CONTRACT 4583 Developer’s AgreementThis page is part of your document - DO NOT DISCARD
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order No. 16446-X59
EXEMPT FROM RECORDER'S FEES
Pursuant to Government
Code §§ 6103, 27383
Recording Requested By
and When Recorded Return to:
CITY CLERK
CITY OF EL SEGUNDO
350 MAIN STREET
EL SEGUNDO, CA 90245
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DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF EL SEGUNDO
AND
THE REALTY ASSOCIATES FUND IX, L.P.,
A DELAWARE LIMITED PARTNERSHIP
FOR 888,892 & 898 NORTH SEPULVEDA BOULEVARD
THIS AGREEMENT MUST BE RECORDED WITHIN TEN DAYS
OF EXECUTION BY ALL PARTIES HERETO PURSUANT TO THE
REQUIREMENTS OF GOVERNMENT CODE § 65868.5
64538\4162327v5
Table of Contents
Page
1. Recitals ................................ .......................... .,............. ---- .....................-,.,....... .......,-A
2. Definitions........................................................................... ..........................................1
3. Interest of Developer............................................................ ........,........,.. ,....,....... .,,...... .2
4. Binding Effect................................................................................. .......... ...... ,........2
5. Negation of Agency ...............„...........,......... ......... .......,.,.............. ..,........,., , ........ --- ,...,2
6. Development of the Site .................................... ........... -- ..... .... ........ ..., ............ .......2
7. Acknowledgements, Agreements and Assurances on the Part of the Developer ...............--3
8. Acknowledgments, Agreements and Assurances on the Part of the City.. ...............
3
9. Vesting of Development Rights .......................... .......... .................... ........ ...............„.,.....,.,...,..4
10. Benefits to the City .......................... ............ ...... ................. ........................ .,,...,..........4
11. Cooperation and Implementation ................ ............................,.............,..,.....6
12. Review of Compliance ......................... ....................... ............................ ....... ...........6
13. Default Provisions ................... ............................. .................... ....... .,.,....................... ...........6
14. Mortgagee Protection ................................. ............................... ...... ........ ......... ,..........
.7
15. Estoppel Certificate................................................................................. ......... ............8
16. Operating Memoranda and Amendments of Development Agreement..................................8
17. Term of Agreement ....................................... ....... .............. ........, ,...,,............ ..................,..9
18. Administration of Agreement and Resolution of Disputes......................................................9
19. Notices ................................,..,.......................,., ,, .........,....... ................. ..,.,,...... .., .............9
20. Severability and Termination ............................................................ ......... ...., ..........,10
21. Time of Essence ........................................ .......................................................... ..... ---
10
22. Force Majeure.................................. .. ...... .......................... ....... --- ...... .,.............. ...,,,....10
23. Waiver........................................................ .................. ......... ............ .............. ...10
24. Entire Agreement ................... ....... ........ .............. ,,,,............. ............,,, . ................... ..........10
25. Relationship of the Parties ., -. .................. .............................. ............................ .......10
26. Rules of Construction...................................................................................... ...........10
27. Constructive Notice and Acceptance.....................................................................................11
28. No Third Party Beneficiaries ...................................... ..................... ,.... .....................11
29. Incorporation of Exhibits ............................. ............................... --- ...... ........................
11
30. Entire Agreement Conflicts ....................... .................................................. ..................
11
31. Release Upon Transfer ........................... ................................... ............. .........a......,...............
11
32. Hold Harmless ........................... ....................... ...........................................................11
33. Joint Preparation ............ ........................ ......... ....,, .,,....,....,....,................,,.......................12
34. Governing Law and Venue... .... .... --................. ......... .......................-.,,..... ................
12
35. Counterparts........................................................ ......... ......... ,............ .......................
12
64538\4162327v5
M
DEVELOPMENT AGREEMENT
This Development Agreement ("Agreement ") is made this I ? day of (Q 0 V
2014, by and between the CITY OF EL SEGUNDO, a general law city and municipal
corporation ("City"), and THE REALTY ASSOCIATES FUND IX, L.P., a Delaware limited
partnership (the "Developer"). In consideration of the mutual covenants and agreements
contained in this Agreement, the City and Developer agree as follows:
1. Recitals.This Agreement is made with respect to the following facts and for the
following purposes, each of which are acknowledged as true and correct by the parties:
A. The City is authorized pursuant to Government Code §§ 65864 through
65869.5 to enter into binding agreements with persons or entities having legal or equitable
interests in real property for the development of such property in order to establish certainty in
the development process.
B. The Developer is the owner of certain real property, located at the
southeast corner of Sepulveda Boulevard and Walnut Avenue, commonly known as 888 N.
Sepulveda Boulevard, 892 N. Sepulveda Boulevard, and 898 N. Sepulveda Boulevard
(collectively, the "Site"). Currently, 898 N. Sepulveda Boulevard is improved with an eight story
office building and is legally described in attached Exhibit "A-1," which is incorporated by
reference ("Parcel 1"). . Currently, 888 N. Sepulveda Boulevard is vacant and is legally
described in attached Exhibit "A-2," which is incorporated by reference ("Parcel 3").. Currently,
892 N. Sepulveda Boulevard is improved with a seven (7) -story parking structure and is legally
described in attached Exhibit "A-3," which is incorporated by reference ("Parcel 2").
