise the Option, until the construction of the Parking Structure
is complete and the Parking Structure is operational.
21.2 Agreement Binding on Successors and Assigns. The burdens of this Agreement
are binding upon, and the benefits of this Agreement inure to, all successors in interest of
the Parties to this Agreement, and constitute covenants that run with the Property. In
order to provide continued notice, the Parties will record this Agreement and any
subsequent amendments to it.
22. Estoppel Certificate. At any time, either Party may deliver written notice to the other
Party requesting that the Party certify in writing that, to the best of its knowledge:
(1) This Agreement is in full force and effect and is binding on the Party;
(2) This Agreement has not been amended or modified either orally or in writing. If this
Agreement has been amended, the Party providing the certification shall identify the
amendments; and
(3) The requesting Party is not in default in the performance of its obligations under this
Agreement. If the requesting Party is in default, the other Party must describe the nature
and amount of the default.
The requesting Party shall execute and return the certificate within sixty (60) days following
receipt. Any assignee of a Party's rights and obligations hereunder, as referred to in this Section
22, and any Mortgagee, shall be entitled to rely on the certificate.
23. Further Actions and Instruments. Each Party shall cooperate with and provide reasonable
assistance to the other Party to the extent consistent with and necessary to implement this
Agreement. Upon the request of a Party at any time, the other Party shall promptly execute, with
acknowledgement or affidavit if reasonably required, and file or record the required instruments
and writings and take any actions as may be reasonably necessary to implement this Agreement
or to evidence or consummate the transactions contemplated by this Agreement.
24. Notices. Any notice or demand that shall be required or permitted by law or any
provision of this Agreement shall be in writing. If the notice or demand will be served upon a
Party, it either shall be personally delivered to the Party; deposited in the United States mail,
certified, return receipt requested, and postage prepaid; or delivered by a reliable courier service
that provides a receipt showing date and time of delivery with courier charges prepaid. The
notice or demand shall be addressed as follows:
W
TO CITY: City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, California 92663 -3884
Attn: City Manager
With a copy to: City Attorney
City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, California 92663 -3884
TO LANDOWNER: The Irvine Company LLC
550 Newport Center Drive
Newport Beach, California 92660 -0015
Attn: General Counsel
With a copy to: Latham & Watkins LLP
600 West Broadway, Suite 1800
San Diego, California 92101 -3375
Attn: Christopher W. Garrett
Either Party may change the address stated in this Section 24 by notice to the other Party in the
manner provided in this Section 24, and notices shall be addressed and submitted to the new
address. Notice shall be deemed to be delivered upon the earlier of. (1) the date received or (2)
three business days after deposit in the mail as provided above.
25. Rules of Construction and Miscellaneous Terms.
25.1 Rules of Construction. The singular includes the plural; the masculine and neuter
include the feminine; "shall" is mandatory; "may" is permissive.
25.2 Time Is of the Essence. Time is of the essence regarding each provision of this
Agreement in which time is an element.
25.3 Waiver. Failure by a Party to insist upon the strict performance of any of the
provisions of this Agreement by the other Party, and failure by a Party to exercise its
rights upon a default by the other Party, shall not constitute a waiver of that Party's right
to demand strict compliance by the other Party in the future.
25.4 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be identical and may be introduced in evidence or used for any other
purpose without any other counterpart, but all of which shall together constitute one and
the same agreement.
25.5 Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, between the
Parties with respect to the subject matter addressed in this Agreement.
33
25.6 Severabilitv. The Parties intend that each and every obligation of the Parties is
interdependent and interrelated with the other, and if any provision of this Agreement or
the application of the provision to any party or circumstances shall be held invalid or
unenforceable to any extent, it is the intention of the Parties. that the remainder of this
Agreement or the application of the provision to persons or circumstances shall be
rendered invalid or unenforceable. The Parties intend that neither shall receive any of the
benefits of the Agreement without the full performance of all of the obligations provided
for under this Agreement. Without limiting the generality of the foregoing, the Parties
intend.that Landowner shall not receive any of the benefits of this Agreement if any of
Landowner's obligations are rendered void or unenforceable as the result of any third
party litigation, and City shall be free to exercise its legislative discretion to amend or
repeal the development regulations applicable to the Property and Landowner shall
cooperate as required, despite this Agreement, should third party litigation result in the
nonperformance of Landowner's obligations under this Agreement.
25.7 Construction. This Agreement has been drafted after extensive negotiation and
revision. Both City and Landowner are sophisticated parties who were represented by
independent counsel throughout the negotiations. City and Landowner each agree and
acknowledge that the terms of this Agreement are fair and reasonable, taking into account
their respective purposes, terms, and conditions. This Agreement shall therefore be
construed as a whole consistent with its fair meaning, and no principle or presumption of
contract construction or interpretation shall be used to construe the whole or any part of
this Agreement in favor of or against either Party.
25.8 Constructive Notice and Acceptance. Every person who now or later owns or
acquires any right, title, or interest in any part of the Project or the Property is and shall
be conclusively deemed to have consented and agreed to every provision of this
Agreement. This Section 25.8 applies regardless of whether the instrument by which the
person acquires the interest references this Agreement.
25.9 No 'third Party Beneficiaries. The only parties to this Agreement are City and
Landowner. This Agreement does not involve any third party beneficiaries, and it is not
intended and shall not be construed to benefit or be enforceable by any other person or
entity.
25.10 Applicable Law and Venue. This Agreement shall be construed and enforced
consistent with the internal laws of the State of California. Any action at law or in equity
arising under this Agreement or brought by any Party for the purpose of enforcing,
construing, or determining the validity of any provision of this Agreement shall be filed
and tried in the Superior Court of the County of Orange, State of California, or the United
States District Court for the Central District of California. The Parties waive all
provisions of law providing for the removal or change of venue to any other court.
25.11 Non - Liability of City Officers and Employees. No official, officer, employee,
agent, or representative of City shall be personally liable to Landowner or its successors
and assigns for any loss arising out of or connected with this Agreement or the
Development Regulations.
01
25.12 Section Headinus. All section headings and subheadings are inserted for
convenience only and shall not affect construction or interpretation of this Agreement.
25.13 Incorporation of Recitals and Exhibits. Recitals A through S are incorporated into
this Agreement by this reference. Exhibits A through H are attached to this Agreement
and incorporated by this reference as follows:
EXHIBIT
DESIGNATION
DESCRIPTION
A
Legal Description of Property
B
Depiction of the Property
C
Development Status, Transportation Improvements and
Open Space Dedications Under the CIOSA and the
Bonita Canyon Development Agreement
D
Affordable Housing Implementation Plan
E
Location of Option Site and Associated Parking Structure
F
Option Agreement
G
Depiction of Lower Castaways Site
H
Existing Development on Property
26. Authority to Execute. The persons executing this Agreement warrant and represent that
they have the authority to execute this Agreement on behalf of the entity for which they are
executing this Agreement. They further warrant and represent that they have the authority to
bind their respective Party to the performance of its obligations under this Agreement.
27. Recordation. This Agreement and any amendment, modification, or cancellation to it
shall be recorded in the Office of the County Recorder of the County of Orange, by City Clerk
within the period required by California Government Code section 65868.5 and City of Newport
Beach Municipal Code section 15.45.090.
[SIGNATURE PAGE FOLLOWS]
35
SIGNATURE PAGE TO
ZONING IMPLEMENTATION AND PUBLIC BENEFIT SPACE AGREEMENT
ATTEST:
City Clerk
APPROVED AS TO FORM:
Robin Clauson
City Attorney
"LANDOWNER"
THE IRVINE COMPANY LLC
m
"CITY"
36
CITY OF NEWPORT BEACH
m
Its: Mayor
STATE OF CALIFORNIA
COUNTY OF ORANGE
On , before me, the undersigned, a Notary Public in and for said State,
personally appeared and , personally known
to me to be the persons whose names are subscribed to the within instrument and acknowledged
to me that they executed the same in their authorized capacities and that by their signature on the
instrument the persons, or the entity upon behalf of which the persons acted, executed the
instrument.
Witness my hand and official seal.
Notary Public in and for
said County and State
STATE OF CALIFORNIA
COUNTY OF ORANGE
On , before me, the undersigned, a Notary Public in and for said State,
personally appeared and , personally known
to me to be the persons whose names are subscribed to the within instrument and acknowledged
to me that they executed the same in their authorized capacities and that by their signature on the
instrument the persons, or the entity upon behalf of which the persons acted, executed the
instrument.
Witness my hand and official seal.
Notary Public in and for
said County and State
EXHIBIT A:
LEGAL DESCRIPTION OF PROPER'T'Y
Newport Center Block 500:
ixef.\1)o ej131WIus] N
Real property in the City of Newport Beach, County of Orange, State of California, described as
follows:
PARCEL NO. 1:
THOSE PORTIONS OF BLOCK 93 OF IRVINE'S SUBDIVISION, IN THE CITY OF
NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP
FILED IN BOOK 1, PAGE 88, OF MISCELLANEOUS RECORD MAPS IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
PARCEL A: (APN 442- 081 -07)
BEGINNING AT THE. EASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE
NORTHERLY RIGHT -OF -WAY LINE OF SAN NICOLAS DRIVE SHOWN AS "SOUTH 800
14'38" EAST 91.45" ON MAP OF TRACT NO. 6015 FILED IN BOOK 239, PAGES 28
THROUGH 41 OF MISCELLANEOUS MAPS, IN THE OFFICE OF SAID COUNTY
RECORDER; THENCE ALONG THE RIGHT -OF -WAY LINES OF SAID SAN NICOLAS
DRIVE, NEWPORT CENTER DRIVE EAST AND SANTA ROSA DRIVE, AS SHOWN ON
SAID MAP, THE FOLLOWING COURSES AND DISTANCES; NORTH 800 14'38" WEST
91.45 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING
A RADIUS OF 25.00 FEET; NORTHWESTERLY 38.16 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 870 26'49" TO THE BEGINNING OF A REVERSE CURVE
CONCAVE WESTERLY HAVING A RADIUS OF 1670.00 FEET; NORTHERLY 472.13
FEET ALONG SAID CURVE THROUGH AN ANGLE OF 160 11'54" TO THE BEGINNING
OF A REVERSE CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 25.00
FEET; NORTHEASTERLY 38.16 FEET ALONG SAID CURVE THROUGH AN ANGLE OF
870 26' 49'; NORTH 780 27'06" EAST 69.97 FEET TO THE BEGINNING OF A CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET;
NORTHEASTERLY 195.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 130
33'11 " TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHWESTERLY
HAVING A RADIUS OF 25.00 FEET, A.RADIAL TO SAID POINT BEARS NORTH 350 38'
46" EAST; THENCE SOUTHEASTERLY 4.81 FEET ALONG SAID CURVE CONCAVE
THROUGH AN ANGLE OF 110 01'42" TO THE BEGINNING OF A REVERSE CURVE
CONCAVE NORTHEASTERLY HAVING A RADIUS OF 161.00 FEET; THENCE
SOUTHEASTERLY 91.20 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 320 27'
16" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY
HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHERLY 32.67 FEET ALONG SAID
CURVE THROUGH AN ANGLE OF 740 53'02"; THENCE SOUTH 00 53'46" EAST 25.50
FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A
RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 900 00' 00" TO THE BEGINNING OF A REVERSE CURVE
CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 2.00 FEET; THENCE
SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 0'
00'; THENCE SOUTH 00 5314611 EAST 179.75 FEET TO THE BEGINNING OF A CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 10.00 FEET; THENCE
SOUTHWESTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45'
40'; THENCE.SOUTH 360 51'54" WEST 9.49 FEET TO THE BEGINNING OF A CURVE
CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 10.00 FEET; THENCE
SOUTHERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45'40";
THENCE SOUTH 00 53'46" EAST 31.50 FEET TO POINT "A" HEREINAFTER REFERRED
TO; THENCE CONTINUING SOUTH 00 53'46" EAST 31.50 FEET TO THE BEGINNING
OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 10.00 FEET,
THENCE SOUTHEASTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE
OF 370 45'40"; THENCE SOUTH 380 3.9'26" EAST 9.49 FEET TO THE BEGINNING OF A
CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 10.00 FEET; THENCE
SOUTHERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45'40";
THENCE SOUTH 00 53'46" EAST 212.75 FEET TO THE BEGINNING OF A CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE
SOUTHWESTERLY 24.40 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 550 55'
53" TO THE BEGINNING OF A REVERSE CONCAVE SOUTHEASTERLY HAVING A
RADIUS OF 147.00 FEET; THENCE SOUTHWESTERLY 66.40 FEET ALONG SAID
CURVE THROUGH AN ANGLE OF 250 52'43" TO THE BEGINNING OF A REVERSE
CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE
SOUTHWESTERLY 9.78 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 220 24'
25" TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHERLY HAVING A
RADIUS OF 950.50 FEET AND THE NORTHERLY RIGHT -OF -WAY LINE OF SAID SAN
NICOLAS DRIVE, A RADIAL TO SAID POINT BEARS NORTH 220 12'47" EAST;
THENCE WESTERLY 206.65 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 120
27'25" TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL:
COMMENCING AT "POINT A" ABOVE DESCRIBED; THENCE SOUTH 890 06'14" WEST
5.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 00 53'46" WEST
52.50 FEET; THENCE SOUTH 890 06,14" WEST 120.00 FEET; THENCE SOUTH 00 53'46"
EAST 105.00 FEET; THENCE NORTH 890 06' 14" EAST 120.00 FEET, THENCE NORTH 00
53'46" WEST 52.50 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL B: (PORTION OF 442- 081 -07)
COMMENCING AT "POINT A" DESCRIBED IN PARCEL A ABOVE; THENCE SOUTH
890 06'14" WEST 5.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 00
53'46" WEST 52.50 FEET; THENCE SOUTH 890 06' 14" WEST 120.00 FEET; THENCE 00
53'46" EAST 105.00 FEET; THENCE NORTH 890 06'14" EAST 120.00 FEET; THENCE
NORTH 00 53.46'46" WEST 52.50 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL C: (APN 442- 081 -08)
COMMENCING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE
SOUTHERLY RIGHT OF WAY LINE OF SANTA ROSA DRIVE SHOWN AS "NORTH 780
27'06" EAST 69.97'" ON A MAP OF TRACT 6015 FILED IN BOOK 239, PAGES 28
THROUGH 41 OF MISCELLANEOUS MAPS IN THE OFFICE OF SAID COUNTY
RECORDER, SAID EASTERLY TERMINUS BEING THE BEGINNING OF A CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET; THENCE
NORTHEASTERLY 195.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 130
33'1 I" TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHWESTERLY
HAVING A RADIUS OF 25.00 FEET AND THE TRUE POINT OF BEGINNING, A RADIAL
TO SAID POINT BEARS NORTH 350 38'46" EAST; THENCE SOUTHEASTERLY 4.81
FEET ALONG SAID CURVE THROUGH AN ANGLE OF 110 01' 42" TO THE BEGINNING
OF A REVERSE CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 161.00
FEET; THENCE SOUTHEASTERLY 91.20 FEET ALONG SAID CURVE THROUGH AN
ANGLE OF 320 27' 16" TO THE BEGINNING OF A REVERSE CURVE CONCAVE
SOUTHWESTERLY HAVING A.RADW S OF 25.00 FEET; THENCE SOUTHERLY 32.67
FEET ALONG SAID CURVE THROUGH AN ANGLE OF 740 53'02"; THENCE SOUTH 00
53'46" EAST 25.50 FEET TO THE BEGINNING OF A CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY
3.24 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00'00" TO THE
BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY HAVING A
RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 900 00'00"; THENCE SOUTH 00 53'46" EAST 179.75 FEET TO
THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF
10.00 FEET; THENCE SOUTHWESTERLY 6.59 FEET ALONG SAID CURVE THROUGH
AN ANGLE OF 370 45'40"; THENCE SOUTH 360 51'54" WEST 9.49 FEET TO THE
BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING.A RADIUS OF 10.00 -
FEET; THENCE SOUTHEASTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN
ANGLE OF 370 45'40"l- THENCE SOUTH 00 53'46" EAST 63.00 FEET TO THE
BEGINNING OF A CURVE CONCAVE NORTHEASTERLY.HAVING A RADIUS OF 10.00
FEET; THENCE SOUTHEASTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN
ANGLE OF 370 45'40"; THENCE SOUTH 380 39'26" EAST 9.49 FEET TO.THE
BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 10.00
FEET; THENCE SOUTHERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE
OF 370 45'40"; THENCE SOUTH 00 53146" EAST 212.75 FEET TO THE BEGINNING OF A
CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE
SOUTHWESTERLY 24.40 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 550 55'
53" TO THE BEGINNING OF A RADIUS CURVE CONCAVE SOUTHEASTERLY
HAVING A RADIUS OF 147.00 FEET; THENCE SOUTHWESTERLY 66.4 FEET ALONG
SAID CURVE THROUGH AN ANGLE OF 250 52'43" TO THE BEGINNING OF A
REVERSE CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET;
THENCE SOUTHWESTERLY 9.78 FEET ALONG SAID CURVE THROUGH AN ANGLE
OF 220 24' 25' TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHERLY
HAVING A RADIUS OF 950.50 FEET AND THE NORTHERLY RIGHT OF WAY LINE OF
SAN NICOLAS DRIVE ON SAID MAP OF TRACT 6015, A RADIAL TO SAID POINT
BEARS NORTH 22012'47" EAST; THENCE SOUTHEASTERLY 55.46 FEET ALONG
SAID CURVE AND SAID RIGHT OF WAY LINE THROUGH AN ANGLE OF 30 20'36" TO
A POINT ON A NON - TANGENT CURVE CONCAVE EASTERLY HAVING A RADIUS OF
25.00 FEET; A RADIAL TO SAID POINT BEARS SOUTH 86° 12'2P WEST; THENCE
NORTHERLY 9.44 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 210 37'37" TO
THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHEASTERLY HAVING A
RADIUS OF 95.00 FEET; THENCE NORTHEASTERLY 122.78 FEET ALONG SAID
CURVE THROUGH AN ANGLE OF 740 02'54" TO THE BEGINNING OF A COMPOUND
CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 262.03 FEET; THENCE
SOUTHEASTERLY 193.09 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 420
13'18"; THENCE SOUTH 450 53'46" EAST 109.58 FEET TO THE BEGINNING OF A
CURVE CONCAVE WESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE
SOUTHEASTERLY AND SOUTHWESTERLY 39.27 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 900 00'00"; THENCE SOUTH 440 06'14" WEST 100.91 FEET
TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS
OF 25.00 FEET; THENCE SOUTHWESTERLY 12.72 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 290 09'46", THENCE NON - TANGENT SOUTH 460 44'00"
EAST 56.70 FEET TO A POINT OF A NON - TANGENT CURVE CONCAVE
SOUTHEASTERLY HAVING A RADIUS OF 25.00 FEET, A RADIAL TO SAID POINT
BEARS NORTH 760 44'00" WEST; THENCE NORTHEASTERLY 13.45 FEET ALONG
SAID CURVE THROUGH AN ANGLE OF 300 50'14"; THENCE NORTH 440 06 14" EAST
99.45 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHERLY A RADIUS OF
25.00 FEET; THENCE NORTHEASTERLY AND SOUTHEASTERLY 39.27 FEET ALONG
SAID CURVE THROUGH AN ANGLE OF 900 00'00"; THENCE SOUTH 450 53'46" EAST
15.01 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A
RADIUS OF 40.00 FEET; THENCE SOUTHEASTERLY AND NORTHEASTERLY 62.83
FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00'00"; THENCE NORTH 440
06'14". EAST 289.00 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY
HAVING A RADIUS OF 40.00 FEET; THENCE NORTHEASTERLY AND
NORTHWESTERLY 62.83 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00'
0011; THENCE NORTH 450 5314611 WEST 254.09 FEET TO THE BEGINNING OF A CURVE
CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET; THENCE
NORTHWESTERLY AND NORTHEASTERLY 39.27 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 900 00'00" THENCE NORTH 440 06' 14" EAST 104.09 FEET
TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS
OF 25.00 FEET; THENCE NORTHEASTERLY 13.00 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 290 47'41" TO THE SOUTHWESTERLY RIGHT OF WAY
LINE OF SAN JOAQUIN HILLS ROAD AS SHOWN ON SAID MAP OF TRACT 6015;
THENCE NON - TANGENT NORTH 460 41'16" WEST ALONG SAID RIGHT OF WAY
LINE 48.72 FEET TO A POINT ON A NON - TANGENT CURVE IN THE BOUNDARY OF
THAT CERTAIN PARCEL SHOWN ON A MAP FILED IN BOOK 13, PAGE 41 OF
PARCEL MAPS IN THE OFFICE OF SAID COUNTY RECORDER, SAID CURVE BEING
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET, A RADIAL TO
SAID POINT BEARS SOUTH 760 12'47" EAST; THENCE SOUTHWESTERLY 13.23 FEET
ALONG SAID CURVE AND SAID BOUNDARY THROUGH AN ANGLE OF 300 19'01";
THENCE CONTINUING ALONG SAID BOUNDARY SOUTH 440 06'14" WEST 103.60
FEET TO THE BEGINNING OF A CURVE IN SAID BOUNDARY CONCAVE
NORTHERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY AND
NORTHWESTERLY 39.27 FEET ALONG SAID CURVE AND SAID BOUNDARY
THROUGH AN ANGLE OF 900 00'00"; THENCE NORTH 45° 53' 46" WEST ALONG SAID
4
BOUNDARY AND ITS NORTHWESTERLY PROLONGATION 190.00 FEET TO THE
BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF
313.67 FEET; THENCE NORTHWESTERLY 111.43 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 200 21'13" TO THE BEGINNING OF A REVERSE CURVE
CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 121.38 FEET; THENCE
NORTHWESTERLY 108.34 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 51°
08'21"; THENCE NORTH 760 40'54" WEST 100.00 FEET; THENCE NORTH 750 36'41
WEST 53.00 FEET TO THE BEGINNING OF A NON - TANGENT CURVE CONCAVE
NORTHEASTERLY HAVING A RADIUS OF 66.00 FEET; A RADIAL TO SAID POINT
BEARS SOUTH 130 19'06" WEST; THENCE NORTHWESTERLY 62.51 FEET ALONG
SAID CURVE THROUGH AN ANGLE OF 540 16' 02' TO THE BEGINNING OF A
COMPOUND CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET;
THENCE NORTHWESTERLY 9.79 FEET ALONG SAID CURVE THROUGH AN ANGLE
OF 220 26'33" TO A POINT ON THE SOUTHEASTERLY RIGHT OF WAY LINE OF SAID
SANTA ROSA DRIVE, SAID POINT OF BEGINNING ON A CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET, A RADIAL TO SAID POINT
BEARS SOUTH 290 13'23" EAST; THENCE.SOUTHWESTERLY 59.38 FEET ALONG
SAID CURVE AND SAID RIGHT OF WAY LINE THROUGH AN ANGLE OF 40 07'18" TO
THE TRUE POINT OF BEGINNING.