C. This Agreement is executed for the purpose of developing the Site
pursuant to applicable law (as defined below) including, without limitation, the 888 North
Sepulveda Boulevard Specific Plan, with a new hotel. Once executed, it supersedes all previous
development agreements affecting the site including, without limitation, a 2001 development
agreement (as amended).
D. This Agreement will bind the Parties to the terms and obligations specified
in this Agreement. Among other things, this Agreement obligates Developer to construct the
Project in compliance with the 888 North Sepulveda Boulevard Specific Plan and limits City's
ability to delay, postpone, preclude or regulate development of the Project.
2. Definitions, Unless the contrary is stated or clearly appears from the context, the
following definitions govern the construction of the words and phrases used in this Agreement.
Words and phrases not defined in this Section will have the meaning set forth in this Agreement;
the El Segundo Municipal Code; or in common usage. :
(a) "Applicable Rules" means federal, state and local laws existing at the
time of the Effective Date. Applicable Rules includes, without limitation, the 888 North
Sepulveda Boulevard Specific Plan along with such Discretionary Approvals adopted by the City
Council for the Project.
64538\4162327vF
(b) "Effective Date" means the date on which the Enabling Ordinance
becomes effective in accordance with Government Code § 36937.
(c) "Enabling Ordinance" means Ordinance No. 1494, approving this
Development Agreement.
(d) "Subsequent Applicable Rules" means the rules, regulations, and
official policies of the City, as they may be adopted, operative after the Effective Date of this
Agreement which, other than as provided for in this Agreement, would govern the zoning,
development, density, permitted uses, growth management, environmental considerations, and
design criteria applicable to the Project and Site. The parties intend the development of the
Project and the Site to be subject to Subsequent Applicable Rules only to the extent specified in
paragraph (a) of Section 8 of this Agreement.
(e) "Uniform Codes" means those Uniform Codes adopted by reference in
the ESMC in accordance with Government Code §§ 50022.2, et seq. as required by applicable
law including, without limitation, Health and Safety Code § 18944.5 and Title 24 of the
California Code of Regulations. The Uniform Codes govern building and construction standards
including, without limitation, the building, plumbing, electrical, mechanical, grading, sign, and
fire standards.
3. Interest of Develo er„ The Developer represents to the City that, as of the
Effective Date, it owns the Site in fee, subject to encumbrances, easements, covenants,
conditions, restrictions, and other matters of record.
4. Binding Effect.This Agreement, and all of the terms and conditions of this
Agreement, runs with the land comprising the Site and is binding upon and inures to the benefit
of the parties and their respective assigns, heirs, or other successors in interest.
5. Negation of A etic .The Parties acknowledge that, in entering into and
performing under this Agreement, each is acting as an independent entity and not as an agent of
the other in any respect. Nothing contained herein or in any document executed in connection
herewith may be construed as making the City and Developer joint venturers, partners or
employer/employee.
6. Development of the Site.The following specific restrictions govern the use and
development of the Project as described herein and in Exhibit 1'13," and without the need for any
additional Discretionary Actions:
(a) Permitted Uses of the Site. Nothing set forth in this Agreement may be
deemed to require Developer to complete the Project. However, City and Developer agree that
the permitted, conditional and permitted uses of the Site are provided in the Applicable Rules.
64538\4162327vF 2
I
(b) Density and Integs t of" Use. City and Developer agree that the maximum
densities and, intensities for the permitted use of the Site are set forth in the Applicable Rules
and in this Agreement.
(c) Maximum Hei lit and Size of Proposed Building. City and Developer
agree that the maximum height and size of the hotel proposed for the Site are set forth in the
Applicable Rules and in this Agreement.
(d) Develo meat Standards. All design and development standards applicable
to the development of the Project must comply with the Applicable Rules.
(e) Adherence to Uniform Codes. All construction on the Site must adhere to
the Uniform Codes in effect at the time building permits are issued.
(f) Remote Airport Parking. Developer will own and operate the remote
airport parking facility with use and operation to be approved by an Administrative Use Permit
concurrent with the approval of this Agreement. Upon the Effective Date, the Parties agree that
the existing "Administrative Use Permit" (EA No. 356, and AUP No. 94-6), for the "Park and
Ride" will be automatically terminated without additional action by either party.
7. Acknowledgements Agreements and Assurances on the Part of the
Developr..The parties acknowledge and agree that Developer's faithful performance in
developing the Project on the Site, pursuant to the terms of this Agreement and in constructing
and installing public improvements, making payments and complying with the Applicable Rules
will fulfill substantial public needs. The City acknowledges and agrees that there is good and
valuable consideration to the City resulting from Developer's assurances and faithful
performance thereof and that same is in balance with the benefits conferred by the City on the
Project and the Developer by this Agreement. In consideration of the foregoing and the City's
assurances set out in Section 8 below, Developer makes the covenants set forth in this
Agreement.