PARCEL D: (APN 442- 081 -06)
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE
NORTHERLY RIGHT OF WAY LINE OF SAN NICOLAS DRIVE SHOWN AS "SOUTH 800
14'38" EAST 91.45 "' ON A MAP OF TRACT 6015 FILED IN BOOK 239, PAGES 28
THROUGH 41 OF MISCELLANEOUS MAPS IN THE OFFICE OF SAID COUNTY
RECORDER, SAID EASTERLY TERMINUS BEING THE BEGINNING OF A CURVE
CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 950.50 FEET; THENCE
SOUTHEASTERLY 262.11 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 15°
48'01 " TO A POINT ON A NON - TANGENT CURVE CONCAVE EASTERLY HAVING A
RADIUS OF 25.00 FEET AND THE TRUE POINT OF BEGINNING, A RADIAL TO SAID
POINT BEARS 860 12'25" WEST; THENCE NORTHERLY 9.44 FEET ALONG SAID
CURVE THROUGH AN ANGLE OF 210 37'37" TO THE BEGINNING OF A COMPOUND
CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 95.00 FEET; THENCE
NORTHEASTERLY 122.78 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 740
02'54" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHWESTERLY
HAVING A RADIUS OF 262.03 FEET; THENCE SOUTHEASTERLY 193:09 FEET ALONG
SAID CURVE THROUGH AN ANGLE OF 420 13'18"; THENCE SOUTH 450 53'46" EAST
109.58 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A
RADIUS OF 25.00 FEET; THENCE SOUTHEASTERLY AND SOUTHWESTERLY 39.27
FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00'00"; THENCE SOUTH 440
06' 14" WEST 100.91 FEET TO THE BEGINNING OF A CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY
12.72 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 290 09'46"; THENCE NON -
TANGENT NORTH 460 44'00" WEST 34.74 FEET TO THE BEGINNING OF A CURVE
CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 950.50 FEET AND BEING THE
SOUTHEASTERLY CONTINUATION OF THE NORTHERLY RIGHT OF WAY LINE OF
SAID SAN NICOLAS DRIVE; THENCE NORTHWESTERLY 293.80 FEET ALONG SAID
CURVE THROUGH AN ANGLE OF 17" 42'37" TO THE TRUE POINT OF BEGINNING.
PARCEL E: (APN 442-08 1-01)
BEGINNING AT THE NORTHWESTERLY TERMINUS OF THAT CERTAIN COURSE IN
THE SOUTHWESTERLY RIGHT OF WAY LINE OF SAN JOAQUIN HILLS ROAD
SHOWN AS "SOUTH 46" 14'16" EAST 286.60 "' ON A MAP OF TRACT 6015 FILED IN
BOOK 239, PAGES 28 THROUGH 41 OF MISCELLANEOUS MAPS IN THE OFFICE OF
SAID COUNTY RECORDER; THENCE SOUTH 460 14'16" EAST 236.39 FEET ALONG
SAID RIGHT OF WAY LINE AND ALONG THE BOUNDARY OF THAT CERTAIN
PARCEL SHOWN ON A MAP FILED IN BOOK 13, PAGE 41 OF PARCEL MAPS IN THE
OFFICE OF THE COUNTY RECORDER TO A POINT ON A NON - TANGENT CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; A RADIAL TO
SAID POINT BEARS SOUTH 760 12'47" EAST; THENCE SOUTHWESTERLY 13.23 FEET
ALONG SAID CURVE AND SAID BOUNDARY THROUGH AN ANGLE OF 300 19'01";
THENCE CONTINUING ALONG SAID BOUNDARY SOUTH 440 06'14" WEST 103.60
FEET TO THE BEGINNING OF A CURVE IN SAID BOUNDARY CONCAVE
NORTHERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY AND
NORTHWESTERLY 39.27 FEET ALONG SAID CURVE AND SAID BOUNDARY
THROUGH AN ANGLE OF 900 00' 00" THENCE NORTH 450 53'46" WEST ALONG SAID
BOUNDARY AND ITS NORTHWESTERLY PROLONGATION 190.00 FEET TO THE
BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF
313.67 FEET; THENCE NORTHWESTERLY 111.43 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 200 21113" TO THE BEGINNING OF A REVERSE CURVE
CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 121.38 FEET; THENCE .
NORTHWESTERLY 108.34 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 51 °
08'21 "; THENCE NORTH 760 40'54" WEST 100.00 FEET; THENCE NORTH 750 36'41
WEST 53.00 FEET TO THE BEGINNING OF A NON - TANGENT CURVE CONCAVE
NORTHEASTERLY HAVING A RADIUS OF 66.00 FEET; A RADIAL TO SAID POINT
BEARS SOUTH 130 19'06" WEST; THENCE NORTHWESTERLY 62.51 FEET ALONG
SAID CURVE THROUGH AN ANGLE OF 540 16'02" TO THE BEGINNING OF A
COMPOUND CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET;
THENCE NORTHWESTERLY 9.19 FEET ALONG SAID CURVE THROUGH AN ANGLE
OF 220 26' 33" TO A POINT ON THE SOUTHEASTERLY RIGHT OF WAY LINE OF
SANTA ROSA DRIVE AS SHOWN ON THE MAP OF SAID TRACT 6015; SAID POINT
BEING ON A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50
FEET; A RADIAL TO SAID POINT BEARS SOUTH 290 13'23" EAST; THENCE
NORTHEASTERLY 190.16 FEET ALONG SAID CURVE AND SAID RIGHT OF WAY
LINE THROUGH AN ANGLE OF 130 11'54"; THENCE NORTH 470 37'43" EAST 2.20
FEET CONTINUING ALONG SAID RIGHT OF WAY LINE TO THE BEGINNING OF A
CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 25.00 FEET THENCE
NORTHEASTERLY AND SOUTHEASTERLY 38.96 FEET ALONG SAID CURVE
THROUGH AN ANGLE OF 890 17'26" TO THE BEGINNING OF A REVERSE CURVE
CONCAVE NORTHEASTERLY HAVING A RADIUS OF 6072.50 FEET AND THE
SOUTHWESTERLY RIGHT OF WAY LINE OF SAID SAN JOAQUIN HILLS ROAD;
THENCE SOUTHEASTERLY 329.29 FEET ALONG SAID CURVE AND SAID RIGHT OF
WAY LINE THROUGH AN ANGLE OF 30 06'25" TO THE POINT OF BEGINNING.
■
EXCEPTING THAT PORTION SHOWN ON A MAP FILED IN BOOK 13, PAGE 41,
PARCEL MAPS, RECORDS OF SAID COUNTY.
PARCEL F:
THE EASEMENT ON, OVER, UNDER AND ACROSS THE LAND DESCRIBED IN, AS
MORE PARTICULARLY DESCRIBED IN, AND SUBJECT TO THE LIMITATIONS
CONTAINED IN, THAT CERTAIN NEWPORT CENTER, BLOCK 500 EAST,
DECLARATION OF ACCESS EASEMENTS DATED AS SEPTEMBER 19, 1984, MADE BY
THE IRVINE COMPANY, A MICHIGAN CORPORATION, AND RECORDED ON
SEPTEMBER 27, 1984, IN THE OFFICIAL. RECORDS OF ORANGE COUNTY,
CALIFORNIA AS INSTRUMENT NO. 84-402558, TO THE EXTENT SUCH EASEMENTS
ARE APPURTENANT TO ANY OF THE ABOVE PARCELS A, B, C, D OR E DESCRIBED
ABOVE.
PARCEL NO. 4:
PARCEL A: (APN 442 -081 -05)
PARCEL 1, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 27, PAGE 43 OF PARCEL MAPS,
IN THE OFFICE OF THE COUNTY RECORDED OF SAID COUNTY.
EXCEPT ANY AND ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL
GAS RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN,
GEOTHERMAL STEAM, AND ALL PRODUCTS DERIVED FROM ANY OF THE
FOREGOING, THAT MAY BE WITHIN OR UNDER THE LAND, TOGETHER WITH THE
PERPETUAL RIGHT OF DRILLING, MINING, EXPLORING AND OPERATING
THEREFOR AND STORING IN AND REMOVING THE SAME FROM THE LAND OR
ANY OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY
DRILL AND MINE FROM LANDS OTHER THAN THOSE CONVEYED HEREBY, OIL OR
GAS WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE
SUBSURFACE OF THE LAND, AND TO BOTTOM SUCH WHIPSTOCKED OR
DIRECTIONALLY DRILLED WELLS, TUNNELS AND SHAFTS UNDER AND BENEATH
OR BEYOND THE EXTERIOR LIMITS THEREOF, AND TO REDRILL, RETUNNEL,
EQUIP, MAINTAIN, REPAIR, DEEPEN AND OPERATE ANY SUCH WELLS OR MINES;
WITHOUT, HOWEVER, THE RIGHT TO DRILL, MINE, STORE, EXPLORE AND
OPERATE THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE
OF THE LAND, AS RESERVED IN THE DEED FROM THE IRVINE COMPANY, A
MICHIGAN CORPORATION, RECORDED AUGUST 4, 1993 AS INSTRUMENT NO. 93-
0520486, OFFICIAL RECORDS.
ALSO EXCEPT ANY AND ALL WATER, RIGHTS OR INTERESTS THEREIN, NO
MATTER HOW ACQUIRED BY GRANTOR, AND OWNED OR USED BY GRANTOR IN
CONNECTION WITH OR WITH RESPECT TO THE LAND, TOGETHER WITH THE
RIGHT AND POWER TO EXPLORE, DRILL, REDRILL, REMOVE AND STORE THE
SAME FROM THE LAND OR TO DIVERT OR OTHERWISE UTILIZE SUCH WATER,
RIGHTS OR INTERESTS ON ANY OTHER PROPERTY OWNED OR LEASED BY
GRANTOR, WHETHER SUCH WATER RIGHTS SHALL BE RIPARIAN, OVERLYING,
APPROPRIATIVE, LITTORAL, PERCOLATING, PRESCRIPTIVE, ADJUDICATED,
STATUTORY OR CONTRACTUAL; BUT WITHOUT, HOWEVER, ANY RIGHT TO
ENTER UPON THE SURFACE OF THE LAND IN THE EXERCISE OF SUCH RIGHTS, AS
RESERVED IN THE DEED FROM THE IRVINE COMPANY, A MICHIGAN
CORPORATION, RECORDED AUGUST 4, 1993 AS INSTRUMENT NO. 93-0520486,
OFFICIAL RECORDS.
PARCEL B:
NONEXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE AND OTHER
PURPOSES, ALL AS DESCRIBED IN THE DECLARATION OF COVENANTS,
CONDITIONS, RESTRICTIONS AND EASEMENTS DATED JANUARY 8, 1992, AND
RECORDED ON JANUARY 17, 1992, AS INSTRUMENT NO. 92-032777, OFFICIAL
RECORDS OF ORANGE COUNTY, CALIFORNIA.
PARCEL NO. 6:
PARCEL A: (APNS 442- 081 -11, 442-081-12,442-081-13 AND 442- 081 -14)
PARCELS 1 THROUGH 4, INCLUSIVE OF PARCEL MAP NO. 84-706, IN THE CITY OF
NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP
FILED IN BOOK 192, PAGES 1 AND 2 OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
EXCEPT ANY AND ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS,
NATURAL GAS RIGHTS,. AND OTHER HYDROCARBONS BY WHATSOEVER NAME
KNOWN, GEOTHERMAL STEAM AND ALL PRODUCTS DERIVED FROM ANY OF THE
FOREGOING, THAT MAY BE WITHIN OR UNDER THE LAND, TOGETHER WITH THE
PERPETUAL RIGHT OF DRILLING, MINING, EXPLORING AND OPERATING
THEREFOR AND STORING IN AND REMOVING THE SAME FROM THE LAND OR
ANY OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY
DRILL AND MINE FROM LANDS OTHER THAN THOSE CONVEYED HEREBY, OIL OR
GAS WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE
SUBSURFACE OF THE LAND, AND TO BOTTOM SUCH WHIPSTOCKED OR
.DIRECTIONALLY DRILLED WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR
ACROSS THE SUBSURFACE OF THE LAND, AND TO BOTTOM SUCH WHIPSTOCKED
OR DIRECTIONALLY DRILLED WELLS, TUNNELS AND SHAFTS UNDER AND
BENEATH OR BEYOND THE EXTERIOR LIMITS THEREOF, AND TO REDRILL,
RETUNNEL, EQUIP, MAINTAIN, REPAIR, DEEPEN AND OPERATE ANY SUCH WELLS
OR MINES, WITHOUT, HOWEVER, THE RIGHT TO DRILL, MINE, STORE, EXPLORE
AND OPERATE THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE
SUBSURFACE OF THE LAND, AS RESERVED IN THE DEED FROM THE IRVINE
COMPANY, A MICHIGAN CORPORATION, RECORDED OCTOBER 16, 1984 AS
DOCUMENT NO. 84- 426594 OF OFFICIAL RECORDS.
ALSO EXCEPT ANY AND ALL WATER, RIGHTS OR INTERESTS THEREIN, NO
MATTER HOW ACQUIRED BY GRANTOR AND OWNED OR USED BY GRANTOR IN
CONNECTION WITH OR WITH RESPECT TO THE LAND, TOGETHER WITH THE
RIGHT AND POWER TO EXPLORE, DRILL, REDRILL, REMOVE AND STORE THE
SAME FROM THE LAND OR TO DIVERT OR OTHERWISE UTILIZE SUCH WATER,
RIGHTS OR INTERESTS ON ANY OTHER PROPERTY OWNED OR LEASED BY
GRANTOR, WHETHER SUCH WATER RIGHTS SHALL BE RIPARIAN, OVERLYING,
APPROPRIATIVE, LITTORAL, PERCOLATING, PRESCRIPTIVE, ADJUDICATED,
STATUTORY OR CONTRACTUAL, BUT WITHOUT, HOWEVER, ANY RIGHT TO
ENTER UPON THE SURFACE OF THE LAND IN THE EXERCISE OF SUCH RIGHTS, AS
RESERVED IN THE DEED FROM THE IRVINE COMPANY, A MICHIGAN
CORPORATION, RECORDED OCTOBER 16, 1984 AS DOCUMENT NO. 84-426594 OF
OFFICIAL RECORDS.
PARCEL B:
TOGETHER WITH THOSE EASEMENTS APPURTENANT THERETO, AS SET FORTH IN
PARAGRAPH 1 OF, AND AS DELINEATED ON EXHIBIT "B" ATTACHED TO THAT
CERTAIN DECLARATION OF ACCESS EASEMENTS RECORDED SEPTEMBER 27, 1984
AS DOCUMENT NO. 84402558 OF OFFICIAL RECORDS, UPON ALL THE TERMS,
COVENANTS AND CONDITIONS CONTAINED THEREIN.
PARCEL C:
NON - EXCLUSIVE EASEMENTS AND RIGHTS OF WAY FOR MOTOR VEHICLE
PARKING AND INCIDENTAL PURPOSES AS SAID EASEMENTS ARE SET FORTH IN
THAT CERTAIN DECLARATION OF RESTRICTIONS RECORDED FEBRUARY 8, 1985
AS DOCUMENT NO. 85-046416 OF OFFICIAL RECORDS, AS AMENDED MARCH 26,
1986 AS DOCUMENT NO. 86-120753 AND AS AMENDED MARCH 27, 2002 AS
DOCUMENT NO. 2002-254611, BOTH OF OFFICIAL RECORDS, UPON ALL THE
TERMS, COVENANTS AND CONDITION CONTAINED THEREIN.
PARCEL D:
TOGETHER WITH THOSE LIMITED NON - EXCLUSIVE RECIPROCAL EASEMENTS
APPURTENANT THERETO, AS SET FORTH IN ARTICLE H OF THAT CERTAIN
DECLARATION OF COVENANTS, CONDITIONS AND ESTABLISHMENT OF
RESTRICTIONS AND GRANT OF EASEMENTS RECORDED APRIL 11, 1986 AS
DOCUMENT NO. 86-145082 OF OFFICIAL RECORDS, UPON ALL THE TERMS,
COVENANTS AND CONDITIONS CONTAINED THEREIN.
Newport Center Block 600:
PARCEL 1: APN. 442- 101 -18
PARCEL 1, AS SHOWN ON EXHIBIT 'B" ATTACHED TO LOT LINE ADJUSTMENT NO.
94-2 RECORDED MARCH 9, 1994 AS INSTRUMENT NO. 94- 0167617 OF OFFICIAL
RECORDS OF ORANGE COUNTY, CALIFORNIA.
PARCEL 2: APNS. 442- 101 -11 AND 442- 101 -16
PARCEL B AND PARCEL 4, AS SHOWN ON A PARCEL MAP FILED IN BOOK 196,
PAGES 14 TROUGH 16 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
PARCEL 3: APNS. 442- 101 -19, 442- 101 -20, 442- 101 -21, 442- 101 -22, 442- 101 -23, 442- 101 -24
AND 442 - 101 -14
PARCELS 1 THROUGH 5 AND LETTERED LOTS A AND B, AS SHOWN ON A PARCEL
MAP FILED IN BOOK 295, PAGES 33 THROUGH 40 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 4: APNS. 442- 101 -09 AND 442- 101 -13
PARCELS 1 AND 2 AS SHOWN ON EXHIBIT 'B" ATTACHED TO CITY OF NEWPORT
BEACH LOT LINE ADJUSTMENT NO. 2002 -014 RECORDED JANUARY 9, 2003 AS
INSTRUMENT NO. 2003000028579 OF OFFICIAL RECORDS.
San Joaquin Plaza:
PARCEL 1: APN. 442- 261 -16 and 442- 261 -03
PARCEL 3, AS SHOWN ON A MAP FILED IN BOOK 81 PAGES 8 AND 9 OF PARCEL
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION OF SAID LAND LYING WITHIN PARCELS 1
THROUGH 4 AS SHOWN ON A MAP, FILED IN BOOK 175 PAGES 22 TO 24 OF PARCEL
MAPS, RECORDS OF SAID COUNTY.
PARCEL 2: APN. 442- 261 -01
PARCEL 2, AS SHOWN ON A MAP FILED IN BOOK 34, PAGE 40 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
10
PARCEL 3: APN. 442- 261 -19
LOT 1 AS SHOWN ON EXHIBIT " B " ATTACHED TO CITY OF NEWPORT BEACH LOT
LINE ADJUSTMENT NO. 98-12 RECORDED DECEMBER 29, 1998 AS INSTRUMENT NO.
1998089644 OF OFFICIAL RECORDS.
Fashion Island:
PARCEL A:
PARCELS 1 THROUGH 9 INCLUSIVE, IN THE CITY OF NEWPORT BEACH,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON PARCEL MAP NO. 86-
399, AS SHOWN ON A MAP FILED IN BOOK 221, PAGES 30 THROUGH 36, INCLUSIVE,
OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDED OF SAID COUNTY.
r yW".
LOTS 14 THROUGH 17 INCLUSIVE AND LOTS "Q ", "R ", "S ", "U ", "R -1 ", "R -2"
AND "R -3 ", OF TRACT NO. 6015, IN THE CITY OF NEWPORT BEACH, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 239, PAGES 28
TO 41 INCLUSIVE OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDED OF SAID COUNTY.