8. Acknowledgments, Agreements and Assuragees on the Part of the: In order
to effectuate the provisions of this Agreement and in consideration for Developer to obligate
itself to carry out the covenants and conditions set forth in the preceding Section 7 of this
Agreement, City agrees and assures Developer that Developer will be permitted to carry out and
complete the development of the Project within the Site, subject to the terms and conditions of
this Agreement Applicable Rules. Therefore, the City agrees and acknowledges that:
(a) Entitlement to Develop. Developer is granted the vested right to develop the
Project on the Site to the extent and in the manner provided by the Applicable Rules and any
"Subsequent Applicable Rules." Any change in the Applicable Rules including, without
limitation, any change in the General Plan, any applicable specific plan, zoning regulations,
growth management regulations, design standards or any subdivision regulation of the City,
adopted or becoming effective after the Effective Date, cannot be applied by the City to the
Project on the Site. Subsequent Applicable Rules can be applied to the Site by the City only if,
after public hearing, (1) the City determines that the failure of the City to apply Subsequent
Applicable Rules will place residents of the City in a condition substantially dangerous to their
64538\4162327vF 3
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health or safety, which condition cannot otherwise be mitigated in a reasonable manner and (2) it
is applied consistently and evenly to all other similar developments in the City. Subsequent
Applicable Rules with regard to increases in existing permit fees imposed by the City (i.e., fees
intended to cover the City's processing costs) and not otherwise restricted by the terms of this
Agreement, may, notwithstanding the above, be imposed on Developer.
(b) Prevailin y Wages. In the event any infrastructure improvements are paid for in
whole or in part out of public funds, as contemplated by Labor Code § 1720, Developer agrees to
pay prevailing wages for the construction of such improvements to the extent required by
Applicable Law.
In the event that an Applicable Rule is enacted after the Effective Date which would
prevent or preclude compliance with one or more provisions of the Agreement, such provisions
of the Agreement must be modified or suspended as may be necessary to comply with such
Applicable Rule.
9. Vesting of Develo ent Rights, In Pardee Construction Co. v. City of Caniarillr ,
37 Cal.3d 465 (1984), the California Supreme Court held that the failure of the parties therein to
provide for the timing or rate of development resulted in a after -adopted initiative restricting the
rate of development to prevail against the parties' agreement. City and Developer intend to avoid
the result in Pardee by acknowledging and providing that Developer has the right, without
obligation, except as otherwise specifically set forth herein, to develop the Site in such order and
at such rate and times as Developer deems appropriate within the exercise of its subjective
business judgment subject to the term of this Agreement.
10. Benefits to the CiIL The parties acknowledge and agree that Developer's
agreement to perform and abide by the terms and conditions of this Agreement is material
consideration for City's agreement to also perform and abide by the terms and conditions of this
Agreement including, without limitation, the following specific public benefits to be provided to
City in consideration for this Agreement:
• The addition of a new hotel at the Site will encourage additional renovation of
businesses in the immediate vicinity of the project site.
• The presence of a hotel and related evening activity will improve safety in this
northern gateway area as more activity, together with building illumination, will
create less of a need for police services as compared to the attractive nuisance of
the existing long-time vacant property.
• Existing and prospective corporate businesses and research & development
businesses will benefit from the availability of additional lodging choices with
competitive pricing resulting from more available rooms in the community.
Residents seeking lodging for out of town guests will benefit from more hotel
choices which provide more competitive pricing with greater room availability.
64538\4162327vF 4
• The project will bring a new hotel flag to City with experience in operating
business hotels for professionals and the addition of the new hotel will increase
the number of rooms and related facilities in City to the benefit of adjacent and
nearby business.
• The project will provide one-time City revenues of $147,593 associated with the
$26 million development costs.
• City will benefit from the increase in transient occupancy tax (TOT) which is a
direct net benefit to the General Fund as hotels and other commercial uses require
minimal city services. Estimated annual TOT is in excess of $500,000 for the life
of the hotel project.
• City will benefit from an increase in sales tax of approximately $100,000 per year
based on expected expenditures per room and the added occupancy rate for a new
business hotel will encourage business growth.
+ City will benefit from an increase in property tax which, based on City's tax
allocation formula and increased property tax valuation from a vacant to a
developed parcel, is estimated to be $29,000 per year.
• The Project will create approximately 20 full-time jobs and a limited number of
part-time positions. At an estimated salary of $35,000 per year, with many of
these jobs filled locally, this will increase annual payroll within the City by
approximately $700,000. Additionally, earnings within the City will result in an
indeterminate amount of additional sales tax derived from retail expenditures by
hotel employees.
• Shuttle service to Los Angeles International Airport will be available to hotel
guests to provide a convenient service for hotel guests and to reduce air quality
impacts and traffic impacts to the City's roadways.
• The Developer agrees to contribute to the City an additional sum in the amount of
$18,000 as an enhanced community benefit to be paid to the City annually
beginning upon the effective date of this Development Agreement. This annual
payment will cease on the date that a Certificate of Occupancy is issued for the
proposed hotel building.
11. Sales and Use Tax
A. In the event the contract price for any work on the Project is valued at five
million dollars ($5,000,000) or more, Developer agrees to report, on a State Board of
Equalization Tax Return, any purchases of tangible personal property made in connection with
the finishing of and/or installation of materials, or fixtures for the Project, when such purchases
were made without sales or use tax due. Developer must indicate the City as a registered job site
location on the State Board of Equalization Tax Return. In such event, Developer must also
obtain a permit or a sub -permit from the State Board of Equalization indicating the City as the
64538\4162327vF 5
registered job site location, in accordance with State Board of Equalization Operations
Memorandum No. 1023.
B. Developer further agrees that if Developer retains contractors or
subcontractors to perform a portion of work in the Project, and said contracts or subcontracts are
valued at five million dollars ($5,000,000) or more, said contracts or subcontracts must contain
the provisions set forth above.
C. The Director of Finance is authorized to relieve Developer, and
Developer's contractors and subcontractors, from the requirements set forth in this Section 5.6
upon proof to the reasonable satisfaction of the Director of Finance that Developer and/or its
contractors or subcontractors have made good faith efforts to obtain said permit or sub -permits,
but were denied the same by the State Board of Equalization.
12. Coo qEa nand lm lem ntatmo .City agrees that it will cooperate with Developer
to the extent allowed by law and practicable to implement this Agreement. Upon satisfactory
performance by Developer of all required preliminary conditions, actions and payments, City
will commence and in a timely manner proceed to complete all steps necessary for the
implementation of this Agreement and the development of the Project or Site in accordance with
the terms of this Agreement. Developer must, in a timely manner, provide City with all
documents, plans, and other information necessary for the City to carry out its obligations under
this agreement.
13. Review of Compliance.
(a) Periodic Review. The City Manager of City will review this Agreement annually,
on or before the anniversary of the Effective Date, in accordance with the procedures and
standards set forth in this Agreement and the ESMC in order to ascertain compliance by the
Developer with the terms of this Agreement.
(b) Special Review. The City Council of City may order a special review of
compliance with this Agreement at any time, but not to exceed twice per year. The Director of
Planning and Building Safety or the City Council, as determined by the City Council, must
conduct such special reviews.
(c) Procedure. During either a periodic review or a special review, Developer must
demonstrate good faith compliance with the terms of this Agreement. The burden of proof on
this issue is on Developer. The parties acknowledge that failure by Developer to demonstrate
good faith compliance constitutes grounds for termination or modification of this Agreement in
accordance with Government Code § 65865.1.
14. Default Provisions.
(a) Default. Either party to this Agreement is deemed to have breached this
Agreement if it materially breaches any of the provisions of the Agreement and the same is not
cured within the time set forth in a written notice of violation from the non - breaching party to
the breaching party, which period of time cannot be less than sixty (60) days for defaults from
the date that the notice is deemed received, provided if the breaching party cannot reasonably
64538\4162327vF
cure such a breach within the time set forth in the notice, then the breaching party cannot be in
default if it commences to cure the breach within such time limit and diligently effects such cure
thereafter. If City determines to proceed with termination of this Agreement, then City must give
written notice to Developer of its intention to terminate this Agreement and comply with the
notice and public hearing requirements of Government Code §§ 65867 and 65868. At the time
and place set forth in the hearing on termination, Developer must be given an opportunity to be
heard. If the City Council finds based upon the evidence that Developer is in breach of the
Agreement, the Council may modify or terminate this Agreement.
(b) Content of Notice of Violation. Every notice of violation must state with
specificity that it is given pursuant to this Section of the Agreement, the nature of the alleged
breach, and the manner in which the breach may be satisfactorily cured. The notice is deemed
given on the date that it is personally delivered or on the date that is three (3) business days after
it is deposited in the United States mail, in accordance with Section 21 hereof.
(c) remedies for Breach. The Parties agree that remedies for breach of the
Agreement is limited to the remedies expressly set forth in this subsection. The remedies for
breach of the Agreement by City or Developer are limited to injunctive relief and/or specific
performance.
15. Attorneys' Fees and. Costs.
Each party to this Agreement agrees to waive any entitlement of attorneys' fees and costs
incurred with respect to any dispute arising from this Agreement. The parties will each bear
their own attorneys' fees and costs in the event of any dispute.
16. Mortgagee Protection. At the same time that City gives notice to the Developer of
a breach, City must send a copy of the notice to each holder of record of any deed of trust on the
portion of the Site in which Developer has a legal interest ("Financier"), provided that the
Financier has given prior written notice of its name and mailing address to City and the notice
makes specific reference to this Section 14. The copies must be sent by United States mail,
registered or certified, postage prepaid, return receipt requested, and are deemed received upon
the third (3rd) day after deposit. Each Financier that has given prior notice to City pursuant to
this Section has the right, at its option and insofar as the rights of City are concerned, to cure any
such breach within sixty (60) days after the receipt of the notice from City. If such breach cannot
be cured within such time period, the Financier may have such additional period as may be
reasonably required to cure the same, provided that the Financier gives notice to City of its
intention to cure and commences the cure within sixty (60) days after receipt of the notice for
City and thereafter diligently prosecutes the same to completion. City cannot commence legal
action against Developer by reason of Developer's breach without allowing the Financier to cure
the same as specified herein. Notwithstanding any cure by Financier, this Agreement is binding
and effective against the Financier and every owner of the Site, or part thereof, whose title
thereto is acquired by foreclosure, trustee sale or otherwise.
64538\4162327vF
17. E_ sdata gj Certificate. At any time and from time to time, Developer may deliver
written notice to City and City may deliver written notice to the Developer requesting that such
party certify in writing that, to the knowledge of the certified party (i) this Agreement is in full
force and effect and a binding obligation of the parties, (ii) this Agreement has not been
amended, or if amended, the identity of each amendment, and (iii) the requesting party is not in
breach of this Agreement, or if in breach, a description of each such breach. The party receiving
such a request must execute and return the certificate within thirty (30) days following receipt of
the notice. City acknowledges that a certificate may be relied upon by successors in interest to
Developer who requested the certificate and by holders of record of deeds of trust on the portion
of the Site in which that Developer has a legal interest.