PARCEL C:
PARCEL 1, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE
OF CALIFORNIA, AS SHOWN ON A PARCEL MAP FILED IN BOOK 67, PAGES 2 AND 3
OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL D:
PARCEL 1, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE
OF CALIFORNIA, AS SHOWN ON A PARCEL MAP FILED IN BOOK 75, PAGE 48 OF
PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL E:
PARCEL 4 OF PARCEL MAPS, AS SHOWN ON A MAP FILED IN BOOK 67,
PAGES 2 AND 3 OF PARCEL MAPS AND LOT "W" OF TRACT NO. 6015, AS PER MAP
11
RECORDED IN BOOK 239, PAGE 28 THROUGH 41 OF MISCELLANEOUS MAPS, ALL
IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN THE
LAND DESCRIBED AS PARCELS 1 AND 2 OF THE CERTAIN LOT LINE ADJUSTMENT
N.B.L.L.A. 87 -3, RECORDED NOVEMBER 13, 1987 AS INSTRUMENT NO. 87- 640346,
OFFICIAL RECORDS OF SAID COUNTY.
PARCEL F:
ALL EASEMENTS, RIGHTS, BENEFITS AND PRIVILEGES (INCLUDING ALL
EASEMENTS OF USE, SUPPORT, ATTACHMENTS, ACCESS, PEDESTRIAN AND
VEHICULAR PASSAGE, ENCROACHMENT, AND OF ERECTION AND MAINTENANCE
OF UTILITY LINES) IN FAVOR OF AN FOR THE BENEFIT OF PARCELS A, B, C, D,
AND E ABOVE, ALL SET FORTH IN (A) THAT CERTAIN AMENDMENT IN ITS
ENTIRETY AND RESTATEMENT OF DECLARATION OR RESTRICTIONS AND
ESTABLISHMENT OF EASEMENTS DATED AS OF MARCH 26, 1976 BY AND AMONG
THE. IRVINE COMPANY, A MICHIGAN CORPORATION ( "CHH "), ADCOR REALTY
CORPORATION, A NEW YORK CORPORATION ( "ADCOW), AND FEDERATED
DEPARTMENT STORES, INC., A DELAWARE CORPORATION ( "FEDERATED'), AND
RECORDED ON MARCH 26, 1976 IN BOOK 11687, AT PAGES 1012 THROUGH 1043,
INCLUSIVE, OF THE OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA AS
AMENDED BY THAT CERTAIN FIRST AMENDMENT TO RESTATED DECLARATION
OF RESTRICTIONS AND ESTABLISHMENT OF EASEMENTS DATED AS OF MARCH
29, 1988 BY AND AMONG IRVINE, CHH, ADCOR, FEDERATED AND THE NEIMAN-
MARCUS GROUP, INC., A DELAWARE CORPORATION (SUCCESSOR IN INTEREST TO
CHH AS TO THE "NEIMAN- MARCUS SITE ", AS DEFINED IN SUCH INSTRUMENT),
AND RECORDED MAY 9, 1988 AS INSTRUMENT NO. 88-213609, OFFICIAL RECORDS.
PARCEL G:
A NON - EXCLUSIVE EASEMENT IN GROSS ON, OVER, UNDER OR ACROSS
THE LAND OF THE PURPOSES SHOWN AS EXISTING OR PROPOSED ON ANY
HERETOFORE RECORDED PARCEL OR TRACT MAP OF THE LAND OR ANY
PORTION THEREOF, INCLUDING BUT NOT LIMITED TO (1) THE INSTALLATION,
EMPLACEMENT AND MAINTENANCE OF ELECTRIC, GAS, TELEPHONE, CABLE
TELEVISION, WATER GAS, SANITARY SEWER LINES, DRAINAGE FACILITIES OR
ANY OTHER UTILITIES, TOGETHER WITH THE RIGHT TO ENTER UPON THE LAND
(WITHOUT UNREASONABLY INTERFERING WITH REASONABLE USE AND
ENJOYMENT THEREOF) IN ORDER TO SERVICE, MAINTAIN, REPAIR,
RECONSTRUCT, RELOCATE OR REPLACE ANY OF SUCH LINES OR FACILITIES;
AND (Il) INGRESS AND EGRESS OVER ANY PUBLIC OR PRIVATE BICYCLE AND
PEDESTRIAN TRAILS OR OTHER SPECIFIC DESIGNATED USE AREAS, IF ANY, AS
RESERVED IN THE DEED RECORDED APRIL 19, 1979 IN BOOK 13111, PAGE 430,
OFFICIAL RECORDS.
12
PARCEL H:
A NON - EXCLUSIVE EASEMENT ON, OVER, UNDER OR ACROSS THE LAND
WITHIN THE SETBACK AREAS DESCRIBED IN SECTION 3(K) OF THE DEED
REFERRED TO BELOW EXTENDING INWARD FROM ALL PROPERTY LINES
BORDERING ON ANY PUBLIC OR PRIVATE STREET FOR THE INSTALLATION,
EMPLACEMENT, REPLACEMENT, REPAIR, OPERATION AND MAINTENANCE OF
ELECTRIC, TELEPHONE, CABLE TELEVISION, WATER, GAS, SANITARY SEWER
LINES, DRAINAGE FACILITIES OR ANY OTHER UTILITIES, AND ALL VAULTS,
FENCES, HEDGES, TREES, LAWNS, PLANTINGS OR OTHER LANDSCAPING, TRAFFIC
OR OTHER SIGNALS, SLOPES, CURBS, GUTTERS, SIDEWALKS, SIGNS, MONUMENTS
OR MAKERS OR SIMILAR IMPROVEMENTS OR FACILITIES AS SHOWN ON THE
PLAN ATTACHED THERETO OR AS OTHERWISE APPROVED BY GRANTEE FROM
TIME TO TIME, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD,
AS RESERVED IN THE DEED RECORDED APRIL 19, 1979 IN BOOK 1311, PAGE 430,
OFFICIAL RECORDS.
APNS: 442- 021 -16, 442- 021 -08, 442- 021 -28, 442- 021 -29, 442- 021 -27, 442- 021 -36, 442- 021 -30,
442- 021 -10, 442- 021 -34, 442- 021 -35, 442- 021 -32, 442- 021 -31, 442- 021 -26, 442- 021 -25, 442-
021- 17,442- 021 - 11,442- 021 - 33,442 - 021 -21 AND 442- 021 -13.
13
EXHIBIT B:
DEPICTION OF PROPERTY
1
EXHIBIT C:
DEVELOPMENT STATUS, TRANSPORTATION ]IMPROVEMENTS
AND OPEN SPACE DEDICATIONS UNDER
CIOSA AND THE BONITA CANYON DEVELOPMENT AGREEMENT
CIOSA
Open Space Dedication Requirement:
Actual Open Space
Conveyed/Offered:
Completion Status:
138.1 acres
146.0 acres
106%
Transportation
Improvements
Total Program
Expended or
Amount Available for
Required:
Funding Requirement:
Committed to Date:
Future Projects:
Frontage
$5,220,360
$5,220,360
$0
Improvements
Fair Share
$1,398,428
$1,398,428
$0
Contribution
Advancement
$14,295,572
$12,191,740
$0
Total
$21,014,360
$21,034,360
$0
Outside Funds Used
$0
$30,108,183
to Complete CIOSA
Improvements
Total CIOSA
Related Funding
$51,122,543
Expended
Approved Development:
Completed
Completion Status:
100%
Development:
88%
1076 residential units
945 residential units
88%
94,000 office square feet
94,000 office square
100%
feet
30,000 regional retail square feet
30,000 office square
100%
feet
68 hotel units
0 hotel units
0%
BONlTA CANYON DEVELOPMENT AGREEMENT
Park Dedication Requirement: Completion Status:
Acquisition and improvement of Bonita Canyon Sports Park 100%
Transportation Improvements Required:
Completion Status:
Dedication of required right of way and widening of Bonita Canyon
Road, Bison Road, and MacArthur Boulevard
100%
Approved Development:
Completed
Development:
Completion Status:
1521 residential units
1339 residential
88%
units
55,000 general commercial square feet
54,000 general
98%
commercial square
feet
Approved Development:
Completed
Completion Status:
Development:
1076 residential units
945 residential units
88%
94,000 office square feet
94,000 office square
100%
feet
30,000 regional retail square feet
30,000 office square
100%
feet
68 hotel units
0 hotel units
0%
EXHIBIT D:
NORTH NEWPORT CENTER
PLANNED COMMUNITY
AFFORDABLE HOUSING
IMPLEMENTATION PLAN
Prepared For:
The City of Newport Beach
November 2007
Contents
I. Introduction ........................ ...............................
Background........................ ...............................
II. Affordable Housing Plan ... ...............................
Proposed Plan ..................... ...............................
Number of Affordable Units/Income Levels ....
Implementation .................. ...............................
Conclusion......................... ...............................
III. Consistency with Housing Element ..................
IV. Amendments to the AHIP .. ...............................
V. Authority ............................ ...............................
Figures
......... ............................... I
......... ............................... I
.......... ..............................3
.......... ..............................3
.......... ..............................6
.......... ..............................6
......... ............................... 6
.......... ..............................7
......... ..............................8
......... ..............................8
Exhibit I - North Newport Center Planned Community .................. ............................... 2
Exhibit 2 - Child Time Center and The Bays Apartment Complex Locations ............... 5
North Newport Center Planned Community i
Affordable Housing Implementation Plan
I. Introduction
The North Newport Center Planned Community (Planned Community) approval by the City of
Newport Beach includes a Planned Community Development Plan that implements the goals and
policies of the City's General Plan. The Planned Community, as shown on Exhibit 1, consists of
four sub -areas within North Newport Center, a regional center comprised of major retail,
professional office, entertainment, recreation, hotel and residential development.
Block 500, Block 600 and San Joaquin Plaza are designated in the General Plan as MU -H3, a
designation which allows for a mixed -use area combining commercial, office, entertainment and
residential uses. The Planned Community Development Plan for North Newport Center allows
construction of 430 residential units in these blocks, and affordable housing units must be
provided in accordance with City Housing Element. This Affordable Housing Implementation
Plan (AHIP) outlines how the required affordable housing will be provided.
Background
The City's Housing Element includes a goal that 15% of all new housing units in the City be
affordable to very low, low and moderate income. households. The Housing Element identifies
.moderate income households as those with annual incomes between 80% and 120% of the
county median household income. Low income households are those with annual incomes
between 51% and 80% of the county.median household income. Very low income households
are those with annual incomes of 50% or less of the County median household income. Projects
with more than 50 units are required to prepare an AHIP that specifies how the development will
meet the City's affordable housing goal.
The Southern California Association of Governments (SCAG) prepares the state-mandated
Regional Housing Needs Assessment (RHNA). The RHNA quantifies the need for housing
within each jurisdiction . during specified planning periods. The City's General Plan Housing
Element must include its "fair share" regional .housing needs allocation for all income groups
which must be updated periodically. The most recently published SCAG RHNA identifies the
City allocation as follows:
• Total allocation between 1/1/06 and 6/30/14 —1,784
• Very low income allocation — 22% (392 units)
• Low income allocation — 18% (321 units)
• Moderate income allocation — 20.3% (362 units)
North Newport Center Planned Community
Affordable Housing Implementation Plan
®Planned Comm* ���Z
Exhibit 1 - North Newport Center Planned Community
North Newport Center Planned Community 2
Affordable Housing Implementation Plan
II. Affordable Housing Plan
Proposed Plan
The City's General Plan Housing Element allows for sale or for rent options in order to meet the
obligation for affordable housing units. In addition, affordable housing may be provided off -site,
with City approval. Consistent with these Housing Element provisions, this Affordable Housing
Implementation Plan includes the following options. Locations of the sites are included on
Exhibit 2.
A. New Construction
The Irvine Company is the owner of a 0.75 -acre parcel of land located at the former Child Time
Center near the intersection of San Joaquin Hills Road and San Miguel Avenue. The site is
designated in the Newport Beach General Plan for Multiple Residential with a density of 10
units. With a density bonus for affordable housing, the site could accommodate 14 multi- family
units. The Irvine Company may construct 14 housing units on this site to be offered for sale or
for rent. If this option is selected, The Irvine Company will record a legal deed restriction on the
property which insures the units will meet. the affordability requirements for a period of at least
30 years.
The units must be rented to households qualifying as very low, low or moderate income
households. The annualized rents chargeable for occupancy of the Affordable Units shall not
exceed thirty percent (30 %) of the amount of Very Low, Low or Moderate Income. The sales
price of affordable for sale units shall not exceed three times the income limits.
The restriction on these units, tenant selection procedures, monitoring, etc. will be included in an
affordable housing agreement, which shall be submitted for review and approval by the City
Attorney and recorded against the property.
B. Covenants on Existing Units
The Irvine Company owns The Bays, an apartment complex consisting of three buildings known
as Baywood, Bayview and Bayport, which is shown on Exhibit 2. The total number of units in
The Bays is 556. Forty -six units in Baywood are restricted as low - income units through 2011.
The Irvine Company will restrict tenant incomes and rental costs for housing units located in The
Bays complex for a period of 30 years with a recorded document. The number of restricted units
will be sufficient to provide the number of affordable units described later in this AHIP,
depending on the income level to be served. The Irvine Company will identify which apartments
are proposed to meet the affordable housing obligation, and will not use units that are under any
other affordable housing covenant at the time they are proposed to meet the obligation for North
Newport Center. The City will inspect the apartments designated to meet the affordable housing
requirement to ensure compliance with relevant codes, proper maintenance and adequate
North Newport Center Planned Community
Affordable Housing Implementation Plan
common areas. The Irvine Company will agree to make improvements, if necessary, to ensure
viable housing for the 30 year period.
The units must be ranted to households qualifying as very low, low or moderate income
households. The annualized rents chargeable for occupancy of the Affordable Units shall not
exceed thirty percent (30 %) of the Very Low, Low or Moderate Income limits.
The restriction on these units, tenant selection procedures, monitoring, eta will be included in an
affordable housing agreement, which shall be submitted for review and approval by the City
Attorney and recorded against the property(ies).
North Newport Center Planned Community 4
Affordable Housing Implementation Plan
Exhibit 2 - Child Time Center and The Bays Apartment Complex Locations
North Newport Center Planned Community 5
Affordable Housing Implementation Plan
Number of Affordable Units/Income Levels
The requirement for affordable housing shall be based on income categories. The Irvine
Company will provide either very low, low or moderate income housing, or a combination of
income categories, using the percentages shown in the table below.
INCOME CATEGORY
PERCENTAGE
REQUIRED
TOTAL AMOUNT
Very Low
100/0
43 units
Low
15%
65 units
Moderate
20%
86 units
Implementation
The affordable housing units required under this AHIP will be provided incrementally. The
affordable units shall be phased as follows:
• Certificate of use and occupancy for 10CP market rate unit / one -third of required
units
• Certificate of use and occupancy for 200th market rate unit / one -third of required
units
• Certificate of use and occupancy for 300a` market rate unit / one -third of required
units
Affordable housing agreements shall be executed and recorded at each phase identified above for
any units constructed on the Child Time site and for designated affordable units in The Bays
apartment complex prior to the point where a certificate of use and occupancy is issued for the
related market rate units.
Conclusion
Implementation of this AHIP will result in the availability of affordable housing units as
identified above within the City of Newport Beach in accordance with the City's Housing
Element.
North Newport Center Planned Community 6
Affordable Housing Implementation Plan
M. Consistency with Housing Element
The City of Newport Beach adopted a General Plan in 2006. A Housing Element was included in
the General Plan in accordance with State law. The Housing Element identifies goals and
programs for the provision of affordable housing in the City. The AHIP is intended to meet the
specific goals of the Housing Element as follows:
Policy H2.1 Encourage preservation of existing and provision of new housing affordable to
very low, low and moderate income households.
Program
2.1.2 Take all feasible actions, through use of development agreements, expedited
development review and expedited processing of grading, building and other
development permits, to ensure expedient construction and occupancy for projects
approved with low and moderate income housing requirements.
The AHIP supports the City's requirement for the provision of affordable housing for all new
development with more than 50 residential units. The Irvine Company has _ prepared a
Development Agreement in accordance with this Policy/Program.
Policy H2.2 Encourage the housing development industry to respond to housing needs of the
community and to the demand for housing as perceived by the industry, with the
intent of achieving the Regional Housing Needs Assessment construction goals
within five years.
Program
2.2.1 Require a proportion of affordable housing in new residential developments or
levy an in -lieu fee. The City's goal over the five-year planning period is for an
average of 15 percent of all new housing units to be affordable to very low, low
and moderate- income households. The City shall either (a) require the payment of
an in -lieu fee, or (b) require the preparation of an Affordable Housing
Implementation Plan (AMP) that specifies how the development will meet the
City's affordable housing goal, depending on the following criteria for project
size:
1. Projects of 50 or fewer units shall have the option of preparing an AMP or
paying the in -lieu fee.
2. Projects where more than 50 units are proposed shall be required to prepare
an AMP.
Implementation of this program will occur in conjunction with City approval of
any residential discretionary permits or Tentative Tract Maps. To insure
compliance with the 15 percent affordability requirements, the City will include
conditions in the approval of discretionary permits and Tentative Tract Maps to
require on -going monitoring of those projects.
Program
2.2.4 All required affordable units shall have restrictions to maintain their affordability
for a minimum of 30 years.
7
As described in Section II, the affordable housing provided per the AHIP will meet the Housing
Element requirement for the total affordable units required. The units will be deed restricted to
remain affordable for a period of 30 years. In addition, the developer will provide periodic
reports in the form required by the City. The provision of the affordable housing units will assist
the City in meeting the RHNA construction goals.
In conclusion, the AHIP is consistent with the relevant goals and programs in the City's 2006
General Plan Housing Element.
IV. Amendments to the AHIP
This AHIP may be amended with the approval of the City Council. No modification of the
General Plan requirement for affordable units is allowed, unless the requirement is reduced
through an amendment to the General Plan prior to implementation of development.
V. Authority
The AHIP has been adopted by the City of Newport Beach per Resolution No. on
the _ day of 200_
EXHIBIT E:
LOCATION OF OPTION SM AND ASSOCIATED PARKING STRUCTURE
T CEMTERURIVE EAST
N
442- 081.12
Z ---cli-
NOT-TOgCM E
4y�\
F
EXHMff F:
[Attached]
OPTION AGREEMENT
This OPTION AGREEMENT ( "Agreement") is entered into as of this _ day of
December _, 2007, by and between THE IRVINE COMPANY LLC, a Delaware limited
liability company, successor -in- interest to The hvine Company, a Michigan corporation
( "Optionor"), and the CITY OF NEWPORT BEACH, a California municipal corporation
( "City").
RECITALS
A. Optionor is the owner of that certain real property located in the City of Newport
Beach, County of Orange, State of California, consisting of (i) approximately 46,175 square feet
of land area more particularly described in Exhibit "1 -A" attached hereto (the "Legal Parcel ")
and (ii) the real property adjacent to said land area and described in Exhibit "1 -B" attached
hereto (the "Existing Adjacent Parcel"). The location of the Legal Parcel is depicted as the
shaded parcel on the Site Map attached hereto as Exhibit "2 ".
B. Optionor and City desire to enter into this Agreement to provide for Optionor to
grant to City and City to obtain from Optionor, upon the terms set forth in this Agreement, an
option to purchase the Legal Parcel and a portion of the Existing Adjacent Parcel, with the total
net land area not to exceed 54,000 square feet, the boundaries to be established by City in
accordance with this Agreement (the Legal Parcel and said portion of the Existing Adjacent
Parcel sometimes are referred to herein as the "Land "). The parties desire for the Land to be
conveyed together with all improvements thereon, all easements, licenses, and interests
appurtenant thereto, and all development rights, governmental approvals, and land entitlements,
owned or held by Optionor, to the extent pertaining to the Land (collectively, the "Property").
C. City and Optionor are entering into this Agreement pursuant to Section 4.8.1 of
that certain Zoning Implementation and Public Benefit Agreement between City and Optionor
dated December 18, 2007 ( "Development Agreement ").
AGREEMENT
Based upon the foregoing Recitals, which are incorporated herein by this reference, and
for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by both parties, Optionor and City agree as follows:
1. OPTION TO ACQUIRE.
1.1 SurveL Ugal Description of Land: Compliance with Subdivision Man
Act. City shall have the right to establish the boundaries of the Land provided that (a) the
boundaries shall not extend beyond the combined existing boundaries of the Legal Parcel, and
the Existing Adjacent Parcel, (b) the Land shall not exceed 54,000 square feet of net land area
(as defined below), and (c) to the extent the boundaries of the Land extend beyond the Legal
Parcel, the shape and configuration of the Land shall be reasonably related to City's good faith
efforts to design an efficient and functional City Hall on the Land and shall not unreasonably
impair Landowner's ability to develop, use, and obtain ingress to and egress from the balance of
the Existing Adjacent Parcel, as determined by Optionor in its reasonable discretion. By
-1-
September 30, 2008, City shall notify Optionor of the land area that City has determined will
comprise the Land through an exhibit depicting the boundaries of the Land. If Optionor objects
to said proposed boundaries, then Optionor shall so inform City by written notice within five (5)
business days. The notice shall set forth with reasonable particularity the nature of Optionor's
objections, and Optionor and City thereafter shall cooperate in good faith to develop mutually
acceptable boundaries consistent with the intent set forth above. If Optionor does not object
within said five (5) business day period, then Optionor shall be deemed. to have approved the
boundaries proposed by City. Within thirty (30) days after approval by Optionor of the
boundaries for the Land, Optionor shall obtain and deliver to City a current survey of the Land
consistent with said boundaries ( "Survey") prepared by a licensed civil engineer or registered
surveyor in accordance with the current ALTA/ACSM standards, and shall be certified to City,
Optionor, and First American Title Company ( "Title Company"). The Survey shall establish
both the gross land area and net land area of the Property for purposes of confirming the
Purchase Price pursuant to Section 2 of this Agreement. As used herein, the term `net land area"
shall mean the gross land area of the Land excluding any areas around the perimeter of the Land
that have been or are required to be dedicated to City for road or sidewalk purposes (i.e., if the
legal parcel in which the Land is situated includes the half width of the abutting street). In
addition, the Survey shall show a metes and bounds description of the Land, consistent with the
boundaries approved by City and Optionor pursuant to the foregoing, and shall show all
easements encumbering and easements appurtenant to the Land, visible or recorded, and roads
and other means of physical and record ingress.and egress to and from the Land. Within thirty
(30) days after City's receipt of the Survey, City shall deliver written notice to Optionor
approving or disapproving the same. In the event that City disapproves the Survey, said
disapproval shall identify in detail any changes that are required to be made in order to obtain
City's approval thereof and Optionor shall promptly make said changes, provided that (i) the
land area of the Land as described in the metes and bounds description shall be consistent with
boundaries approved by City and Optionor pursuant to the foregoing and (ii) the changes shall
not require Optionor to take any actions, other than revision of the Survey, which would require
Optionor to spend any monies or incur any obligations. Upon City's approval of the Survey, the
term "Land" as used in this Agreement shall mean the land described in the approved metes and
bounds description. City's approval of the Survey shall be for the purpose of establishing the
metes and bounds description of the Land and the net land area for purposes of establishing the
Purchase Price in accordance with Section 2, and shall not constitute City's approval of any
easements or encumbrances on the Property.