18. Operating; Memoranda and Amendments ofDevelopment A reernent.
(a) Operating, Memoranda. The Parties acknowledge that the provisions of
the Agreement require a close degree of cooperation and that new information and future events
may demonstrate that changes are appropriate with respect to the details of performance of the
Parties under this Agreement. The Parties desire, therefore, to retain a certain degree of
flexibility with respect to the details of performance for those items covered in general terms
under this Agreement. If and when from time to time, the Parties find that refinements or
adjustments are desirable, such refinements or adjustments will be accomplished through
operating memoranda or implementation agreements approved by the Parties which, after
execution, will be attached to this Agreement as addenda and become a part hereof.
Operating memoranda or implementation agreements may be executed on behalf
of the City by the City Manager after review by the City Attorney. In the event a particular
subject requires notice or hearing, such notice or hearing will be appropriately given. Any
significant modification to the terms of performance under this Agreement will be processed as
an amendment of this Agreement in accordance with applicable rules and must be approved by
the City Council.
(b) An-endinents. This Agreement may be amended from time to time only
upon the mutual written consent of City and Developer; provided, however, that in connection
with the transfer of any portion of Developers rights or obligations under this Agreement to
another developer, Developer (or any assignee of Developer's rights), such other developer and
City may agree that the signature of such other developer may be required to amend this
Agreement insofar as such amendment would materially alter the rights or obligations of such
developer hereunder. In no event will the signature or consent of any "Non -Assuming
Transferee" (defined below) be required to amend this Agreement.
(c) Minor Chang . Any change to this Agreement which does not substantially
affect (i) the Term of this Agreement, (ii) permitted uses of the Project Site, (iii) provisions for
the reservation or dedication of land, (iv) conditions, terms, restrictions or requirements for
subsequent discretionary actions, or (v) the density or intensity of use of the Project Site or the
maximum height or size of proposed will, with Developer's consent, be subject to the review and
approval of the City's city manager (the "City Manager") and not require notice or public
hearing, except to the extent otherwise required by law.
64538\4162327vF $
(d) Future Development Agreements. Except as otherwise consented to by
Developer, any future development agreement that may be entered into between City and a
successor or assign of Developer with respect to any portion of the Project Site must be
consistent with the terms and provisions of this Agreement.
(e) Future Approvals Do Not Require Amendments to Development Agreement.
Except as may be otherwise agreed to by the parties, no amendment of this Agreement is
required in connection with the issuance of any Subsequent Applicable Rules except Major
Modifications as defined in the 888 North Sepulveda Boulevard Specific Plan. Any Subsequent
Applicable Rules will automatically be incorporated into this Agreement. Except as otherwise
provided by this Agreement, City will not issue any Subsequent Applicable Rules for any portion
of the Project Site unless Developer requests such Subsequent Applicable Rule from City.
19. Term of Agreement. This Agreement becomes operative and begins upon the
Effective Date and remains in effect for a term of ten (10) years, unless said term is terminated,
modified, or extended by circumstance set forth in this Agreement or by mutual consent of the
Parties. Following the expiration of said term, this Agreement is deemed terminated and of no
further force and effect; provided, such termination does not automatically affect any right of the
City or Developer arising from City approvals on the Project before the expiration of the term or
arising from the duties of the parties as prescribed in this Agreement.
20. Administration of Agreement and Resolution of Dis uses. All decisions by the
City staff concerning the interpretation and, administration of this Agreement and the Project
which is the subject hereof are appealable to the City Council and all like decisions by the City
Council are final. However, decisions of the City Council are also subject to judicial review
pursuant to Code of Civil Procedure § 1094.5. so long as such action is filed in a court of
competent jurisdiction not later than ninety (90) days following the date on which the City's
decision becomes final pursuant to Code of Civil Procedure § 1094.6.
21. Notices. All notices under this Agreement must be in writing and are effective
when personally delivered or upon the third (3ra) clay alter deposit in the United States mail as
registered or certified mail, postage prepaid, return receipt requested, to the following
representatives of the parties at the addresses indicated below:
If to the City: City of El Segundo
350 Main Street
El Segundo, California 90245
Attn: Director of Planning and Building Safety
With a copy to: Jenkins & Hogin, LLP
1230 Rosecrans Avenue, Suite 110
Manhattan Beach, CA 90266
Attn: Mark Hensley
If to Developer: The Realty Associates Fund IX, L.P.
1301 Dove Street, Suite 860
Newport Beach, CA 92660
64538\4162327vF
Attn: Jim Harper
With a copy to: Barnard Ventures, LLC
5100 Birch Street, Suite 100
Newport Beach, CA 92660
Attn: Scott Barnard
Any party may, from time to time, by written notice to the other, designate a different
address which shall be substituted for the one above.
22. Severa ifitv and Termination, If any provision of this Agreement is determined by
a court of competent jurisdiction to be invalid or unenforceable, or if any provision of this
Agreement is superseded or rendered unenforceable according to any law which becomes
effective after the Effective Date, the remainder of this Agreement shall be effective to the extent
the remaining provisions are not rendered impractical to perform, taking into consideration the
purposes of this Agreement.
23
Time of Essence.Time is of the essence for each provision of this Agreement of
which time is an element.
24. h"or Ma'eur . In the event of changed conditions, changes in local, state or
federal laws or regulations, floods, delays due to strikes, inability to obtain materials, civil
commotion, fire, or other circumstances which substantially interfere with carrying out the
Project, as approved by the City, or with the ability of either party to perform its obligations
under this Agreement, and which are not due to actions of Developer and are beyond its
reasonable control, the parties agree to bargain in good faith to modify such obligations to
achieve the goals and preserve the original intent of this Agreement.
25. Waiver. No waiver of any provision of this Agreement constitutes a waiver of any
other provision, whether or not similar; nor does any such waiver constitute a continuing or
subsequent waiver of the same provision. No waiver is binding, unless it is executed in writing
by a duly authorized representative of the party against whom enforcement of the waiver is
sought.
26. Emire A reement.This Agreement contains the entire agreement between the
Parties regarding the subject matter hereof, and all prior agreements or understandings, oral or
written, are hereby merged herein. This Agreement cannot be amended, except as expressly
provided herein.
27. l elationshiv of the Parties. Each party acknowledges that, in entering into and
performing under this Agreement, it is acting as an independent entity and not as an agent of any
of the other Party in any respect. Nothing contained herein or in any document executed in
connection herewith may be construed as creating the relationship of partners, joint ventures or
any other association of any kind or nature between City and Developer, jointly or severally.
28. Mules of Construction. The captions and headings of the various sections and
subsections of this Agreement are for convenience of reference only, and they do not constitute a
pact of this Agreement for any other purpose or affect interpretation of the Agreement. Should
64538\4162327vP 10
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any provision of this Agreement be found to be in conflict with any provision of the Project
Approvals or the Subsequent Approvals, the provisions of this Agreement shall prevail over the
Project Approvals.
29. Constructive Notice and Acce stance., Every person who, now or hereafter, owns
or acquires any right, title or interest in or to any portion of the Project Site is conclusively
deemed to have consented and agreed to every provision contained herein, whether or not any
reference to this Agreement is contained in the instrument by which such person acquired such
right, title or interest in the Project Site.
30. No Third Party Beneficiaries.,. This Agreement is made and entered into for the
sole protection and benefit of the Parties and their successors and assigns. No other person has
any right of action based upon any provision of this Agreement.
31. Incorporation of Exhibits. The following Exhibits are part of this Agreement and
each of which are incorporated herein by this reference:
Exhibit A-1
Legal Description of Parcel 1
Exhibit A-2
Legal Description of Parcel 3
Exhibit A-3
Legal Description of Parcel 2
Exhibit B
Description of the Project
Exhibit C
Form of Assignment and Assumption
32. Entire Agreement Conflicts. This Agreement represents the entire agreement of
the parties. Should any or all of the provisions of this Agreement be found to be in conflict with
any provision or provisions found in the Project Approvals, Applicable Rules, or Subsequent
Applicable Rules, then the provision(s) of this Agreement prevail.
33. Release Upon Transfer. fer. Upon the sale or transfer of the Developer's interest in
any portion of the Site, except as otherwise provided herein, Developer is released from its
obligations with respect to the portion so sold or transferred subsequent to the effective date of
the sale or transfer and the City's sole remedy is against the assignee or its successor or assign,
provided that (i) Developer is not in breach of this Agreement at the time of the sale or transfer
and (ii) before the sale or transfer, Developer delivers to City a written assignment and
assumption agreement in the form attached hereto as Exhibit "C," duly executed by the
purchaser or transferee and notarized by a notary public, whereby the purchaser or transferee
expressly assumes the obligations of Developer under this Agreement with respect to the sold or
transferred portion of the Site. Failure to provide a written assumption agreement hereunder
does not negate, modify or otherwise affect the liability of the purchaser or transferee pursuant to
this Agreement. Nothing contained herein may be deemed to grant to City discretion to approve
or deny any such sale or transfer.
34. Hold Harmless. Developer agrees to indemnify and hold the City harmless from
and against any claim, action, damages, costs (including, without limitation, attorney's fees),
injuries, or liability, arising from the City's approval of the Project, this Agreement, Developer's
performance of this Agreement, and all procedures with approving this Agreement (collectively,
6453 8\4162327vF 11
"Discretionary Approvals"), except to the extent such is a result of the City's sole negligence or
intentional misconduct. Should the City be named in any suit, or should any claim be brought
against it by suit or otherwise, whether the same be groundless or not, arising out of the
Discretionary Approvals, Developer agrees to defend the City (at the City's request and with
counsel satisfactory to the City) and will indemnify the City for any judgment rendered against it
or any sums paid out in settlement or otherwise. For purposes of this Section "the City" includes
the City of El Segundo's elected officials, appointed officials, officers, and employees.
A. Defense of Agreement
. If City accepts Developer's indemnification and defense as provided
above, City agrees to and must timely take all actions which are necessary or required to uphold
the validity and enforceability of this Agreement, the Discretionary Approvals, and the
Applicable Rules. This Section will survive the termination of this Agreement.
35. Joint Pre aration. This Agreement is deemed to have been prepared jointly and
equally by the Parties, and it cannot be construed against any party on the ground that the Party
prepared the Agreement or caused it to be prepared.
36. .iov erning Law and Venue. This Agreement is made, entered into, and executed
in the County of Los Angeles, California, and the laws of the State of California govern its
interpretation and enforcement. Any action, suit or proceeding related to, or arising from this
Agreement must be filed in the appropriate court having jurisdiction in the County of Los
Angeles.
37. Counterparts. This Agreement may be executed in multiple counterparts, each of
which is deemed an original, but all of which constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have each executed this Agreement of the date
first written above.