The parties acknowledge that the Land is not an existing "legal lot" under the Subdivision
Map Act. Accordingly, promptly following the approval of the Survey, Optionor and City shall
take such steps as may be appropriate to effect such lot line adjustments as reasonably may be
proposed by Optionor or City to (a) establish and/or confirm that the Land, as described and
approved per the Survey, thereafter shall consist exclusively of one or more legal lots under the
Subdivision Map Act, and (b) establish and/or confirm that any property adjoining the Land and
retained by Optionor (any such property, the "Retained Property"), including any property that
remains from a former legal lot after adjustments of boundary lines so as to establish the Land,
thereafter shall consist exclusively of one or more legal lots under the Subdivision Map Act. At
the request of Optionor and subject to any public review process, such steps may include any
actions that reasonably may be required of City, at no cost to City, in order to establish or
confirm that the Retained Property shall be in compliance with the Subdivision Map Act (e.g.,
-2-
the issuance by City of a certificate of compliance with respect to the Retained Property). The
completion of the above described steps in accordance with applicable law sometimes is referred
to herein as the "Subdivision Map Act Condition."
Optionor acknowledges that minor boundary adjustments may need to be made to the
existing rights -of -way within the vicinity of the Land in order to accommodate the creation of
the Land as a separate parcel and the construction of a City Hall thereon, and Optionor shall,
within thirty (30) days after written request by City, dedicate to City the rights -of -way necessary
to accommodate said boundary adjustments.
1.2 Grant of Option. Optionor hereby grants to City an option to purchase
the Property upon all of the terms, covenants, and conditions contained in this Agreement
("Option") and in the Escrow Instructions to be executed in accordance with Section 1.5 below.
The Option created hereby shall be irrevocable by Optionor and shall be binding upon the
successors and assigns of Optionor. Optionor's granting of the Option to City shall be in
consideration of City's performance of its obligations set forth in that certain Zoning
Implementation and Public Benefit Agreement between Optionor and City dated December 18,
2007 (the "Development Agreement', and City shall not be required to pay any option fee, or.
pay or provide any other consideration or purchase price for the Option. Contingent upon the
occurrence of the Effective Date, as referred to in Section 11 of the Development Agreement,
Optionor hereby represents and warrants to City that the Development Agreement has been duly
executed and delivered by Optionor to City, that all steps and approvals have been taken and
obtained under applicable law in order for the Development Agreement to become effective and
to become the binding obligation of Optionor, and that the Development Agreement constitutes a
valid and binding obligation of Optionor, fully enforceable against Optionor in accordance with
its terms. Contingent upon the occurrence of the Effective Date, as referred to in Section 1 I of
the Development Agreement, City .hereby represents and warrants to Optionor that the
Development Agreement has been duly executed and delivered by City, that all steps and
approvals have been taken and obtained under applicable law in order for the Development
Agreement to become effective and to become the binding obligation of City, and that the
Development Agreement constitutes a valid and binding obligation of City, fully enforceable
against City in accordance with its terms.
1.3 Option Period. The term of this Option ( "Option Period') shall
commence on the Effective Date, as defined in Section 11 of the Development Agreement, and
expire on the earliest of the following dates: (i) the date that is 48 months after the Effective
Date; (ii) upon City's termination of this Agreement by delivery of written notice of termination
to Optionor, which notice City shall have the right to deliver at any time during the Option
Period prior to City's exercise of the Option; (iii).the date City's electorate approves and City
implements an initiative restricting the location of a new City Hall building to a site outside of
Newport Center Block 500, with such initiative to be deemed implemented upon the issuance of
a certificate of occupancy for a City Hall building at that site; or (iv) the date (if any) upon which
the Development Agreement ceases to be in full force and effect.
1.4 Conditions to Exercise of Option. City's right to exercise the Option
shall be subject to the satisfaction of the following conditions: (i) the Effective Date under the
Development Agreement shall have occurred, and the Development Agreement shall continue to
59�
be in full force and effect, and (ii) City shall have awarded a contract for the construction of a
new City Hall on the Property, which contract shall call for construction substantially consistent
with the design adopted by the City pursuant to Section 6 of this Agreement.
1.5 Manner of Exercise of Option. In the event this Agreement has not
earlier terminated pursuant to the provisions of Section 1.3 above, City shall have the.right to
exercise the Option during the Option Period by delivering to Optionor or Optionor's counsel
written notice of City's election to acquire the Property, together with three (3) originals of the
Agreement for Purchase and Sale of Real Property and Escrow Instructions in the form attached
hereto as Exhibit "6" (`Escrow Instructions'), with each original of said Escrow Instructions
fully executed by City and with (a) the blank in Section 2.1 of the Escrow Instructions completed
with the Purchase Price, (b) the blank in Section 3.2(b) of the Grant Deed completed to reference
the executed Escrow Instructions, (c) Exhibit "3" to the form of Grant Deed completed to
reference the plans for the construction of the new City Hall, as adopted per Section 6 of this
Agreement, (d) Exhibit "4" to the form of Grant Deed completed to reference the Conduit Area
identified pursuant to Section 6 of this Option Agreement, and (e) Exhibit "5" to the form of
Grant Deed be completed to reference the Parking Structure Site identified in the Development
Agreement. Optionor shall thereupon promptly execute the Escrow Instructions, with Sections 5
and 6 initialed by Buyer and Seller, respectively, in the spaces provided, and deliver, within
seven (7) days after receipt thereof, one fully executed original to City and one fully executed
original to First American Title Company at its offices located at 2 First American Way, Santa
Ana, CA 92707 ( "Escrow Holder'), and shall retain one fully executed original for Optionor's
records. Thereafter, Optionor and City shall cooperate in executing any additional and
supplemental escrow instructions as may be required by the Escrow Holder to perform its duties
with respect to the escrow, provided that in the event of any conflict between the form of Escrow
Holder's standard escrow instructions and the Escrow Instructions, the Escrow Instructions shall
govern. The date that the Escrow Instructions are executed and delivered by City to Optionor
shall be the date inserted on the first page of the Escrow Instructions as the date of the Opening
of Escrow. The Close of Escrow shall occur within thirty (30) days following the exercise of the
Option by City, as more particularly provided in the Escrow Instructions.
1.6 Recordation of Memorandum. Within five (5) business days after the
date the metes and bounds description of the Land is determined in accordance with Section 1.1
of this Agreement, Optionor shall execute and deliver to City a short form memorandum of this
Agreement ( "Memorandum ") in the form attached hereto as Exhibit "3." Said Memorandum
shall be completed to insert the Effective Date in the blank in Section 1 of the Memorandum.
Upon receipt of the Memorandum from Optionor, City shall execute the Memorandum and cause
it to be recorded in the Official Records of Orange County, California.
1.7 Document to Remove Cloud. This Agreement constitutes only an Option
to purchase the Property, and although the Option granted hereby shall automatically terminate
with respect to the Property unless exercised within the time and in accordance with the other
provisions set forth herein, City agrees that upon termination or expiration of the Option Period
or, if City timely exercises the Option but the Closing provided for in the Escrow Instructions
does not occur for any reason other than an uncured material default by Optionor, City shall
execute, acknowledge, and deliver to Optionor upon Optionor's request therefor, a quitclaim
-4-
deed or such other document(s) required by a reputable title company to remove any cloud from
Optionor's title to the Property that might arise as a result of the Option.
2. PURCHASE PRICE.
In the event that City exercises the Option, the purchase price payable by City to
Optionor for the Property shall be the sum of One Hundred Forty-Five Dollars ($145.00) per
square foot of net land area ( "Purchase Price"). The net land area of the Property shall be
determined by the Survey to be obtained by Optionor and approved by City pursuant to Section
1.1 of this.Agreement. Within five (5) days after City's approval of the Survey as provided for
in Section 1. 1, City and Optionor each shall execute and deliver to the other a, written instrument
confirming the net land area of the Property and the Purchase Price resulting therefrom. Prior to
executing the Escrow Instructions, the parties shall insert the amount of the Purchase Price into
the blank in Section 2.1 of the Escrow Instructions. If City exercises the Option, the Purchase
Price shall be paid by City to Optionor at the Closing in accordance with the terms set forth in
the Escrow Instructions. As used herein, the terms "Closing," "Close of Escrow" and "Closing
Date" shall have the meaning ascribed in Section 3.1 of the Escrow Instructions.
INSPECTIONS AND REVIEW.
3.1 Delivery of Property Documents. Within five (5) days after the date of
this Agreement; Optionor shall deliver to City all documents, reports, agreements or other items
which, to the knowledge of Optionor, are in Optionor's possession or control relating to the
Property, including without limitation the following to the extent within the knowledge of
Optionor (collectively, the "Property Documents'): all information and documents relating to
the condition of the soils, groundwater, subsurface improvements, including without limitation
building foundations and underground utility lines, and subsurface physical and environmental
conditions on and under the Property, including copies of all asbestos, lead -based paint, soils,
seismic, geologic, drainage, toxic waste, engineering, environmental and similar type reports and
surveys; all information and documents relating to the physical and environmental condition of
the structures located on the Property; any survey of the Property; and all engineering reports and
studies relating to the physical and environmental condition of the Property. During the Option
Period, Optionor shall promptly deliver to City any additional Property Documents that Optionor
comes to posses or control after the date of this Agreement. Optionor makes no representations
as to the accuracy or completeness of such information or to any analyses based on such
information.
3.2 Condition of Title. Prior to the date of this Agreement, City reviewed
that certain preliminary title report dated December 11, 2007, issued by the Title Company under
Order No. 325913 -SAI ( "Title Report'. City agrees it shall accept title to the Property on the
Close of Escrow subject to the following title exceptions (collectively, the "Approved Title
Exceptions'): (i) the standard printer) exceptions and exclusions container) in the form of the
Title Policy commonly used by Title Company; (ii) the exceptions discloser) as items 14 and 17
of the Title Report; (iii) the Grant Deer) attached as Exhibit "B" to the Escrow Instructions; and
(iv) any other exceptions to title that may be causer) by City or that may be approver) in writing
by City in its sole and absolute discretion. If City exercises the Option to purchase the Property,
Optionor shall be responsible for removing prior to the Close of Escrow all title exceptions that
51
do not constitute Approved Title Exceptions. Without City's written consent, Optionor shall not
allow any new title exceptions or defects to be created that will not be eliminated or removed by
Optionor prior to the Closing (if City timely exercises the Option).
3.3 Right of Entry. During the Option Period (and, if City timely exercises
the Option, from that date until the Closing or the termination of the Escrow Instructions,
whichever first occurs), City (either directly or through any of City's employees, representatives,
agents, engineers, consultants, contractors, and designees) shall have the right to enter onto the
Property to make such independent investigations, inspections, tests, reviews, studies or surveys
as City deems necessary or appropriate, including without limitation, any desired investigations
of the site work, soil, subsurface soils, drainage, seismic and other geological and topographical
matters, and location of any asbestos, toxic substances, hazardous materials or wastes, provided,
however, that: (i) all of the foregoing inspections, investigations, tests, etc. shall be performed by
City at City's sole cost and expense; (ii) City shall not enter the Property for any such purposes
unless it first has provided Optionor with evidence reasonably satisfactory to Optionor that City
(and its employees, representatives, agents, engineers, consultants, contractors or designees, as
the case may be) possess insurance reasonably acceptable to Optionor in scope and coverage to
protect against damages or losses that may be suffered in connection with such activities, and
that Optionor has been made an additional insured with respect to such policies; (iii) City shall
.provide written notice to Optionor at least 48 hours prior to inspection and any on -site inspection
must be conducted in the company of a representative of Optionor, (iv) with respect to any
invasive inspections, City shall obtain the prior written approval of Optionor prior to conducting
such inspections, investigations, tests, etc. which approval shall not be unreasonably withheld,
conditioned or delayed; (v). City shall, in a timely manner, repair any and all damage to the
Property caused by such inspections, investigations, tests, etc. and return the Property as close as
reasonably practicable to its original condition prior to City's entry, unless such repair would be
legally prohibited under any environmental or other applicable laws (in which case City shall be
responsible for reimbursing Optionor in full for the reasonable costs that would be required to
repair and restore the Property to such standard, excluding the costs attributable to compliance
with environmental and other applicable laws); (vi) City shall keep the Property free of all liens
in connection with its inspection of the Property and shall cause all such liens to be removed
immediately upon its being notified of same; and (vii) City shall not materially disrupt the
ordinary course of Optionor's businesses and/or activities on the Property during any such
inspections, investigations, tests, etc. (including without limitation parking of automobiles or any
business or activities conducted by any tenants or other third parties on the Property with the
permission of Optionor, although Optionor agrees that it shall cooperate reasonably with City
(subject to any contractual limitations which may be binding upon Optionor) in order to permit
City to undertake its desired inspections, inspections, tests, etc.). City shall indemnify, defend
and hold harmless Optionor from and against any and all damage, liability or expense arising
from the entries of City, its agents, contractors, consultants, and employees upon the Property,
provided, that the foregoing indemnity shall not apply to any damage, liability or expense arising
from or related to (a) the mere discovery of matters by City during its investigation of the
Property, including any latent defects in or Hazardous Materials on or in the Property or any
diminution in value of the Property as a result thereof, or (b) negligent or wrongful acts or
omissions of the Optionor or its agents, representatives or employees.
0
4. REPRESENTATIONS AND WARRANTIES; CONDITION OF PROPERTY.
4.1 Ontionor's Representations and Warranties. Optionor hereby makes the
following representation and warranties as of the date hereof and acknowledges that the
execution of this Agreement by City has been made and, if the Option is exercised, the
acquisition by City of the Property will be made in material reliance by City on such covenants,
representations and warranties:
(a) Power: Consents. Optionor has the legal power, right and
authority to enter into this Agreement and the instruments referenced herein, to perform
its obligations hereunder and to consummate the transaction contemplated hereby, and all
documents to be executed by Optionor hereunder, including the Escrow Instructions if
City exercises the Option, are and at the time of Closing will be duly executed and
delivered by Optionor, are and at the time of Closing will be legal, valid and binding
obligations of Optionor enforceable against Optionor in accordance with their respective
terms and do not and at the time of Closing will not violate any provision of any
agreement or judicial order to which Optionor or the Property is subject. Optionor has
obtained all necessary authorizations, approvals and consents to the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
(b) No Litigation. Optionor has not received written notice of
.any pending or threatened. claims, allegations, lawsuits or governmental investigations of
any kind, whether for personal injury, property damage, property taxes or otherwise
affecting or relating to the Property, nor to the actual knowledge of Optionor, any such
action or proceeding pending or threatened.
(c) Compliance with Laws. To Optionor's actual knowledge,
the Property is not in violation of any applicable law, rule, statute, ordinance or
regulation, and Optionor has not received any written notification from any applicable
governmental authority having jurisdiction over the Property of any existing, past or
potential violation of applicable law.
(d) Hazardous Materials. Optionor has no actual knowledge,
and has not received any written notice or communication from any governmental agency
having jurisdiction over the Property notifying Optionor, of the presence of surface or
subsurface zone Hazardous Materials in, on, under or adjacent to the Property or any
portion thereof (provided, however, that the parties acknowledge that Optionor has
informed City of Optionor's understanding that those certain properties in the vicinity of
the Land listed on Exhibit "4" may have experienced Hazardous Materials contamination
problems, and that Optionor makes no representation, warranty or other assurance as to
the nature, extent or status of such contamination problems, but rather encourages City to
consider the consequences of the same during the course of its due diligence). The term
"Hazardous Materials" shall mean (i) hazardous wastes, hazardous materials, hazardous
substances, hazardous constituents, toxic substances or related materials, whether solids,
liquids or gases, including, but not limited to, substances deemed as "hazardous wastes,"
"hazardous materials," "hazardous substances," "toxic substances," "pollutants,"
-7-
"contaminants," "radioactive materials," or other similar designations in, or otherwise
subject to regulation under, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ( "CERCLA "), 42 U.S.C. § 9601 et seq.; the Toxic
Substance Control Act ( "TSCA'), 15 U.S.C. § 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. § 1802; the Resource Conservation and Recovery Act
( "RCRA" ), 42 U.S.C. § 9601, et seq.; the Clean Water Act ( "CWA'), 33 U.S.C. § 1251
et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300 et seq.; the Clean Air Act
( "CAA "), 42 U.S.C. § 7401 et seq.; the Hazardous Waste Control Law, California Health
and Safety Code § 25025 et seq., the Carpenter - Presley- Tanner Hazardous Substance
Account Act, California Health and Safety Code, Division 20, Chapter 6.8, the
Hazardous Materials Release Response Plans and Inventory Act, California Health and
Safety Code, Division 20, Chapter 6.95, The Underground Storage of Hazardous
Substances Act, California Health and Safety Code, Division 20, Chapter 6.7, the Porter -
Cologne Act, California Water Code § 13050 et seq. and in any permits, licenses,
approvals, plans, rules, regulations or ordinances adopted, or other criteria and guidelines
promulgated pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinances now or hereafter in effect relating to environmental
matters (collectively, "Environmental Laws'); including without limitation
(A) petroleum, (B) refined petroleum products, (C) waste oil, (D) waste aviation or motor
vehicle fuel, (E) asbestos, or (F) lead -based paint.
(e) Rights of Third Parties. Optionor has not entered into any
lease or other agreement for possession or sale with any person or entity, except City,
pursuant to which such person or entity has any interest or future right or 'interest to
occupancy, possession or use of all or any portion of the Property, except for those
agreements listed on Exhibit "5" or any other agreements that may be listed in the Title
Report, all of which City is encouraged to review in accordance with the provisions of
this Agreement.
(f) Bankruptcv. Optionor has not, and as of the Closing if City
exercises the Option, Optionor shall not have (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of
any involuntary petition by Optionor's creditors, (iii) suffered the appointment of a
receiver to take possession of all, or substantially all, of Optionor's assets, which remains
pending as of such time, (iv) suffered the attachment or other judicial seizure of all, or
.substantially all, of Optionor's assets, which remains pending as of such time,
(v)-admitted in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.
For purposes of this Agreement, whenever any representation, warranty, certification or
other statement of Optionor is stated to be made to the "knowledge," "best knowledge," or
"actual knowledge" of Optionor or any of its agents or representatives, such statement shall be
deemed to refer to, and to be strictly limited and confined to, the present actual knowledge of
Dan Miller, Senior Vice President, Entitlement & Public Affairs; Ron Keith, Executive Vice
President, Commercial Property Development; and Danielle Sim, Senior Vice President,
Property Operations, and without any obligation on the part of such persons to undertake any
further investigation or inquiry (including without limitation any investigation or inquiry into
11:11
files or into the content or effect of applicable laws). In no event shall such individuals have any
personal liability on account of such knowledge or their designation for purposes of this
paragraph. If Optionor becomes aware of any act or circumstance which would materially
change or render materially incorrect, in whole or in part, any representation or warranty made
by Optionor under this Agreement, whether as of the date given or any time thereafter through
the Closing Date and whether or not such representation or warranty was based upon Optionor's
actual knowledge and/or belief as of a. certain date, Optionor shall promptly deliver written
notice of such changed fact or circumstance to City. In addition, if at any time prior to the
termination of the Option Period or the close of the escrow provided for in the Escrow
Instructions, whichever first occurs, any of the individuals specifically referred to. in this
paragraph ceases to be employed by Landowner or ceases to occupy his or her current job
position in terms of responsibility with respect to the Property that is the subject of this.
Agreement, the person or persons then employed by Landowner who replace such person(s) in
such job position(s) or capacity(ies) automatically shall be deemed to have been added to the list
of persons specified above for purposes of the obligation of Optionor to promptly deliver such
written notice to City of such changed fact or circumstance.