CITY OF EL SEGUNDO
By: hu�
'Mayo
64538\4162327vF 12
1�
ATTEST:
City Clerk
APPROVED AS TO FORM,
1 �l
............ __ V
City Atto trey o ' 'r,
The Realty Associates Fund IX, L.P.,
a Delaware limited partnership
By:. Realty Associates Fund IX LLC,
a Massachusetts limited liability company,
its general partner
By: Realty Associates Advisors LLC, a Delaware
limited liability company, its manager
By: Realty Associates Advisors Trust, a
Ma is business trust, its m,
I3y
By: Realty A iatas Fund IX Texas Corporation, Regional Diz ec!-14°
gene Partner
By.
mm
�'icer Reglona! Dii-ecton
State of California
County of Orange
On 6 aDbfV 10 2D I t-i before me, �A I~V) �� _ Notary Public,
personally appeared _ �j� . M j1Syj , who proved to me on the basis of
satisfactory evidence to be the person who ie(�6 isla# subscribed to the within
instrument and acknowledged to me tat helsV/thh executed the same in his/Vr/'tVir
au
thorized capacity(ie, andthat by liis/h "r/the signatureo on the instrumetit the persot (4, or
the entity upon behalfof which the persollacted, executed the instrument,
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS m hand and official seal. CARMEN LEE
Y Commission * 1906938
Notary Public - California
Orange County
M Comm, Expires Nov 3,, 014
Signature . (Seal)
64538\4162327vF 13
11
November 17, 2014
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES SS
CITY OF EL SEGUNDO
On November 17, 2014, before me, Cathy Domann, Deputy City Clerk H,
personally appeared Suzanne Fuentes, Mayor for the City of El Segundo, who
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument, and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on the instrument
the person, or entity upon behalf of which the persons acted, executed the
instrument.
I certify under the Penalty of Perjury under the laws of the Sate of California that
the foregoing paragraph is true and correct.
Witness my hand and Official Seal.
kkIllittl;rlq/, ,
Ca#ki D` �„1?e� � �Cit 'Clerk H
w rvy M
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EXHIBIT A-1
LegalDesedytion of Parcel 1, (8" North Sepulveda Boulevard)
Parcel 1 of Vesting Tentative Parcel Map No. 71788.
64538\4162327v5 Exhibit A- I - 1
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EXHIBIT A-2
Le al beset iptiors of Parcel 3 (888North Sepulveda Boulevard)
Parcel 3 of Vesting Tentative Parcel Map No. 71788.
64538\4162327v5 Exhibit A-2 - 1
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EXHIBIT A-3
Le al Description of Parcel 892 North Spmlyeda. Boulevard
Parcel 2 of Vesting Tentative Parcel Map No. 71788.
64538\4162327v5 Exhibit A-3-1
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EXHIBIT "B"
Description of Project
The Project consists of the development of a 190 room, five (5) story hotel not to exceed 77 feet
in height to the primary roof, consisting of 111,350 square feet (104,040 net square feet) together
with the existing 95,360 square foot (79,404 net square feet) office building comprising a Floor
Area Ratio ("FAR") of 1.41 on the three parcel property, with shared office and hotel parking
provided by the existing parking structure located on Parcel 2, with an additional 72 parking
stalls provided by the new hotel. The hotel will be approved by a Conditional Use Permit
("CUP") to be approved concurrently with this Agreement. The CUP encompasses the entire
2.98 acre Specific Plan area site. The remote airport parking business would operate through a
CUP approved concurrently with this Agreement and subject to the approval of a Parking
Demand Study and Shared Parking Analysis.
64538\4162327v5 Exhibit B-1
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EXHIBIT "C"
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption is entered into as of this day of ,
20, by and between The Realty Associates Fund IX, L.P., a Delaware limited partnership
("Assignor") and ("Assignee") with respect to the following
facts:
RECITALS:
A. Assignor is the "Developer" with respect to that certain Development Agreement
dated (the "Development Agreement") by and between Assignor and the
City of El Segundo, a city in the State of California ("City"),
B. The Development Agreement pertains to that certain real property located in the
City consisting of 888, 892 and 898 North Sepulveda Boulevard (collectively, the "Site").
C. By this Assignment and Assumption, Assignor desires to assign all its right, title
and interest in and to the Development Agreement to Assignee and Assignee desires to assume
all of Developer's interest and obligations with respect to the Development Agreement.
NOW, THEREFORE, for good and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor and Assignee hereby agree as follows:
1. Assignment of Develop nient Agreement. Assignor hereby grants, assigns,
transfers, conveys and delivers to Assignee all of its right, title and interest in and to the
Development Agreement and Assignee hereby accepts such assignment.
2. As l., -Recourse. Assignee hereby acknowledges and represents that
Assignee has had a full and complete opportunity to evaluate the Development Agreement and
the Site Assignee acknowledges and represents that Assignee accepts the assignment of
Assignor's interest in the Development Agreement on an "AS IS" basis, without any recourse to
Assignor, and without any representation or warranty of any kind with respect to the terms and
conditions of the Development Agreement and/or the obligations of "Developer" under the
Development Agreement.
3. Assumption of Obligations. By acceptance of this Assignment, Assignee hereby
assumes and agrees to perform and to be bound by all the terms, conditions, covenants and
obligations imposed upon or assumed by Assignor under the Development Agreement.