4.2 Survival. All representations and warranties contained in Section 4.1
shall be true and correct on the date hereof, and Optionor's liability for misrepresentation of or
breach of warranty, representation or covenant, wherever contained in this Agreement, shall .
survive the execution and delivery of this Agreement and the Closing for a period of twelve (12)
months from the Closing Date, and thereafter Optionor shall have no liability with respect
thereto; and provided further, however, Optionor shall have no liability whatsoever to City with
respect to a breach of any of the representations and warranties herein contained if City obtains
knowledge of a fact or circumstance the existence of which would constitute a breach of
Optionor's representations and warranties hereunder prior to the Closing Date and City proceeds _
to Closing, in which event each representation or warranty shall be deemed automatically
amended to conform with the knowledge of City as of the Closing Date, and Optionor shall have
no liability whatsoever for such previously inaccurate representation or warranty. For the
purposes hereof, City shall be deemed to have knowledge of any fact or circumstance set forth in
any environmental assessment, soils, geological, physical condition or other report received by
City prior to Closing, and the representations and warranties herein contained shall be deemed
automatically modified to the extent information contained in any environmental assessment,
soils, geological, physical condition or other report received by City prior to Closing is
inconsistent with the matters covered herein.
4.3 Disclaimer of Further Representations or Warranties. Sale. If City
elects to exercise the Option to acquire the Property, City acknowledges it will have had an
adequate opportunity to review, enter, inspect and assess the Property and the Property
Documents, and all aspects thereof, including without limitation the Property's physical
characteristics and conditions, the nature and extent of any environmental contamination within
the Property (and of any steps to remediate the same), the condition of the soils within the
Property, the geological condition of the Property and the relative seismic risks pertaining to the
Property, the availability or adequacy of access to the Property, the nature of any other properties
surrounding or within the vicinity of the Property, and all other matters related or relevant to the
Property, the acquisition thereof or the development thereof. Upon the Close of Escrow, and
except as otherwise expressly provided in this Agreement, City shall be deemed to have waived
0
any and all objections to any of the foregoing matters and to have accepted the Property in its
present "AS -IS," "WHERE -IS," "WITH ALL FAULTS" condition; provided, however, that
nothing in this Section 4.3 is intended to limit or restrict Optionor's representations and
warranties set forth in Section 4.1 or City's right to rely upon the same and its remedies for
Optionor's breach thereof for the period of time set forth in Section 4.2.
5. OPTIONOR'S COVENANTS.
During the period between the execution of this Agreement and the expiration of the
Option Period (and, if City timely exercises the Option, from that date until the Closing), (i)
Optionor shall not further encumber or place any fiuther liens or encumbrances on the Property,
including, but not limited to, covenants, conditions, restrictions, easements, liens, leases,
tenancies, or other possessory interests without the prior written consent of City which consent
may be withheld by City in its sole discretion; provided, however, that City agrees that City's
consent shall not be required, and Optionor shall have the right to proceed with, any such
encumbrances which by their terms shall terminate or be terminable by Optionor at or before the
Closing (and provided further that to the extent any such encumbrances cause any material
damage to the Property, Optionor shall repair such damage at or before the Closing); (ii)
Optionor shall not take any affirmative action to cause physical damage to the Property, and shall
not place or authorize to be deposited, stored, or placed on, in, or under any portion of the
Property any Hazardous Materials other than in strict compliance with applicable federal, state,
and local environmental laws and as may be appropriate and necessary to maintain and repair the
Property (e.g., the use of minor amounts of pesticides to control weeds); and (iii) Optionor shall
not take or permit to be taken any actions constituting waste of the Property and shall maintain or
cause to be maintained the Property in substantially the same condition as exists on the date of
this Agreement and, except in the ordinary course of business, Optionor shall not make any
alterations to the Property.
6. DESIGN AND CONSTRUCTION OF CITY HALL.
6.1 -In 'the event City exercises the option and acquires the Property, all
construction by City on the Property shall be completed at no cost to Optionor and shall be
performed in a manner reasonably tailored to minimize the disruption of the operation of
neighboring properties. With respect to the City Hall improvements to be initially constructed
by City on the Property if City exercises the Option, City agrees (i) prior to the award of any
design contract for the proposed improvements, Optionor shall have thirty (30) days to review
and comment on the proposed improvements and design plan, and (ii) after the design plans have
been completed and prior to soliciting public bids for such improvements, Optionor shall have
sixty (60) days to review and comment on City's designed improvements or any significant
changes thereto. Upon receipt of Optionor's comments, City shall give reasonable consideration
to any suggestions provided by Optionor regarding the proposed improvements; provided,
however, City is not required under this Agreement to implement any suggestions made by
Optionor. City and Optionor acknowledge that it is mutually beneficial for the City Hall
building and the Parking Structure (as such term is used in the Development Agreement) to be
compatible in design and functionality. It is recognized that the City Hall is a unique civic
building which should have a distinctive architectural style and that the style of City Hall, while
distinctive, should incorporate elements of the design vocabulary referenced in the North
-10-
Newport Center Development Plan (as such term is used in the Development Agreement),
including the design regulations included therein. While the design the City selects need not
resemble an office building and may be distinctive, City agrees that the City Hall shall not be
constructed in a post modern "deconstructivist" style out of character with the existing
architectural style of North Newport Center, and further that the plans shall call for no more than
1,000 square feet of "Floor Area" (as hereinafter defined) within the building improvements
within the City Hall building for each 4.17 parking spaces within the Parking Structure that, per
the Development Agreement, have been granted to the City by easement for use in connection
with the City Hall improvements on the Property. For purposes of this Option Agreement, the
term "Floor Area" shall mean "Net Floor Area" as defined in the City of Newport Beach
Municipal Code in effect as of the date hereof.
6.2 The parties acknowledge that the form of Grant Deed attached as Exhibit
"B" to the Purchase Agreement calls for Optionor to reserve certain rights in the Land for the
location of "Conduit" (as such term is used in said Grant Deed) reasonably necessary for
development and operation of the Parking Structure or any other improvements being developed
pursuant to the Development Agreement. In order to identify the area within the Land, if any,
within which such Conduit may be located (the "Conduit Area "), the parties agree as follows:
(a) The Conduit Area shall be located within 10 feet of the
exterior boundaries of the portions of the Land immediately adjacent to any public or
private street.
(b) As Optionor proceeds with the design and development of
the Parking Structure pursuant to the Development Agreement and/or City proceeds with
the design and development of the City Hall building and related improvements on the
Land, Optionor and City each shall have the right, in accordance with this clause (b) and
clause (c) below, to reduce the scope of the Conduit Area, with an eye toward both
providing reasonable opportunity for the laying of Conduit reasonably necessary for the
Parking Structure and minimizing any undue interference with the ultimate location of
the City Hall improvements upon the Land. The ultimate location of the Conduit Area
shall be within the area described in clause (a) above; provided, however, that the
location of the Conduit Area may be reduced with the approval of both Optionor and
City, which approval shall not be unreasonably withheld, conditioned, or delayed by
either party. In proceeding with development of the Parking Structure and the City Hall
improvements, the parties shall have the right to rely on the Conduit Area as so approved
in writing by Optionor and City.
(c) In connection with Optionor's provision of comments to
proposed plans for the City Hall improvements in accordance with Section 6.1 above,
Optionor further shall identify any encroachments of the proposed City Hall
improvements upon the Conduit that Optionor proposes to construct or install within the
Conduit Area, and the parties shall cooperate to mutually identify a revised Conduit Area
to the extent reasonably appropriate (and subject to the interests of Optionor and City
described in clause (b) above).
990
(d) The Conduit Area determined pursuant to the foregoing
shall be delineated with reasonable precision and described in Exhibit "4" to the form of
Grant Deed to be delivered pursuant to the Escrow Instructions.
7. LIKE -KIND EXCHANGE.
Notwithstanding anything to the contrary in this Agreement, City acknowledges and
agrees that Optionor shall have the right at Closing, in lieu of receiving the Purchase Price for the
sale of the Property, to exchange the Property (the "Tax -Free Exchange') in a transaction
intended to qualify as a tax -free exchange under Section 1031 of the Internal Revenue Code of
1986, as amended from time to time, and any regulations, rulings and guidance issued by the
Internal Revenue Service (collectively, the "Code "). If Optionor elects to effect a Tax -Free
Exchange pursuant to this Section, Optionor shall provide written notice to City prior to Closing,
in which case Optionor shall enter into an exchange agreement and other exchange documents
with a "qualified intermediary" (as defined in Treas. Reg. § 1.1031(k)- 1(g)(4) of the Code) (the
"Exchange Party), pursuant to which Optionor shall assign all of its right, title and interest
under this Agreement to the Exchange Party. City shall execute and deliver such documents as
may be required to complete the transactions contemplated by the Tax -Free Exchange which are
in form and substance reasonably acceptable to City, and otherwise cooperate with Optionor in
all reasonable respects to effect the Tax -Free Exchange. City agrees that if Optionor elects to
effect a Tax -Free Exchange. pursuant to this Section, at Closing, City shall pay the Purchase
Price to the Exchange Party and direct Escrow Agent to disburse the Purchase Price to the
Exchange Party. Notwithstanding the foregoing, (i) the Tax -Free Exchange shall not diminish
City's rights; nor increase City's liabilities or obligations, under this Agreement, nor delay the
Closing; (ii) Optionor shall pay for all fees, costs and expenses in connection with the Tax -Free
Exchange; (iii) ) the purchase and sale of the Property shall not be conditioned upon the
consummation of the 1031 exchange; (iv) in no event shall Optionor be relieved from liability
under the Agreement or the Escrow Instructions to be executed in connection herewith including,
without limitation, with respect to representations and warranties of Optionor to City under this
Agreement and its exhibits (to the extent the same by their terms survive the Closing); (v) the
consummation of the 1031 exchanges shall be at no liability, risk, fee or expense to the City; and
(vi) the Optionor shall protect, indemnify, defend and hold City free and harmless from all
losses, costs, claims, liabilities, lawsuits, demands and damages, including any attorneys' fees
and expenses, incurred as a consequence of effecting the transaction through the Tax -Free
Exchange (rather than through the direct sale of the Property by Optionor to City).
8. MISCELLANEOUS.
8.1 Attorney's Fees. If either party commences an action against the other to
enforce any of the terms of this Agreement or because of the breach by either party of any of the
terms of this Agreement, the losing party shall pay to the prevailing party its expert witness fees
and its reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution
or defense of such action, including appeal of and/or enforcement of a judgment.
8.2 Notices. All notices required to be delivered under this Agreement to the
other party must be in writing and shall be effective (i) when personally delivered by the other
party or messenger or courier thereof, (ii) three (3) business days after deposit in the United
-12-
States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily
deadline time with a reputable overnight courier or service; or (iv) upon receipt of a teleoopy or
fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one
of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and
addressed to the respective parties as set forth below or to such other address and to such other
persons as the parties may hereafter designate by written notice to the other parties hereto.
Notices delivered after 5:00 PM on a business day shall not be deemed to have been delivered
until the following business day. As used herein, business days shall exclude weekends and state
and federal holidays. The parties' respective addresses for notices are as set forth below, (with
such addresses subject to change from time to time if a notice of change of address is delivered
in accordance with the notice provisions set forth herein:
To Optionor: The Irvine Company LLC
550 Newport Center Drive
Newport Beach, CA 92660 -0015
Attn: General Counsel
Facsimile: (949)760 -0896
Copy to: Latham & Watkins LLP
600 West Broadway, Suite 1800
San Diego, CA 92101 -3375
Attn: Christopher W. Garrett
Facsimile: (619) 696 -7419
To City: City of Newport Beach
3300 Newport, Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Manager
Facsimile: (949) 644 -3020
Copy to: City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Attorney
Facsimile: (949) 644 -3139
8.3 Assignment. Neither party shall, whether voluntarily, involuntarily, or
by operation of law, assign all or any part of this Agreement or any rights hereunder without the
Other party's written approval, which approval may be withheld in the other party's sole and
absolute discretion; except that (a) Optionor may proceed with the Tax -Free Exchange in
accordance with Section 7 hereof, and (b) City many assign its rights to another governmental
entity controlled by City and solely for financing purposes (including without limitation a public
financing authority.), provided that (i) the nominee is a tax - exempt entity and (ii) City shall
continue to be liable for all obligations of City hereunder and under the Escrow Instructions.
Also, City may specify a tax- exempt nominee controlled by City to whom title will be conveyed
91911
on the Closing Date if the Option is exercised. In connection with any assignment, any assignee
shall execute all documents reasonably necessary to assume all of the obligations imposed under
this Agreement as if the assignee were the original party to this Agreement.
8.4 Time of the Essence. Time is of the essence with respect to each of the
terms, covenants, and conditions of this Agreement.
8.5 Binding on Heirs. Subject to the limitations set forth in Section 8.3
above, this Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the respective parties hereto.
8.6 Entire Agreement With the exception of the Zoning Implementation and
Public Benefit Agreement, and the Escrow Instructions if the Option is exercised by City, this
Agreement contains the entire agreement of the parties hereto with respect to the matters covered
hereby, and all negotiations and agreements, statements or promises between the parties hereto
or their agents with respect to this transaction are merged in this Agreement, which alone
expresses the parties' rights and obligations. No other prior agreements or understandings not
contained or incorporated herein shall be binding or valid against either of the parties hereto.
8.7 Modification. Any amendments or modifications to this Agreement must
be in writing and executed by both parties to this Agreement.
8.8 Waivers. No delay or omission by either party hereto in exercising any
right or power.accruing upon the compliance or failure of performance by the other party hereto
under the provisions of this Agreement shall impair any such right or power or be construed to
be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants,
conditions or agreements hereof to be performed by the party shall not be construed as a waiver
of any succeeding breach of the same or other covenants, agreements, restrictions or conditions
thereof.
. 8.9 Intemretation; Governing Law; Forum. This Agreement shall be
construed according to its fair meaning and as if prepared by both parties hereto. Title and
captions are for convenience only and shall not constitute a portion of this Agreement. As used
in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall
each be deemed to include the others wherever and whenever the context so dictates. This
Agreement shall be construed in accordance with the internal laws of the State of California in
effect at the time of the execution of this Agreement without regard to conflict of law principles.
Venue and jurisdiction of any action arising out of this Agreement shall exclusively be in any
state or federal court sitting in the County of Orange, State of California.
8.10 Severability. If any term, provision, condition or covenant of this
Agreement or the application thereof to any party or circumstances shall, to any extent, be held
invalid or unenforceable, the remainder of this instrument, or the application of such term,
provision, condition or covenant to persons or circumstances other than those as to whom or
which it is held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
Bra
8.11 Authority to Execute. Each individual executing this Agreement on
behalf of a party hereto warrants that (i) such party is duly organized and existing, (ii) he or she
is duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so
executing this Agreement, such party is formally bound to the provisions of this Agreement, and
(iv) the entering into this Agreement does not violate any provision of any other agreement to
which said party is bound.
8.12 Execution in Counteprart This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement binding on all parties hereto,
notwithstanding that all parties are not signatories to the original or the same counterpart.
[signature page follows]
9FI
IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of
the day and year first above written.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
-16-
"OPTIONOR"
THE IRVINE COMPANY LLC, a Delaware
limited liability company
By:
Its:
By:
Its:
"CrM,
CITY OF NEWPORT BEACH,
a California municipal corporation
Its:
EXHIBIT "1 -A" TO OPTION AGREEMENT
LEGAL LOT INCLUDED WITHIN PARCEL
The real property described as A.P.N. 442- 081 -06
EXHIBIT "1 -B" TO OPTION AGREEMENT
EXISTING ADJACENT PARCEL
The real property described as A.P.N. 442- 081 -08
EXHIBIT "2" TO OPTION AGREEMENT
SITE MAP
\ate
s 442-081
9�
aRi r BITER DRIVE EAST
Nip
4Y^
442-08142e� ^O,q
z--W-O --
NOTTO -CME
EXHIBIT "3" TO OPTION AGREEMENT
MEMORANDUM OF OPTION AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Clerk
(Space Above For Recorder's Use)
Exempt from the payment of a recording fee pursuant to
Government Code Sections 6103 and 27383.
MEMORANDUM OF OPTION AGREEMENT
By.this MEMORANDUM OF OPTION AGREEMENT ( "Memorandum ") entered into
as of the _ day of , 2008, THE IRVINE COMPANY LLC, a Delaware limited
liability company ( "Optionor"), and CITY OF NEWPORT BEACH, a California municipal
corporation ( "City"), the parties hereby agree as follows:
1. Optionor has granted to City an option (the "Option') to acquire, that real
property located in the City of Newport Beach, County of Orange, State of California, more
particularly described in the legal description attached hereto as Exhibit "A" ( "Property"), in
accordance with and subject to the terms and conditions set forth in that certain unrecorded
Option Agreement dated December _, 2007 ( "Option Agreement"). The Option Agreement
has an "Effective Date" of . The term and provisions of the Option
Agreement are incorporated herein by this reference as if fully set forth below. Capitalized terms
utilized in this Memorandum which are not expressly defined herein shall have the meaning
given to them in the Option Agreement.
2. The Option to purchase shall terminate, to the extent not exercised, on the date
set forth in the aforesaid Option Agreement and shall otherwise be subject to the terms and
conditions contained therein. In any event, this Memorandum shall terminate no later than forty-
eight (48) months after the Effective Date.
3. This Memorandum is intended only to memorialize the existence of the Option
Agreement and does not constitute an amendment or modification thereof. In the event of any
inconsistency between this Memorandum and the terms and conditions set forth in the Option
Agreement, the Option Agreement shall prevail and control.
[signature page follows]
-1-
IN WITNESS WHEREOF, Optionor and City have entered into this Agreement as of the
date set forth above.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
-2-
"OPTIONOR"
THE IRVINE COMPANY LLC, a Delaware
limited liability company
By:
Its:
By:
Its:
.CIT 1
CITY OF NEWPORT BEACH,
a California municipal corporation
Its:
STATE OF CALIFORNIA )
) ss..
COUNTY OF ORANGE )
On before me, Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose.name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her /their authorized capacity(ies), and that by his/her /their
signature(s) on the instrument the persons) .or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On I before me, , Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
helshelthey executed the same in his/her /their authorized capacity(ies), and that by his/her /their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
Notary Public
-3-
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE )
On before me, , Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her /their authorized capacity(ies), and that by his/her /their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
Notary Public
MI
EXHIBIT "A" TO MEMORANDUM
LEGAL DESCRIPTION OF PROPERTY
That certain real property located in the City of Newport Beach, County of Orange, State
of California, described as follows:
[to be inserted]
J
EXHIBIT "4" TO OPTION AGREEMENT
DISCLOSURE RE: NEARBY PROPERTIES WITH
POTENTIAL CONTAMINATION HISTORIES
In the area of the Land, Optionor is aware of certain sites that may have experienced a hazardous
substance contamination problem. These sites are identified and discussed below. Optionor's
awareness of these sites is based either on a current or prior ownership of the property, or
because the condition was otherwise brought to Optionor's attention, but Optionor makes no
representation or warranty as to the accuracy of the information within this Exhibit. Further,
while Optionor is providing this information as a courtesy to City, this information should not be
viewed as an exhaustive listing of environmentally contaminated properties within the vicinity of
the Land, or of the nature or extent of any such contamination.
It is recommended that City satisfy itself as to the effect of the sites described herein (or any
other sites) on the condition of the Land.
Bayside Cleaners
1056 S. Bayside Drive, Newport Beach, CA
During a preliminary investigation, low concentrations of the dry cleaning solvent PCE was
detected in site soils. Orange County Health Care Agency has issued a "No Further Action"
letter with Regional Water Quality Control Board concurrence.
Chevron Service Station
Jamboree/ San Joaquin Hills Roads, Newport Beach, CA
Chevron experienced a petroleum product release from their underground fuel storage tank
system resulting in contamination of site soils and groundwater. Site investigations and some
remedial work have been conducted. Additional information concerning the status of this site
can be obtained from regulatory agencies.
Former Texaco Service Station
Jamboree /San Joaquin Hills Road, Newport Beach, CA
Texaco experienced a petroleum product release from their underground fuel storage tank system
resulting in contamination of site soils and groundwater. Texaco has conducted site
investigations, and groundwater monitoring under regulatory agency oversight. Shell Oil is
currently operating the station. Additional information concerning the status of this site can be
obtained from regulatory agencies.
Former Mobil Service Station
Jamboree/Pacific Coast Highway, Newport Beach, CA
Mobil experienced a petroleum product release from their underground fuel storage tank system
resulting in contamination of site soils and groundwater. The station was demolished in March
1988, and subsequent remedial activities conducted. Mobil has received site closure from the
Orange County Health Care Agency and Regional Water Quality Control Board.
Former Shell Service Station
Jamboree7Pacific Coast Highway, Newport Beach, CA
Shell experienced a petroleum product release from their underground fuel storage tank system
resulting in contamination of site soils and groundwater. The station was demolished in July
1984. and Shell has conducted site investigations, and groundwater monitoring under regulatory
agency oversight is continuing.
Newport Center Cleaners
521 Newport Center Drive, CA.
During a preliminary investigation, low concentrations of the dry cleaning solvent PCE was
detected in site soils. Orange County Health Care Agency has issued a "No Further Action"
letter with Regional Water Quality Control Board concurrence.
The Island Hotel (formerly Four Seasons Hotel)
690 Newport Center Drive, Newport Beach, CA
Four Seasons experienced a petroleum product release from their underground fuel storage tank.
Site soils have been remediated; however, groundwater monitoring is being conducted under
Orange County Health Care Agency oversight.
Newport Auto Center
445 East Coast Highway, Newport Beach, CA
Newport Auto Center experienced a petroleum product release from their underground fuel
storage tank system resulting in contamination of site soils and groundwater. The underground
tanks have been removed, and subsequent remedial activities conducted. Quarterly monitoring
and reporting to regulatory agencies is continuing pending site closure.
EXHIBIT "5" TO OPTION AGREEMENT
LIST OF AGREEMENTS
NONE
EXIHBIT "6" TO OPTION AGREEMENT
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
Escrow No.
Date of Opening of Escrow:
To: First American Title Company ( "Escrow Holder")
2 First American Way
Santa Ana, CA 92707
Attention: Escrow Officer
Telephone:
This AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND
ESCROW INSTRUCTIONS ( "Agreement ") is made this day of _,
by and between THE IRVINE COMPANY LLC, a Delaware limited liability company
( "Seller"), and CITY OF NEWPORT BEACH, a California municipal corporation (`Buyer").
RECITALS:
A. Seller is the owner of that certain real property comprised of approximately
54,000 square feet of land area, located in the City of Newport Beach, County of Orange, State
of California, more particularly described in Exhibit "A" attached hereto ( "Property').
B. Seller and Buyer previously executed that certain Option Agreement dated
December _, 2007. All of the terms, conditions, provisions and covenants of the Option
Agreement are incorporated in this Agreement by reference as though written out at length
herein and the Option Agreement and this Agreement shall be deemed to constitute a single
instrument or document. Capitalized terms used herein and not otherwise defined shall have the
same meaning as set forth in the Option Agreement.
C. By its execution of this Agreement, Buyer has exercised its option to purchase the
Property.
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Pronertv. Subject to all of the terms, conditions, and
provisions of this Agreement, and for the consideration herein set forth, Seller agrees to convey
the Property to Buyer and Buyer agrees to purchase the Property from Seller.
2. Purchase Price.
2.1 Amount of Purchase Price. The purchase price which Seller agrees to
accept and Buyer agrees to pay for the Property is , and shall not be
subject to any escalation or increase for any reason. The Purchase Price is all - inclusive of
Seller's interest in the Property and the rights and obligations which exist or may arise out of the
acquisition of the Property, as more fully explained in Section 6 of this Agreement.
-1-
2.2 Payment of Purchase Price. On the Closing Date, Buyer shall deposit with
Escrow Holder in "good funds" payable to Seller a sum equal to the Purchase Price. The term
"good funds" shall mean a wire transfer of funds, cashier's or certified check drawn on or issued
by the offices of a financial institution located in the State of California, or cash.
3. Escrow
3.1 Opening of Escrow, Closing Date. Pursuant to Section 1.5 of the Option
Agreement, the Escrow shall be deemed opened on the date that Buyer executed and delivered
this Agreement to Seller and that date shall be inserted on the first page of this Agreement as the
date of the Opening of Escrow. Escrow shall close on or before the date that is thirty (30) days
after the Opening of Escrow ("Closing Date"). The terms the "Close of Escrow," and/or the
"Closing" as used herein shall mean the date Seller's Grant Deed is filed for record by the
Escrow Holder in the Office of the County Recorder of Orange County, California.
3.2 Escrow Instructions. This Agreement, together with any standard
instructions of Escrow Holder, shall constitute the joint escrow instructions of Seller and Buyer
to Escrow Holder as well as an agreement between Seller and Buyer. In the event of any conflict
between the provisions of this Agreement and Escrow Holder's standard instructions, this
Agreement shall prevail.
3.3. Deliveries by Seller. On or before 1:00 p.m. on the business day
preceding the Closing Date, Seller shall will deposit with Escrow Holder the following: (a) an
executed and acknowledged grant deed conveying fee title to the Property to Buyer in the form
attached hereto as Exhibit "B" ("Grant Deed'); (b) a certificate of non - foreign status and
California Franchise Tax Board Form 597, each executed by Seller and prepared by Escrow
Holder; and (c) such funds and other items and instruments, executed and acknowledged if
appropriate, as may be reasonably necessary in order for the Escrow Holder to comply with this
Agreement.
3.4 Deliveries by Buyer. On or before 1:00 p.m. on the business day
preceding the Closing Date, Buyer shall .deposit with Escrow Holder the following: (a) a
Preliminary Change of Ownership Statement completed in the manner required in Orange
County; and (b) all additional funds and/or documents, executed and acknowledged (if
appropriate) which are reasonably necessary to comply with the teams of this Agreement, other
than the Purchase Price. On the Closing Date and provided Escrow Holder has received all
closing documents and is in a position to close the Escrow, Buyer shall deliver the Purchase
Price to Escrow Holder.
3.5 Closing, Recording and Disbursements. On the Closing Date, and
provided all of the conditions to closing set forth in Sections 4.1 and 4.2 of this Agreement have
been satisfied or waived in writing by the appropriate party, Escrow Holder shall take the
following actions:
(a) Recording. Escrow Holder shall cause the .Grant Deed to be
recorded in the Official Records of Orange County, California.
-2-
(b) Disbursement of Purchase Price. Escrow Holder shall disburse the
.Purchase Price to Seller after deducting therefrom the escrow and closing costs and
prorations chargeable to Seller under Sections 3.7 and 3.8 of this Agreement.
(c) Title Policy. Escrow Holder shall deliver to Buyer the Title Policy
referred to in Section 4.2(b) of this Agreement.
(d) Delivery of Documents. Escrow Holder shall deliver to the parties
conformed copies of the Grant Deed and any other documents (or copies thereof)
deposited by the parties with Escrow Holder pursuant to this Agreement. The original of
the Grant Deed shall be returned to Buyer after recordation.
3.6 Possession. Seller shall deliver the Property to Buyer at the Close of
Escrow, free and clear of all tenancies, lessees, occupants, licensees, and all possessory rights of
any kind or nature.
3.7 Payment of Costs. The premium for the Title Policy attributable to CLTA
standard owners coverage shall be paid by Seller. Buyer shall pay for any additional title
coverage requested by Buyer, including the difference between a CLTA standard owner's policy
and an ALTA extended owner's policy,, and any endorsements required by Buyer. Seller shall
pay all documentary transfer taxes payable in connection with the recordation of the Grant Deed.
The escrow fee of Escrow Holder shall be shared equally by Seller and Buyer; provided,
however, if the Close of Escrow has not occurred by the Closing Date by reason of a default
hereunder, the defaulting party shall bear all Escrow cancellation charges. All other costs and
expenses of Escrow not. specifically allocated in this Agreement shall be allocated between
Buyer and Seller in accordance with customary practice in the county in which the Property is
located.
3.8 Real Property Taxes. Buyer is a public entity and is not required to pay
property taxes. Seller shall cause all property taxes and assessments as of Closing to be paid
when due. Seller may apply for a refund for any portion of taxes and assessments paid by Seller
and allocated to any period after the Closing Date, in accordance with the applicable provisions
of the Revenue and Taxation Code.
3.9 IRS Reporting Responsibilities. Any returns, statements or reports
required to be filed under Section 6015(e) of the Internal Revenue Code of 1986 (or any similar
reports required by state or local law) relating to the Property shall be filed by Escrow Holder.
In no event shall this Agreement be construed so as to require that such returns, reports or
statements be filed by Seller or Seller's counsel or Buyer or Buyer's counsel. Escrow Holder
shall provide evidence to Seller and Buyer of its compliance with the provisions of this Section
3.9.
4. Conditions Precedent to Close of Escrow.
4.1 Conditions to Seller's Obligations. Seller's obligations to convey the
Property and close the Escrow shall be subject to the satisfaction or written waiver by Seller of
each of the following conditions precedent:
MI
(a) Escrow Holder holds and will deliver to Seller the instruments and
funds accruing to Seller pursuant to this Agreement; and
(b) Buyer is not in default of any term or condition of this Agreement
and the Development Agreement shall continue to be in full force and effect.
4.2 Conditions to Buver's Obligations. Buyer's obligation to purchase the
Property and close the Escrow shall be subject to the satisfaction or written waiver by Buyer of
each of the following conditions precedent:
(a) Escrow Holder holds and will deliver to Buyer the instruments and
funds, if any, accruing to Buyer pursuant to this Agreement;
(b) First American Title Insurance Company is irrevocably committed
to issue to Buyer a CLTA standard, or at Buyer's election, an ALTA extended coverage
owner's policy of insurance, with liability in the amount of the Purchase Price, showing
fee title to the Property vested in Buyer, subject only to the Approved Title Exceptions
referred to in Section 3.2 of the Option Agreement ( "Title Policy"); and
(c) all representations and warranties made by Seller in, this
Agreement and the Option Agreement are true and correct as of the Closing as though
made at that time, and Seller is not in default of any term or condition of this Agreement
or the Option Agreement.
(d) Buyer shall have approved, subject to acquisition of the Property,
the award of a construction contract for construction of the City Hall of the City of
Newport Beach.
4.3 Satisfaction of Conditions. Where satisfaction of any of the foregoing
conditions requires action by Seller or Buyer, each party shall use its diligent efforts, in good
faith, and at its own cost, to satisfy such condition.
4.4 Termination. In the event each of the conditions set forth in Section 4.1 is
not fulfilled on the Closing Date or waived by Seller, Seller may, at its election, terminate this
Agreement and the Escrow opened hereunder. In the event that the conditions set forth in
Section 4.2 are not fulfilled on the Closing Date or waived by Buyer, Buyer may, at its election,
terminate this Agreement and the Escrow opened hereunder. Notwithstanding the foregoing, if
Escrow is not in a position to close due to a party's failure to deposit into Escrow any documents
or funds required to close Escrow, the non - defaulting party shall have the right to terminate this
Agreement without first having given the defaulting party notice of the default and seven (7)
days to cure the default, with the understanding that it is the parties' desire that this Agreement
not terminate as a result of a technicality such as a party's inadvertent failure to timely make a
deposit into Escrow. In the event this Agreement is terminated, all documents delivered by
Seller to Buyer or Escrow Holder shall be returned immediately to Seller and all documents and
funds delivered by Buyer to Seller or Escrow Holder shall be returned immediately to Buyer.
Nothing in this Section 4.4 shall be construed as releasing any party from liability for any default
of its obligations hereunder or breach of its representations and warranties under this Agreement
or the Option Agreement occurring prior to the termination of this Agreement and/or the Escrow.
IM
5. ProRertv Purchased "AS -IS ". Release.
Buyer acknowledges that the provisions of the Option Agreement have provided Buyer
with ample and adequate opportunity to review, enter, inspect and assess the Property and the
Property Documents, and all aspects thereof, including without limitation the Property's physical
characteristics and conditions, the nature and extent of any environmental contamination within
the Property (and of any steps to remediate the same), the condition of the soils within the
Property, the geological condition of the Property and the relative seismic risks pertaining to the
Property, the availability or adequacy of access to the Property, the nature of any other properties
surrounding or within the vicinity of the Property, and all other matters related or relevant to the
Property, the acquisition thereof or the development thereof. Buyer hereby further confirms and
acknowledges that, except for Seller's express representations and warranties set forth in this
Agreement or the Option Agreement, upon the Close of Escrow Buyer shall be deemed to have
waived any and all objections to any of the foregoing matters and to have accepted the Property
in its then present "AS -IS," "WHEREAS," "WrM ALL FAULTS" condition and without any
other oral or written representations or warranties of Optionor of any nature whatsoever,
provided, however, that nothing in this Section 5. is intended to limit or restrict Seller's
representations and warranties set forth in Section 4.1 of the Option Agreement or Buyer's right
to rely upon the same and its remedies for Seller's breach thereof for the period of time set forth
in Section 4.2 of the Option Agreement. Further, Seller shall have no liability whatsoever to
Buyer with respect to a breach of any of the representations and warranties set forth in this
Agreement or the Option Agreement if Buyer obtains knowledge of a fact or circumstance the
existence of which would constitute a breach of Seller's representations and warranties
hereunder _prior to the Closing Date and Buyer proceeds to Closing, in which event each
representation or warranty shall be deemed automatically amended to conform with the
knowledge of Buyer as of the Closing Date, and Seller shall have no liability whatsoever for
.such previously inaccurate representation or warranty. For the purposes hereof, Buyer shall be
deemed to have knowledge of any fact or circumstance set forth in any environmental
assessment, soils, geological, physical condition or other report received by Buyer prior to
Closing, and the representations and warranties herein contained shall be deemed automatically
modified to the extent information contained in any environmental assessment, soils, geological,
physical condition or other report received by Buyer prior to Closing is inconsistent with the
matters covered herein.
Buyer, on behalf of itself and its agents, successors, assigns, and all entities related to any
of the foregoing, and on behalf of all persons claiming any interest in the Property or this
Agreement, and as owner, principal, director, partner, shareholder, agent, or representative of
any business, enterprise, or venture, expressly waive any and all rights under Section 1542 of the
Civil Code of the State of California, or any other federal or state statutory rights or rules, or
principles of common law or equity, or those of any jurisdiction, government, or political
subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision").
Thus, Buyer and each of them, and any business, enterprise, or venture in which it is involved,
may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or
assert in any manner claims released hereunder. Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SIB
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH, IF KNOWN BY
HIM, MUST HAVE MATERIALLY, AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Buyer's Initials:
6. Relocation, Release. Seller acknowledges and agrees that a portion of the
Purchase Price represents Buyer's payment to Seller for Seller's relocation from the Property.
Buyer's payment to Seller of said amount shall constitute full and complete satisfaction of any
obligation Buyer may have for providing relocation assistance to Seller and paying its relocation
costs required to comply with all applicable federal, state and local laws, rules and regulations
arising out of, based upon, or relating to, relocation assistance or benefits owing under
Government Code § 7260 et seq., Title 25 of the California Code of Regulations, Section 6000 et
seq., or under any other federal,, state or local relocation statutes, regulations or guidelines,
including but not limited to, any such regulations or guidelines of Buyer.
Seller, for itself and for its agents, successors, assigns, and all entities related to any of
the foregoing, and on behalf of all . persons claiming any interest in the Property or this
Agreement fully releases, acquits and discharges the Buyer and its officers, officials, members,
directors, employees, attorneys, accountants, other professionals, insurers, and agents, and all
entities, boards, commissions, and bodies related to any of them (all of the foregoing,
collectively, the "Released Parties "), from all rights, claims, demands, actions or causes of action
that Seller, or any of them, has or may have against the Released Parties arising out of or related
to Buyer's acquisition of the Property or the displacement of Seller from the Property, including,
but not limited to all of Seller's property rights and interests in the Property, and including but
not limited to relocation benefits and assistance, all leasehold interests and rights of tenancy or
occupancy, all improvements, all improvements pertaining to the realty, fa niture, fixture, and
equipment, business goodwill, lost income (past or future), failure to locate a suitable
replacement location, lost rental income or sublease or license income, severance damages, pre -
condemnation damages, if any, economic or consequential damages, professional consultant
fees, attorney's fees and costs, expert witness fees and costs, interest , all other costs, and any
and all compensable interests, and/or damages, and/or claims, of any kind and nature, claimed or
to be claimed, suffered or to be suffered, by Seller, and any of them, by reason of Buyer's
acquisition of the Property or Seller's displacement from the Property.
Seller, on behalf of itself and its agents, successors, assigns, and all entities related to any
of the foregoing, and on behalf of all persons claiming any interest in the Property or this
Agreement, and as owner, principal, director, partner, shareholder, agent, or representative of
any business, enterprise, or venture, expressly waive any and all rights under Section 1542 of the
Civil Code of the State of California, or any other federal or state statutory rights or rules, or
principles of common law or equity, or those of any jurisdiction, government, or political
subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision ").
Thus, Seller and each of them, and any business, enterprise, or venture in which it is involved,
may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or
assert in any manner claims released hereunder. Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH, IF KNOWN BY
HIM, MUST HAVE MATERIALLY, AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Seller's Initials:
In the event any occupants or lessees of the Property shall be entitled to relocation
assistance, Seller shall have the sole and exclusive responsibility for providing relocation
assistance and.paying all relocation costs required to comply with all applicable federal and state
laws, rules, and regulations. Seller shall indemnify, defend, and hold Buyer and the Buyer
harmless from and against any claims, liabilities, damages, or losses made against it by tenants or
occupants of the Property, including without limitation claims for relocation assistance and
inverse condemnation.
7. Miscellaneous.
7.1 Attornev's Fees. If either party commences an action against the other to
enforce any of the terms of this Agreement or because of the breach by either party of any of the
terms of this Agreement, the losing party shall pay to the prevailing party its expert witness fees
and its reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution
or defense of such action, including appeal of and/or enforcement of a judgment.
7.2 Notices. All notices required to be delivered under this Agreement to the
other party must be in writing and shall be effective (i) when personally delivered by the other
party or messenger or courier thereof; (ii) three (3) business days after deposit in the United
States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily
deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or
fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one
of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and
addressed to the respective parties as set forth below or to such other address and to such other
persons as the parties may hereafter designate by written notice to the other parties hereto.
Notices delivered after 5:00 PM on a business day shall not be deemed to have been delivered
until the following business day. As used herein, business days shall exclude weekends and state
and federal holidays. The parties' respective addresses for notices are as set forth below, (with
such addresses subject to change from time to time if a notice of change of address is delivered
in accordance with the notice provisions set forth herein:
To Seller: The Irvine Company LLC
550 Newport Center Drive
Newport Beach, CA 92660 -0015
Attn: General Counsel
Facsimile: (949) 760 -0896
10
Copy to: Latham & Watkins LLP
600 West Broadway, Suite 1800
San Diego, CA 92101 -3375
Attn: Christopher W. Garrett
Facsimile: (619) 696 -7419
To Buyer: City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Manager
Facsimile: (949) 644 -3020
Copy to: City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Attorney
Facsimile: (949) 644 -3139
7.3 Assignment. Neither party shall, whether voluntarily, involuntarily, or by
operation of law, assign all or any part of this Agreement or any rights hereunder without the
other party's written approval, which approval may be withheld in the other party's sole and
absolute discretion, except that (a) Seller may proceed with the Tax -Free Exchange in
accordance with Section 7 of the Option Agreement, and (b) Buyer many assign its rights to
another governmental entity controlled by Buyer and solely for financing purposes (including
without limitation a public financing authority), provided that (i) the nominee is a tax- exempt
entity and (ii) Buyer shall continue to be liable for all obligations of Buyer hereunder and under
the Option Agreement. Also, Buyer may specify. a tax- exempt nominee controlled by Buyer to
whom title will be conveyed on the Closing Date. In connection with any assignment, any
assignee shall execute all documents reasonably necessary to assume all of the obligations
imposed under this Agreement as if the assignee were the original party to this Agreement.
7.4 Time of the Essence. Time is of the essence with respect to each of the
terms, covenants, and conditions of this Agreement.
7.5 Binding on Heirs. Subject to the limitations set forth in Section 7.3 above,
this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the
respective parties hereto.
7.6 Entire Agreement. With the exception of the Development Agreement
any written implementation agreements that may have been entered into by and between Seller
and Buyer pursuant to Section 4.8.2 of the Development Agreement, and the Option Agreement,
this Agreement contains the entire agreement of the parties hereto with respect to the matters
covered hereby, and all negotiations and agreements, statements or promises between the parties
hereto or their agents with respect to this transaction are merged in this Agreement, which alone
expresses the parties' rights and obligations. No other prior agreements or understandings not
contained or incorporated herein shall be binding or valid against either of the parties hereto.
7.7 Modification. Any amendments or modifications to this Agreement must
be in writing and executed by both parties to this Agreement.
7.8 Waivers. No delay or omission by either party hereto in exercising any
right or power accruing upon the compliance or failure of performance by the other party hereto
under the provisions of this Agreement shall impair any such right or power or be construed to
be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants,
conditions or agreements hereof to be performed by the party shall not be construed as a waiver
of any succeeding breach of the same or other covenants, agreements, restrictions or conditions
thereof
7.9 Interpretation: Governing Law. Forum. This Agreement shall be
construed according to its fair meaning and as if prepared by both parties hereto. Title and
captions are for convenience only and shall not constitute a portion of this Agreement. As used
in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall
each be deemed to include the others wherever and whenever the context so dictates. This
Agreement shall be construed in accordance with the internal laws of the State of California in
effect at the time of the execution of this Agreement without regard to conflict of law principles.
Venue and jurisdiction of any action arising out of this Agreement shall exclusively be in any
state or federal court sitting in the County of Orange, State of California.
7.10 Severability. If any term, provision, condition or covenant of this
Agreement or the application thereof to any party or circumstances shall, to any extent, be held
invalid or unenforceable, the remainder.of this instrument, or the application of such term,
provision, condition or covenant to persons or circumstances other than those as to whom or
which it is held invalid or unenforceable, shall not be affected thereby, and each terra and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
7.11 No Merger. Subject to Section 4.2 of the Option Agreement, the
provisions of these Escrow Instructions and the Option Agreement shall survive the Close of
Escrow and shall not be merged with the Grant Deed.
7.12 Broker Commissions. Seller and Buyer each represent and warrant to the
other that it has not engaged any broker or finder in this transaction and that no broker or finder
is entitled to any commission or finder's fee in connection with this transaction as a result of its
actions or agreement, and Seller and Buyer shall indemnify, defend and hold harmless each other
from any claim to any such commission or fee resulting from any action or agreement of or by
the indemnifying party.