4. Miscellaneous.
(a) Notices. All notices or other communications provided for or permitted
hereunder shall be made in writing by hand -delivery, or pre -paid first-class mail:
64538\4162327v5 Exhibit C-1
If to Assignor: The Realty Associates Fund IX, L.P.,
A Delaware limited partnership
1301 Dove Street, Suite 860
Newport Beach, CA 92660
If to Assignee:
ALL SUCH NOTICES AND COMMUNICATIONS SHALL BE DEEMED TO HAVE BEEN
DULY GIVEN: WHEN DELIVERED BY HAND, IF PERSONALLY DELIVERED; AND
TWO BUSINESS DAYS AFTER BEING DEPOSITED IN THE MAIL, POSTAGE PRE -PAID,
IF MAILED AS AFORESAID. ANY PARTY MAY FROM TIME TO TIME, BY WRITTEN
NOTICE TO THE OTHER, DESIGNATE A DIFFERENT ADDRESS WHICH SHALL BE
SUBSTITUTED FOR THAT SPECIFIED ABOVE.
(b) Cap ions and Heading . The captions and headings in this Assignment for
convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(c) Time of Essence. Except as otherwise provided herein, time is of the
essence with respect to all provisions of this Assignment in which a definite time for
performance is specified; provided, however, that the foregoing shall not be construed to limit or
deprive a party of the benefit of any grace period provided for in this Assignment.
(d) Interpretation and Governing Law. This Assignment shall be governed by
and construed in accordance with the internal laws of the State of California applicable to
agreements made and to be performed within the state. The provisions of this Assignment shall
be interpreted in a reasonable manner to affect the purpose of the parties and this Assignment
Accordingly, any rule of law (including California Civil Code Section 1654) or legal decision
that would require interpretation of any ambiguities in this Assignment against the parry that has
drafted it is not applicable and is waived.
(e) Waiver of Jqry rrial. The parties hereby waive their respective right to
trial by jury of any cause of action, claim, counterclaim or cross -complaint in any action,
proceeding or hearing brought by a party hereto or its successors and assigns on any matter
whatsoever arising out of, or in any way connected with, this Assignment, the relationship of the
parties hereto, or the enforcement of any remedy under any law, statute, or regulation,
emergency or otherwise, now or hereafter in effect.
(f) Seyerabi.li y. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired or
affected, it being intended that all other rights and privileges shall be enforceable to the fullest
extent permitted by law.
64538\4162327v5 Exhibit C-2
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(g) A-ttorna .s' Fees. In any action or proceeding brought to enforce or
interpret any provision of this Assignment, or where any provision hereof is validly asserted as a
defense, the prevailing party shall be entitled to recover actual attorneys' fees and all other
litigation costs including without limitation costs awardable pursuant to California Code of Civil
Procedure Section 1033.5 and amounts payable to expert witnesses ("Costs") in addition to any
other available remedy. In addition to the fees and Costs recoverable under the preceding
sentence, the parties agree that the prevailing party shall be entitled to recover actual attorneys'
fees and Costs incurred in connection with the enforcement of a judgment arising from such
action or proceeding.
(h) mire A aMeelment. This Assignment is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. This Assignment supersedes any and all prior restrictions, promises, representations,
warranties, agreements, understandings and undertakings between the parties with respect to
such subject matter and there are no restrictions, promises, representations, warranties,
agreements, understandings or undertakings with respect to such subject matter other than those
set forth or referred to herein.
(i) Waiver. No delay on the part of any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party hereto of any right, power or privilege hereunder operate as a waiver of any other
right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
0) Amendments. Neither this Assignment nor any term hereof may be
changed, waived, discharged or terminated orally or in writing, except that any term of this
Assignment may be amended by a writing signed by the parties, and the observance of any such
term may be waived (either generally or in a particular instance and either retroactively or
prospectively) by a writing signed by the party against whom such waiver is to be asserted.
(k) Successors 41nd Assigns. This Assignment shall inure to the benefit of and
be binding upon the successors and permitted assigns of each of the parties.
(1) No Tlaird. Party Beneficiaries. Nothing expressed or mentioned in this
Assignment is intended or shall be construed to give any person, other than the parties hereto and
their respective successors and assigns, any legal or equitable right, remedy or claim under or in
respect of this Assignment or any provisions herein contained, this Assignment and any
conditions and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns, and for the benefit of no
other person.
(m) quntrars. This Assignment may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the
same agreement.
64538\4162327v5 Exhibit C-3
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5. Facsimile. This. Assignment may be executed by a party's signature transmitted
by facsimile ("fax"), and copies of this Assignment executed and delivered by means of faxed
signatures shall have the same force and effect as copies hereof executed and delivered with
original signatures. All parties hereto may rely upon faxed signatures as if such signatures were
originals. Any party executing and delivering this Assignment by fax shall promptly thereafter
deliver a counterpart signature page of this Assignment containing said party's original
signature. All parties hereto agree that a faxed signature page may be introduced into evidence in
any proceeding arising out of or related to this Assignment as if it were an original signature
page.
"ASSIGNOR" The Realty Associates Fund IX, L.P.,
a Delaware limited partnership
"ASSIGNEE"
By: Realty Associates Fund IX LLC,
a Massachusetts limited liability company,
its general partner
By: Realty Associates Advisors LLC, a Delaware
limited liability company, its manager
By: Realty Associates Advisors Trust, a
Massachusetts business trust, its manager
By�._......
Officer
By: Realty Associates Fund IX Texas Corporation,
REIT General Partner
By:
Officer
By:..
Name:
Its:
64538\4162327v5 Exhibit C-4