7.13 Authority to Execute. Each individual executing this Agreement on behalf
of a party hereto warrants that (i) such party is duly organized and existing, (ii) he or she is duly
authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing
this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the
entering into this Agreement does not violate any provision of any other agreement to which said
party is bound.
in
7.14 Execution in Counterpart This Agreement may be executed in several
counterparts,. and all so executed shall constitute one agreement binding on all parties hereto,
notwithstanding that all parties are not signatories to the original or the same counterpart.
[signature page follows]
-10-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of Purchase
and Sale of Real Property and Escrow Instructions as of the date fast above written.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
"SELLER"
THE IRVINE COMPANY LLC, a Delaware
limited liability company
By:
Its:
By:
Its:
"BUYER"
CITY OF NEWPORT BEACH, a California
municipal corporation
By:
-11-
Its:
EXHIBIT "A" TO ESCROW INSTRUCTIONS
LEGAL DESCRIPTION OF PROPERTY
That certain real property located in the City of Newport Beach, County of Orange, .State
of California, described as follows:
[to be inserted]
EXHIBIT "B" TO ESCROW INSTRUCTIONS
GRANT DEED
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663
Attn: City Clerk
(Space Above For Recorder's Use)
The undersigned grantor(s) declare(s) that this transaction is This document is being recorded for the benefit
exempt from the payment of a documentary transfer tax of the City of Newport Beach and is exempt
pursuant to Revenue and Taxation Code Section 11922. from payment of a recordation fee pursuant to
Government Code Sections 6103 and 27383.
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
THE IRVINE COMPANY LLC, a Delaware limited liability company, successor -in- interest to
The Irvine Company, a Michigan corporation ( "Grantor'), hereby grants to CITY OF
NEWPORT BEACH, a California municipal corporation ( "City"), that certain real property
located in the City of Newport Beach, County of Orange, State of California, described in the
legal description attached hereto. as Exhibit "I" and incorporated herein by this reference (the
"Burdened Property"), subject to all exceptions of record and to the following rights reserved to
the Grantor for the benefit of the owner (the `Benefited Party") of fee title to the real property
described in Exhibit "2" (the `Benefited Property") presently owned by Grantor:
1. Reservation of Oil. Mineral. and Water Rights. Benefited Party, its
successors and assigns, shall have the right to the following, together with the right to grant and
transfer or a portion of the same:
1.1 Any and all oil, oil rights, minerals, mineral rights, natural gas
rights, and other hydrocarbons by whatsoever name known, geothermal steam, and all products
derived from any of the foregoing, that may be within or under the Burdened Property, together
with the perpetual right of drilling, mining, exploring and operating therefor and storing in and
removing the same from the Burdened Property or any other land, including the right to
whipstock or directionally drill and mine from lands other than those conveyed hereby, oil or gas
wells, tunnels and shafts into, through or across the subsurface of the Burdened Property, and to
bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or
beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and
operate any such wells or mines; without, however, the right to drill, mine, store, explore and
operate through or enter upon the surface or the upper 500 feet of the subsurface of the Burdened
Property.
-I-
1.2 Any and all water, rights or interests therein, no matter how
acquired by Grantor, and owned or used by Grantor in connection with or with respect to the
Burdened Property, together with the right and power to explore, drill, redrill, remove and store
the same from the Burdened Property or to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by Grantor, whether such water rights shall be
riparian, overlying, appropriative, percolating, littoral, prescriptive, adjudicated, statutory or
contractual; but without, however, any right to enter upon the surface of the Burdened Property
in the exercise of such rights.
2. Reservation of Right to Run Conduit. The Benefited Party shall have a
non - exclusive easement on, over, under or across the portion of the Burdened Property described
.in Exhibit "4," which area shall in no event be wider than ten (10) feet from the exterior
boundaries of the portions of the Burdened Property immediately adjacent to any public or
private street (the "Conduit Area "), for the installation, emplacement, operation and maintenance
of underground electric, gas, telephone, cable television, water, sanitary sewer lines, drainage
facilities or any other similar underground conduits or utility improvements (collectively,
"Conduit "). Any such conduits shall be constructed or installed at a depth below the finish
surface grade of the land and subject to such engineering standards that will reasonably ensure
the following: (i)City and/or the owner of the Burdened Property (if different from City) will be
able to construct, install, and maintain parking areas and/or driveways for the passage of vehicles
over and across the Conduit Area; (ii) City and/or the owner of the Burdened Property will be .
able to construct, install, and maintain landscaping (including plant materials other than deep -
rooted trees and irrigation equipment) and hardscape (including without limitation plazas,
sidewalks, retaining walls, planters, benches, signs, light standards, meter boxes, and similar
improvements) that do not exceed forty -two inches (42 ") in height above the finish surface grade
of the land; and (iii) the Benefited Party will be able to perform required maintenance, repair,
and replacement of Conduit to the maximum extent practicable without excavations within the
Conduit Area. The Benefited Party further shall have the right to enter such portion of the
Burdened Property for purposes of establishing, maintaining, repairing and removing any such
Conduits; provided that (i) except in the event of an emergency, the Benefited Party shall notify
City in writing a reasonable time prior to entering onto the Conduit Area for such purpose
concerning the Benefited Party's intention to perform such work, the nature of the work to be
performed, the estimated time period during which the work will be performed, and in the event
of an emergency the Benefited Party shall provide such written notice as soon as practicable; (ii)
the Benefited Party shall.indemnify, defend, and hold harmless City, the owner of the Burdened
Property (if other than City), and the Burdened Property from and against any and all claims,
liabilities, and losses for personal injury or death, property damage, and economic loss arising
out of the Benefited Party's exercise of its rights under this Section 2; (iii) all such work shall be
performed by the Benefited Party in a good and workmanlike manner in compliance with all
applicable laws and subject to appropriate safety standards for the benefit of the persons
employed to perform the work and all persons using the Burdened Property, including members
of the general public; (iv) the Benefited Party shall minimize to the greatest extent practicable
any interference with City's development and use of the Burdened Property and, not by way of
limitation of the foregoing, shall ensure that adequate pedestrian and vehicular access is
maintained at all times; (v) the Benefited Party shall promptly repair and restore any damage to
the Burdened Property as nearly as practicable to the condition existing immediately prior to the
Benefited Party's entry, including without limitation backfilling all trenches with compacted fill
-2-
to engineering standards, replacement of landscaping with healthy landscaping of similar size
and maturity to any landscaping that is destroyed, and repair and replacement of all permitted
improvements within the Conduit Area, and (vi) the Benefited Party shall promptly pay or
reimburse City for all other costs actually and reasonably incurred by City resulting from the
Benefited Party's establishing, maintaining, repairing, replacing, and removing any such
Conduit. City and the owner of the Burdened Property (if other than City) shall not use the
Burdened Property in any manner that shall unduly burden utilization of the foregoing easement
rights by the Benefited Party.
3. Initial City Hall huprovements. During the first 25 years immediately
following the recordation of this Deed, the Burdened Property shall not be improved except in
accordance with the provisions of this Section 3:
3.1 City Ri6t to Construct Initial City Hall. City shall have the right
to construct or cause to be constructed a City Hall facility upon the Burdened Property. In this
regard, the parties acknowledge that: (i) the conceptual design plans for the initial City Hall
facility are described in Exhibit "3" attached hereto, and said plans have been reviewed by
Benefited Party prior to recordation of this Deed; and (ii) City shall construct or cause to be
constructed the initial City Hall facility in a manner substantially consistent with said plans;
provided, however, that the City shall have the right in its sole discretion to alter such plans and
the City Hall facility so long as the resulting City Hall facility (a) shall be compatible in design
and functionality with the parking structure improvements (the "Parking Structure ") constructed
or to be constructed upon the real property described in Exhibit "5" attached hereto (the "Parking
Structure Property") in accordance with the terms of that certain Zoning huplementation and
Public Benefit Agreement between Grantor and City dated December 18, 2007 (the
"Development Agreement'), (b). shall incorporate elements of design vocabulary referenced in
the "North Newport Center Design Regulations" (as hereinafter defined) (it being recognized by
Benefited Party, however, that subject to the provisions of this paragraph the City Hall facility
may be a unique civic building with a distinctive architectural style), (c) shall not be constructed
-in a post- modern "deconstructivist" style that is out of character with the existing architectural
style of "North Newport Center," and (d) shall consist of no more than 1,000 square feet of
"Floor Area" (as hereinafter defined) within the City Hall building improvements for each 4.17
parking spaces within the Parking Structure that have been granted to the City, by easement and
pursuant to the Development Agreement, for use in connection with the Burdened Property. For
purposes of this Deed, the term "North Newport Center" means portions of Newport Center
Block 500, portions of Newport Center Block 600, portions of San Joaquin Plaza, and Fashion
Island; the term "North Newport Center Design Regulations" means the North Newport Center
Planned Community Development Plan approved by the City Council of the City of Newport
Beach by adoption of ordinance on or about December 18, 2007; and the term "Floor Area" shall
mean "Net Floor Area" as defined in the City of Newport Beach Municipal Code in effect as of
the date of the recordation of this Deed.
3.2 Outside Date to Commence Construction. Subject to an extension
of time for the period of any force majeure delay, if City fails to commence construction of a
City Hall facility meeting the requirements of Sections 3.1 of this Deed (the "Initial City Hall')
or cause such construction to commence within 24 months after the date of recordation of this
Deed, then the Benefited Party shall have the right, for a period of sixty (60) days following the
1191!
end of said 24 month period, to provide notice (a "Commencement Failure Purchase Notice ") to
City of its intent to purchase the Burdened Property. If the Benefited Party timely delivers such
a Commencement Failure Purchase-Notice pursuant to the foregoing (or if the Benefited Party
delivers a Commencement Failure Purchase Notice pursuant to Section 5.4) and construction of
the Initial City Hall is not commenced within sixty (60) days after the date City receives such
notice, then:
(a) City shall cause the owner of the Burdened Property to sell
and convey fee title to the Burdened Property to the Benefited Party (or its designee) on a
closing date that is selected by the Benefited Party and that is no earlier than ninety (90)
days and no later than one hundred fifty (150) days after delivery of such notice;
(b) The purchase price payable by Benefited Party to the owner
of fee title to the Burdened Property for the purchase of the Burdened Property pursuant
to this Section shall be an amount equal to the cash purchase price paid by City in
acquiring the Burdened Property pursuant to that certain Agreement for Purchase and
Sale of Real Property and Escrow Instructions dated by and between
Grantor and the City (the "Purchase Agreement'); and
(c) At the closing of the transfer contemplated by this Section,
City shall cause fee title to the Burdened Property to be transferred to the Benefited Party
(or its designee) subject only to those exceptions existing as of the date of City's
acquisition of the Burdened Property pursuant to the Purchase Agreement, and any
fiuther exceptions approved in writing by the Benefited Party subsequent to the date of .
such acquisition. The physical condition of the Burdened Property shall be substantially
the same as when Grantor conveyed title to the Burdened Property pursuant to the
Purchase Agreement and otherwise in a strictly "as -is" condition,. and neither City nor the
owner of the Burdened Property (if other than City) shall be responsible for making any .
representations or warranties with respect thereto. The Benefited Party shall pay for
documentary stamp taxes for recording the deed and for the premium for any title
insurance requested by the Benefited Party. All other costs or expenses shall be allocated
between the transferor and the transferee in the manner customary in Orange County,
California.
3.3 Outside Date to Complete Construction. Subject to an extension of
time for the period of any force majeure delay, if City fails to complete construction of the Initial
City Hall within 42 months after the date of recordation of this Deed, then the Benefited Party
shall have the right, for a period of sixty (60) days following the end of such 42 month period, to
provide notice (a "Completion Failure Purchase Notice') to City of its intent to purchase the
Burdened Property. If the Benefited Party timely delivers such a Completion Failure Purchase
Notice pursuant to the foregoing (or if the Benefited Party delivers a Completion Failure
Purchase Notice pursuant to Section 5.5) and City or the owner of the Burdened Property (if
other than City) either (i) does not complete construction of the Initial City Hall within sixty (60)
days after the date City receives such notice or (ii) does not act within sixty (60) days after the
date City receives such notice to continue construction of the Initial City Hall and thereafter
proceed to completion of the Initial City Hall with oommerciallyreasonable diligence, then:
me
(a) City shall cause the owner of the Burdened Property to sell
and convey fee title to the Burdened Property to the Benefited Party (or its designee) on a
closing date that is selected by the Benefited Parry and that is no earlier than ninety (90)
days and no later than one hundred fifty (150) days after delivery of such notice (or, if
City continues construction of the Initial City Hall after receipt of such notice but City
fails thereafter to proceed to completion of the Initial City Hall with commercially
reasonable diligence, on a closing date that is selected by the Benefited Parry and that is
no earlier than ninety (90) days and no later than one hundred fifty (150) days after City
fails to so proceed);
(b) The purchase price payable by Benefited Party to the owner
of fee title to the Burdened Property for the purchase of the Burdened Property pursuant
to this Section shall be the greater of the following:
(i) The lower of the amount set -forth in clause (A) or
(B) below:
(A) an amount equal to the fair market value of
the Property at its highest and best use and without regard to the restrictions set
forth in this Deed other than the restrictions set forth in 1, 2, and 6 through 19
("Fair Market Value'). If within seventy-five (75) days after City's receipt of the
Completion Failure Purchase Notice the Benefited Party and the City have not
been able to agree on the Fair Market Value of the Burdened Property, then the
Fair Market Value shall be determined in accordance with the following
procedures (and the closing date for the conveyance of the Burdened Property
shall. be extended if and to the extent the Fair Market Value has not yet been
established). Within one hundred five (105) days after City's receipt of the
Completion Failure Purchase Notice, the City and the Benefited Party each shall
procure an appraisal of the Burdened Property by a qualified independent
Appraiser to determine the Fair Market Value of the Burdened Property. If the
two appraisals differ by less than five (5 %) percent of the lower of the two
appraisals, the average of the two appraisals shall be deemed to be the Fair
Market Value. If, however, the two appraisals differ by more than five (5 %)
percent of the lower of the two appraisals, then the two Appraisers shall
immediately select a third Appraiser. If the two Appraisers are unable to agree
within twenty (20) days on the selection of a third Appraiser, then either the City
or the Benefited Party may petition the Superior Court of the County of Orange to
appoint a third Appraiser willing to serve in accordance with the provisions of this
Deed. The third Appraiser may establish procedures for the submission of
additional information by the parties regarding the value of the Property. If
within twenty (20) days after the appointment of the third Appraiser the Benefited
Party and the City have not agreed on the Fair Market Value of the Burdened
Property, then the third Appraiser shall select one of the previous two appraisals
as the Fair Market Value of the Burdened Property based on the third Appraiser's
judgment as to which of the two appraisals is the closest to the third Appraiser's
opinion of Fair Market Value considering all of the facts and circumstances. The
City and the Benefited Party shall bear the fees of the Appraiser each appoints.
511
The fees of the third Appraiser shall be paid as follows: (A) if the third Appraiser
selected the appraisal of the Appraiser appointed by the Benefited Party, then City
shall bear the fees of the third Appraiser, (B) if the third Appraiser selected the
appraisal of the Appraiser appointed by City, then the Benefited Party shall bear
the fees of the third Appraiser, (C) if City and the Benefited Party agree to, a Fair
Market Value after the appointment of the third Appraiser but before the third
Appraiser selects an appraisal as the Fair Market Value of the Burdened Property,
then the fees of the third Appraiser shall be born equally between City and the
Benefited Party. As used herein, the term "Appraiser" means an appraiser who is
a member of the American Institute of Real Estate Appraisers or an SREA
member of the Society of Real Estate Appraisers (or in case such professional
designations are modified or discontinued, the most nearly equivalent successor
designation);
(B) the sum of (1) the cash purchase price paid
by City in acquiring the Burdened Property pursuant to the Purchase Agreement,
and (2) any additional direct costs incurred by the City in developing the
Burdened Property; to the extent reasonably established by City. To the extent
the parties disagree over the amount to be calculated pursuant to the immediately
preceding sentence, then either City or the Benefited Party may ask the third
Appraiser to determine the amount, in which case the third Appraiser shall
establish procedures for the submission of evidence pertaining to this issue and
shall reach a decision within ten (10) days after the determination of Fair Market
Value in accordance with Section 3.3(b)(i); and
(ii) If the City has obtained the funds for the
construction of the City Hall through the issuance of certificates of participation or
another form of financing contemplated by Section 5.1 below, then the amount required
to repay in full the outstanding indebtedness under such financing.
(c) At the closing of the transfer contemplated by this Section,
City shall cause fee title to the Burdened Property to be transferred to the Benefited Party
(or its designee) subject only to those exceptions existing as of the date of City's
acquisition of the Burdened Property pursuant to the Purchase Agreement, and any
further exceptions approved in writing by the Benefited Party subsequent to the date of
such acquisition, as reasonably established by the City and otherwise in an as -is physical
condition. The Benefited Party shall pay for documentary stamp taxes for recording the
deed and for the premium for any title insurance requested by the Benefited Party. All
other costs or expenses shall be allocated between the transferor and the transferee in the
manner customary in Orange County, California.
3.4 Force Majeure Delay. As used in this Section 3, the phrase "force
majeure delay" shall mean a delay in the diligent processing of the commencement or
construction of the Initial City Hall, but only to the extent reasonably attributable to events
outside City's reasonable control.
10
4. Restrictions on Use During First 25 Years. Subject to Section 5 below,
until the twenty-fifth (25'b) anniversary of the date that this Deed is recorded in the Official
Records of the Orange County Recorder's office, City shall use the Burdened Property only for
the following purposes:
4.1 Development of City Hall. Until such time as the Initial City Hall
has been completed, City may use the Burdened Property only for purposes reasonably related to
the development of the Initial City Hall.
4.2 City Hall Uses. From and after completion of the Initial City Hall,
City may use the Burdened Property exclusively for the following purposes (collectively, the
"City Hall Uses'):
(a) City may use the City Hall as the seat of government for
the City of Newport Beach. In such event, the City Hall shall contain the chambers of the
City Council and the offices of the Mayor, the City Council members and the City
Manager.
(b) The City may use the Burdened Property for other uses
which are reasonably ancillary to, and customary in connection with, the operation of a
City Hall and are not unreasonably disruptive to the use of the Benefited Property. The
foregoing shall not be construed as permitting use of any portion of the Burdened
Property for sale of goods, food or beverages, other than the following: (i) sales of food
and beverages to employees of City Hall and persons visiting City Hall for official City
business, including without limitation sales transacted through vending machines located
upon the Burdened Property, the use of which is ancillary to other City Hall Uses
(excluding however retail establishments which market to the general public); (ii) sales
by City or a City Affiliate of signs, shirts, or other merchandise related to the operations
of the City, celebrating the unique identity of the City, or for a special event or fundraiser
for a community or public purpose; and (iii) in connection with the staging of civic
events at the City Hall, the sale by third parties of goods, food or beverages, but only if
such sales are ancillary to the events and the purposes behind the events do not include a
material objective of achieving such sales. Notwithstanding the foregoing, all sales
activities pursuant to clauses (i) -(iii) of the preceding sentence shall be confined to an
area or areas within the interior of the City Hall with a Floor Area no greater than 2,000
square feet.
(c) City from time to time may remodel, renovate or refurbish
the City Hall improvements, provided that (i) before commencing any material acts of
remodeling, renovation or refurbishment,,City first shall provide plans for the proposed
remodeling, renovation or refurbishment to the Benefited Party for review and comment
(brut not for approval); and (ii) notwithstanding clause (i) of this Section 4.2(c), City shall
have the right in its sole discretion to approve the plans for the remodeling, renovation or
refiubishment so long as the resulting City Hall improvements (A) shall continue to be
compatible in design and functionality with the Parking Structure improvements
constructed upon the Parking Structure Property, (B) shall continue to incorporate
elements of design vocabulary referenced in the North Newport Center Design
-7-
Regulations (it being recognized by Benefited Party, however, that subject to the
provisions of this paragraph the City Hall facility maybe a unique civic building with a
distinctive architectural style), (C) shall not be remodeled, renovated or refurbished in a
post -modem "deconstructivist" style that is out of character with the existing
architectural style of North Newport Center, and (D) shall consist of no more than 1,000
square feet of Floor Area within the building improvements within the City Hall building
for each 4.17 parking spaces within the Parking Structure that have been granted to the
City, by easement and pursuant to the Development Agreement, for use in connection
with the Burdened Property.
4.3 Not An Operating Covenant. The parties acknowledge and agree
that the provisions of this Section 4 shall constitute a use restriction and shall not be construed as
an operating covenant.
5. Transfers. Notwithstanding any other provisions of this Deed to the
contrary, City shall have the right to sell or lease its interests in the Burdened Property so long as
such sale or lease complies with the following:
5.1 Financing. City may enter into leases, leasebacks, and any other
financing arrangements for the purpose of covering the cost of acquiring the Property and
developing the City Hall thereon, or for the purpose of refinancing any such financing, provided
in each case that such transactions or arrangements (i) shall be consistent with such types of
transactions undertaken by other municipalities in raising funds for construction of public
improvements and public facilities, and (ii) shall not raise a material risk that City shall be
deprived of its possessory rights to the Burdened Property. In this regard, the owner of the
Benefited Property shall cooperate with City in furtherance of such financing arrangements and
shall consider and adopt such changes to the provisions of this Deed as may be reasonably
necessary and appropriate in order to facilitate such financing (e.g., inclusion of provisions
calling for the Benefited Party, before exercising remedies as a consequence of a default or
breach by City hereunder, to provide notice to the lender (or similar party under the financing) of
such event, and further to provide said lender (or similar party) with an opportunity to cure, so
long as such changes do not change in any material respect the rights or obligations of the
Benefited Party with respect to the Burdened Property, the Benefited Property or this Deed.
5.2 Customary Easements. City may enter into easement agreements
burdening the Burdened Property, to the extent reasonably necessary and appropriate for the
provision of utilities in connection with the development of the site as a City Hall.
5.3 Affiliates. City may assign interests in the Burdened Property to
entities controlled by City, including without limitation to a public financing authority
( "Affiliates'), provided that no such Affiliates shall further sell, lease, assign, encumber or
otherwise transfer such interests except in accordance with this Section 5.
5.4 Repurchase Right in the Event of Transfer Prior to
Commencement of Initial City Hall. If, prior to commencement of construction of the Initial
City Hall, City sells, leases, assigns, encumbers or otherwise transfers an interest in the Burdened
Property other than as permitted by Section 5.1, 5.2 or 5.3 of this Deed, then the Benefited Party
shall have right to deliver a Commencement Failure Purchase Notice pursuant to Section 3.2.
5.5 R_pe urchase Rights in the Event of Transfer Prior to Completion of
Initial City Hall.. If, subsequent to commencement of construction of the Initial City Hall but
prior to completion of construction of the Initial City Hall, City sells, leases, assigns, encumbers
or otherwise transfers an interest in the Burdened Property other than as permitted by Section
5.1, 5.2 or 5.3 of this Deed, then the Benefited Party shall have the right to deliver a Completion
Failure Purchase Notice pursuant to Section 3.3.
5.6 Right to Transfer Subject to Right of First Offer. From and after
completion of the Initial City.Hall until the twenty -fifth (25a') anniversary of the recordation of
this Deed, City (or the owner of the Burdened Property, if other than City) may sell or lease all
of such owner's right, title, and interest in and to the Burdened Property in accordance with the
provisions of this Section 5.6, provided that the proposed terms for the transaction do not call for
City or any Affiliate of the City to receive any consideration as a consequence thereof other than
cash or a combination of cash and deferred payments (including rent, if applicable), and provided
further that before consummating any such transfer, City first shall cause the owner of fee title to
the Burdened Property to provide to the Benefited Party a written summary of the price and other
terms applicable to the proposed transaction (the "Offer Notice'). The Offer Notice shall also
contain all relevant information in City's possession, if applicable, which would reasonably be
relied upon in evaluating whether to acquire the applicable interest in the Burdened Property
(including but not limited to. any proposals or options for lease affecting the Burdened Property,
a recent preliminary title report, a list of known litigation, notices, citations and other material
matters affecting the Burdened. Property, and the most recent environmental site assessment
obtained by or in the possession of City, if any, concerning the Burdened Property). For a period
of thirty (30) days following receipt of the Offer Notice, the Benefited Party shall have the right
to elect to acquire the offered interest referred to in the Offer Notice on the proposed terms.
Such election shall be made by the Benefited Party in its sole discretion and by delivery of
written notice to such effect to City.
(a) If the Benefited Party timely elects to acquire the offered
interest referred to in the Offer Notice following delivery of an Offer Notice, then City
and the Benefited Party shall diligently pursue, in good faith, the negotiation, execution
and consummation of the operative documents required to complete such transfer to the
Benefited Party (or its designee) on a date selected by the Benefited Party that is no more
than one hundred fifty (150) days after delivery to Benefited Party of the Offer Notice.
(b) If the Benefited Party does not timely elect to acquire the
offered interest referred to in the Offer Notice following delivery of an Offer Notice, then
City shall have the right, for a period of one hundred fifty (150) days after the lapse of the
Benefited Party's right to elect to acquire the offered interest in the Burdened Property
pursuant to the Offer Notice, to consummate a sale or lease of the offered interest to a
third party on terms which are no less favorable to City (directly or indirectly) than the
terms described in the Offer Notice.
W
(i) If such sale is not timely consummated in such
manner, then City shall not effect any transfer of an interest in the Burdened Property
without-first providing the Benefited Party with another Offer Notice pursuant to this
Section 5.6 and once again affording the Benefited Party an opportunity to elect to
acquire the offered interest in the Burdened Property in accordance with this Section 5.6.
(ii) Conversely, if such transfer is timely consummated
through recordation of a conveyancing deed or similar applicable document in
accordance with the requirements of this Deed, then: (A) the Benefited Party's right to
purchase the Burdened Property in accordance with this Section 5.6 shall lapse and be of
no further force or effect; (B) the provisions in Sections 3, 4 and 5 of this Deed thereafter
shall have no further force or effect, and (C) the owner of the Burdened Property shall not
have any further obligation to comply with the provisions of such Sections.
5.7 Restriction on Other Transfers. Except as ex ressly permitted by
this Section 5, from the date this Deed is recorded until the twenty-fifth (25 anniversary of said
date, City shall not sell, lease or otherwise encumber or transfer any interests in the Burdened
Property, or provide any other person or entity with any possessory interest in the Burdened
Property except as expressly authorized herein.
6. After First 25 Years. From and after the twenty-fifth (25s') anniversary of
the date this Deed is recorded (or, if sooner, following a transfer of the Burdened Property
pursuant to Section 5.6 to a party other than the Benefited Party or its designee), the owner of fen
title to the Burdened Property shall have the right to use and improve the Burdened Property m
such manner as such owner shall determine in its sole discretion, provided that:
6.1 said owner shall continue to comply with the provisions `of
Sections 1, 2, and 6 through 19 of this Deed;
6.2 before commencing any material construction to change the nature
of the improvements on the Burdened Property, the owner of fee title to the Burdened Property
first shall provide plans for the proposed changes to the Benefited Party for review and comment
(but not for approval); and
6.3 notwithstanding Section 6.2, the owner of fee title to the Burdened
Property shall have the right in its sole discretion to approve the plans for such changes so long
as the resulting improvements on the Burdened Property (i) shall continue to be compatible in
design and functionality with the Parking Structure improvements constructed upon the Parking
Structure Property, (ii) shall continue to incorporate elements of design vocabulary referenced in
the North Newport Center Design Regulations (it being recognized by Benefited Party, however,
that subject to the provisions of this paragraph the improvements on the Burdened Property may
have a distinctive architectural style), (iii) shall not be remodeled, renovated or refurbished in a
post -modem "deconstructivist" style that is out of character with the existing architectural style
of North Newport Center, and (iv) shall include total Floor Area that is no greater than the
greater of (i) the previously existing Floor Area of the improvements on the Burdened Property
and (ii) 72,000 square feet.
-10-
7. Attorney's Fees. If either party commences an action against the other to
enforce any of the terms of this Deed or because of the breach by either parry of any of the terms
of this Deed, the losing party shall pay to the prevailing parry its expert witness fees and its
reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or
defense of such action, including appeal of and/or enforcement of a judgment.
8. Notices. All notices required to be delivered under this Deed to the other
party must be in writing and shall be effective (i) when personally delivered by the other party or
messenger or courier thereof; (ii) three (3) business days after deposit in the United States mail,
registered or certified; (iii) twenty-four (24) hours after deposit before the daily deadline time
with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax
transmission, provided a hard copy of such transmission shall be thereafter delivered in one of
the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and
addressed to the respective parties as set forth below or to such other address and to such other
persons as the parties may hereafter designate by written notice to the other parties hereto.
Notices delivered after 5:00 PM on .a business day shall not be deemed to have been delivered
until the following business day. As used herein, business days shall exclude weekends and state
and federal holidays. The parties' respective addresses for notices are as set forth below, (with
such addresses subject to change from time to time if a notice of change of address is delivered
in accordance with the notice provisions set forth herein, in which case the parties upon request
of either party shall execute and record an amendment to this Deed evidencing said change of
address):
To Benefited Party: The Irvine Company LLC
550 Newport Center Drive
Newport Beach, CA 92660 -0015
Attn: General Counsel
Copy to: The Irvine Company LLC
550 Newport Center Drive
Newport Beach, CA 92660 -0015
Attn: Chief Operations Officer
To City: City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Manager
Copy to: City of Newport Beach
3300 Newport Boulevard
Post Office Box 1768
Newport Beach, CA 92663 -3884
Attn: City Attorney
9. Time of the Essence. Time is of the essence with respect to each of the
terms, covenants, and conditions of this Deed.
-11-
10. Entire Agreement. This Deed contains the entire agreement of the parties
hereto with respect to the matters covered hereby. No other prior agreements or understandings
not contained or incorporated herein shall be binding or valid against either of the parties hereto
with respect to the subject matter set forth herein.
11. Modification. Any amendments or modifications to this Deed must be in
writing and executed by both City and Benefited Party.
12. Waivers. No delay or omission by either party hereto in exercising any
right or power accruing upon the compliance or failure of performance by the other party hereto
under the provisions of this Deed shall impair any such right or power or be construed to be a
waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions
or agreements hereof to be performed by the party shall not be construed as a waiver of any
succeeding breach of the same or other covenants, agreements, restrictions or conditions thereof
13. Estoppel Certificates. The owner of the Benefited Property and the owner
of the Burdened Property each shall have the right from time to time to request and receive an
estoppel certificate from the other certifying as to (i) the extent to which this Deed continues in
full force and effect, (ii) whether there have been any amendments to this Deed, and identifying
the documentation evidencing such amendments, if any, (iii) whether either such owner is in
default in the performance of its obligations hereunder, and the nature of any such default, and
(iv) such other factual matters as a third party reasonably may desire comfort in connection with
a transaction with the owner of the Burdened Property or the owner of the Benefited Property or
concerning the Burdened Property or the Benefited Property. Further, should the owner of the
Benefited Property encumber its interests in favor of a lender, the owner of the Burdened
Property shall agree to reasonable notice and cure rights in favor of such lender.
14. No Third Party Beneficiaries. There are no third party beneficiaries to the
covenants, restrictions and other provisions of this Deed.
15. Interpretation; Governing Law; Forum. This Deed shall be construed
according to its fair meaning and as if prepared by both parties hereto. Title and captions are for
convenience only and shall not constitute a portion of this Deed. As used in this Deed,
masculine, feminine or neuter gender and the singular or plural number shall each be deemed to
include the others wherever and whenever the context so dictates. This Deed shall be construed
in accordance with the internal laws of the State of California in effect at the time of the
execution of this Deed without regard to conflict of law principles. Venue and jurisdiction of any
action arising out of this Deed shall exclusively be in any state or federal court sitting in the
County of Orange, State of California.
16. Severability. If any term, provision, condition or covenant of this Deed or
the application thereof to any party or circumstances shall, to any extent, be held invalid or
unenforceable, the remainder of this instrument, or the application of such tam, provision,
condition or covenant to persons or circumstances other than those as to whom or which it is
held invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Deed shall be valid and enforceable to the fullest extent permitted by law.
-12-
17. Authority to Execute. Each individual executing this Deed on behalf of a
party hereto warrants that (i) such party is duly organized and existing, (ii) he or she is duly
authorized to execute and deliver this Deed on behalf of said party, (iii) by so executing this
Deed, such party is formally bound to the provisions of this Deed, and (iv) the entering into this
Deed does not violate any provision of any other agreement to which said party is bound.
18. Execution in Counterpart. This Deed may be executed in several
counterparts, and all so executed shall constitute one agreement binding on all parties hereto,
notwithstanding that all parties are not signatories to the original or the same counterpart.
19. Runs With the Land. In accepting this Deed, City hereby agrees to all of
the rights and obligations described above in this Deed. The terms and conditions of this Deed
shall create equitable servitudes upon the Burdened Property; shall bind the owners of the
Burdened Property (and each person or entity having any interest therein); and shall inure to the
benefit of the owner of the Benefited Property. The benefits provided to Grantor (and any
Benefited Party) under this Deed shall run with ownership of the Benefited Property. In the
event of a breach by City in the performance of its obligations hereunder, the Benefited Party
shall be entitled to all rights and remedies permitted under applicable law.
Dated THE IRVINE COMPANY LLC, a Delaware
limited liability company
592
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On before me, Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
helshe/they executed the same in his/her /their authorized capacity(ies), and that by his/her /their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On before me, Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
helshelthey executed the same in his/her /their authorized capacity(ies), and that by his/her /their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
Notary Public
=14-
CERTIFICATE OF ACCEPTANCE
This to certify that the interest in real property conveyed by the foregoing Grant Deed, from The
Irvine Company LLC to the City of Newport Beach, is hereby accepted by the undersigned
officer of the City of Newport .Beach, on behalf of the City of Newport Beach, pursuant to
authority conferred by Resolution No. of the City Council of the City of Newport Beach
adopted on , and the. City of Newport Beach consents to (a) all rights reserved to
the Benefited Party as described in said Deed and (b) the recordation of said Deed by its
undersigned duly authorized officer.
CITY. OF NEWPORT BEACH, a California
municipal corporation
071 =.,
ATTEST:
City Clerk
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On before me, Notary Public,
personally appeared personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged tome that he/she/they executed the same in his/her /their
authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
Notary Public
66S
EXHIBIT "1" TO GRANT DEED
LEGAL DESCRIPTION OF BURDENED PROPERTY
That certain real property located in the City of Newport Beach, County of Orange, State
of California legally described as follows:
[to be inserted]
EXHIBIT "2" TO GRANT DEED
LEGAL DESCRIPTION OF BENEFITED PROPERTY
That certain real property located in the City of Newport Beach, County of Orange, State
of California legally described as follows:
[See next page)
LEGAL DESCRIPTION OF "BENEFITED PROPERTY"
I. 500 AND 550 NEWPORT CENTER DRIVE
Parcel A:
Beginning at the easterly terminus of that certain course in the northerly right of way line of San
Nicholas Drive shown as south 80 degrees, 14 minutes, 38 seconds east 91.45 feet on Map of
tract 6015 filed in Book 239, page 28 through 41 of miscellaneous Maps, in the Office of said
County recorder; thence along the right of way lines of said San Nicholas Drive, Newport Center
Drive East and Santa Rosa Drive as shown on said Map. The following courses and distances,
north 80 degrees, 14 minutes, 38 seconds west 91.45 feet to the beginning of a curve concave
northeasterly having a radius of 25.00 feet, northwesterly 38.16 feet along said curve through an
angle of 87 degrees, 26 minutes, 49 seconds to the beginning of a reverse curve concave westerly
having a radius of 1670.00 feet; northerly 472.13 feet along said curve through an angle of 16
degrees, 11 minutes, 54 seconds to the beginning of a reverse curve concave southeasterly
having a radius of 25.00 feet; northeasterly 38.16 feet along said curve through an angle of 87
degrees, 26 minutes, 49 seconds north 78 degrees, 27 minutes, 06 seconds east 69.97 feet to the
beginning of a curve concave northwesterly having a radius of 825.50 feet, northeasterly 195.27
feet along said curve through an angle of 13 degree, 33 minutes, .l l seconds to a point of non-
tangent curve concave.southwesterly having a radius of 25.00 feet, a radial to said point bears
north 35 degrees, 38 minutes, 46 seconds east; thence southeasterly 4.81 feet along said curve
through an angle of 11 degrees, 01 minutes, 42 seconds to the beginning of a reverse curve
concave northeasterly having a radius of 161.00 feet; thence southeasterly 91.20 feet along said
curve through an angle of 32 degrees, 27 minutes, 16 seconds to the beginning of a reverse curve
concave southwesterly having a radius of 25.00 feet; thence southerly 32.67 feet along said curve
through an angle of 74 degrees, 53 minutes, 02 seconds; thence south 0 degrees, 53 minutes, 46
seconds east 25.50 feet to the beginning of a curve concave northwesterly having a radius of 2.00
feet; thence southwesterly 3.14 feet along said curve through an angle of 90 degrees, 00 minutes,
00 seconds to the beginning of a reverse curve concave southeasterly having a radius of 2.00
feet; thence southwesterly 3.14 feet along said curve through an angle of 90 degrees, 00 minutes,
00 seconds; thence south 0 degrees, 53 minutes, 46 seconds east 179.75 feet to the beginning of a
curve concave northwesterly having a radius to 10.00 feet; thence southwesterly 6.59 feet along
said curve through an angle of 37 degrees, 45 minutes, 40 seconds; thence south 36 degrees, 51
minutes, 54 seconds west 9.49 feet to the beginning of a curve concave southeasterly having a
radius of 10.00 feet; thence southerly 6.59 feet along said curve through an angle of 37 degrees,
45 minutes, 40 seconds; thence south 0 degrees, 53 minutes, 46 seconds east 31.50 feet to "Point
A" hereinafter referred to; thence continuing south 0 degrees, 53 minutes, 46 seconds east 31.50
to the beginning of a curve concave northeasterly having a radius of 10.00 feet; thence
southeasterly 6.59 feet along said curve through an angle of 37 degrees, 45 minutes, 40 seconds;
thence south 38 degrees, 39 minutes, 26 seconds east 9.49 feet to the beginning of a curve
concave southwesterly having a radius of 10.00 feet; thence southerly 6.59 feet along said curve
through an angle of 37 degrees, 45 minutes, 40 seconds; thence south 0 degrees, 53 minutes, 46
seconds east 212.75 feet to the beginning of a curve concave northwesterly having a radius of
25.00 feet; thence southwesterly 24.40 feet along said curve through an angle of 55 degrees, 55
minutes, 53 seconds to the beginning of a reverse concave southeasterly having a radius of
147.00 feet; thence southwesterly 66.40 feet along said curve through an angle of 25 degrees, 52
minutes, 43 seconds to the beginning of a reverse curve concave northwesterly having a radius of
25.00 feet; thence southwesterly 9.78 feet along said curve through an angle of 22 degrees, 24
minutes, 25 seconds to a point on a non - tangent curve concave southerly having a radius of
950.50 feet and the northerly right of way line of said San Nicholas Drive, a radial to said point
bears north 22 degrees, 12 minutes, 47 seconds east; thence westerly 206.65 feet along said curve
through an angle of 12 degrees, 27 minutes, 25 seconds to the point of beginning.
II. FASHION ISLAND
Parcel A:
Parcels 1 through 9, inclusive, in the City of Newport Beach, County of Orange, State of
California, as shown on Parcel Map No. 86 -399 as per Map filed in Book 221, pages 30 through
36, inclusive, of Parcel Maps, in the Office of the County Recorder of said County.
Parcel B:
Lots 13 through 17, inclusive, Lots Q, R, S, U, R -1, R -2, and R -3 of Tract No. 6015, in the City
of Newport Beach, County of Orange, State of California, as per Map recorded in Book 239,
pages 28 through 41, inclusive, of Miscellaneous Maps, in the Office of the County Recorder of
said County.
Parcel C:
Parcel I, in the City of Newport Beach, County of Orange, State of California, as shown on a
Parcel Map filed in Book 67, pages 2 and 3 of Parcel Maps, in the Office of the .County Recorder
of said County.
Parcel D:
Parcel 1, in the City of Newport Beach, County of Orange, State of California, as shown on a
Parcel Map filed in Book 75, page 48 of Parcel Maps, in the Office of the County Recorder of
said County.
Parcel E:
Parcel 4 of Parcel Maps, as shown on a Map filed in Book 67, pages 2 and 3 of Parcel Maps and
Lot W of Tract No. 6015, as per Map recorded in Book 239, pages 28 through 41, inclusive, of
Miscellaneous Maps, all in the City of Newport Beach, County of Orange, State of California, in
the Office of the County Recorder of said County, lying within the land described as Parcels 1
and 2 of that certain Lot Line Adjustment N.B.L.L.A. 87 -3, recorded November 13, 1987, as
instrument No. 87- 640346, Official Records of said County.
EXHEBI T "3" TO GRANT DEED
CONCEPTUAL DESIGN PLANS FOR INITIAL CITY HALL FACET TI'Y
[to be inserted]
EXEIEIT "4" TO GRANT DEED
CONDUIT AREA
[to be inserted]
EXHIBIT "5" TO GRANT DEED
PARKING STRUCTURE PROPERTY
[to be inserted]
EXHIBIT G:
DEPICTION OF LOWER CASTAWAYS SITE
EXISTING DEVELOPMENT ON PROPERTY
As of Date of Approval of the City of Newport Beach General Plan 2006 Update
(July 25, 2006)
Sub -Area
Existing Development
285,142 square feet of office and commercial
Block 500
development
952,673 square feet of office and commercial
Block 600
development
295 hotel rooms
San Joaquin Plaza
330,989 square feet of office and commercial
development
1,331,268 square feet of regional retail development
Fashion Island
1700 theater seats I
Within an area of 27,000 square feet
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
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. 2007 -21 as duly and regularly introduced before and adopted by the
City Council of said City at a special meeting of said Council, duly held on the 18th day of December
2007, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Henn, Curry, Rosansky, Webb, Daigle, Gardner, Mayor Selich
Noes: None
Absent: None
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 19th day of December 2007.
(Seal)
City Clerk
City of Newport Beach, California
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LAVONNE M. HARELESS, City Clerk of the City of Newport Beach, California, do hereby
certify that Ordinance No. 2007 -21 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: December 22, 2007.
2008.
In witness whereof, I have hereunto subscribed my name this cull day of �j (.ZQ
o
City Clerk
City of Newport Beach, California